E-COMMERCE

Question Bank

1. What do you mean by e-com? write difference between inter

and intra
organizational e-com?

 Electronic commerce, commonly known as e-commerce,

consists of the buying and selling of products or services over
electronic systems such as the Internet and other computer
networks. The amount of trade conducted electronically has
grown extraordinarily since the spread of the Internet. A wide
variety of commerce is conducted in this way, spurring and
drawing on innovations in electronic funds transfer, supply
chain management, Internet marketing, online transaction
processing, electronic data interchange (EDI), inventory
management systems, and automated data collection systems.
Modern electronic commerce typically uses the World Wide
Web at least at some point in the transaction's lifecycle,
although it can encompass a wider range of technologies such
as e-mail as well.
 Electronic commerce (EC, or e- commerce) describes the
process of buying,selling, transferring, or exchanging of
products, services, and/or information via computer
networks, including the Internet.
 INTERNET VERSUS NON-INTERNET EC.
* Most e-commerce is done over the Internet.
* But EC can also be conducted on private networks,
such as value-added networks (VANs, networks that add
communication services to existing common carriers), on local
area networks (LANs), or even on a single computerized
machine. For example, buying food from a vending machine and
paying with a smart card or a cell phone can be viewed as EC
activity
2. What are the types of e-com? Explain point wise.
 Business-to-Business(B-to-B) site:is a website that is
dedicated to exchange of information, goods and services to
other business rather than final consumers.
 Business-to-Customer(B-to-C) site: is a website where all
transections take place between a business house and the
final consumer.
 Consumers-to-businesses (C2B): In C2B, consumers make
known a particular need for a product or service, and
suppliers compete to provide the product or service to
consumers. An example is Priceline.com, where the customer
names a product and the desired price, and Priceline tries to
find a supplier to fulfill the stated need.
 Consumer-to-consumer (C2C): is a website where all the
transections take place between a consumer and the website
acting asa a platform that brings the buyer and the seller
togther.
 Government-to-Consumer(G-to-C) site: website is an
attempt by the government to reach out to people in general.
 Business-to-Government(B-to-G) site: website is a
variation of the B-to-B web site. This web site used by the
government to exchange information with various business
houses across the world.
 3. Explain what are the forces behind the development of e-
com?

4. Explain the economic potential of e-com with example?

Electronic Commerce is a marriage between a rapidly evolving

technical environment and an increasingly pervasive set of ideas as to
how markets should function. However, markets involve complex
interaction between specific business/organizational factors, and
general economic, social and political factors. The full economic
potential of Electronic Commerce can only be evaluated against a
backdrop of rapid change on all of these fronts. There are strong
current indications that massive changes have already begun to occur
across the entire business spectrum.

There are difficulties in assessing the commercial potential of the

Internet. The Internet is the first multifunctional digital information
environment that is available to a wide spectrum of users, ranging
from large organizations to individuals, and it will likely become a focal
point for the convergence of access media and the development of
interactive services.

Although growth in the Internet is not the same phenomenon as

growth in E-Commerce, ne vistas for Electronic Commerce are
continually opening up on the Internet. In particular, the spectacular
rates of increase in the numbers of households with Internet access
has drawn special attention to prospects for direct sales to individual
consumers. Companies are learning to identify the many new
consumer communities that are emerging in the Internet environment,
and to evaluate their product and service needs. Relatively mature
communities have developed already around electronic services in the
areas of travel and tourism, road navigation and health.

At this stage in the development of E-Commerce, a many of the

aspects of inter-corporate and consumer E-Commerce applications
must be evaluated separately in terms of their economic potential.
However, developments like the Internet already bringing the
consumer and corporate E-Commerce environments steadily together.
The workplace (including schools & universities) is the most common
source of computer awareness and skills that become transferred to
the household.

The significance and growth potential of E-Commerce is linked

interactively to the broader socialization of the electronic networking
environment, a phenomenon that looks certain to proliferate with each
generation. Indeed, evidence for this is already accumulating.tands at
a critical juncture. After an exhilarating start-up, further development
hinges on bridging the chasm between early adopter and a true mass
market. We envision Eco System ad the foundation of that bridge.

5. What are the advantages of e-com to businesses & consumers

separately. Explain each point in detail.
E-commerce advantages and disadvantages

E-commerce provides many new ways for businesses and consumers to communicate
and conduct business. There are a number of advantages and disadvantages of
conducting business in this manner.

