introduction to electronic commerces

48
1 Chapter 3 Introduction to Electronic Commerce

Upload: nirmala-last

Post on 23-Jan-2015

1.458 views

Category:

Business


0 download

DESCRIPTION

 

TRANSCRIPT

Page 1: Introduction To Electronic Commerces

1

Chapter 3

Introduction to Electronic Commerce

Page 2: Introduction To Electronic Commerces

2

Learning Objectives

In this chapter, you will learn about:• The basic elements of electronic commerce• Differences between electronic commerce

and traditional commerce• Advantages and disadvantages of using

electronic commerce• The international nature of electronic

commerce

Page 3: Introduction To Electronic Commerces

3

Learning Objectives

• The Internet and the World Wide Web have stimulated the emergence of electronic commerce.

• Economic forces that have created a business environment to foster electronic commerce

• The ways by which businesses use value chains to identify electronic commerce opportunities

Page 4: Introduction To Electronic Commerces

4

Defining Electronic Commerce

• Electronic commerce refers to business activities conducted using electronic data transmission via the Internet and the World Wide Web.

• Three main elements of e-commerce:– Business-to-consumer

– Business-to-business

– The transactions and business processes that support selling and purchasing activities on the Web

Click to see Figure 1-1

Page 5: Introduction To Electronic Commerces

5

Page 6: Introduction To Electronic Commerces

6

Forms of Electronic Commerce

• Web-based e-commerce

• Electronic funds transfers (EFTs)

• Electronic data interchange (EDI)– General Electric– Wal-Mart

Page 7: Introduction To Electronic Commerces

7

Value Added Network (VAN)

• A value added network is an independent firm that offers connection and EDI transaction forwarding services to buyers and sellers engaged in EDI.

• VANs are responsible for ensuring the security of data transmitted.

• VANs charged a fixed monthly fee plus a per-transaction charge to subscribers.

Page 8: Introduction To Electronic Commerces

8

Elements of Traditional Commerce: the Buyer’s Side

• Identify specific need• Search for products or services that will satisfy the

specific need• Select a vendor• Negotiate a purchase transaction• Make payment• Perform regular maintenance and make warranty

claimsClick to see Figure 1-

2

Page 9: Introduction To Electronic Commerces

9

Page 10: Introduction To Electronic Commerces

10

Elements of Traditional Commerce: the Seller’s Side

• Conduct market research to identify customer needs

• Create product or service that will meet customers’ needs

• Advertise and promote product or service

• Negotiate a sale transaction

Page 11: Introduction To Electronic Commerces

11

Elements of Traditional Commerce: the Seller’s Side

• Ship goods and invoice customer

• Receive and process customer payments

• Provide after-sale support, maintenance, and warranty services

Click to see Figure 1-3

Page 12: Introduction To Electronic Commerces

12

Page 13: Introduction To Electronic Commerces

13

Activities as Business Processes

• Business Processes refer to activities in which businesses engage as they accomplish a specific element of commerce, including:– Transfer funds– Placing orders– Sending invoices– Shipping goods to customers

Page 14: Introduction To Electronic Commerces

14

Electronic Commerce Processes

• Electronic fund transfer (EFT)

• Electronic data interchange (EDI)

• Internet commerce

• Electronic business (IBM style)

Page 15: Introduction To Electronic Commerces

15

Electronic Commerce Processes

• Examples of business processes:– Well suited to electronic commerce– Well suited to traditional commerce– A combination of both strategies

Click to see figure 1-4

Click to see figure 1-5

Page 16: Introduction To Electronic Commerces

16

Page 17: Introduction To Electronic Commerces

17

Page 18: Introduction To Electronic Commerces

18

Well-suited E-commerce Business Processes

• Sale/purchase of books and CDs and other commodities

• Online delivery of software

• Promotion and delivery of travel services

• Online shipment tracking

Page 19: Introduction To Electronic Commerces

19

Well-suited Traditional Business Processes

• Sales/purchase of high-fashion clothing

• Sale/purchase of perishable food products

• Processing of small-denomination transactions

• Sale of high-value jewelry and antiques

Page 20: Introduction To Electronic Commerces

20

Business Processes Suited to Both Commerce Strategies

• Sale/purchase of automobiles

• Online banking

• Roommate-matching services

• Sale/purchase of investment and insurance products

Page 21: Introduction To Electronic Commerces

21

Advantages of Electronic Commerce

• Electronic commerce can increase sales and decrease costs.

• Web advertising reaches to potential customers in the world.

• Web creates virtual communities for specific products or services.

Page 22: Introduction To Electronic Commerces

22

Advantages of Electronic Commerce

• A business can reduce the costs by using electronic commerce in its sales support and order-taking processes.

• Electronic commerce increases sale opportunities for the seller.

• Electronic commerce increases purchasing opportunities for the buyer.

Page 23: Introduction To Electronic Commerces

23

General Welfare of Society

• Electronic commerce benefits the general welfare of society because:– Electronic payments of tax refunds and welfare

cost less to issue and arrive securely.– Electronic payments can be audited easily.– Electronic commerce enables people to work

from home.– Electronic commerce makes products and

services available in remote areas.

Page 24: Introduction To Electronic Commerces

24

Disadvantages of Electronic Commerce

• Some business processes are difficult to be implemented through electronic commerce.

