BIT 541 Electronic Commerce Week 1

Walsh College
Barbara L.Ciaramitaro, Ph.D.

Definition of E-Commerce

E-Commerce is defined as those transactions of business activities that occur through networks, most prominently, the Internet, utilizing electronic data transmission technologies. – Transactions are defined as an exchange of value such as a purchase or sale. The E-Commerce transactions can occur between businesses, between businesses and consumers, and between consumers. The term business includes governmental agencies as well as individual entrepreneurs. E-Business is defined as those set of activities, processes and underlying technology that provides support for internal activities such as inventory management, recruitment and hiring.

Additionally during the early 90’s the telecommunications companies invested in installing a backbone infrastructure that could support high speed. high volume interactions through the Internet. In the early 90’s. we saw the emergence of the use of HTML and the graphical user interface which combined to initiate the emergence of the World Wide Web.    . and bills of lading. World Wide Web and the backbone infrastructure allowed electronic commerce initiatives to grow dramatically. The combined effect of the Internet.Introduction To E-Commerce  Prior to the 1990’s electronic commerce primarily focused on electronic data interchange (EDI) of transactional documents including invoices. purchase orders.

   . than traditional commerce. if not more so. there was an explosion of electronic business initiatives known as the dot-com boom. This time period is referred to as the dot-com bust. Over the last few years.Introduction To E-Commerce  During the late 90’s through 2000. In 2000. the electronic commerce environment has regained market strength and this re-emergence is sometimes referred to as the second wave of electronic commerce. During this time a wide variety of initiatives emerged with investors willing to make large investments in electronic commerce initiatives on the belief that if you built a web site – customers would come. the electronic commerce environment imploded resulting in a dramatic number of electronic business failures. Many investors and entrepreneurs lost their investments in these initiatives as they learned that electronic commerce is just as challenging.

E-Commerce involves three interrelated themes. The evolution of business practices resulting in new ways to interact with customers and conduct transactions through the Internet. The societal impact and resulting issues resulting from the ability to more easily share and access information through the Internet.Introduction To E-Commerce  According to Laudon et al (2006). – The underlying technology on which it is built. – – . including the Internet and the World Wide Web.

dense in content and also allows for a high level of interactivity between participants in the transaction. The underlying E-commerce technologies are guided primarily by a set of universally adopted standards. The current available technology allows E-Commerce communications and interactions to be rich in complexity. E-Commerce technology allows E-Commerce vendors to target their efforts toward specific markets through the use of personalization and customization technology and processes. E-Commerce has global reach and impact as there are no geographical boundaries to the Internet.Introduction To E-Commerce  Laudon et al identifies seven (7) unique features of E-Commerce – It is ubiquitous in that it is available anywhere and at all times as long as there is access to the Internet. – – – – .

Improve the efficiencies of procurement activities. 2002) – – Expand the marketplace to national and international markets. and storing information. distributing. Lower telecommunication costs as much of the business in transacted over the public Internet. Minimize supply chain inefficiencies such as excessive inventories and delivery delays.Benefits of E-Commerce  The potential benefits to organizations who are able to successfully capitalize on ECommerce initiatives are many. (Turban. Decrease the cost of creating. Encourage innovative business models. processing. – – – – – . Allow companies to interact more closely with their customers.

(Turban. E-Business reduces face-to-face social interactions which could result in a breakdown in the traditional human relationships. It can be difficult to integrate systems and software between businesses. reliability. Special hardware and software along with specialized skills are required.Limitations of E-Commerce  The major limitations of E-Business include the following. In many global areas. the underlying telecommunication backbone is insufficient. – – – – – . It can be difficult to integrate the Internet and other software utilized in E-Business. and communication protocols are still evolving. 2002) – System security.

