Chapter One Understanding e-commerce 1-1

Chapter One
Understanding e-commerce
1-1
Learning objectives
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Evolution of e-commerce
Role of technology in e-commerce
Internet and e-commerce
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History of e-commerce
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History of ecommerce dates back to the year (1991) when the
internet was made available for commercial purposes
web sites were allowed to use internet for business
transactions
Do business electronically from virtually anywhere in the world
that has a computer.
In 2004 alone, e-commerce generated well over $100 billion in
retail business and over $1.5 trillion business-to-business
traffic.
At first, the term ecommerce meant the process of execution
of commercial transactions electronically
leading technologies such as Electronic Data Interchange (EDI)
and Electronic Funds Transfer (EFT) were used
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Factors that impacted e-commerce
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Security
wrong usage of credit information
Privacy
security protocol such as HTTP
The Dot Com era
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"brick and mortar" retailers recognized the advantages of electronic
commerce
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first generation e-commerce portal
In spite of ‘dotcom’ burst, the ecommerce sales continued to grow in the next few
years
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customers prefer e-commerce over tele orders
Today’s Internet promotes individualism.
Case: Amazon.com: synonymous with e-commerce
Case: Dell: An evolutionary e-commerce
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What is e-commerce
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E-commerce is a short version of the term Electronic Commerce
transactions related to online buying and selling of products or services
done using electronic systems such as the Internet and other computer
networks
penetration and spread of the internet has fuelled e-commerce
Examples os e-commerce are electronic funds transfer, supply chain
management, Internet marketing, online transaction processing, electronic
data interchange (EDI), inventory management systems, and automated data
collection systems
definition of e-commerce in modern the modern times implies that it
typically uses the World Wide Web at least at any point in the transaction's
lifecycle
Online retailers are sometimes known as e-tailers
online retail is sometimes known as e-tail
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Types of e-commerce
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B2B: E-commerce that is conducted between businesses
is referred to as Business-to-business
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(1) open to the entire public or (2) limited to a group of
businesses who have been part of the specific group
business-to-consumer (B2C),
business-to-government (B2G)
All the forms of e-commerce include following steps. i) account
acquisition, ii) product discovery through search and browse,
iii) price negotiation, iv) payment, and v) product delivery.
In some cases, dispute resolution and customer services may also
exist
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Changing times in e-commerce
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Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT).
Automated Teller Machines (ATMs)
growth and acceptance of credit cards, and telephone banking became
part of e-commerce
Broadband connections to homes is fulfilling the ultimate mission of ecommerce.
E-mail is now the very connectivity of e-commerce.
Bar code scanning is on the way out, replaced by sophisticated biometric
technology.
Legal downloading of music, video, and other digital products via the
Web is increasing.
Big businesses, as well as small- and medium-sized firms, can afford to
develop a Web presence quickly, reliably, and at an affordable cost.
E-commerce has gone international.
E-commerce components
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Important component of e-commerce based firm is the
website
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website should have technology that will make it easier for its
customers to navigate
site should offer every single feature necessary
fully-functional and sustainable ecommerce web site
stable server for hosting
provide customer specific services
technology partners who constantly upgrade the features as
well as technology
help business partners such as logistics partners and suppliers
to share and exchange business data
Alternatively SaaS can be used for running these services
(reduce cost)
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E-commerce Versus E-business
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E-commerce
 Selling goods and services on the retail level with anyone, anywhere, via
the Internet
 Greater efficiency and effective exchange of goods and services
 Exchange based upon transaction
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A block of information exchange between the merchant and its
customers via the corporate Web site
www.amazon.com
E-business
 Connecting critical business systems and constituencies directly via the
Internet
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E-commerce and Web 2.0
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web 2.0 and collaborate
collaboration becomes a mutual touch point for all the
stakeholders
aggregating information about people, products and services
reduces time spent searching resources for information, eliminates
redundant data
increased relevance, delivering key information to places where it
can be used effectively
Digital Convergence - digital devices communicating with one
another
Anytime, anywhere, anyone - e-commerce is available to anyone
(24/7)
Demand for customized products and services - mass
customization puts pressure on firms to handle customized
requests on a mass-market scale
Business-to-Government (B2G)
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The government market is strikingly similar to B2B.
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Huge potential for savings in $1.8 trillion federal and $1 trillion state and
local expenditures
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Changing the status quo in government is not so easy
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Changes to employee tasks and job restructuring often create resistance
Tax savings potential is not easily recognized
Committing to technology means constant need for upgrades and
additional costs
E-commerce Business Models
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Storefront Model
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Broker Model
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Click-and-Mortar Model
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Advertiser Model
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Built to Order Merchant Model
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Portal Site Model
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Service Provider Model
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Free Access Model
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Subscription-based Access Model
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Virtual Mall Model
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Prepaid Access Model
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Virtual Community Model
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Infomediary Model
Summary
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Electronic commerce (EC) is the ability to deliver
products, services, information, or payments via networks
such as the Internet and the World Wide Web.
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Electronic business connects critical business systems
directly to key constituents
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The rise of specialized Web sites and Web logs (blogs)
generated opportunities to read and write on a vast array
of topics
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Several drivers promote EC: digital convergence
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Advantages of EC
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