E-COMMERCE –An Introduction

The buying and selling of products and services by businesses and consumers through an electronic medium, without using any paper documents. E-commerce is widely considered the

buying and selling of products over the internet, but any transaction that is completed solely through electronic

measures is considered

E-commerce.

Features:

• Scalable

• Reliable

• Secure

• Cost-effective

E-Commerce Applications

• Inter-organizational (business-to-business)

- Supplier management

- Inventory management

- Distribution management

- Channel management

• Intra-organizational (within business)

- Workgroup management

- Collaborative publishing

- Sales force productivity

• Customer-to-business

- Social portals

- Transactional portals

Elements of Internet, Extranet and Intranet E-Commerce

ELEMENT INTERNET EXTRANET INTRANET

E-Commerce type

B2C (e.g. Mail order via the web) B2B (Procurement and fulfillment)

Internal procurement and processing.

Access Unrestricted (anyone can access a URL address)

Restricted to company employees, staff, and business partners)

Restricted to company customers, employeesand staff

Security Generally minimal, except for verifying credit cards and financial transaction integrity.

Firewalls and restricted access to data and applications.

Firewalls to eliminate non-companyemployees.

Payment method

Credit card or electronic cash Predefined credit agreement between businesses

Within-business charges

Trading with Untrusted customer Trusted trading partners

Trusted employees

What sorts of E-Businesses are there?

• Selling advertising space

• Selling an on-line service

• Selling a retail service

RETAIL and On-Line Retail

• Retail is the sale of goods and services from individuals orbusinesses to the end-user.

• Online retailing, a type of electronic commerce used forbusiness-to-consumer (B2C) transactions and mail order, areforms of non-shop retailing.

• E-Commerce allows small and large businesses to competeon a more level playing field, enabling to have customers allover the world.

Evolution Of On-Line Retail

Predicted Scenario: On-Line retail today:

Analyzing viability of On-Line firms

Strategic analysis:

General Factors: Barriers to entry Power of suppliers Power of customers Existence of substitutes Competition Industry value chain

Firm-specific Factors:

Firm Value Chain Core competencies Synergies Technology Social and legal challenges

Financial Analysis:

General Factors:

Sales Cost of sales Gross Profit ratio Operating expenses Net Profit Balance Sheet

E-RetailingBusiness models

Single channel web firms creating revenues from on-line sale.

Operate both On-Line and Physical space

First establish brand name, the use the strength of image, to sell or mail printed catalogs. Orders are received by mail or toll –free telephone

Generate revenues from rents and services paid for by retailers who sell on their site

Sell directly to customers On-Line without intervention of retailers

On-Line Service Sector

Service companies are those companies that provide services or perform tasks for its customers; which may include consumers, businesses, governments and other organizations.

Largest and most rapidly expanding part of the economies in advanced industrial nations

In the US, the service sector (broadly defined) employs about four out of every five workers and accounts for about 75% of all economic activity

E-commerce in the service sector offers extraordinary opportunities to deliver information, knowledge, and transaction efficiencies

The major service industry groups include:

Finance, insurance, real estate

Travel

Legal and accounting

Business services –consulting, advertising and marketing, and information processing

Banking services

Educational services

On-Line Banking sectorCyber banking/ electronic banking/ home banking

Advantages:

• Easy to check balance• Easy payment of dues• Easy Transferability• Easy handling of finances• Wider reach• Feasibility of Capital• Management• International Banking and

multiple currency handling

Limitations:• Brand name plays an

unavoidable role.• Low switching cost

increases rivalry• Threat of substitutes• Threat of negative

information.

On-Line Travel Services

Online travel is one of the most successful B2C e-commerce segments

Travel is an information intensive product requiring significant consumer

research

Travel market segments include airline tickets, hotel reservations, car

rentals, and cruises/tours

Benefits :

Easy Fare Comparison Easy Fare Tracking Free Information Prospects of potential

savings One-Stop Shopping Paperless

Environment Personalized Service.

Limitations:

Internet inaccessibility

Difficulty of usage Complex trips

require specialized knowledge.

ON LINE CAREER SERVICE INDUSTRY

The online career services are utilized by:Job seekers

1) Job offers

2) Recruiting firms

3) Government agencies and Institutions

Applications of online career service industry

Advantages & Disadvantages of online career services industry

• Provides the ability to advertise to a large no of job seekers.

• Provides the ability to save on advertisement costs.

• Provides the ability to reduce the cost of processing the applications by using electronic application form.

• Provides the ability search highly skilled employees.

• Many people do not use the internet.

• Security and privacy issues.

• online career services are not very suitable for non technology oriented jobs.

Online Real Estate services industry

Real estate transaction are an ideal area for e-commerce due to the following reasons :

• Potential buyer can view many properties on the screen which results in saving time for not only the buyer but also for the broker

• Potential buyer can make mortgage or rental comparisons or calculations

• Potential customers can view information such as neighborhood , crime reports , etc. before taking a final decision

Online insurance industry

• Online insurance industry has significantly improved to include more plans than ever before and entirely online application process

• Online insurance has enabled customers to receive quotes apply for coverage signed electronically and pay by credit card. All within approximately within ten minutes.

• The websites of online insurance companies operate as market places that enable customers to make comparisons online for a variety of insurance products, including automobile and life insurance.