Amity School of Business

Amity School of Business

BBA, Semester IV E-Commerce Ms Bhawana Gupta

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MODULE-I Understanding E-commerce

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E-Commerce
Electronic commerce is an emerging model of new selling and merchandising tools in which buyers are able to participate in all phases of a purchase decision, while stepping through those processes electronically rather than in a physical store or by phone (with a physical catalog). The processes in electronic commerce include enabling a customer to access product information, select items to purchase, purchase items securely, and have the purchase settled financially. It is an emerging concept that describes the process of buying and selling or exchanging of products, services; and information via computer networks including the Internet.
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E-Business
E-Business implies the use of web-based technology to buy and sell goods and services, create value and strengthen relationship with customers, suppliers, business partners, shareholders and employees. Ebusiness refers to a broader definition of e-commerce; it not only includes buying and selling but also servicing customers and collaborating with business partners through electronic media. E-Business goes beyond e-commerce by integrating e-commerce tightly with business operations to improve performance, create value and enable new relationships between business firms and customers.
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Difference between E-commerce and E-Business

1. The term e-commerce usually refers to monetary transactions that mainly include the buying or selling or products or services. However, other business functions like marketing, customer education, customer support, getting raw materials etc come under the term of e-business as they all are business functions. If you are successfully selling something, that is considered as an ecommerce activity. However, brining customers to your website by efficiently marketing your product and maintaining the standard of your website is an e-business activity. Moreover, educating your customers about the website and about the products or services is also an e-business activity. To order to have a successful e-business, you need to get the appreciation of the customers and you need to use tools and techniques that can help you in bringing healthy amount of customers towards your website. Moreover, your website needs to have a better search engine rating which is an e-business activity 5

Difference between E-commerce and E-Business

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2. E-Commerce is often described as outward process as it involves processes like reaching the customers, any external partner, external suppliers etc. On the other hand, e-business covers various internal processes like content management, risk management, inventory management, production management, finance management and other internal business processes. 3. If you are willing to start your e-business, you must think about all business processes while outsourcing the e-commerce services using various web development companies. E-commerce can be considered as an online way of transaction while e-business can be described as the management of various business functions that enable successful 6 transactions and growth of the business.

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Example of E-commerce and EBusiness

When Dell sell , laptops, monitors, printers, accessories etc online then it is not engaged in e-commerce but e-business. Let me tell you how. When a visitor comes on the website, the first thing he see is website design and navigation as well as those things which are going to help him find what he is looking for and if he directly lands on the page he was looking for, he looks for the information related to it. The information provided should be appealing and clear maximum doubts of the visitor so as to convert him in a client. Till now no money has been exchanged nor been talked about. So, was this e-commerce? No, it is e-business which guides the visitor.
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Myths about E-commerce

Setting up a E-commerce Web site is easy E-commerce means the end of mass marketing Everyone is doing it. E-Commerce means a new economy. Build it and they will come.

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E-commerce Advantages
Being able to conduct business 24 x 7 x 365 : E-commerce systems can operate all day every day. Your physical storefront does not need to be open in order for customers and suppliers to be doing business with you electronically. Launching of New Products and Sales Promotion: It is easier to launch a new product through the Internet. Complete information about the product can be provided over the Internet. Emails about the launch of the new product can be sent to the dealers and customers. Lower cost of staff : There is paperless exchange of information. This saves a lot of time, money and energy in receiving orders and executing the dame under the traditional mode of ecommerce. Thus, less clerical work is involved. As a result, there is reduction in labour cost of the business.
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E-commerce Advantages
Speedy Payments: Payments between business firms and customers and also between business firms can be made online without any loss of time. E-commerce eliminates the need of issue of cheque by the customer, deposit of cheque by the seller with the banking, and sending the cheque for clearing by the bank. The facility of electronic transfer of funds has given a great boost to trade and ecommerce. Flexibility: E-commerce provides flexibility to marketers. Information sent to customers about products through mailed catalogues cannot be changed until the next mail is sent but online catalogues can be changed any moment the seller wants. Wider Reach: E-commerce has increased the reach of business firm. They can make sales to customers spread over all parts of the world.

