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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

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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

    Advantages and problems of b2c

    Advantages and Problems of B2C

    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/

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