Electronic commerce

1
Electronic commerce

• present and future

2
What is electronic commerce?

• The buying, selling, and distribution of goods
  and services over the Internet.
• What kinds of buying and selling?
• B2B(usiness)
• B2C(onsumer)
• B2G(overnemnt)
• G2B(usiness)
• G2C(itizen)

3
Examples of e-commerce sites

• Retail sales
• Travel planning
• Academic sites
• On-line music instruction
• Hotel reservations
• State government
• Legal assistance
• Auction sites

• Certification programs
• Assistance with citizenship applics
• Computer sales
• Building contracting
• Electronic manufacturing
• International financial services

4
Obvious benefits of the I-net

• Foundations of e-commerce
• Internet
• Hardware
• Software
• Financial institutions
• Internet is pervasive
• Standard protocols connectivity
• Wide reach
• Linking suppliers, retailers, warehouses,
  customers, markets
• Links cultures

5
Cost savings from I-net

• Reduced communication costs
• Compare to hard copy costs i.e. paperless
• Compare I-net telephony to private network costs
• Reduced transaction costs
• Compare to in-person transactions costs
• Reduces numbers of intermediaries
• Reduces management costs
• Organizing
• Controlling
• Coordinating
• Employee informing costs (employee personal
  information access)

6
Customization of information

• Appeal to diverse audiences
• Customize to viewing style approach
• Customize to purpose and interest of viewer (the
  dynamic page)

7
Instant gratification

• Rapid access to knowledge, information,
  services
• On-the-spot access
• Access to varied content suppliers
• entertainment
• statistics
• weather
• government

8
Environmental friendliness

• Paper saving
• Traffic saving
• pollution
• congestion
• personal conflict

9
Under what circumstances do we have a workable
Internet business model?

• How do you determine viability of a business
  model?
• How important is information?
• Is anything else as important as information?

10
A business model (brick and mortar?)
11
How do present day e-businesses fit the business
model?

• Virtual storefront
• Selling of physical products, services,
  electronic products.
• Need acquisition? How?
• Need warehousing? How?
• Need delivery? How?
• Source of revenue?
• (Amazon, Specialty foods, Banking, h/w s/w
  sales)

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How do present day e-businesses fit the business
model? (contd)

• Exchange and auction
• Provide a forum to exchange goods and services in
  response to changing prices (auction and reverse
  auction).
• Need acquisition? How?
• Need warehousing? How?
• Need delivery? How?
• Source of revenue?
• (eBay, steel sales sites, commodities auction
  sites)

13
How do present day e-businesses fit the business
model? (contd)

• Content providers and information brokers
• Provides information subjects of interest as well
  as information on the availability of products
  and services and their costs.
• Need acquisition? How?
• Need warehousing? How?
• Need delivery? How?
• Source of revenue?
• (Travel services, journal newspaper sites,
  economic data sites)

14
How do present day e-businesses fit the business
model? (contd)

• Hardware and software service providers
• Provides hardware, software and processing
  services to business and private users.
• Need acquisition? How?
• Need warehousing? How?
• Need delivery? How?
• Source of revenue?
• (PC support on-line, application software
  providers (ASPs), backup storage services, etc.)

15
How do present day e-businesses fit the business
model? (contd)

• Shopping brokers and aggregators
• Provide forums for many sellers to display and
  sell their products or provides forum for
  several buyers to purchase in quantity.
• Need acquisition? How?
• Need warehousing? How?
• Need delivery? How?
• Source of revenue?
• (Insurance broker sites, car shopping sites,
  Mercata.com, etc.)

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Dangers when the business model is disregarded.

• Faltering customer service
• Drying up of revenue sources (.com dot bust!)
• The bottom line in any case
• Quality products services
• Lowest cost
• Delivery
• Customer care

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How does a business prepare for successful
e-business operations?

• 1. Examine market demand
• Survey customer likes and dislikes
• Survey buying patterns
• Forecast the economy
• Forecast product demand

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How does a business prepare for successful
e-business operations (continued)?

• 2. Plan product/service supply
• Design supply strategy
• Inventory management strategy
• Distribution of goods/services
• Procurement and receiving
• Design or outsource shipping
• Design tracking

19
How does a business prepare for successful
e-business operations (continued)?

• 3. Demand fulfillment
• Order fulfillment
• Order tracking
• Backlog management
• Financial arrangement verification and capture

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Will the Internet really change everything?

• Can a single technology do all that?
• Can a single technology impact on the entire
  economy?
• Can it impact on the world economy?
• Will some be left behind? Why?

21
Where the Internet may have an influence

• Financial services (banking, loans financial
  institutions and the public are still
  distrustful)
• Entertainment (but how do you pay the bills?)
• Health care (x-actions on the web but are the
  public and the institutions on board?)
• Government (delivery of regulatory information
  though costly)
• Basic information services (national data sites
  who pays the bill?)

22
Where the impact of the Internet may be more
marginal

• Retailing (sites look good but, you still need to
  move the boxes)
• Manufacturing (supply and value chains are
  important but, you still have to produce quality
  goods)
• Education (can cut costs but, at what price
  impersonal education?)
• Travel (the sites look fantastic but, you still
  need to get there on time and find a room you can
  afford)
• Energy (power exchange sales are popular but, you
  still need to have the equipment to generate
  deliver the juice)

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End e-commerce overview

• Read Chapter 8 for further information and details