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E-Business and E-Commerce. MIS Chapter 5. Jack G. Zheng May 23rd 2008. Introduction. What is e-commerce “Electronic commerce (e-commerce) is any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services.”*

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E business and e commerce

E-Business and E-Commerce

MIS Chapter 5

Jack G. Zheng

May 23rd 2008


  • What is e-commerce

    • “Electronic commerce (e-commerce) is any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services.”*

    • Or simply, buying and selling on the Internet (Web)

  • What is e-business

    • “Electronic business (e-business) is any process that a business organization conducts over a computer-mediated network.”*

    • “Any business processes (activities)” include both internal and external, transactional and non-transactional

    • It covers e-commerce

* See http://www.census.gov/epcd/www/ebusines.htm

E commerce models
E-Commerce Models

  • B2C (business to consumer)

    • The most well known

  • B2B (business to business)

    • The largest segment (12 times more than B2C)

  • C2C (consumer to consumer)

    • Auction sites such as ebay.com

  • C2B (consumer to business)?

    • Not well implemented

    • Usually means buyer-centered reverse auction

      • priceline.com

  • E commerce growth
    E-Commerce Growth

    • E-Commerce Growth in the USA

    E activity e society
    E-Activity? E-Society?














    B2c e commerce e tailer styles
    B2C E-Commerce (e-Tailer) Styles

    • Pure plays

      • No physical stores

      • Amazon, Dell, E*Trade …

    • Click(s)-and-mortar

      • Retailers which has both an Internet presence and physical stores (or retail agent)

      • In contrast to brick-and-mortar

    • M-Commerce

      • “M” for mobile – using mobile devices like cell phone, PDA, or laptop

    What is likely to be sold online
    What is likely to be sold online?

    • Commodity-like products

      • Product features are uniform and standard; look and feel is not important

    • Are the following commodity like products?

      • Books?

      • Electronics? Computer (parts)?

      • Furniture?

      • Clothes? Shoes?

      • Grocery? (Webvan case study)

        • Why did it fail?

        • Are there opportunities for online grocery? What are the ways to succeed?

    Digital products
    Digital Products

    • Digital products (information products): software, video, music, e-book, articles, reports, news …

      • They don’t have physical appearance

      • They are easy to be mass-customized and personalized

      • They can be delivered at the time of purchase

      • Fixed cost is high while marginal cost is close to zero

    • The distribution of information products is expected to change dramatically in future

      • They have global reach

      • They foster disintermediation

      • Information product medium is less important

      • Unbundling: only pay for the part you want

      • Micro-payments

    How b2b is different from b2c
    How B2B is different from B2C?

    • MRO (maintenance, repair and operation materials)

      • Indirect materials

      • Materials that are necessary for running a business, but do not directly contribute to the primary business activities

      • For example, office supplies

    • Direct materials

      • Directly used in manufacturing or service

      • Critical to their business

    How b2b is different from b2c1
    How B2B is different from B2C?

    • Transaction is

      • Contracted

      • Regular, continuous and repeated

      • Large amount

      • More procedures

    • Billing and payment is

      • Regular, continuous and repeated

      • Usually separate from delivery

      • Large amount

      • More procedures

    B2b automation
    B2B Automation

    • B2B has the need to be automated by computer systems

      • Save cost (human labor)

      • Save time (lead time)

    • There is the need to integrate computer systems and processes from both parties

      • EDI (Electronic Data Interchange)

      • XML and Web Services

    Edi 1
    EDI (1)

    • EDI is the direct computer-to-computer transfer of transaction information in standard business documents, in a standard format

    • Computer-to-computer exchange

      • Over a telecommunication network (VAN, or the Internet)

    Edi 2
    EDI (2)

    • Standard business document

      • Formal business document, such as request for quotation and purchase order (ANSI X12)

    • Standard format

      • A fixed, predefined format that both computer system can understand

    • EDI replaces paper documents processing, thus

      • shortens purchase/supply cycle

      • lower labor costs

    E commerce payment systems
    E-Commerce Payment Systems

    • B2C/C2C

      • Credit cards and smart cards (cash cards)

      • Electronic check (electronic transfer)

      • Financial cybermediary (online payment service)

        • PayPal

      • Electronic Bill Presentment and Payment (EBPP) systems

      • Digital wallet

    • B2B

      • Financial EDI (FEDI), which directly involves banks

    Good resources
    Good Resources

    • E-Stats from US Census

      • http://www.census.gov/eos/www/ebusiness614.htm

    • CIO.com eCommerce Center

      • http://www.cio.com/research/ec/

    • Web security

      • http://www.secinf.net/websecurity/