unit 1 ecom final

7/31/2019 Unit 1 Ecom Final

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E-commerce


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Course Overview:-

The objective of this course is to familiarize the studentswith what is different about managing in a networkedeconomy. It will give them an insight and understandinginto the world of e-commerce.

Students have already learnt the importance oftechnology in business. This course would build uponthat knowledge and help the students to understand howthe business is changing with the use of technologyand how new businesses are also being formed in what

is being called the new information economy. Studentsshould be able to think of and craft an effective e-business strategyat the end of this course.


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E-commerce Defined

E-commerce involves digitally enabledcommercial transactionsbetween and amongorganizations and individuals

Digitally enabled transactionsinclude alltransactions mediated by digital technology

Commercial transactionsinvolve the

exchange of value across organizational orindividual boundaries in return for products or

services


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Why Study E-commerce?

E-commerce technology is different andmore powerful than any of the othertechnologies that we have seen in the

past century. E-commerce has challenged much

traditional business thinking

E-commerce has a number of uniquefeatures that help explain why we haveso much interest in e-commerce


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Seven Unique Features of E-commerceTechnology and Their Significance

Is ubiquitous (available everywhere, all the time)

Offers global reach (across cultural/national boundaries)

Operates according to universal standards (lowersmarket entry for merchants and search costs for

consumers) Provides information richness (more powerful selling

environment)

Is interactive (can simulate face-to-face experience, but

on a global scale) Increases information density (amount and quality of

information available to all market participants)

Permits personalization/customization


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The Visions and Forces Behind E-commerce: 19952000

For computer scientists, vindicated avision of universal communications andcomputing environment that could be

accessed by everyone For economists, vision of a perfect market

and friction-free commerce

For entrepreneurs-commerce representedan extraordinary opportunity to return farabove normal returns on investment.


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The dimensions of E-commerce


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How does EC market work?


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EC Payment Systems

Credit cards

Electronic Funds Transfer (EFT)

transfers money value from one bankaccount to another (uses debit card e.g.switch)

Stored-value cards and E-cash digital

currency used for micro payment e.g.smart cards

Electronic Check Systems similar to

paper-based cheque system


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Security schemes for E-

payment 4 essential security requirements

Authenticationa method to verify the buyers identity before payment is authorized

Encryption a process of making messagesindecipherable except by those who have anauthorised decryption key

Integrity ensuring that information will not be

accidentally or maliciously altered or destroyedduring transmission

Non-repudiationprotection against customers denial of orders placed and against merchants denial of payments made


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Advantages of E-Commerce

May increase sales: Reach new markets. Improve promotion effectiveness (via 1:1

marketing). May reduce costs: Lower customer service costs. Lower costs of payment processing. Lower search and other transaction costs.

May improve business capabilities: Provide customized price quotes. Increase purchasing opportunities for buyer

(efficient market).


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Disadvantages of E-

Commerce Not all products are salable on the

Internet: Perishable grocery products.

Antiques. Difficult to calculate ROI: Costs and benefits hard to measure.

System integration challenging: Integrating existing databases and

transaction-processing software betweenfirms.

Global competition. Cultural and legal obstacles.


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Impact of e-Commerce

Improving market opportunities

Creation of new markets

Cultural integration and melt-down Electronic cast system 2 classes:

haves and have nots

Organizational transformation andredefinition

Global teams

Global knowledge management


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The term E-business refers primarily to the digital establishment of transactions and

processes within a firm, involving information systems under the control of the firm. Forthe most part, in our view e-business does not include commercial transactions involving

an exchange of value across organizational boundaries.

For example a companys online inventory mechanisms are a component of e-business,

but such internal processes do not directly generate revenue for the firm from outside

businesses or consumers as e-commerce does.

Difference Between E-Business and E-Commerce


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Types of EC Business-to-business (B2B) most EC is of this type

electronic market transactions between organizations.

Business-to-consumer (B2C) retailing transactions with

individual shoppers (amazon.com) Consumer-to-consumer (C2C) e.g selling in classified ads

Consumer-to-business (C2B) individuals who sell toorganizations, individuals who seek sellers.

Non-business EC academic institutions, not-for-profitorganizations, religious organization, social organizations,government agencies to reduce expenses (eg improvepurchasing) or improve operations and customer service

Intra-business EC all internal organizational activities usuallyperformed on intranets


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A business (also called a firm or an enterprise) is a legallyrecognized organization designed to provide goods and/orservices to

consumers.
http://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Good_(economics_and_accounting)http://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Consumerhttp://en.wikipedia.org/wiki/Consumerhttp://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Good_(economics_and_accounting)http://en.wikipedia.org/wiki/Organization


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THE EVOLUTION OF BUSINESS

IndustrialRevolution

1700-mid1800s

EntrepreneurshipEra

Mid 1800s

ProductionEra

Early 1900s

MarketingEra

1950s

RelationshipEra

Mass Production

Factories

Work Specialization

Efficiency

Industrial Titans

Wealth Creation

Increase in Living Standard

Manipulation/Competition

Exploitation

Assembly Line

Refining Production

Productivity Gains

Decrease Costs

Hard Sell

No Customer Focus

Consumer Power

Growth inConsumerism

Product Differentiation

Customer Focus

Long-term

Relationships

Satisfied Customers

Use of Technology


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Organization

Retail Client

Wholesalers

Distributor

Supplier

Manufacturer

Reseller

Supply sideDemand side

In side

HR, Training, Admin,

Purchase, Finance, Logistics,

Sales & Mkting , Delivery,

Corporate

(Buyer) (Producer)

( Seller )

Demand = 0, Supply feasible

(new market)

Demand > Supply ??

(Emerging market)

Demand = Supply ??

(Mature market)

Demand < Supply ??

(Declining market)


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Business and IT ChallengesTop Challenges of Todays Organizations

1. Improving customer service and relationships2. Improving operating efficiency

3. Reducing costs4. Creating competitive advantage with technology5. Applying technology to increase productivity6. Driving accountability7. Aligning information technology (IT) with the

business strategies8. Gain visibility into current IT performance


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Buyer utility

Price

Cost

Adoption

BLUE OCCEAN

STRATEGY

yes

yes

yes

yes

Think Again

Think Again

Think Again

Think Again

Is there exceptional buyer utility

In your business idea???

Is your price easily acceptable to the

Most of your buyers??

Can you attain your cost target

To profit at your strategic price??

What are the adoption hurdles in

Achieving your business goals??

Are you addressing them up there??

Fantastic! This is

commercially viable idea.

No

No

No

No


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IBM Global Services Method 30

Architecture assists with translating

business requirements into workable

and holistic architectures/solutions to

suit the business requirements.

unit 1 ecom final

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