COMPUTER APPLICATION

FOR BUSINESS II

What is Commerce

• Commerce is the whole system of an economy that constitutes an environment for business.

• Commerce is a branch of business. It is concerned with the exchange of goods and services. It includes all those activities, which directly or indirectly facilitate that exchange.

• Commerce is concerned with the distribution of goods & services.

What is E-Commerce

• Electronic commerce, commonly known as e-commerce, is a type of industry where buying and selling of product or service is conducted over electronic systems such as the Internet and other computer networks.

What is E-Commerce

• E-commerce involves digitally enabled commercial transactions between and among organizations and individuals.

• The buying and selling of products and services by businesses and consumers through an electronic medium, without using any paper documents.

What is E-Commerce

• A type of business model that enables a firm or individual to conduct business over an electronic network, typically the internet.

What is E-Commerce

What is E-Commerce

What is E-Commerce

History of E-Commerce• The growth and acceptance of credit cards,

automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce.

• Another form of E-Commerce was the airline reservation system, for example Sabre in the USA and Travicom in the UK.

• By the end of 2000, many European and American business companies offered their services through the World Wide Web.

• Since then people began to associate a word “E-Commerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services.

Amazon.com: Before and After

Amazon.com: Before and After Most well-known e-commerce company Conceived by Jeff Bezos in 1994 Opened in July 1995 Four compelling reasons to shop

Selection (1.1 million titles) Convenience (anytime, anywhere) Price (high discounts on bestsellers) Service (automated order confirmation,

tracking, and shipping information)

Amazon.com: Before and After

($1.4 Billion)$2.7 Billion2000

($720 Million)$1.6 Billion1999

($125 Million)$610 Million1998

($31 Million)$148 Million1997

($6.24 Million)$15.6 Million1996

EarningsRevenues

Revenues and Earnings

Advantages of E-commerce

• Faster buying/selling procedure, as well as easy to find products.

• Buying/selling 24/7. • Low operational costs and better quality of services. • Easy to start and manage a business. • No need of physical company set-ups.• Customers can easily select products from different

providers without moving around physically.

Disadvantages of E-commerce

• There is no guarantee of product quality.• There are many hackers who look for opportunities, and thus

an ecommerce site, service, payment gateways, all are always prone to attack.

E-commerce vs. E-business

E-commerce involves Digitally enabled commercial transactions

between organizations and individuals. Digitally enabled transactions include all

transactions mediated by digital technology Commercial transactions involve the

exchange of value across organizational or individual boundaries in return for products or services

E-commerce vs. E-business

E-business involves Digital enablement of transactions and

processes within a firm, involving information systems under the control of the firm

E-business does not involve commercial transactions across organizational boundaries where value is exchanged

The Difference Between E-commerce and E-Business

• Electronic commerce was identified as the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT).

• What is EDI?• What is EFT?

Electronic Payment System

Electronic Payment System

• An electronic payment system facilitates the acceptance of electronic payment for online transactions.

• Electronic / Online payment usually is the transaction that results in transfer of monetary funds from the customer bank or credit card account to your bank account.

Electronic Payment System

• Electronic Payment is a financial exchange that takes place online between buyers and sellers.

• Online payment services allow business and consumers to exchange money electronically over the Internet. With an online payment service, your business can receive payment from virtually any customer with an email account.

Electronic Payment System

Electronic Payment System

Online Payment Process

• Customer submits the payment information to the merchant. For example customer completes the payment form on the merchant website and submits the information.

• The merchant submits the payment information to the online payment gateway.

• The online payment gateway submits the payment to the payment processor.

Online Payment Process

• The payment processor authorizes the payment and responds to the payment gateway

• The payment gateway responds back to the merchant

• The merchant responds back to the customer showing if the online payment was successful or not and taking the appropriate action.