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E-commerce Advantages
Direct contact with customers: E-commerce helps the business firm to establish direct contact with the customers through the internet. It allows the firm to focus on specific types of customers. Cost of intermediaries or middlemen are saved. Better Customer Service: E-commerce allows quick response to the queries of customers about price, product features, quality, etc. It also increases customer satisfaction through quick delivery of goods. The customer need not visit the store of the business firm for making purchase.

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Constraints in E-Commerce
The Cost Factor Security System and Data Integrity System Scalability Fulfillment and Customer Relations Problems Lack of E-Commerce Professionals Corporate Vulnerability

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Issues in E-Commerce
E-Commerce systems are based on Internet Technologies, which provide open and easy communications on a global basis. However, since Internet is unregulated, unmanaged and uncontrolled, it introduces a wide range of risks and threats to the systems operating on it. The following are the security issues related to e-commerce are: Integrity: Ability to ensure that information being displayed on a web site has not been altered in any way by an unauthorized party. Customer perspective has information transmitted or received been altered? Merchants perspective has data on the site been altered without authorization? Is the data being received from customer valid?
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Issues in E-Commerce
- Non-repudiation: The ability to ensure that e-com participant do not deny their online actions Customer can a party in an action with me later deny taking that action? Merchant can a customer deny ordered products? - Authenticity: The ability to identify the identity of a person or entity with whom one is dealing. Customer who am I dealing with? How do I be assured that the person or entity is who they claim to be? Merchant what is the real identity of the customer? 14

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Issues in E-Commerce
- Confidentiality: The ability to ensure that message and data are available to only those who are authorized to view it. Customer can someone other that the intended recipient read my message? Merchant are message or confidential data accessible to anyone other than those authorized to view it? - Privacy: The ability to control the use of information about oneself. Customer can I see that only information relevant to context is provided? Merchant is the personal information of customers used in some unwilling & unauthorized manner? 15

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Value Chain in E-commerce

VALUE CHAIN : a way of organizing the activities of a business so that each activity adds value (value added activity) or productivity to the total operations of the business. It is a strategic tool for identifying how the critical components of a business tie together to deliver value for the business across the valuechain process. Business receive raw materials as input, add value to them through various processes, and sell the finished product as output to customers. This means that organizations are open systems. They do not consist of isolated sets of function. They are a chain of valuecreating activities that assure competitive advantages by the way they deliver value to the customers. A communication process that extends from a firm backward to suppliers and forward to customers ties all 16 sorts of activities together therefore, the value chain

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Value Chain in E-commerce

Value chain activities are divided into two activities: 1. Primary Activities 2. Support Activities Primary Activities of a business are:
1. 2. 3. 4. 5. Inbound Logistics Operations Outbound Logistics Service. Marketing and Sales
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Value Chain in E-commerce

Support Activities of a business are :
1. 2. 3. Corporate Infrastructure Human Resources Technology development

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E-Commerce Strategies
Value proposition Why should the customer buy from you? What is unique about you that other dont have? Market opportunity Refers to the companys intended market space and the overall potential financial opportunities available to the firm in that market space. Competitive environment Refers to the other companies operating in the same market space selling similar products. Competitive advantage Achieved by firm when it can offer a superior product/service at a lower price that its competitors. 19

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E-Commerce Strategies
Market strategy Its a plan, the organization put together that details exactly how it intend to enter a new market and attract new customers. Organization development plan Describes how the company will organize the work that needs to be accomplished. Management Team Right people, at right place with right decision making capabilities. Should be responsible for making the business model work. Revenue Model How the firm will generate the revenue, produce profits and superior return on invested capital. 20

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E-Commerce Business Models

Websites are not free; every one costs money to develop and maintain. The cost and potential revenue constitute a Business model. It is a way of doing business to sustain a business-generate revenue. Free e-mail service is a business model, Free home pages fix into a business model. The business model spells out how a company makes money by showing where it is in the value chain. There are different models in e-commerce . Each model has it own unique features and offering.
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E-Commerce Business Models

STOREFRONT MODEL CLICK-AND-MORTAR BROKER MODEL SUBSCRIPTION-BASED ACCESS MODEL PREPAID ACCESS MODEL BUILT TO ORDER MERCHANT MODEL VIRTUAL MALL MODEL

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