e-business

e-commerce
• All electronically mediated information exchanges
between an organization and its external
stakeholders.
• Electronic commerce or e-commerce refers to a wide
range of online business activities for products and
services.
• It also pertains to “any form of business transaction
in which the parties interact electronically rather
than by physical exchanges or direct physical
contact.”
 e-commerce
• By automating the whole process from order
taking to delivery and the flow of information
and decisions associated across organisations
and the end customer-business are able to
reacting faster to customers demand and keep
market uncertainties to the barest minimum,
that in a nutshell is called as e-commerce.
 INTERNET

Extranet

Internet
interface
ENVIRONMENT

Supplier

The Business

Customer
 e-business
• All electronically mediated information exchanges,
both within an organization and with external
stakeholders supporting the range of business
process.
• Electronic business methods enable companies to
link their internal and external data processing
systems more efficiently and flexibly, to work more
closely with suppliers and partners, and to better
satisfy the needs and expectations of their
customers
 SCHEMATIC OF AN E-BUSINESS SET UP

Supplier System

Info passes on
Bank to supplier of
raw material
Debit Factory System
customer &
credits vendor
Back-office,
process and
Authentic software for
Vendors accounting,
ERP, MIS
WEB STORE and
Inventory

Certification
authority www. com

Authentic
Customers Godown System

Order is
placed

Courier’s Web interface to

customer

Customer Courier/Dispatch Systems

The distinction between buy-side and sell-side e-commerce
 Cost/efficiency and competitiveness drivers
• Cost/efficiency drivers
– Increasing speed with which supplies can be obtained
– Increasing speed with which goods can be dispatched
– Reduced sales and purchasing costs
– Reduced operating costs.
• Competitiveness drivers
– Customer demand
– Improving the range and quality of services offered
– Avoid losing market share to businesses already using e-
commerce.
 Tangible and intangible benefits
Tangible benefits Intangible benefits
 Increased sales from new sales leads giving  Corporate image communication
rise to increased revenue from:  Enhancement of brand
– new customers, new markets  More rapid, more responsive marketing
– existing customers (repeat-selling) communications
– existing customers (cross-selling). including PR
 Marketing cost reductions from:  Faster product development lifecycle
– reduced time in customer service enabling faster response to market needs
– online sales  Improved customer service
– reduced printing and distribution costs of  Learning for the future
marketing communications.  Meeting customer expectations to have a
 Supply-chain cost reductions from: web site
– reduced levels of inventory  Identifying new partners, supporting existing
– increased competition from suppliers partners better
– shorter cycle time in ordering.  Better management of marketing information
 Administrative cost reductions from more and customer information
efficient routine business processes such as  Feedback from customers on products
recruitment, invoice payment and holiday
authorization.
B2B and B2C interactions between an organization, its suppliers and its customers
Disintermediation of a consumer distribution channel showing
(a) the original situation, (b) disintermediation omitting the wholesaler, and
(c) disintermediation omitting both wholesaler and retailer
From original situation (a) to disintermediation (b) and reintermediation (c)
• Disintermediation
– The removal of intermediates such as distributors or
brokers that formerly linked a company to its
customers.
• Countermediation
– Creation of a new intermediately by an established
company. The advent of e-commerce means that
marketers cannot rely on the online presence of existing
intermediates instead they must create their own online
intermediates.
• Infomediary
• A business whose main source of revenue derives from
capturing consumer information and developing
detailed profiles of individual customers for use by third
parties
 Different types
• Directories
• Search engines
• Malls
• Virtual resellers
• Financial intermediates
• Forums, fan clubs and user groups
• Evaluation
 Blogs
• Weblogs or blogs gives an easy method of
regularly publishing web pages which are best
described as online journald, diaries or news
or vent listings.
• They may include feedback comments from
other sites or contributors to the site.
• Eg www.marketingvox.com
Example channel chain map for consumers selecting an estate agent
to sell their property
 Portals
• A web site that acts as a gateway to
information and services available on the
internet by providing search engines,
directories and other services such as
personalized news or free e-mail
 Types of portal
Type of portal Characteristics Example
Access portal Associated with ISP Wanadoo (www.wanadoo.com) and now (
www.orange.co.uk), AOL (www.aol.com)
Horizontal or Range of services: search engines, Yahoo! (www.yahoo.com) , MSN (www.msn.com)
functional portal directories, news recruitment, personal Google (www.google.com)
information management, shopping, etc.
Vertical A vertical portal covers a particular Construction Plus (www.constructionplus.co.uk)
market such as construction with news Chem Industry (www.chemindustry.com)
and other services. Barbour Index for B2B resources (
www.barbour-index.com), E-consultancy (
www.e-consultancy.com)
Focuses on e-business resources
Media portal Main focus is on consumer or business BBC (www.bbc.co.uk) , Guardian (
news or entertainment. www.guardian.co.uk), ITWeek (www.itweek.co.uk)
Geographical May be: Google country versions, Yahoo! country and city
(Region, country, horizontal , Vertical versions, Craigslist (www.craigslist.com),
local) Countyweb (www.countyweb.com)
Marketplace May be: EC21(www.ec21.com)
Horizontal, Vertical, Geographical eBay (www.eBay.com)
Search portal Main focus is on Search Google (www.google.com), Ask Jeeves (
www.ask.com)
Media type May be: BBC (www.bbc.co.uk) , Silicon (www.silicon.com)
Voice, Video, Delivered by streaming
media or downloads of files
 Location of trading in the market
place
• While traditional marketplaces have a physical
location, an internet-based market has no
physical presence- it is virtual market place
 Online representation
Place of purchase Examples of sites
A. Seller-controlled Vendor sites, i.e. home site of organization selling products, e.g.
www.dell.com.
B. Seller-oriented Intermediaries controlled by third parties to the seller such as
distributors and agents, e.g. Opodo (www.opodo.com)
represents the main air carriers

