Professional Documents
Culture Documents
Objectives
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Electronic Commerce:
Definitions and Concepts
A Definition
Electronic Commerce (EC) is where business
transactions take place via telecommunications
networks, especially the Internet.
Electronic commerce describes the buying and selling of products,
services, and information via computer networks including the
Internet.
The infrastructure for EC is a networked computing environment
in business, home, and government.
• E-business
A broader definition of EC that includes not just the buying and
selling of goods and services, but also servicing customers,
collaborating with business partners, and conducting electronic
transactions within an organization
.
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the relationship between the concepts of e-
.commerce and e-business
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Figure1.2: Three definitions of the relationship between e-commerce and e-
business
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Examples of E-Commerce
Sites Description
Amazon.com Provides access to several million books
electronically. It also sells music CDs, electronics,
software, toys, video games, prescription drugs, and
much more.
Drugstore.com Refills and sells new drugs and vitamins and other
health products online.
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E-Commerce Framework
Five support areas for EC applications
People
Public policy
Marketing and advertisement
Support services
Business partnerships
E-Commerce Framework (cont.)
– Three dimensions
• the product (service) sold [physical / digital]
• the process [physical / digital]
• the delivery agent (or intermediary) [physical / digital]
– Traditional commerce
• all dimensions are physical (Brick & Mortar)
– Pure EC
• all dimensions are digital (Virtual/online)
– Partial EC
• all other possibilities include a mix of digital and physical
dimensions (click & Mortar)
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The Dimensions of Electronic
Commerce
Virtual product
Digital
Product Virtual process
Digital process
Physical
Product Physical process
Physical Digital Virtual delivery agent
agent agent
13 Figure 1.4:The Dimensions of Electronic Commerce
The Dimensions of Electronic
Commerce
The core of
Virtual product
Electronic commerce electronic commerce
areas
Digital
Product Virtual process
electronic flow
credit card statement
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Benefits
17 Figure 1.6 : major contribution to the Growth of EC
The Benefits of E-Commerce
Benefits to Organizations
Expands the marketplace to national and international
markets
Decreases the cost of creating, processing, distributing,
storing and retrieving paper-based information
Allows reduced inventories and overhead by facilitating
“pull” type supply chain management
The pull type processing allows for customization of
products and services which provides competitive
advantage to its implementers
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Benefits to Organizations (cont.)
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Benefits to Customers
Enables customers to shop or do other transactions
24 hours a day, all year round from almost any
location
Provides customers with more choices
Provides customers with less expensive products
and services by allowing them to shop in many
places and conduct quick comparisons
Allows quick delivery of products and services in
some cases, especially with digitized products
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Benefits to Customers (cont.)
Customers can receive relevant and detailed
information in seconds, rather than in days or
weeks
Makes it possible to participate in virtual auctions
Allows customers to interact with other customers
in electronic communities and exchange ideas as
well as compare experiences
Electronic commerce facilitates competition,
which results in substantial discounts.
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Benefits to Society
Enables more individuals to work at home, and to
do less traveling for shopping, resulting in less
traffic on the roads, and lower air pollution
Allows some merchandise to be sold at lower
prices
Enables people in third world countries and rural
areas to enjoy products and services which
otherwise are not available to them
Facilitates delivery of public services at a reduced
cost, increases effectiveness, and/or improves
quality
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Review Questions
1. Define EC and E-business?
2. Distinguish between e-commerce and e-business?
3. Distinguish between pure and partial EC?
4. Define click-and-mortar and pure play organizations
5. Describe some EC benefits to organizations,
individuals, and society.
6. List the major components of the EC framework?
7. Explain what is meant by buy-side and sell-side e-
commerce.
Transactional Types of E-
Commerce
Classification of EC by the
Nature of the Transaction
• Business-to-business (B2B) : EC model in which all
of the participants are businesses or other
organizations
• Business-to-consumer (B2C): EC model in which
businesses sell to individual shoppers
• Consumer-to-consumer (C2C) : consumers sell
directly to other consumers
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Classification of EC by the Nature of
the Transactions Business
From
Consumer
B C
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Classification of EC by the
Nature of the Transaction (cont.)
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Classification of EC by the
Nature of the Transaction (cont.)
• Business-to-employee (B2E): EC model in which
an organization delivers services, information, or
products to its individual employees
• Collaborative commerce (c-commerce): EC model
in which individuals or groups communicate or
collaborate online
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Classification of EC by the
Nature of the Transaction (cont.)
• E-government: Government-to-citizens (G2C):
EC model in which a government entity buys
or provides good, services, or information to
businesses or individual citizens
• E-Learning: educational institutions-to-
students/trainees: The online delivery of
information for purposes of training or education
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Classification of EC by the
Nature of the Transaction (cont.)
• Exchange (electronic): a public e-market with
many buyers and sellers
Used in B2B
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Classification of EC by the
Nature of the Transaction (cont.)
