1

Chapter 9

Electronic Commerce and Electronic Business

2

What is Electronic Commerce?Definition

• Electronic Commerce (e-commerce): Use of communication networks, including the public Internet, to conduct commercial transactions between businesses or with consumers.

3

What is Electronic Commerce?Types of Electronic Commerce

• Business-to-Consumer (B2C) E-Commerce: Electronic commerce carried out by an enterprise in order to serve its consumer customers.

• Business-to-business (B2B) E-Commerce: Companies doing business electronically with other businesses.

4

What is Electronic Commerce?Types of Electronic Commerce (Continued)

5

What is Electronic Commerce?Types of Electronic Commerce (Continued)

6

What is Electronic Commerce?Benefits of E-Commerce

• Geographic Reach• Speed• Productivity• Information Sharing• New Features• Lower Costs• Competitive Advantage

8

What is Electronic Commerce?Growth of E-Commerce

9

What is Electronic Commerce?Growth of E-Commerce (Continued)

10

Business-to-Consumer E-Commerce ApplicationsElectronic Markets

• Online Retailing: Shoppers visit a store over the Internet and check out the products.

• Electronic Storefront: Home page of an online retailing business.

• Brick and Mortar: Any physical store or building, regardless of how it is constructed or where it is located.

• Electronic Markets (e-markets): A collection of individual shops accessible through the World Wide Web.

• Auctions: Shoppers make bids rather than relying on predetermined fixed prices.

11

Business-to-Consumer E-Commerce Applications Electronic Markets (Continued)

• Forward Auction: Shoppers bid. Highest bid wins the products

• Reverse Auction: Service providers bid. Lowest price wins the business

• Dutch Auctions: High opening price for an item and asks for buyers willing to pay the price. At specified intervals, the price is lowered until a bidder is willing to pay the displayed price.

12

Business-to-Consumer E-Commerce Applications Portal

• Portal: A gateway or hub site, such as Yahoo!, that provides chat rooms.

• Content Aggregator: An e-commerce portal that assembles information (that is, content) from a variety of sources, organizing the information into a form that is useful to visitors to the Web site.

• Infomediary: A Web site that locates, retrieves, and organizes specialized information for potential users. The term is a composite of information and intermediary.

13

Business-to-Consumer E-Commerce Applications Online Services

• Electronic Banking: Customers conduct their banking activities without going to a physical bank office.– Virtual Bank: Operates exclusively over the Internet.

• Personal Finance and Bill Payment– Automatic Transfer of Bank Loan and Mortgage

Payments– Online Bill Payment– Electronic Bill Presentment

• Securities and Investments

• Travel Services

14

Functions Performed by B2C E-Commerce SiteCommon Functions of B2C sites

• Catalog and Content Management– Content: Information distributed over the Internet.

• Shopping and Checkout

• Back Office Processing– Back Office: Deals with the final steps in the sale.

• Processing Customer Payment• Updating Inventory Records• Preparing Item for Distribution

15

Functions Performed by B2C E-Commerce SiteCommon Functions of B2C sites (Continued)

• Advertising– Search Engines– Banner Ads– Interactive Marketing: The use of customer

advertising prepared to fit the profile of a specific visitor to a site.

• Interactive Coupon: Offered online.– E-Mail

• Spam: Unsolicited advertising by e-mail.

16

Business-to-Business E-Commerce ApplicationsSupply Chain Management

• Supply Chain Characteristics– Supply Chain: The flow of parts, components,

materials, funds, and information between a company’s sources and its customers.

– Supply Chain Management: The oversight of activities interconnecting suppliers and buyers.

18

Business-to-Business E-Commerce ApplicationsSupply Chain Management (Continued)

• Supply Chain Software– Capacity Requirements Planning– Demand Planning Module– Manufacturing Planning Module– Distribution Planning Module– Logistics Planning Module– Transportation Planning Module

19

Business-to-Business E-Commerce ApplicationsSupply Chain Management (Continued)

• Supply Chain Integration Strategies– Supply Chain Integration: The synchronization of all

parties involved in making a product or delivering a service in order to meet buyer, seller, and customer needs.

– Efficient Consumer Response/Continuous Replenishment: Data and information on products are captured at the point of sale and shared with suppliers periodically (usually daily) so that both can work together to jointly forecast future demand for replenishable items, monitor trends, and detect opportunities for new items.

20

Business-to-Business E-Commerce ApplicationsSupply Chain Management (Continued)

21

Business-to-Business E-Commerce ApplicationsSupply Chain Management (Continued)

• Supply Chain Integration Strategies– Efficient Consumer Response/Continuous

Replenishment• Disintermediation: Name given to removing

intermediaries (like brokers and distributors) from the supply chain.

– Vendor-Managed Inventory: Companies deal directly with vendor, that is, manufacturers or suppliers.

22

Business-to-Business E-Commerce ApplicationsSupply Chain Management (Continued)

23

Business-to-Business E-Commerce Applications E-Procurement

• E-Procurement Objectives– Reducing Purchasing Costs– Providing Employee Self-Service– Increasing Leverage with Suppliers