C. Neutral Intermediaries not controlled by buyer’s industry, e.g. EC21 (

www.ec21.com).
Product-specific search engines, e.g. CNET (www.computer.com
)
Comparison sites, e.g. Barclay Square/Shopsmart (
www.barclaysquare.com)
Auction space, e.g. eBay (www.ebay.com)
D. Buyer-oriented Intermediaries controlled by buyers, e.g. Covisint used to
represent the major motor manufacturers (www.covisint.com
) although they now don’t use a single marketplace, but each
manufacturer uses technology to access its suppliers direct.
Purchasing agents and aggregators

E. Buyer-controlled Web site procurement posting on company’s own site, e.g. GE

Trading Process Network (www.tpn.geis.com
Variations in the location and scale of trading on e-commerce sites
 Trading mechanisms
Commercial (trading) mechanism Online transaction mechanism
1. Negotiated deal Negotiation – bargaining between single seller and
Example: can use similar mechanism to buyer. Continuous replenishment – ongoing
auction as on Commerce One ( fulfilment of orders under pre-set terms
www.commerceone.net)
2. Brokered deal Achieved through online intermediaries offering
Example: intermediaries such as auction and pure markets online
screentrade (www.screentrade.co.uk)
3. Auction Seller auction – buyers’ bids determine final price
Example: C2C: E-bay (www.ebay.com) of sellers’ offerings. Buyer auction – buyers request
B2B: Industry to Industry ( prices from multiple sellers. Reverse – buyers post
http://business.ebay.co.uk/) desired price for seller acceptance
4. Fixed-price sale Static call – online catalogue with fixed prices.
Example: all e-tailers Dynamic call – online catalogue with continuously
updated prices and features
5. Pure markets Spot – buyers’ and sellers’ bids clear instantly
Example: electronic share dealing
6. Barter Barter – buyers and sellers exchange goods.
Example: www.intagio.com and According to the International Reciprocal Trade
www.bartercard.co.uk Association (www.irta.com ) barter trade was over
$9 billion in 2002.