IT in Business

Electronic
Commerce and
Electronic Business
Lecture – 12
 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)

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 What is Electronic Commerce?
Types of Electronic Commerce (Continued)

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 What is Electronic Commerce?
Benefits of E-Commerce

 Geographic Reach
 Speed
 Productivity
 Information Sharing
 New Features
 Lower Costs
 Competitive Advantage

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 What is Electronic Commerce?
Benefits of E-Commerce (Continued)

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 What is Electronic Commerce?
Growth of E-Commerce

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 What is Electronic Commerce?
Growth of E-Commerce (Continued)

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 Business-to-Consumer E-Commerce Applications
Online Retailing and Electronic Storefronts

 Online Retailing: Shoppers visit a store over

the Internet and check out the products.

 Electronic Storefront: Home page of an

online retailing business.

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 Business-to-Consumer E-Commerce Applications
Electronic Markets

 Electronic Markets (e-markets): A collection of

individual shops accessible through a single location
on the World Wide Web.

 Auctions: Shoppers make bids to determine the sale

price of an item rather than relying on predetermined
fixed prices.

 Brick and Mortar: Any physical store or building,

regardless of how it is constructed or where it is
located.

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 Business-to-Consumer E-Commerce Applications
Electronic Markets (Continued)

 Forward Auction: Shoppers bid on a desired item with

the knowledge that the seller will take the highest offer.

 Reverse Auction: The direct opposite of a traditional

auction. The bidders list their product or service
requirements and the maximum price they are willing to
pay for it. Potential sellers who can provide the good or
service reverse bid against each other by posting their
bids for buyers. The bidder offering the requested
products or services at the best price wins the bid.

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 Business-to-Consumer E-Commerce Applications
Electronic Markets (Continued)

 Dutch Auctions: On electronic markets, the

market operator displays a high opening
price for an item and asks for buyers willing
to pay the price. At pre-specified intervals,
the price is lowered until a bidder is willing to
pay the displayed price.

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 Business-to-Consumer E-Commerce 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 E-Commerce Applications
Online Services

 Electronic Banking/Cyber-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
– Automatic Payment of Utility Bills
– Online Bill Payment
– Electronic Bill Presentment
– Combined Electronic Bill Presentment and Payment

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 Business-to-Consumer E-Commerce Applications
Online Services (Continued)

 Securities and Investments

 Travel Services

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 Functions Performed by B2C E-Commerce 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 E-Commerce 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 E-Commerce 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 E-Commerce Applications
Supply Chain Management (Continued)

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 Business-to-Business E-Commerce 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 E-Commerce 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 replenish able items, monitor trends, and detect
opportunities for new items.

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 Business-to-Business E-Commerce Applications
Supply Chain Management (Continued)

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 Business-to-Business E-Commerce 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 E-Commerce Applications
Supply Chain Management (Continued)

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 Business-to-Business E-Commerce Applications
E-Procurement

 Electronic Procurement (e-procurement): Give

employee access to catalogs of products and
services from multiple suppliers.

 Direct Spending: To obtain materials or components

from suppliers for use in the manufacture of a
product or delivery of a service.

 Indirect Spending/Maintenance, Repair, and

Operations (MRO): Buys goods and services that
support operation of the company as a whole.

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 Business-to-Business E-Commerce Applications
E-Procurement

 E-Procurement Objectives
– Reducing Purchasing Costs
– Providing Employee Self-Service
– Increasing Leverage with Suppliers

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 Business-to-Business E-Commerce Applications
Electronic Exchange

 Electronic Exchange/B2B hub: Commerce sites on

the Internet where buyers and sellers can come
together to shop, exchange information, or carry out
transactions to buy or sell products and services.

 Public Exchange/Independent Exchange: A third

party – the market maker – operates the electronic
market, displays the market’s information content,
and provides electronic tools for conducting trade.
– Vertical Exchange: Structured to serve members of a
specific industry.

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 Business-to-Business E-Commerce Applications
Electronic Exchange (Continued)

 Public Exchange/Independent Exchange

– Horizontal Exchange: Seeks to simultaneously serve the
interests of companies across different industries.
Customers seek their services because of functional
expertise rather than industry expertise.

 Consortia-led Exchange: Industry players combine

forces to create a common forum for the exchange
of goods and services.

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 Business-to-Business E-Commerce Applications
Electronic Exchange (Continued)

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 Business-to-Business E-Commerce Applications
Electronic Exchange (Continued)

 Private Exchange: An Internet-base trading

forum (I.e., an electronic market)
implemented by a single company with a
select group of suppliers and customers.

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 Business-to-Business E-Commerce Applications
Electronic Exchange (Continued)

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The End

Thank You 