E-commerce advantages

Some advantages that can be achieved from e-commerce include:

• Being able to conduct business 24 x 7 x 365 . E-commerce systems can

operate all day every day. Your physical storefront does not need to be open in
order for customers and suppliers to be doing business with you electronically.
• Access the global marketplace . The Internet spans the world, and it is
possible to do business with any business or person who is connected to the
Internet. Simple local businesses such as specialist record stores are able to
market and sell their offerings internationally using e-commerce. This global
opportunity is assisted by the fact that, unlike traditional communications
methods, users are not charged according to the distance over which they are
communicating.
• Speed. Electronic communications allow messages to traverse the world almost
instantaneously. There is no need to wait weeks for a catalogue to arrive by post:
that communications delay is not a part of the Internet / e-commerce world.
• Marketspace. The market in which web-based businesses operate is the global
market. It may not be evident to them, but many businesses are already facing
international competition from web-enabled businesses.
• Opportunity to reduce costs. The Internet makes it very easy to 'shop around'
for products and services that may be cheaper or more effective than we might
otherwise settle for. It is sometimes possible to, through some online research,
identify original manufacturers for some goods - thereby bypassing wholesalers
and achieving a cheaper price.
 • Computer platform-independent . 'Many, if not most, computers have the
ability to communicate via the Internet independent of operating systems and
hardware. Customers are not limited by existing hardware systems' (Gascoyne &
Ozcubukcu, 1997:87).
• Efficient applications development environment - 'In many respects,
applications can be more efficiently developed and distributed because the can
be built without regard to the customer's or the business partner's technology
platform. Application updates do not have to be manually installed on computers.
Rather, Internet-related technologies provide this capability inherently through
automatic deployment of software updates' (Gascoyne & Ozcubukcu, 1997:87).
• Allowing customer self service and 'customer outsourcing'. People can
interact with businesses at any hour of the day that it is convenient to them, and
because these interactions are initiated by customers, the customers also
provide a lot of the data for the transaction that may otherwise need to be
entered by business staff. This means that some of the work and costs are
effectively shifted to customers; this is referred to as 'customer outsourcing'.
• Stepping beyond borders to a global view. Using aspects of e-commerce
technology can mean your business can source and use products and services
provided by other businesses in other countries. This seems obvious enough to
say, but people do not always consider the implications of e-commerce. For
example, in many ways it can be easier and cheaper to host and operate some
e-commerce activities outside Australia. Further, because many e-commerce
transactions involve credit cards, many businesses in Australia need to make
arrangements for accepting online payments. However a number of major
Australian banks have tended to be unhelpful laggards on this front, charging a
lot of money and making it difficult to establish these arrangements - particularly
for smaller businesses and/or businesses that don't fit into a traditional-economy
understanding of business. In some cases, therefore, it can be easier and
cheaper to set up arrangements which bypass this aspect of the Australian
banking system. Admittedly, this can create some grey areas for legal and
taxation purposes, but these can be dealt with. And yes these circumstances do
have implications for Australia's national competitiveness and the
competitiveness of our industries and businesses.

As a further thought, many businesses find it easier to buy and sell in U.S. dollars: it is
effectively the major currency of the Internet. In this context, global online customers can
find the concept of peculiar and unfamiliar currencies disconcerting. Some businesses
find they can achieve higher prices online and in US dollars than they would achieve
selling locally or nationally. Given that banks often charge fees for converting currencies,
this is another reason to investigate all of your (national and international) options for
accepting and making online payments.

In brief, it is useful to take a global view with regard the potential and organisation of
your e-commerce activities, especially if you are targeting global customers.

• A new marketing channel. The Internet provides an important new channel to

sell to consumers. Peterson et al. (1999) suggest that, as a marketing channel,
the Internet has the following characteristics:
• the ability to inexpensively store vast amounts of information at different virtual
locations
 • the availability of powerful and inexpensive means of searching, organising, and
disseminating such information
• interactivity and the ability to provide information on demand
• the ability to provide perceptual experiences that are far superior to a printed
catalogue, although not as rich as personal inspection
• the capability to serve as a transaction medium
• the ability to serve as a physical distribution medium for certain goods (e.g.,
software)
• relatively low entry and establishment costs for sellers
• no other existing marketing channel possesses all of these characteristics.

Some of these advantages and their surrounding issues are discussed below in further
detail.

E-commerce disadvantages and constraints

Some disadvantages and constraints of e-commerce include the following.

