MARIA DEL MORAL GROUP F USING MIS 2e Chapter 8 E-Commerce & Supply Chain Systems

Q1 – How do companies use e-commerce? E-commerce occurs whenever goods and services are bought and sold over public and private computer networks. Merchant companies take title to the goods they sell. Nonmerchant companies arrange for the purchase and sale of goods without owning or taking title to those goods. The chart below lists the types of merchant and nonmerchant companies. Fig 8-1 E-Commerce Categories

Q1 – How do companies use e-commerce? B2C transactions occur between a supplier and retail customer. The supplier generally uses a Web storefront. B2B transactions occur between companies. B2G transactions occur between companies and governmental organizations. Fig 8-2 Example of Use of B2B, B2G, and B2C

Q1 – How do companies use e-commerce? There are three types of nonmerchant e-commerce companies: – Auctions match buyers and sellers using the e-commerce version of standard auction where the auction company receives a commission on each product that’s sold. eBay.com is the best-known example. – A clearinghouse provides goods at a stated price, arranges for delivery but never takes title to the goods. The company receives a commission on each product that’s sold. Amazon.com is the best-known example. – Electronic exchanges are a type of clearinghouse that’s similar to a stock exchange. Whenever the company matches up buyers and sellers and a transaction occurs, the exchange takes a commission. Priceline.com is the best-known example.

Q1 – How do companies use e-commerce? E-Commerce improves market efficiencies in a variety of ways, as this figure shows. Customers benefit from the first two, disintermediation and increased price information. Businesses benefit from increasing their knowledge of price elasticity. Fig 8-4 E-Commerce Market Efficiencies

Q1 – How do companies use e-commerce? Businesses need to consider the economic factors that may disfavor their participation in e-commerce such as these: – Channel conflicts that occur when a manufacturer competes with its traditional retail outlets by selling directly to the consumer. – Price conflicts that may occur by a manufacturer selling directly to consumers and undercutting retailers’ prices. – Logistics expenses increase when a manufacturer must process thousands of small-quantity orders rather than a few large-quantity orders. – Customer-service expenses increase when a manufacturer must begin dealing directly with customers rather than relying on retailers’ direct relationships with customers. Fig 8-4 E-Commerce Market Efficiencies