IT in Business Electronic Commerce and Electronic Business Lecture – 12

IT in Business

Electronic Commerce and Electronic BusinessLecture – 12

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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.

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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.

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

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

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What is Electronic Commerce?Benefits of E-Commerce

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

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

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What is Electronic Commerce?Growth of E-Commerce

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

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Business-to-Consumer E-Commerce ApplicationsOnline Retailing and Electronic Storefronts

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

Electronic Storefront: Home page of an online retailing business.

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Business-to-Consumer E-Commerce ApplicationsElectronic Markets

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

Auctions: Shoppers make bids to determine the sale price of an item rather than relying on predetermined fixed prices.

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

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Business-to-Consumer E-Commerce ApplicationsElectronic Markets (Continued)

Forward Auction: Shoppers bid on a desired item with the knowledge that the seller will take the highest offer.

Reverse Auction: The direct opposite of a traditional auction. The bidders list their product or service requirements and the maximum price they are willing to pay for it. Potential sellers who can provide the good or service reverse bid against each other by posting their bids for buyers. The bidder offering the requested products or services at the best price wins the bid.

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Business-to-Consumer E-Commerce ApplicationsElectronic Markets (Continued)

Dutch Auctions: On electronic markets, the market operator displays a high opening price for an item and asks for buyers willing to pay the price. At pre-specified intervals, the price is lowered until a bidder is willing to pay the displayed price.

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Business-to-Consumer E-Commerce ApplicationsPortal

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.

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Business-to-Consumer E-Commerce ApplicationsOnline Services

Electronic Banking/Cyber-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– Automatic Payment of Utility Bills– Online Bill Payment– Electronic Bill Presentment– Combined Electronic Bill Presentment and Payment

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Business-to-Consumer E-Commerce ApplicationsOnline Services (Continued)

Securities and Investments

Travel Services

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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

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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.

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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.

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

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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

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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 replenish able items, monitor trends, and detect opportunities for new items.

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

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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.

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

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Business-to-Business E-Commerce ApplicationsE-Procurement

Electronic Procurement (e-procurement): Give employee access to catalogs of products and services from multiple suppliers.

Direct Spending: To obtain materials or components from suppliers for use in the manufacture of a product or delivery of a service.

Indirect Spending/Maintenance, Repair, and Operations (MRO): Buys goods and services that support operation of the company as a whole.

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Business-to-Business E-Commerce ApplicationsE-Procurement

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

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Business-to-Business E-Commerce ApplicationsElectronic Exchange

Electronic Exchange/B2B hub: Commerce sites on the Internet where buyers and sellers can come together to shop, exchange information, or carry out transactions to buy or sell products and services.

Public Exchange/Independent Exchange: A third party – the market maker – operates the electronic market, displays the market’s information content, and provides electronic tools for conducting trade.

– Vertical Exchange: Structured to serve members of a specific industry.

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Business-to-Business E-Commerce ApplicationsElectronic Exchange (Continued)

Public Exchange/Independent Exchange– Horizontal Exchange: Seeks to simultaneously serve the

interests of companies across different industries. Customers seek their services because of functional expertise rather than industry expertise.

Consortia-led Exchange: Industry players combine forces to create a common forum for the exchange of goods and services.

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Business-to-Business E-Commerce ApplicationsElectronic Exchange (Continued)

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Business-to-Business E-Commerce ApplicationsElectronic Exchange (Continued)

Private Exchange: An Internet-base trading forum (I.e., an electronic market) implemented by a single company with a select group of suppliers and customers.

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Business-to-Business E-Commerce ApplicationsElectronic Exchange (Continued)

The End

Thank You