Introduction To E-Business and E-Commerce

Chapter 1
Introduction to e-business and

e-commerce
What Is E-commerce?
• Use of Internet and Web to transact business

• More formally:
• Digitally enabled commercial transactions between and among organizations
and individuals
Slide
Copyright © 2016 Pearson Education, Ltd.
1-2
What Is E-commerce?
E-commerce: Electronic commerce (e-commerce)

All electronically mediated information exchanges between an
organization and its external stakeholders Kalakota and Whinston
(1997) refer to a range of different perspectives for
e-commerce:
.
Slide
1-3
What Is E-commerce?
1 A communications perspective – the delivery of information,
products or services or payment by electronic means.
2 A business process perspective – the application of technology
towards the automation of business transactions and work-flows.
3 A service perspective – enabling cost cutting at the same time
as increasing the speed and quality of service delivery.
4 An online perspective – the buying and selling of products and
information online. Slide
1-4
E-commerce Trends 2014–2015
• Retail e-commerce grows over 15%
• Continued expansion of mobile, social, and
local e-commerce
• Mobile platform rivals PC platform
• Continued growth of cloud computing
• Explosive growth in Big Data
• Continued growth of user-generated content
on social networks, blogs, wikis
Slide
1-5
The First 30 Seconds
• First 20 years of e-commerce

• Just the beginning
• Rapid growth and change
• Technologies continue to evolve at exponential rates
• Disruptive business change
• New opportunities
Slide
1-6
E-commerce vs. E-business
• E-business:
• Digital enabling of transactions and processes within a firm,
involving information systems under firm’s control
• Does not include commercial transactions involving an

exchange of value across organizational boundaries
Slide
1-7
Slide
1-8
Buy-side e-commerce and Sell-side
e-commerce
• Buy-side e-commerce
E-commerce transactions between a purchasing organization and
its suppliers.
• Sell-side e-commerce
E-commerce transactions between a supplier organization and its
customers.
Figure 1.2 The distinction between buy-side and sell-side e-commerce
Figure 1.3 Three definitions of the relationship between e-commerce and e-business
Figure 1.4 The relationship between intranets, extranets and the Internet
Intranet and Extranet
• Intranet :
A private network within a single company using Internet
standards to enable employees to access and share information
using web publishing technology.
• Extranet :
A service provided through Internet and web technology delivered
by extending an intranet beyond a company to customers,
suppliers and collaborators.
Why Study E-commerce?
• E-commerce technology is different, more powerful than previous

technologies
• E-commerce brings fundamental changes to commerce
• Traditional commerce:
• Consumer as passive targets
• Mass-marketing driven
• Sales-force driven
• Fixed prices
• Information asymmetry
Slide
1-14
Eight 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
Slide
1-15
Slide
1-16
The impact of the Internet on business
• Andy Grove, Chairman of Intel, one of the early adopters of e-

commerce, has made a meteorological analogy with the Internet.
• He says:
Is the Internet a typhoon force, a ten times force, or is it a bit of
wind? Or is it a force that fundamentally alters our business?
(Grove, 1996)
Internet risks – what can go wrong with a
transactional site?
False orders made by customer .1

Incorrectly input orders .2
Insufficient security .3
People are usually hesitant to give out banking details over the internet .4
After sales service may be hard to organize depending on store location and .5
postage
E-business opportunities
• Reach
• Over 1 billion users globally
• Connect to millions of products
• Richness
• Detailed product information on 20 billion + pages indexed by Google.
Blogs, videos, feeds…
• Personalized messages for users
• Affiliation
• Partnerships are key in the networked economy
Types of E-commerce
• Selling Side
• Transaction e-commerce sites
• Service-oriented relationship-building site
• Brand-building sites
• Portal, publisher or media sites
Types of E-commerce
• Digital Marketing
• The management and execution of marketing using e-media in
conjunction with digital data about customer
• Involves using digital technology
• To achieve these objectives
• Through using these marketing tactics
e-Commerce and SCM
• What’s Supply Chain Management (SCM)

• The coordination of all supply activities of an organization from its
supplier and partners to its customers
• Value Chain
• Necessarily processing, converting, improving or adding value to a
particular product (from its original state) thereby giving more appeal,
utility or value to a new product that promises a level of satisfaction to
prospective clients or customers.
How e-Commerce impact SCM?
Cost efficiency
E-commerce allows transportation companies of all sizes to exchange cargo documents electronically over the Internet.
By using e-commerce, companies can reduce costs, improve data accuracy, streamline business processes, accelerate
business cycles, and enhance customer service.
Changes in the distribution system

E-commerce will give businesses more flexibility in managing the increasingly complex movement of products and
information between businesses, their suppliers and customers.
Customer orientation
E-commerce is a vital link in the support of logistics and transportation services for both internal and external
customers. E-commerce will help companies deliver better services to their customers, accelerate the growth of the e-
commerce initiatives that are critical to their business, and lower their operating costs.
Shipment tracking
E-commerce will allow users to establish an account and obtain real-time information about cargo shipments
Business-Consumer Model of e-Commerce
• Classified by market relationship
• Business-to-Consumer (B2C)
example: www.amazon.co.uk
• Business-to-Business (B2B)
Example: manufacturers and wholesalers or between retailers and wholesalers (Bajaj India to Uttara
Motors)
• Consumer-to-Consumer (C2C)
Example: www.bikroy.com, ebay
Business-Consumer Model of e-Commerce
• Classified by technology used
• Mobile commerce (M-commerce):-The use of wireless handheld devices such
as cellular phones and laptops to conduct commercial transactions online.
Summary
Figure 1.8
and examples of
transaction
alternatives
between
businesses,
consumers and
governmental
organizations
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
Business Adoption of E-Commerce/Business
• Drivers for Adoption-Profit generation and cost reduction

• Tangible and Intangible benefits from e-business.
A simple stage model for buy-side and sell-side e-
commerce
• An example of a basic stage model reviewing capabilities for

sell-side and buy-side e-commerce is shown in (Figure
1.13) .This shows how companies will introduce more complex
technologies and extend the range of processes which are e-
business-enabled.
A
Figure 1.13
simple stage
model for
buy-side and
sell-side e-
commerce

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Chapter 1

Introduction to e-business and

• Use of Internet and Web to transact business

E-commerce: Electronic commerce (e-commerce)

• First 20 years of e-commerce

• Does not include commercial transactions involving an

• E-commerce technology is different, more powerful than previous

• Andy Grove, Chairman of Intel, one of the early adopters of e-

False orders made by customer .1

• What’s Supply Chain Management (SCM)

Changes in the distribution system

• Drivers for Adoption-Profit generation and cost reduction

• An example of a basic stage model reviewing capabilities for

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