Chapter 9
Electronic Commerce and
Electronic Business
1
What is Electronic Commerce?
Definition
• Electronic Commerce (e-commerce): Use of
communication networks, including the public
Internet, to conduct commercial transactions
between businesses or with consumers.
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What is Electronic Commerce?
Types of Electronic Commerce
• Business-to-Consumer (B2C) E-Commerce:
Electronic commerce carried out by an
enterprise in order to serve its consumer
customers.
• Business-to-business (B2B) E-Commerce:
Companies doing business electronically with
other businesses.
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What is Electronic Commerce?
Types of Electronic Commerce
(Continued)
4
What is Electronic Commerce?
Types of Electronic Commerce
(Continued)
5
What is Electronic Commerce?
Benefits of E-Commerce
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Geographic Reach
Speed
Productivity
Information Sharing
New Features
Lower Costs
Competitive Advantage
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What is Electronic Commerce?
Growth of E-Commerce
8
What is Electronic Commerce?
Growth of E-Commerce (Continued)
9
Business-to-Consumer ECommerce Applications
Electronic Markets
• Online Retailing: Shoppers visit a store over
the Internet and check out the products.
• Electronic Storefront: Home page of an online
retailing business.
• Brick and Mortar: Any physical store or
building, regardless of how it is constructed or
where it is located.
• Electronic Markets (e-markets): A collection of
individual shops accessible through the World
Wide Web.
• Auctions: Shoppers make bids rather than
relying on predetermined fixed prices.
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Business-to-Consumer ECommerce Applications
Electronic Markets (Continued)
• Forward Auction: Shoppers bid. Highest bid wins
the products
• Reverse Auction: Service providers bid. Lowest
price wins the business
• Dutch Auctions: High opening price for an item
and asks for buyers willing to pay the price. At
specified intervals, the price is lowered until a
bidder is willing to pay the displayed price.
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Business-to-Consumer ECommerce Applications
Portal
• Portal: A gateway or hub site, such as Yahoo!, that provides
chat rooms.
• Content Aggregator: An e-commerce portal that assembles
information (that is, content) from a variety of sources,
organizing the information into a form that is useful to
visitors to the Web site.
• Infomediary: A Web site that locates, retrieves, and
organizes specialized information for potential users. The
term is a composite of information and intermediary.
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Business-to-Consumer ECommerce Applications
Online Services
• Electronic Banking: Customers conduct their banking
activities without going to a physical bank office.
– Virtual Bank: Operates exclusively over the Internet.
• Personal Finance and Bill Payment
– Automatic Transfer of Bank Loan and Mortgage
Payments
– Online Bill Payment
– Electronic Bill Presentment
• Securities and Investments
• Travel Services
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Functions Performed by B2C ECommerce Site
Common Functions of B2C sites
• Catalog and Content Management
– Content: Information distributed over the Internet.
• Shopping and Checkout
• Back Office Processing
– Back Office: Deals with the final steps in the sale.
• Processing Customer Payment
• Updating Inventory Records
• Preparing Item for Distribution
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Functions Performed by B2C ECommerce Site
Common Functions of B2C sites (Continued)
• Advertising
– Search Engines
– Banner Ads
– Interactive Marketing: The use of customer
advertising prepared to fit the profile of a
specific visitor to a site.
• Interactive Coupon: Offered online.
– E-Mail
• Spam: Unsolicited advertising by e-mail.
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Business-to-Business ECommerce Applications
Supply Chain Management
• Supply Chain Characteristics
– Supply Chain: The flow of parts, components,
materials, funds, and information between a
company’s sources and its customers.
– Supply Chain Management: The oversight of
activities interconnecting suppliers and
buyers.
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Business-to-Business ECommerce Applications
Supply Chain Management (Continued)
• Supply Chain Software
– Capacity Requirements Planning
– Demand Planning Module
– Manufacturing Planning Module
– Distribution Planning Module
– Logistics Planning Module
– Transportation Planning Module
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Business-to-Business ECommerce Applications
Supply Chain Management (Continued)
• Supply Chain Integration Strategies
– Supply Chain Integration: The synchronization of all
parties involved in making a product or delivering a
service in order to meet buyer, seller, and customer
needs.
– Efficient Consumer Response/Continuous
Replenishment: Data and information on products are
captured at the point of sale and shared with suppliers
periodically (usually daily) so that both can work
together to jointly forecast future demand for
replenishable items, monitor trends, and detect
opportunities for new items.
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Business-to-Business ECommerce Applications
Supply Chain Management (Continued)
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Business-to-Business ECommerce Applications
Supply Chain Management (Continued)
• Supply Chain Integration Strategies
– Efficient Consumer Response/Continuous
Replenishment
• Disintermediation: Name given to removing
intermediaries (like brokers and
distributors) from the supply chain.
– Vendor-Managed Inventory: Companies deal
directly with vendor, that is, manufacturers or
suppliers.
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Business-to-Business ECommerce Applications
Supply Chain Management (Continued)
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Business-to-Business ECommerce Applications
E-Procurement
• E-Procurement Objectives
– Reducing Purchasing Costs
– Providing Employee Self-Service
– Increasing Leverage with Suppliers
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