• Time for delivery of physical products . It is possible to visit a local music

store and walk out with a compact disc, or a bookstore and leave with a book. E-
commerce is often used to buy goods that are not available locally from
businesses all over the world, meaning that physical goods need to be delivered,
which takes time and costs money. In some cases there are ways around this,
for example, with electronic files of the music or books being accessed across
the Internet, but then these are not physical goods.
• Physical product, supplier & delivery uncertainty . When you walk out of a
shop with an item, it's yours. You have it; you know what it is, where it is and how
it looks. In some respects e-commerce purchases are made on trust. This is
because, firstly, not having had physical access to the product, a purchase is
made on an expectation of what that product is and its condition. Secondly,
because supplying businesses can be conducted across the world, it can be
uncertain whether or not they are legitimate businesses and are not just going to
take your money. It's pretty hard to knock on their door to complain or seek legal
recourse! Thirdly, even if the item is sent, it is easy to start wondering whether or
not it will ever arrive.
• Perishable goods . Forget about ordering a single gelato ice cream from a shop
in Rome! Though specialised or refrigerated transport can be used, goods
bought and sold via the Internet tend to be durable and non-perishable: they
need to survive the trip from the supplier to the purchasing business or
consumer. This shifts the bias for perishable and/or non-durable goods back
towards traditional supply chain arrangements, or towards relatively more local e-
commerce-based purchases, sales and distribution. In contrast, durable goods
can be traded from almost anyone to almost anyone else, sparking competition
for lower prices. In some cases this leads to disintermediation in which
intermediary people and businesses are bypassed by consumers and by other
businesses that are seeking to purchase more directly from manufacturers.
• Limited and selected sensory information. The Internet is an effective conduit
for visual and auditory information: seeing pictures, hearing sounds and reading
text. However it does not allow full scope for our senses: we can see pictures of
the flowers, but not smell their fragrance; we can see pictures of a hammer, but
 not feel its weight or balance. Further, when we pick up and inspect something,
we choose what we look at and how we look at it. This is not the case on the
Internet. If we were looking at buying a car on the Internet, we would see the
pictures the seller had chosen for us to see but not the things we might look for if
we were able to see it in person. And, taking into account our other senses, we
can't test the car to hear the sound of the engine as it changes gears or sense
the smell and feel of the leather seats. There are many ways in which the
Internet does not convey the richness of experiences of the world. This lack of
sensory information means that people are often much more comfortable buying
via the Internet generic goods - things that they have seen or experienced before
and about which there is little ambiguity, rather than unique or complex things.
• Returning goods. Returning goods online can be an area of difficulty. The
uncertainties surrounding the initial payment and delivery of goods can be
exacerbated in this process. Will the goods get back to their source? Who pays
for the return postage? Will the refund be paid? Will I be left with nothing? How
long will it take? Contrast this with the offline experience of returning goods to a
shop.
• Privacy, security, payment, identity, contract. Many issues arise - privacy of
information, security of that information and payment details, whether or not
payment details (eg credit card details) will be misused, identity theft, contract,
and, whether we have one or not, what laws and legal jurisdiction apply.
• Defined services & the unexpected . E-commerce is an effective means for
managing the transaction of known and established services, that is, things that
are everyday. It is not suitable for dealing with the new or unexpected. For
example, a transport company used to dealing with simple packages being asked
if it can transport a hippopotamus, or a customer asking for a book order to be
wrapped in blue and white polka dot paper with a bow. Such requests need
human intervention to investigate and resolve.
• Personal service . Although some human interaction can be facilitated via the
web, e-commerce can not provide the richness of interaction provided by
personal service. For most businesses, e-commerce methods provide the
equivalent of an information-rich counter attendant rather than a salesperson.
This also means that feedback about how people react to product and service
offerings also tends to be more granular or perhaps lost using e-commerce
approaches. If your only feedback is that people are (or are not) buying your
products or services online, this is inadequate for evaluating how to change or
improve your e-commerce strategies and/or product and service offerings.
Successful business use of e-commerce typically involves strategies for gaining
and applying customer feedback. This helps businesses to understand,
anticipate and meet changing online customer needs and preferences, which is
critical because of the comparatively rapid rate of ongoing Internet-based
change.
• Size and number of transactions. E-commerce is most often conducted using
credit card facilities for payments, and as a result very small and very large
transactions tend not to be conducted online. The size of transactions is also
impacted by the economics of transporting physical goods. For example, any
benefits or conveniences of buying a box of pens online from a US-based
business tend to be eclipsed by the cost of having to pay for them to be delivered
to you in Australia. The delivery costs also mean that buying individual items
from a range of different overseas businesses is significantly more expensive
 than buying all of the goods from one overseas business because the goods can
be packaged and shipped together.

Reflecting some of the comments above, the following chart (Figure 1.6) shows some of
the complaints made by Australian e-consumers.

Figure 1. 6 Reasons for consumer complaints (Australia 2002) (EGEC, November

2003:11)

6. write short note on:-

• peer to peer e-com,
• business to business e-com,
Automation of purchase, sale transactions
from business to business
Private industrial networks: Coordination between
companies for efficient supply chain management and
collaborative activities
Electronic hubs: On-line marketplaces, point-to-point
connections, integrated information

• consumer to consumer e-com.

7. What do you mean by mobile commerce/Explain.

Mobile commerce (m-commerce):
• Wireless devices used to conduct both business-to-
consumer and business-to-business e-commerce
transactions over the Internet
• Extend personalization by delivering new value-added
services directly to customers at any time and place

8. Draw & explain the framework of electronic commerce.

9. How and when internet was adopted for E-com.

10. write short note on B2B,B2C E-com.

11. Discuss the impact of E-com on business.

12 How telecommunication plays important role in E-com?

13. Draw and explain industry framework of E-com?

14. What are the challenges before the maker of E-com?

15. What do you mean by mobile computing? Explain its

application.

16 Explain B2B E-Commerce using an example of a book

distributor who stocks a
large number of books, which he distributes via a large network of
book sellers. Assume that the distributor has stocks of books of a
large number of publishers and book sellers order books as and
when their stock is low. Distributors give 1 month's time to
booksellers for payment.

17 Explain B2C E-Commerce of a customer reserving airline

tickets from his
home or place of work.

18 Explain C2C E-Commerce with an appropriate example.

19 List the advantages and disadvantages of E-Commerce

20 Explain the system architecture of E-Commerce by looking

at it as a set of layers with the physical network at the bottom layer
and applications at the top layer.

21 Define internet. Why is internet important in E-Commerce?