• Return-on-investment is difficult to apply to electronic commerce.

• Businesses face cultural and legal obstacles to conducting electronic commerce.

Page 25: Introduction To Electronic Commerces

25

International Electronic Commerce

• About 60 percent of all electronic commerce sites are in English, languages barrier needs to be overcome.

• The political structures of the world presents some challenges.

• Legal, tax, and privacy are concerns of the international electronic commerce.

Page 26: Introduction To Electronic Commerces

26

The Internet and World Wide Web

• The Internet is a large system of interconnected computer networks that spans the globe.

• The Internet supports e-mail, online newspapers and publications, discussion group, game, and free software.

• The World Wide Web includes an easy-to-use standard interface for Internet resources accesses.

Page 27: Introduction To Electronic Commerces

27

Origins of the Internet

• In the early 1960s, the U.S. Department of Defense started research on networking computers.

• Its researchers developed a multiple channels network.

• In 1969, the Defense Department used this network model to connect four mainframe computers at different locations.

Page 28: Introduction To Electronic Commerces

28

New Uses for the Internet

• In 1972, a researcher wrote a program that could send and receive messages over the network.

• E-mail was born and became widely used.

• The network software include:– File Transfer Protocol (FTP)– User’s News Network (Usenet)

Page 29: Introduction To Electronic Commerces

29

Commercial Use of the Internet

• Companies used PC to construct their networks in 1980s.

• National Science Foundation (NSF) funded the network services in 1980s.

• In 1989, NSF permitted two commercial e-mail services.

• As the 1990s began, the Internet started to serve the global resource accesses.

Page 30: Introduction To Electronic Commerces

30

Growth of the Internet

• In 1991, the NSF further eased its restriction on Internet commercial activity.

• The privatization of the Internet was substantially completed in 1995.

• The new structure of the Internet was based on four network access points (NAPs).

• Internet service providers (ISPs) sell Internet access rights directly to customers.

Click to see Figure 1-6

Page 31: Introduction To Electronic Commerces

31

Page 32: Introduction To Electronic Commerces

32

Development of Hypertext

• In the 1960s, Ted Nelson described his page-linking system hypertext.

• In 1987, Nelson published a book about a global system for online hypertext publishing and commerce.

• In 1991, Berners-Lee of CERN developed the code for a hypertext server program and made it available on the Internet.

Page 33: Introduction To Electronic Commerces

33

HTML

• A hypertext server is a computer that stores files written in the hypertext markup language (HTML).

• HTML is a language that includes a set of codes (or tags) attached to text.

• A hypertext link points to another location in the same or another HTML document.

Page 34: Introduction To Electronic Commerces

34

Web Browser and Markup Languages

• A web browser is a software interface that lets users browse HTML documents.

• HTML is based on Standard Generalized Markup Language (SGML).

• eXtensible Markup Language (XML) allows users to define new meanings for its commands in web page.

Click to see Figure 1-7

Page 35: Introduction To Electronic Commerces

35

Page 36: Introduction To Electronic Commerces

36

Graphical User Interface

• A graphical user interface (GUI) is a way of presenting program control functions and program output to users.

• Web browsers include:– Mosaic– Netscape Navigator– Microsoft Internet Explorer

Click to see Figure 1-8

Page 37: Introduction To Electronic Commerces

37

Page 38: Introduction To Electronic Commerces

38

Economic Forces of Electronic Commerce

• Transaction costs were the main motivation for moving economic activity from markets to hierarchically structured firms.

• Transaction costs are the total of all costs that a buyer and a seller incur for business.

• Types of economic organization:– Market form– Hierarchically-structured form

Click to see Figure 1-9

Click to see Figure 1-10

Page 39: Introduction To Electronic Commerces

39

Page 40: Introduction To Electronic Commerces

40

Page 41: Introduction To Electronic Commerces

41

The Role of Electronic Commerce

• Businesses and individuals can use electronic commerce to reduce transaction cost.

• Electronic commerce can make network economic structure, which rely on information sharing, much easier to construct and maintain.

Click to see Figure 1-11

Page 42: Introduction To Electronic Commerces

42

Page 43: Introduction To Electronic Commerces

43

Value Chains

• A strategic business unit is one particular combination of product, distribution channel, and customer type.

• A value chain is a way of organizing the activities that each strategic business unit undertakes to design, produce, promote, market, deliver, and support the products or services it sells.

Page 44: Introduction To Electronic Commerces

44

Strategic Business Unit Value Chains

• For each business unit, the primary activities are:– Identify customers

– Design

– Purchase materials and supplies

– Manufacture

– Market and sell

– Deliver

– Provide after-sale service and support

Page 45: Introduction To Electronic Commerces

45

Strategic Business Unit Value Chains

• The support activities of value chain for a strategic business unit include:– Finance and administration– Human resources– Technology development

Click to see Figure 1-12

Page 46: Introduction To Electronic Commerces

46

Page 47: Introduction To Electronic Commerces

47

Industry Value Chains

• Value system describes the larger stream of activities into which a particular business unit’s value chain is embedded.

• Industry value chain refers to value systems.• Using the value chain reinforces the idea that

electronic commerce should be a business solution.

Click to see Figure 1-13

Page 48: Introduction To Electronic Commerces

48