fd1d64ad-9894-4025-96ce-eba773e51571 , eb unit-1 part-1
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Introduction to Electronic
Business and Electronic
Commerce
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History of E-Commerce
In 1990s electronic messaging
technologies became an integral part of
workflow or collaborative computing
systems( also called groupware)
Lotus notes is a prominent example of
such systems
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History of E-Commerce
In 1990s, the advent of the world wide web
on the internet represents a turning point
in electronic commerce by providing a
technology solution to the problem of
publishing.
the web made electronic commerce a
cheaper way of doing business andenabled more diverse business activities.
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Technology and commerce
In order to understand how technology can aid
commerce we need to understand traditional
commerce.
Once we have identified what activities areinvolved in traditional commerce, we can
consider how technology can improve them.
Note that technology does not always improve
commerce. Knowing when technology will NOT
help is also useful.
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Origins of commerce
The origins of traditional commerce predaterecorded history.
Commerce is based on the specialization of
skills. Instead of performing all services andproducing all goods independently, people relyon each other for the goods and services theyneed.
Example: My friend trades eggs to one of herneighbors in exchange for repairs to the fenceson her ranch.
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Traditional commerce
Although money has replaced bartering,the basic mechanics of commerce remainthe same: one member of society createssomething of value that another member
of society desires. Commerceis a negotiated exchange of
valuable objects or services between at
least two parties and includes all activitiesthat each of the parties undertakes tocomplete the transaction.
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Views of commerce
Commerce can be viewed from at least
two different perspectives:
The buyers viewpoint
The sellers viewpoint
Both perspectives will illustrate that
commerce involves a number of distinct
activities, called business processes.
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The buyers perspective
From the buyers perspective, commerceinvolves the following activities:
Identify a specific need
Search for products or services that will satisfy
the specific need Select a vendor
Negotiate a purchase transaction includingdelivery logistics, inspection, testing, andacceptance
Make payment
Perform/obtain maintenance if necessary
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The sellers perspective
From the sellers perspective, commerceinvolves the following activities:
Conduct market research to identify customerneeds
Create a product or service to meet thoseneeds
Advertise and promote the product or service
Negotiate a sales transaction including deliverylogistics, inspection, testing, and acceptance
Ship goods and invoice the customer
Receive and process customer payments
Provide after sales support and maintenance
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Business processes
Business processes are the activitiesinvolved in conducting commerce.
Examples include: Transferring funds
Placing orders
Sending invoices Shipping goods to customers
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E-Commerce
We will define e-commerceas the use ofelectronic data transmission to implement or
enhance any business activity.
Example: A buyer sends an electronic purchase
order to a seller. The seller then sends an
electronic invoice back to the buyer.
When used appropriately, electronic
transmission can save both time and money.
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E-Commerce Definition
The transformation of key business processes
through the use of internet technologies- IBM
E-commerce is buying and selling activities overdigital mediaR Kalakota (1999)
E-commerce is about doing businesselectronically- European commission (1997)
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Myths you should know
There is still a confusion on what e-commerce can or cannot do. Following arethe myths to be addressed:
Sett ing up a websi te is easy:True, except it
is not easy to ensure performance. There aretechnology, networking infrastructure, anddesign criteria to be considered.
E-Commerce means no more massmarket ing: The web is first commercialchannel that enables cost effective one-to-onemarketing on a large scale, but a businessmust still market its web presence.
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Myths you should know
E-Commerce means a new economy: Thereis no new economy but there is something
new in the real economy.
E-Commerce is revo lut ionary: Internet
technology has created a new way to shop,most rules of retailing still apply. Unfortunately
many Internet retailers (i-tailers) spend
disproportionate amount on the revolutionary
tasks of Web site construction and marketing
and to little on customer support and
fulfilment.
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Myths you should know
Al l products can be so ld on l ine us ing
ident ical business model : Different products
require different selling techniques and
customer support. Therefore differentbusiness models depending on product.
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Myths you should know
Bu i ld i t and they wi l l come: websites have
to be promoted just like any other business.
The midd leman is out : Intermediaries of the
traditional organization delivers product to theretailer from the manufacturer or the
wholesaler.
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Impact of e-commerce
E-commerce is changing the way
traditional commerce is conducted:
Technology can help throughout the
process including promotion, searching,
selecting, negotiating, delivery, and
support.
The value chain is being reconfigured.
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Appropriateness
It is important to identify which businessprocesses can be streamlined using e-commercetechnologies.
It is equally important to realize that someprocesses make effective use of traditionalcommerce and cant be improved upon using
technology.
Technology is not a panacea. Using it when it isnot necessary or helpful can be a costly mistake.
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Well-suited for e-commerce
Business processes that are well-suited forelectronic commerce: Sale/purchase of new books and CDs
Online delivery of software
Advertising and promotion of travel services
Online tracking of shipments
The business processes that are especially well-
suited to e-commerce include commodity items,that is, a product or service that has becomestandardized.
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Best for traditional commerce
Business processes that are well-suited to
traditional commerce:
Sale/purchase of high fashion clothing
Sale/purchase of perishable food products Sale of expensive jewelry and antiques
In general, products that buyers prefer to touch,
smell, or otherwise closely examine are difficult
to sell using e-commerce.
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Questionable cases
Would e-commerce or traditional commerce
work best for the following activities?
Sale/purchase of rare books Browsing through new books
Sale/purchase of shoes
Sale/purchase of collectibles (trading cards, plates,
etc.)
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Combinations of both
Some business processes can be handled wellusing a combination of electronic and traditionalmethods:
Sale/purchase of automobiles
Online banking Sale/purchase of investment/insurance products