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Lecture 5
Ch. 6
E-Business and E-Commerce
6.1 e-Business Challenges and Str
• Mix of online channels & media gives consumers strong
control over where and how they interact with a business or
Managers need to know how to respond to changing
consumer behavior & needs of business customers –
and how to deal with IT software vendors and consulting
– EC Organizations
E-commerce describes the process of buying, selling,
transferring, or exchanging products, services, and/or information
via computer networks, including the Internet. E-business refers
to a broader definition of e-commerce, not just the buying and
selling of goods and services, but also servicing customers,
collaborating with business partners, conducting e-learning, and
processing electronic transactions.
• Brick-and-mortar (or old-economy) refer to pure phy
sical organizations (corporations).
• Virtual (or pure-play) organizations are companies t
hat are engaged only in EC .
• Click-and-mortar (or click-and-brick) organizations a
re those that conduct some e-commerce activities, yet
their primary business is done in the physical world.
Chapter 4
Types of E-Business Transactions
• Business-to-business (B2B). Over 85% of EC volume is B2B.
• Business-to-consumers (B2C). Also called e-tailing.
• Consumers-to-business (C2B). Consumers make known a
particular need for a product or service, and then suppliers
compete to provide that product or service at the requested price;
• Government-to-citizens (G2C) and to others. A government
agency provides services to its citizens via EC technologies.
• Mobile commerce (m-commerce). Transactions and activities are
conducted via wireless networks.
E-Business Web Site Requirements and Challenges
• Availability relates to the server-side of e-business. An always on
facility is needed to maintain the business critical apps.
• Accuracy and Quick Response. Web software must be capable of
searching, sorting, processing promotions and payments, verifying
that the credit card number belongs to the person trying to use it,
confirming the purchase in real-time, etc. In time-sensitive B2B,
errors that delay delivery are intolerable.
• Security and PCI DSS Compliance. PCI DSS (Payment Card
Industry Data Security Standard) is a set of infosec requirements
to help prevent credit card fraud.
• Integrating EC systems with enterprise systems. Need better
integration across all customer points of interactions.
• Web analytics. Learning from Web traffic and log data.
E-business Models
Comparison shopping engines
Affiliate marketing
Electronic marketplaces and exchanges
Information brokers and matching services
Forward auctions
Reverse auctions
Online auctions
Online direct marketing.
Viral marketing
6.2 B2C e-Commerce
• Most well-known B2C site is,
whose patented IT developments
provide a competitive edge
• ING Direct, largest online bank with high rates,
high-volume, low-margins, and high profits
• Online job market. Most companies and
government agencies advertise job openings,
accept résumés, and take applications via the Internet.
• Despite B2C ongoing growth, many e-tailers still face
challenges that interfere with the growth of its e-tailing
Issues in E-tailing
1. Resolving channel conflict between an online selling
channel and physical selling channels
2. Resolving conflicts within click-and-mortar
3. Managing order fulfillment, logistics, and reverse
4. Determining viability and risk of online e-tailers.
5. Identifying appropriate revenue (business) models.
6.3 B2B e-Commerce & e-Procure
• comprises about 85% of e-commerce dollar volume.
• covers apps that enable an enterprise to form
electronic relationships with its distributors, resellers,
suppliers, customers, and other partners.
• By using B2B, organizations can restructure their
supply chains and partner relationships.
6.4 E-Government
E-commerce models apply to government & the public
E-government is the use of Internet technology to
deliver information and public services to citizens,
business partners and suppliers of government entities
• Improves the efficiency and effectiveness of govn’t
functions, including the delivery of public services
• Increases transparency by giving access to govn’t
• Citizens can provide feedback and more actively
participate in democratic institutions and processes
Advertising Strategies and Revenu
e Models
• Affiliate marketing and advertising: an
organization refers consumers to other
companies’ Web sites.
• Viral marketing: word-of-mouth marketing;
customers promote a product or service by
telling many others about it, often via
tweets or texts.
• Customizing ads: marketing managers can
customize display ads based on users’
E-payment systems
Electronic funds transfer (EFT)
Electronic checks
Electronic credit cards
Purchasing e-cards
e-Cash—smart cards
Electronic bill presentment and payments
Pay at ATMs
B2B special methods
IT at Work 6.6
E-Money: The Future Currency
The growing e-money lifestyle in
Japan is making life more
convenient for consumers by
allowing transactions via mobiles.
The Mobile Suica system was
debuted by NTT DoCoMo in 2006.
Mobile Suica is a phone-based
smartcard that can be used for buying
rail tickets or accessing buildings.
Figure 6.11 Contactless
Mobile Suica on mobile
phone; based on RFID
6.6 E-Business Ethics and Legal Iss
• Privacy: Most e-payment systems know who the
buyers are; therefore, it’s necessary to protect the
buyers’ identities.
• Web tracking: By using tracking software and log files,
companies can track individuals’ movements on the
• Job loss: EC may eliminate jobs.
• Disintermediation: Technology eliminates the need for
intermediaries, such as travel and insurance agents.