• Mobile commerce (M-commerce)—EC
transactions and activities conducted in a
wireless environment
• Location-commerce—(L-commerce)
m-commerce transactions targeted to
individuals in specific locations, at specific
times
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Electronic Commerce
Topologies
Electronic Commerce
Topologies
Types of Networks
A global networked environment is known as
the Internet
A counterpart within organizations, is called an
intranet
An extranet extends intranets so that they can
be accessed by business partners.
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Electronic Commerce Topologies
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Figure 1.4 The relationship between intranets, extranets and the Internet
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Summary : Internet, Intranet, and Extranet
Network Typical Type of
Type Users Access Information
Any
General, public
Internet individual Unlimited,
and
with dial-up public; no
advertisement
access or restrictions
Intranet LAN
Authorized Private and Specific,
employees restricted corporate and
ONLY proprietary
Extranet Authorized Private and Shared in
groups from outside authorized
collaborating authorized collaborating
companies partners group
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37
Internet
Computer Organization
Server
Legend
Internet backbone
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Intranet
Firewall
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The Intranets
An intranet is a corporate LAN and/or Wide Area
Network (WAN) that is secured behind company’s
firewalls and it uses Internet technologies.
• Intranets are developed using the same TCP/IP protocol
as the Internet
• They operate as private networks with limited access.
Only employees who are issued passwords and access
codes are able to use them.
• So, intranets are limited to information pertinent to the
company and contain exclusive and often proprietary and
sensitive information.
• Firewalls protect intranets from unauthorized outside
40access.
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Extranet
Firewall
Firewall
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The Extranet
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The Limitations of Electronic Commerce
Non-Technical Limitations of Electronic Commerce
43
Non-Technical Limitations (cont.)
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Non-Technical Limitations (cont.)
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The Limitations of Electronic
Commerce
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Review Questions
1. List the major transactional types of EC?
2. . List the major technical and nontechnical limitations of EC
(three each)?
3. List the major Topologies of EC ?
4. Why is B2B e-commerce so essential?
5. What are the main differences between business-to-business and
business-to-consumer e-commerce?
E-business opportunities
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E-business opportunities
The Internet also provides significant •
opportunities for many businesses to build
closer relationships with their existing
customers and suppliers online to help
achieve customer retention. Encouraging use
of online, e-business services by customers
and suppliers can significantly reduce costs
while providing a new, convenient channel for
purchase and customer service
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Business adoption of digital technologies for e-
commerce and e-business
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Business adoption of digital technologies for e-
commerce and e-business
Potential for increased revenue arising from * •
increased reach to a larger customer base and
encouraging loyalty and repeat purchases
.among existing customers
Cost reduction achieved through delivering * •
services electronically. Reductions include staff
costs, transport costs and costs of materials
.such as paper
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Business adoption of digital technologies
for e-commerce and e-business
Cost/efficiency drivers •
Increasing speed with which supplies can be 1 •
.obtained
Increasing speed with which goods can be 2 •
dispatched
Reduced sales and purchasing costs 3 •
.Reduced operating costs 4 •
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Business adoption of digital technologies
for e-commerce and e-business
Competitiveness drivers •
Customer demand 5 •
Improving the range and quality of services 6 •
offered
Avoiding losing market share to businesses 7 •
already using e-commerce
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Tangible and intangible benefits from e-
commerce and e-business
Tangible benefits •
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E-business risks and barriers to business adoption
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E-business risks and barriers to business
adoption
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E-business risks and barriers to business
adoption
Problems with fulfilment of goods ordered * •
online, meaning customer orders go missing
or are delayed and the customer never
.returns
E-mail customer-service enquiries from the * •
web site don’t reach the right person and are
.ignored
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Evaluating an organization’s e-business
capabilities
nline technologies
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Evaluating an organization’s e-business
capabilities
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Drivers of consumer Internet adoption
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Drivers of consumer Internet
adoption
Choice–The web gives a wider choice of products •
andsuppliersthanviaconventionaldistribution channels. The success of online
intermediaries such as Kelkoo (www.kelkoo.com) and Screentrade
(www.screentrade.com) is evidence of this. Similarly, Tesco.com provides Tesco with a
platform to give consumers a wider choice of products (financial, travel, white goods)
with more detailed information than are physically available in-store. 6 Cost reduction
– The Internet is widely perceived as a relatively low-cost place of purchase. Often
customers expect to get a good deal online as they realize that online traders have a
lower cost-base as they have lower staff and distribution costs than a retailer that runs
a network of high-street stores. A simple price differential is a key approach to
encouraging usage of online services. In the late 1990s, low-cost airline easyJet
encouraged the limited change behaviour required from phone booking to online
booking by offering a £2.50 discount on online flight bookings. Note that the 7 Cs of
Rayport and Jaworski (2003) provide a similar framework of Context,
.Content,Community,Customization,Communication,Connection and Commerce
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Characteristics of E-commerce
Ubiquity 2. Global Reach 3. Universal .1
Standard. 4. Richness 5.Interactivity 6.
Information Density 7.
Personalization/customization 8. Social
Technologies
Web 2.0/3.0 technology .2
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