e Commerce(Presentation 1)

8/6/2019 e Commerce(Presentation 1)

1/16

What is Commerce ?Commerce is the exchange of items of value between personsor companies. Any exchange of money for a product, service ,orinformation is considered a deal of commerce.

In other words, substantial commerce is a process of distributionof goods from a place where they are produced and found inplenty to a place where the goods are in short supply or scarce

(limited) and hence in demand.

The concept of commerce is a very comprehensive and complexorganism and includes all the necessary functions involved inbuying and selling. It consists of all persons, organizations andinstitutions engaged in the distribution of goods.

They include railways, road transport, shipping, merchants,banks, insurance companies, brokers, wholesalers, retailers,stock market, distributors, agents, service providers etc.


2/16

Commerce-Generation

Barter System: This is system of exchange of goods against goods. This

process is having limited scope and extend to near villages.

Money Economy : Exchange of goods and service against money. This is

extended to city to city, after development of modern transport and also

implementation of foreign trade.

Face to face : Finds and designs a variant and new ways of business to sell,

buy products and services including new methods of payment. Conducting

business face to face has been the business practice for centuries. Mail order business : Later generations introduced mail order business and

the catalogue method.

Super Market: Departmental stores; consumer cooperative stores and super

markets came into existence that put a roof over goods. These developments

drove some of the small shops out of business.

Telephone ordering: Another significant event is telephone ordering, whichis nothing but a process of buying from a catalogue but without orders in

writing.

Television: Television brought the sales pitch into our living rooms and

creating an impact on our buying behavior.

Internet: Buying and selling of products and services through web.


3/16

Limitations of Conventional Commerce:

Manually and paper work: Traditionally, commercialtransitions have been carried out mainly through paperwork. They are manually transmitted and forwarded bypostal services. The process is called paper-based systemof commerce.

Delay in finalizing transitions : There are manyassociated delays like transportation delay, manualprocessing delay and ordering delay etc.

Higher Cost : It is known for higher labor cost due tomanual processing and related paper works. Other costsinclude data typing, retyping, document storage, handling,maintenance etc.


4/16

Continue.

Error Prone : The conventional commerce system iserror prone.

Uncertainty of events : Another limitation ofconventional commerce system is relating to theuncertainty of events. These uncertainties mainly pertain

to transportation. There is uncertainty about whether thetransaction is received at the other end, and there areuncertainties of cheque clearance.

Time Consuming : The entire process of business is

time consuming.

Timely analysis update and current position cannot beascertained instantly.


5/16

Continue.

Lack of business communication process: In the traditional

business communication, orders cannot be raised to reflect both thedemand and no stock availability. Immediate instructions cannot be

sent to the distributors in time with the other to ensure fast delivery of

the service.

The advantage of the potential market cannot be obtained quickly,thereby losing customers.

Offline processing (manual) will never increase sales and nor will it

provide the means for immediate payment.

There is no place in the old practice for impulse (desire/wish) buying.


6/16

Continue.

Absence of round the clock buying: The absence

of round the clock buying and level playing field aregreat drawback of conventional commerce.

Fails to benefits modern consumers: In manyrespects, conventional commerce fails to benefits

modern consumers who want and appreciate on-linetransaction.

Lack of enhance the market size : Enhancingmarket size is a long time consuming process not

advantageous to the remote merchants andcustomers. This fails to generate substantialbusiness.


7/16

Continue.

No direct contact between producer & the consumer :

The traditional method of doing business involves

middlemen like distributors, resellers, agents etc. There is

no direct contact between the producer and the

consumer. Consumers would get goods through severalmarket intermediaries. This subsequently increase the

price of goods which consumers finally pay.

Not cost effective : It is not cost effective and does notpermit lowest transaction cost in a traditional commercial

practice.


8/16

What is E-Commerce ?

E-commerce is a revolutionary form of industry thatenables organizations to interact electronically with theircustomers. It allows companies to be more flexible andefficient in their operations and also leads to enhancingcloser relationships with both the customers andsuppliers. E-commerce is the tool which can extend acompany's reach to a global level. The Internet is a globalbusiness platform for companies all over the world.

Electronic commerce (EC) is the ability to deliver

products, services, information, or payments via networkssuch as the Internet and the World Wide Web.


9/16

Need of E-commerce

From the communication perspective: It is the ability to

deliver products, services, information, or payments vianetworks like the Internet.

From an interface view, e-commerce means information andtransaction exchanges; business-to-business (B2B), business

to-Consumer (B2C), Consumer-to-Consumer (C2C),andBusiness-to-Government (B2G).

As a business process, e-commerce means activities thatsupport commerce electronically by networked connections.For example, business processes like manufacturing andinventory and business-to-business processes like supply chainmanagement are managed by the same networks as business-to-consumer processes.


10/16

Benefit of E-commerce to organisation,

consumers and society Lower cost to the E-merchant : Doing e-business on the internet is cost

effective; it reduces logistical problems and give small business equalvisibility with giants (huge) like Amazon. COM, General Motors, or Bankof America. Any financial transaction, which is done electronic is cheaperas compare to manually.

Economy : By any standard, e-commerce is economical. Unlike the brick-and-mortar environment, there is no rental of physical store space,insurance or infrastructure investment. As you need is an idea, a unique

product, and a well-designed web storefront to reach your cyber-customers,and a partner to make the delivery.

