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8/4/2019 01_Introduction to E-Commerce
http://slidepdf.com/reader/full/01introduction-to-e-commerce 1/19
Introduction to E-Commerce
8/4/2019 01_Introduction to E-Commerce
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• Electronic commerce (e-commerce) – E-commerce refers to the use of electronic means and technologies to
conduct commerce (sale, purchase, transfer, or exchange of products,
services, and/or information), including within business, business-to-
business, and business-to-consumer interactions. Delivery of product or service may occur over or outside of the Internet.
• Electronic business (e-business)
– Term used interchangeably with e-commerce
– E-business is defined as the transformation of key business
processes (internal processes that companies use to
support their buying, selling, hiring, planning, and other
activities) through the use of Internet technologies
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• E-commerce and E-business share some common
characteristics. Both E-commerce and E-business: – provides s higher payoff in the form of more efficient processes
– lowers costs and provide potentially greater profits
– utilize a technology infrastructure of databases, application servers, security
tools, systems management and legacy systems
– involve the creation of new value chains between a company and its
customers and suppliers, as well as within the company itself
– involve major and potentially disruptive organizational change
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Categories of Electronic Commerce
• E-commerce can be categorized by the typesof entities participating in the transaction.
• Some general e-commerce categories: – Business-to-consumer (B2C)
– Business-to-business (B2B)
– Consumer-to-consumer (C2C)
– Business-to-government (B2G)
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The Development and Growth of
Electronic Commerce
• Electronic funds transfers (EFTs)
– Also called wire transfers
– Electronic transmissions of account exchangeinformation over private communications networks
• Electronic data interchange (EDI)
– Transmitting computer-readable data in a standardformat to another business (e.g. purchase order,
invoices, etc.)
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The Development and Growth of
Electronic Commerce (continued)
• Trading partners
– Businesses that engage in EDI with each other
• Value-added network (VAN)
– Independent firm that offers connection andtransaction-forwarding services to buyers andsellers engaged in EDI
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The Second Wave of Electronic
Commerce (continued)• Second wave:
– Global enterprises in many countries are
participating in electronic commerce – Established companies fund electronic commerce
initiatives with their own capital
– Customized e-mail strategies are now integral to
customer contact
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Comparison of E-commerce Waves
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Product/Process Suitability to
Electronic Commerce• Commodity item
– Hard to distinguish from the same products or
services provided by other sellers
– Features have become standardized and well
known
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Product/Process Suitability to
Electronic Commerce (continued)
• Shipping profile
– Collection of attributes that affect how easily aproduct can be packaged and delivered
• High value-to-weight ratio
– Can make overall shipping cost a small fraction of the selling price
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Advantages of Electronic
Commerce• Electronic commerce can increase sales anddecrease costs
• If advertising is done well on the Web, it canget a firm’s promotional message out topotential customers in every country
• Using e-commerce sales support and order-
taking processes, a business can: – Reduce costs of handling sales inquiries
– Provide price quotes
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Advantages of Electronic
Commerce (continued)• It increases purchasing opportunities for
buyers
• Negotiating price and delivery terms is easier
• The following cost less to issue and arrivesecurely and quickly:
– Electronic payments of tax refunds
– Public retirement
– Welfare support
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Disadvantages of Electronic
Commerce• Perishable grocery products are much harder
to sell online
• It is difficult to: – Calculate return on investment
– Integrate existing databases and transaction-
processing software into software that enables e-commerce
• Cultural and legal obstacles also exist
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Strategic Business Unit Value
Chains• Value chain
– A way of organizing the activities that eachstrategic business unit undertakes
• Primary activities include:
– Designing, producing, promoting, marketing,delivering, and supporting the products or services
it sells• Supporting activities include:
– Human resource management and purchasing
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Industry Value Chains
• Value system
– Larger stream of activities into which a particular business unit’s value chain is embedded
– Also referred to as industry value chain
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