Amity School of Business BBA, Semester - II E - Commerce Arpan Sinha

Module -1 E-Commerce – Foundation (Understanding E-Commerce)

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.

Electronic Commerce : Introduction E-Business E-Commerce Internet Commerce

The Cycle of Electronic Commerce Access Searches Queries Surfing Follow-on Sales Customers Online Ads Online Orders Standard Orders Distribution Online: soft goods Delivery: hard goods Electronic Customer Support

Components of Electronic Commerce Processes Institution Marketing Sales Payment Fulfillment Support Government Merchants Manufacturers Suppliers Consumers Electronic Commerce Networks Intranet Extranet Internet

Generic Framework of Electronic Commerce Electronic Commerce Applications Supply Chain Management Online Marketing and Advertising Procurement & Purchasing Online Shopping Audio and Video on Demand Online Financial Transaction Entertainment and Gaming Education and Research Common Business Services Infrastructure (Security/Authentication, Electronic Payment, Directories/Catalogs) Technical standards for electronic documents, multimedia contents, business transactions, and network protocols Public policy, legal, economical development, and privacy issues Multimedia Content & Network Publishing Infrastructure (Digital Video, Electronic Books, World Wide Web) Messaging & Information Distribution Infrastructure (EDI, E-Mail, HyperText Transfer Protocol) Information Superhighway Infrastructure (Telecom, Cable TV, Wireless, Internet)

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. E-business 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.

Difference between E-commerce and E-Business 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.

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:

E-Commerce Advantages E-Commerce Disadvantages

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

Issues in E-Commerce Confidentiality: Privacy: 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: Non-repudiation: Authenticity: Confidentiality: Privacy:

Impact of E-Commerce In Business : - In Economic In Society

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 value-chain 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 value-creating 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 sorts of activities together – therefore, the value chain

Value Chain in E-commerce Value chain activities are divided into two activities: Primary Activities Support Activities Primary Activities of a business are: Inbound Logistics: Operations: Outbound Logistics Service

Value Chain in E-commerce Support Activities of a business are : Corporate Infrastructure: Human Resources: Technology development:

E-Commerce Strategies Value proposition Market opportunity Competitive environment Competitive advantage Market strategy Organization development plan Management Team Revenue Model

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 has a business model, Free home pages fir 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.

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

E-Business Challenges Security : Threat of hacking Customer Privacy : Lacks human warmth : Sincerity of sellers and buyers Information Overload

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