Higher Margins : E-commerce means higher margins. For e.g., the cost of processing a conventional airline ticket is $8. According to a local travelagency, processing the same ticket ( called an e-ticket) over the web costs$1. Along with higher margins, businesses can gain more control andflexibility and save time when manual transactions are done electronically.


11/16

Continue

Better Customer Services: E-commerce means better and quicker

customer services. Web-based customer service makes customers happy.Instead of calling a company on the phone, holding for 20 minutes, then

connecting to a clerk to tap into your account, customers have direct access

to their accounts over the web. It save time and money.

Quick Comparison shopping: E- commerce helps consumers to

comparison shop and according to that customer can select the product asper his/her taste and budget.

Productivity gains : E-commerce means productivity gains. weaving the

web throughout an organisation means improved productivity.

Teamwork: E-commerce means working together. E-mail is one example of

how people collaborate to exchange information and work on solutions. Ithas transformed the way organizations interact with suppliers, vendors,

business partners and customers. More interaction means better overall

results.


12/16

Continue. rowth in knowledge market: E-commerce helps create knowledge

markets, small groups inside big firms can be funded with seed (beginning)money to development new ideas.

Information sharing, convenience, and control : Electronicmarketplaces improve information sharing between merchants and

customers and promote quick, just-in-time deliveries. Customers andmerchants save money; are online 24 hours a day, 7 days a week;experience no traffic jams, no crowds and do not have to carry heavyshopping bags. Control is another major driving factor. Instead of bankscontrolling the relationship with the customers, they can have more controlof their banking need via web sites. todays bank provide facility to access

their accounts via. web. Customization : Digital products are highly customizable. They are easy

to reorganize, revise, or edit. With information about consumer tastes and preferences, products can be differentiated ( customized) and matched toindividual needs.


13/16

Drawback of E-commerce

The Cost Factor: To set up an e-commerce infrastructure, we need cash, beyond a sophisticated interactive web site, networks, servers, terminals,

software, staffing and training. Transaction costs are another issue. Theelectronic market place appears to be a perfect market, where worldwidesellers and buyers share information and trade without intermediaries. Newtypes of intermediaries like electronic malls that guarantee product quality,mediators for bargaining, and certification authorities to ensure the legitimacyof transactions add to transaction costs.

Security : with crackers, file corruption and misuse's, no company can affordto do business online without protection via firewalls, specialized antivirus

products etc. For millions of potential cyber-customers, the fear of credit cardtheft and identity theft continues to be concern. The goal of an onlinemerchant is to assure customers secure lines and secure sites that will protecttheir privacy, whatever the transaction.

System and Data Integrity : Data protection and the integrity of the systemthat handles the data are serious concerns. Computer viruses are (uncontrolled), with new viruses discovered every day. Viruses cause unnecessary delays ,file backups , storage problems etc. The danger of hackers accessing files andcorrupting accounts adds more stress to an already complex operations.


14/16

Continue..

System Scalability (upgradeable) : A business develops an interactive

interface with customers via a web site. After a while, statistical analysisdetermines whether visitors to the site are one-time or recurring customers.

If the company expects two million customers and six million show up ,

web site performance is bound to experience degradation, slowdown, and

eventually loss of customers. To keep this problem from happening, a web

site must be scalable or upgradeable on the regular basis.

E-Commerce is not Free : For a long time, success stories in e-commerce

have favored (special) large businesses with deep pockets and smart

finding. Small retailers that go head-to-head with e-commerce giants (huge)

could be in for a surprise. As in the brick-and-mortar environment, they

simply cannot compete on price or product offering. Brand loyalty is

related to this issue. Brands are expected to lower search costs, build trust

and communicate quality. Users remain suspicious (doubtful) of search

engines for locating product information; instead, they rely on recognized

dot-com brands for purchases.


15/16

Continue..

Fulfillment and Customer Relations Problem : Fulfillment and customer

relations is the one of the big issues in e-commerce. Without prompt delivery of

product and less quick response to customer complaints is effect the relationship.

The interpersonal part of e-commerce between e-merchants and customers

continues to be a setback. Many web sites lack a phone contact to discuss order

problems with humans. This is also the case with help desks that are designed to

help customers wade through technical problems. The lines are either busy or

simply do not answer. This is directly related to fulfillment problems, when

customers have a difficult time receiving or returning items purchased over a

merchants web site. The best approach is to have customers who purchase items

via the companys web site go to the nearest companys brick-and-mortar store and

settle the complaint in person. This is what has been recently called click n brick

business.

Cultural, language and trust issues: There are global issues. When e-commerce

and the internet went global, there was an obvious pressure to adapt e-market, e-

products, and interfaces to cultural expectations and constraints. Culture is the set

of norms. Some merchants are display their product in their languages. It become

difficult to the customer to understand. Trust is another issue to know the product is

qualitative and reasonable .


16/16

Continue..

Lack of awareness : There is a continuing shortage of e-

literate people in the workplace. Most of the surveysconducted in 2003 and 2004 conclude that few managers have

e-commerce skills, Internet experience, or foresight. They also

have a tough time attracting people wanting to take advantage

of online opportunities. Traditional organizational structuresand cultures were also found to inhibit progress in e-

commerce.

Corporate weakness : The availability of products details,

catalogs and other information about a business through its

web site makes it vulnerable to access by the competition. Theidea of extracting business intelligence from the competitions

web pages is (called web farming) dangers to selecting right

product.

e Commerce(Presentation 1)

Documents

Transcript of e Commerce(Presentation 1)