– – – – – . C2C – Consumer to Consumer in which individual participants in an online marketplace buy and sell goods directly to each other. B2G – Business to Government in which businesses sell goods or services to governmental agencies. M-Commerce – Involves the use of wireless devices to enable transactions on the Web. (2006). et al. there are generally considered to be six categories of E-Commerce activities: – B2C – Business to Consumer in which business sell product and/or services directly to individual consumers. P2P – Person to Person in which Internet users are able to share files and computer resources directly without having to go through a central Web server. B2B – Business to Business in which businesses sell products or servers directly to other businesses.Categories of E-Commerce  According to Schneider (2004) and Laudon.

(We will include B2G in this category). B2B in which businesses sell products or servers directly to other businesses. we will focus much of our discussion on two categories of ECommerce: – B2C in which business sell product and/or services directly to individual consumers. – .Categories of E-Commerce  In this course.

real estate. health information. One lesson learned from the dot-com bust is that web site traffic alone does not denote success. – – – . B2C includes services such as online banking. Although some pure Internet based companies have survived the dot-com bust (e. The major challenge of B2C is to get online browsing customers to purchase products or services. Amazon). (Patton.B2C – Business to Consumer  B2C refers to any business or organization that sells products or services to consumer over the Internet for the consumer’s own use. online auctions. 2005) – In addition to online retailers. over the last several years traditional brick and mortar retailers are investing more in online transactions.g. travel services. and many others. Historically B2C was viewed a a threat to traditional “brick and mortar” businesses.

2005).  B2B interactions often include exchanges where products are bought and sold using a common platform. Private B2B exchanges are run by a single company for doing business with its suppliers and customers. There are two significant differences between B2B and B2C efforts (Varon. – Public B2B exchange are operated by industry consortia who establish their rules and management structure. delivery and specifications. B2B requires integration of technology and processes between businesses. – –  B2B involves negotiation between businesses over prices.B2B – Business to Business  B2B refers to any business or organization that sells products or services to other businesses over the Internet. – .

Value chain. CEO. marketing. Structure that includes a number of levels with different levels of responsibility. Hierarchical business organization. Network effect. President. VP’s. and delivery of the products or services it sells. These were discussed and defined by Schneider (2004) and include: – Market. Middle Managers). A way of organizing business activities so that each strategic business unit focuses on the design.g. A real or virtual space in which potential buyers and sellers interact and agree on a medium of exchange. manufacture. – – – .E-Commerce Concepts  E-Commerce utilizes several structures and concepts. (e. An increase in the value of a network to its participants as the number of participants increase.

– Research has also found that a range of human and organizational issues and potential changes in organizational structure and working practices lie at the center of the ability of E-Commerce to succeed.Variables that Impact E-Commerce Success or Failure  Organizational Structure – Research has found that a significant element of E-Commerce success is the role of senior management (BCS Socio Technical Group.  Senior managers need to provide understand. vision and leadership concerning the EBusiness initiative. 2005) (Discuss findings)       Simplify business processes Empower employees Develop and implement new business models Focus on customers Develop appropriate skills and training Implement effective change strategies . (Clegg.. et al. 2003).

organizations must build and maintain organizations structures to perform a combination of primary and supporting business activities. 2004). supplies and personnel  Manufacture of product or creation of service  Market and selling of product or service  Distribution of product or service  After-sales support Supporting Activities (E-Business):  Finance and administration  Human resources  Technology support .In order to implement successful EBusiness strategies. – – Primary activities (E-Commerce) include:  Identification of customers  Design of product or service  Procurement of materials. (Schneider.Variables that Impact E-Commerce Success or Failure  Strategic Business Unit Value Chains .

E-Commerce looks as if it is almost completely automated but the degree of automation is an “illusion”.   . E-Commerce is very open to observation and analysis by competitors who can not only duplicate your successful processes but identify your unsuccessful processes into to compete effectively against them.Variables that Impact E-Commerce Success or Failure  Technology and Process Infrastructure – Researchers have identified several E-Business “Myths” (Janenko. There are still a considerable amount of manual processes involved in E-Commerce. (Discuss findings)  Many E-Businesses learned that a quality Web site does not translate to a quality customer experience. 2003).

