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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/