Unit i

Goa University Bachelor of Computer Applications

INTRODUCTION TO E-COMMERCE

UNIT-I

BCA61 : e-Commerce Applications


Unit I : Introduction to e-Commerce

Definitione- Commerce is defined by – “ any form of business transaction in which the

parties interact electronically rather than physical exchanges of documents or direct meetings amongst officials”

– “ doing business online”– “business conducted exclusively thru’ electronic

format”

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Various Definition1. Doing business online2. Buying Products and Services through web store fronts

2.a. Products – physical products 2.b. Services – distant education, online medical consultation – abroad

3.Buying & selling, marketing & servicing, delivery & payment of products, service & info. over Internet, Intranet, extranet etc.

4. Technology, Strategy, System, Mystery etc.5. e-business –use Net as medium of exchange, B2B, B2C6. Doing business to cut costs – improving quality, increasing

speed of services3



Meaning of e-Commerce

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Meaning e-Commerce• It covers : Online point-of-sale & Transaction

processing• Electronic Data Interchange (EDI)• Electronic Funds Transfer• Electronic Banking• Interactive Marketing• Supply Chain Management• Enterprise Collaboration includes :

e-mail, voice mail, forums, Data conferencing, video conferencing, electronic meeting systems

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Scope of e - Commerce

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Supply Chain Management• E-Commerce is directly or indirectly applicable in all areas of our

life from banking, entertainment, on line order processing cycle or Supply Chain Management

• Supply Chain – network of facilities & distribution options that performs the functions of procurement of materials (from Supplier), transformation of materials into intermediate & finished products (manufacturing), and distribution of finished products to Customers

• A supply chain, logistics network, or supply network is a coordinated system of entities, activities, information and resources involved in moving a product or service from supplier to customer

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Example

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Supply Chain

• Entities – of supply chain consists of manufacturers, service providers, distributors & retail outlets

• Objective of Supply Chain – to fulfill customer demands thru’ efficient use of resources

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Supply Chain …• Ever-greater demands are being placed on business

which are – to provide products & services quicker with greater added value to the current location with no relevant inventory position

Supply Chain Management – transforming company’s “supply chain” into optimally efficient, customer-satisfying process

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Business Applications

• e-Commerce applications in Manufacturing• e-Commerce applications in Wholesale• e-Commerce applications in Retail• e-Commerce applications in Service Sector

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e-commerce in Manufacturing• Transformation of raw materials into finished goods

for sale is Manufacturing• Production of goods or services in a complex web of

contracts & co-operation is supply chain or value system

• Manufacturing requires various components, Sub-assemblies including transportation, storage, paper work (Fig.1.3)

• Supply chain transaction adds cost without intrinsic value

• E-commerce applied to Supply Chain reduce cost or improve service

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Fig.1.3.(Manufacturing)

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E-Commerce in Wholesale• Sale of goods & services in large quantities at lower

prices to someone other than consumers – Wholesale

• Sale of goods to retailers, to industrial, commercial, other business users – middle person or distributors – WHOLE SALE

• Physical assemble, sort & grade goods in large lots, breaking bulk, repacking & redistributing in smaller lots is all Wholesale

• E.g. Pharmaceuticals – store, refrigerate, deliver & install goods, engage in sales promotion

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E-Commerce in Wholesale …Problems of Traditional wholesale system :- 1. Wholesale markets can’t compete with foreign wholesale

enterprises with advanced management & operation methods

2. Wholesale Operating Costs including staffing, setting up local warehouses, establishing distribution centers are High

3. Staff quality and large land supply & other resources affect wholesale market

4. Wholesale sector is characterized by its high input & low output

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e-Commerce in Wholesale …

• Role of e-Commerce in Wholesale :- 1. Lower Operating costs, access to information & quick response2. Global marketing in less time & low cost3. Gaining the competitive edge by wholesalers as like MNC’s4. Intermediaries are affected5. It offers wide range of information, intermediary and business services

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e-Commerce in Retail• Selling Products or Services to consumers for personal use is

Retailing• E.g., Department stores, Discount stores – Services providers like

dentist, hotels, on-line stores like Amazon.com• Retailers provides link between consumers & manufacturers –

adding value to products by making sales easy• Services by retailers make it less risky & more fun to buy products• Retailers answers questions, display products for consumers to

see before buying• Retailers provides extra services from personal shopping to gift

wrapping & delivery

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E-Commerce in Retail…

• Role of E-Commerce in Retailing :-1. Internet made retailing an exciting & challenging

field recently2. Nature of business due to this reason is undergoing

fundamental changes3. On-line retailers like Amazon.com bring

assortments of products for sale as like mortal retailers do

4. Traditional retailers are needed for those who need personal check of products, and for personal services which need face-to-face interaction with the consumer

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e-Commerce for Service Sector

• Service Sector one of 3 main industrial categories of developed economy

• Tertiary sector of industry involves provision of services like transportation, distribution & sale of goods to other businesses & for consumers e.g.-Pest Control, entertainment

• Focus of service on people to people• It includes “soft” parts of economy like Insurance, tourism,

banking, education etc.• Public utilities are part of tertiary sector

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e-Commerce for Service Sector…

Issues for service providers 1. Services are intangible, hence difficult to

make consumers understand about the benefits

2. No special technology as like in manufacturing to attract people

3. Quality of service depends on quality of individual providing services

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e-Commerce for Service Sector…

Role of e-Commerce in Service Sector 1. Gaining competitive advantage by providing strategies

for differentiation and cost leadership and customer satisfaction

2. e-Commerce will improve speed of transactions, reduce mgmt. expenditure, increase competitiveness

3. Helps banking, insurance & financial sectors, real estate, construction, telecom, tourism, postal & logistics services

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Global Trading Environment & Adoption of e-Commerce

e-Commerce provides global platform for business –

Seller treat world as global market & buyers have wide choice to buy

World is like single market in e-Commerce

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Global Trading Environment…• Some factors to make e-commerce successful are :-• Providing value to customers • Providing service & performance• Providing an attractive website• Providing incentive for customers by providing

special offers, discounts• Providing personal attention thru’ personalized

websites, etc. like face-to-face human interaction• Providing sense of community thru’ Chat rooms,

discussion boards etc.

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Global Trading Environment…• Providing reliability & security thru’ firewalls, parallel

servers, information encryption etc.• Providing 360 degree view of customer relationship• Owning customer’s total experience• Streamlining business processes, thru’ re-engineering

& I.T.’s• Self –serving sites help assists customers• Constructing commercially sound business model

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Global Trading Environment…• Operating on or near the cutting edge of technology &

staying there as technology changes• Setting up an organization of sufficient alertness –

respond quickly to any changes economically, socially & physically

• On-line product/service suitability – digital products – e.g., Google, eBay, Schwab etc.

• Virtual marketers sell non-digital product/services to consumers in remote locations

• For spare parts, e-comm. provides exact & reliable info. about part number for the relevant model or version of a product – e.g., parts lists keyed by serial number

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Education

Unit i