Online Payment Process

Payment Gateway (Service Provider)

Unique of E-commerce Technology and Their Business Significance

E-commerce: is ubiquitous has global reach operates according to universal

standards provides information richness is interactive increases information density permits personalization

Seven Unique Features of E-commerce Technology and Their Business Significance

Major Types of E-Commerce

Market relationships Business-to-Consumers (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C)

Technology-based Peer-to-Peer (P2P) Mobile Commerce (M-commerce)

Major Types of E-Commerce

Business-to-Consumer E-commerce

Most commonly discussed type Online businesses attempt to reach individual

consumers, it provides direct selling through online.

Consumers spend $65 billion in 2001. Businesses selling to the general public typically

through catalogs utilizing shopping cart software. B2C is the indirect trade between the company

and consumers. If you want to sell goods and services to

customer so that anybody can purchase any products directly from supplier’s website.

BUSINESS TO BUSINESS (B2B)

• B2B can be open to all interested parties or limited to specific, pre-qualified participants (private electronic market).

• Companies doing business with each other such as manufacturers selling to distributors and wholesalers selling to retailers.

Business-to-Business E-commerce Businesses focus on sell to other

businesses Largest form of e-commerce $700 billion in transactions in 2001 Primarily involved inter-business

exchanges at first Other models have developed

e-distributors Infomediaries (information and intermediary) B2B service providers

Consumer-to-Consumer E-commerce

Provide a way for consumers to sell to each other

Estimated $5 billion market Consumer:

prepares the product for market places the product for auction or sale relies on market maker to provide

catalog, search engine, and transaction clearing capabilities

CONSUMER TO CONSUMER (C2C)

• It facilitates the online transaction of goods or services between two people.

• Though there is no visible intermediary involved but the parties cannot carry out the transactions without the platform which is provided by the online market maker such as eBay.

CONSUMER TO BUSINESS (C2B)

• A consumer posts his project with a set budget online and within hours companies review the consumer's requirements and bid on the project.

• The consumer reviews the bids and selects the company that will complete the project.

• C2B empowers consumers around the world by providing the meeting ground and platform for such transactions.

Peer-to-Peer E-commerce

Enables Internet users to share files and computer resources

Napster

Mobile E-commerce

Wireless digital devices enable transactions on the Web

Uses personal digital assistants (PDAs) to connect

Used most widely in Japan and Europe

E-COMMERCE EXAMPLES:

• An individual purchases a book on the Internet.• A government employee reserves a hotel room over

the Internet. • A business buys office supplies on-line or through an

electronic auction. • A manufacturing plant orders electronic components

from another plant within the company using the company's intranet.

E-Commerce I and II E-Commerce I

Explosive growth starting in 1995 Widespread of Web to advertise products Ended in 2000 when dot.com began to

collapse E-Commerce II

Began in January 2001 Reassessment of e-commerce companies

E-Commerce I 1995-2000

Disintermediation displacement of market middlemen

who traditionally are intermediaries between producers and consumers by a new direct relationship between manufacturers and content originators with their customers

E-Commerce I 1995-2000

Friction-free commerce a vision of commerce in which

information is equally distributed transaction costs are low prices can be dynamically adjusted to

reflect actual demand intermediaries decline unfair competitive advantages are

eliminated

E-Commerce II 2001-2006 Crash in stock market values of E-commerce

I companies throughout 2000 is an end to E-commerce I

Led to a sobering reassessment of the prospects of e-commerce and the methods of achieving business success.

E-Commerce II 2001-2006 Reasons for the end of E-Commerce I

run-up in technology stocks due to enormous information technology capital expenditure of firms rebuilding their internal business systems to withstand Y2K

telecommunications industry had built excess capacity in high-speed fiber optic networks

1999 e-commerce Christmas season provided less sales growth that anticipated and demonstrated e-commerce was not easy (eToys.com)

valuations of dot.com and technology companies had risen so high supporters were questioning whether earnings could justify the prices of the shares.

E-Commerce I and E-Commerce II Compared

The Internet and the Evolution of Corporate Computing

Disciplines Concerned with E-Commerce