2003)  Design and document a companies internal process Identify what steps can be automated and which steps must be performed manually. (Janenko. E-Commerce critical operational processes needs to be designed so that any site visitor is able to quickly and successfully navigate the site. Design the functionality of the E-Business efforts to support internal operational processes.    .Variables that Impact E-Commerce Success or Failure Technology and Process Infrastructure –  Researchers have identified a series of steps to build effective ECommerce environments.

Variables that Impact E-Business Success or Failure  Other Technology Variables Infrastructure – There are several technological pressure that impact E-Commerce initiatives. These include:  Rapid technological change and obsolescence Increasing technological innovations Information overload Rapid decline in technology cost versus performance ratio Competition for skilled technology resources     .

privacy) – . There are several market pressures which can impact the success of an Commerce  Strong competition  Changes in the global economy environment  Regional trade agreements  Government deregulation  Unstable local government and/or rapid political changes  Increased importance of ethical and legal issues (e. A real or virtual space in which potential buyers and sellers interact and agree on a medium of exchange.g.Variables that Impact E-Commerce Success or Failure  Market Environment – Market.

g. etc) – Schneider (p.  Traditional brick and mortar companies are often able to leverage their trust relationship with customers as they move to offer more online services (e. As more companies are conducting business on a global basis. bank. Language and Culture Issues – Successful E-Commerce ventures have to learn how to establish trusting relationships with their customers.Variables that Impact E-Commerce Success or Failure  Trust. it is important for E-Commerce efforts to understand and respect local cultures. stock transactions. but more than 50% of the current Internet users do not read English. 2004) reports that researches estimate that about 60% of the content available on the Internet today is in English. – . 31.

Using SWOT Analysis in E-Commerce  In SWOT analysis. This approach can be effective in examining E-Business plans. 27). and leadership and culture supporting that vision. – . p. an organization examines and evaluates potential business ventures (Schneiderman. 2004. Weaknesses  What does the company do poorly?  What problems could be avoided?  Does the company have serious financial liabilities. – Strengths  What does the company do well?  Is the company currently strong competitively in its market?  Does the company have a strong vision.

Using SWOT Analysis in E-Business  SWOT Analysis (continued) – Opportunities  Are industry trends moving upward?  Do new markets exist for the company’s products and/or services?  Are there new technologies that the company can utilize? Threats  What are the competitors doing well?  What obstacles does the company face?  Are there troubling changes in the company’s business environment? – .

E-Commerce prices will rise to cover the real costs of doing business in the Internet environment. This will put regulatory constraints on the ability to share and access information through the Internet.What Can We Expect for the Future of ECommerce – E-Commerce activities will continue to grow and expand through all commercial activity and markets. As a result. E-Commerce margins and profits will come in line consistent with more traditional commercial ventures. Traditional “brick and mortar” companies will play an increasing role in ECommerce. the number of “pure” online companies will decrease as most successful E-Commerce companies will offer a combination of “brick and mortar” and online services. – – – . Regulation of E-Commerce will continue to grow in the United States and globally. As a result.

2005 from http://www. Patton. 2005 from http://www. New Jersey. Patricia. pp. Addison-Wesley. pp. et al. 26. Kenneth & Traver. Number 1. The ABCs of B2B. Efraim. The ABCs of B2C. 2002 Edition. Electronic Commerce: The Second Wave. (2002). p. 180-186 Laudon. The Computer Bulletin. Elana. E-Business: The Illusion of Automated Success. Varon. Turban. 5th Edition. (2006).html. Technology. CIO E-Business Research Center. (2005). Ebusiness examined. CIO E-Business Research Center. . Prentice Hall. (2005). Clegg. Thomson Course Retrieved on December 2. (2004). Number 15. Susannah. 15. 53-71.cio.cio. Electronic Commerce: A Managerial Perspective. Vol. Sociotechnical Study of e-Business: Grappling with an Octopus. (2005). Schneider. Gary. Society (Third Edition). 3.References         BCS SocioTechnical Group. (2003). March 2003. (2003). Journal of Electronic Commerce in Organizations. Vol. Carol. The TQM Magazine. Janenko. E-Commerce: Business. Retrieved on December 2.

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