Chapter 1

Overview of Electronic Business

 Dr.Vijay

016-7737348
Assessment

Assignment – 40%
(Handout Week 3, Submission Week 12)

Mid Term – 20% (Week 9)

Final Exam – 40%

Learning Objectives

1. Define electronic commerce (EC) and

describe its various categories.
2. Describe and discuss the content and
framework of EC.
3. Describe the major types of EC transactions.
4. Describe the digital revolution as a driver of
EC.

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E-commerce: A Brief History

1995–2000: Innovation
 Key concepts developed
 Dot-coms; heavy venture capital investment

2001–2006: Consolidation
 Emphasis on business-driven approach

2006–Present: Reinvention
 Extension of technologies
 New models based on user-generated content, social
networking, services
Early Visions of E-commerce
 Computer scientists:
 Inexpensive, universal communications and computing
environment accessible by all
 Economists:
 Nearly perfect competitive market and friction-free commerce
 Lowered search costs, disintermediation, price transparency,
elimination of unfair competitive advantage
 Entrepreneurs:
 Extraordinary opportunity to earn far above normal returns on
investment—first mover advantage
Electronic Commerce:
Definitions and Concepts
electronic commerce (EC)
The process of buying, selling, or
exchanging products, services, or
information via computer networks

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Electronic Commerce:
Definitions and Concepts
e-business
A broader definition of EC that includes
not just the buying and selling of goods
and services, but also servicing
customers, collaborating with business
partners, and conducting electronic
transactions within an organization

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Unique Features of E-commerce
Technology

1. Ubiquity
2. Global reach
3. Universal standards
4. Information richness
5. Interactivity
6. Information density
7. Personalization/customization
8. Social technology
Electronic Commerce:
Definitions and Concepts
 Pure versus Partial EC
 EC can take several forms depending on
the degree of digitization
1. the product (service) sold
2. the process (e.g., ordering, payment,
fulfillment)
3. the delivery method

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Electronic Commerce:
Definitions and Concepts

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Electronic Commerce:
Definitions and Concepts
brick-and-mortar (old economy)
organizations
Old-economy organizations
(corporations) that perform their primary
business off-line, selling physical
products by means of physical agents
virtual (pure-play) organizations
Organizations that conduct their
business activities solely online

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Electronic Commerce:
Definitions and Concepts
click-and-mortar (click-and-brick)
organizations
Organizations that conduct some
e-commerce activities, usually as an
additional marketing channel

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Electronic Commerce:
Definitions and Concepts
electronic market (e-marketplace)
An online marketplace where buyers and
sellers meet to exchange goods,
services, money, or information

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Electronic Commerce:
Definitions and Concepts
 interorganizational information systems
(IOSs)
Communications systems that allow routine
transaction processing and information flow
between two or more organizations
 intraorganizational information systems
Communication systems that enable
e-commerce activities to go on within
individual organizations

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The EC Framework,
Classification, and Content
intranet
An internal corporate or government
network that uses Internet tools, such as
Web browsers, and Internet protocols
extranet
A network that uses the Internet to link
multiple intranets

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The EC Framework,
Classification, and Content

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The EC Framework,
Classification, and Content
EC applications are supported by
infrastructure and by these five support
areas:
People
Public policy
Marketing and advertisement
Support services
Business partnerships

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The EC Framework,
Classification, and Content
Classification of EC by the Nature of
the Transactions or Interactions
business-to-business (B2B)
E-commerce model in which all of the
participants are businesses or other
organizations

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The EC Framework,
Classification, and Content
 business-to-consumer (B2C)
E-commerce model in which businesses sell to
individual shoppers
 e-tailing
Online retailing, usually B2C
 business-to-business-to-consumer
(B2B2C)
E-commerce model in which a business
provides some product or service to a client
business that maintains its own customers

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The EC Framework,
Classification, and Content
consumer-to-business (C2B)
E-commerce model in which individuals
use the Internet to sell products or
services to organizations or individuals
who seek sellers to bid on products or
services they need
mobile commerce (m-commerce)
E-commerce transactions and activities
conducted in a wireless environment

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The EC Framework,
Classification, and Content
 location-based commerce (l-commerce)
M-commerce transactions targeted to individuals
in specific locations, at specific times

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The EC Framework,
Classification, and Content
 business-to-employees (B2E)
E-commerce model in which an organization
delivers services, information, or products to
its individual employees
 collaborative commerce (c-commerce)
E-commerce model in which individuals or
groups communicate or collaborate online
 consumer-to-consumer (C2C)
E-commerce model in which consumers sell
directly to other consumers

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The EC Framework,
Classification, and Content
 peer-to-peer (P2P)
Technology that enables networked peer computers to
share data and processing with each other directly;
can be used in C2C, B2B, and B2C e-commerce
 e-learning
The online delivery of information for purposes of
training or education
 e-government
E-commerce model in which a government entity buys
or provides goods, services, or information from or to
businesses or individual citizens

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The EC Framework,
Classification, and Content
exchange
A public electronic market with many
buyers and sellers
exchange-to-exchange (E2E)
E-commerce model in which electronic
exchanges formally connect to one
another for the purpose of exchanging
information

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The EC Framework,
Classification, and Content
The Future of EC
Web 2.0
The second-generation of Internet-based
services that let people collaborate and
share information online in perceived new
ways—such as social networking sites,
wikis, communication tools, and
folksonomies

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Digital Revolution Drives EC

digital economy
An economy that is based on digital
technologies, including digital
communication networks, computers,
software, and other related information
technologies; also called the Internet
economy, the new economy, or the Web
economy

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Business Environment Drives EC

The Business Environment

The business environment impact model
Business pressures
Organizational response strategies

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EC Business Models
business model
A method of doing business by which a
company can generate revenue to
sustain itself

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EC Business Models
 Six elements of a business model include
descriptions of:
1. Customers to be served and the company’s relationships
with these customers including customers’ value proposition
2. All products and services the business will offer
3. The business process required to make and deliver the
products and services
4. The resources required and the identification of which ones
are available, which will be developed in house, and which
will need to be acquired
5. The organization’s supply chain, including suppliers and
other business partners
6. The revenues expected (revenue model), anticipated costs,
sources of financing, and estimated profitability (financial
viability)

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EC Business Models
revenue model
Description of how the company or an
EC project will earn revenue
value proposition
The benefits a company can derive from
using EC

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EC Business Models – TUTORIAL 1

 The major revenue models are:

Sales
Transaction fees
Subscription fees
Advertising fees
Affiliate fees
Other revenue sources

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Benefits and Limitations of EC

Benefits to
Organizations
Consumers
Society
Limitations
Technological
Nontechnological

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THANK YOU

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