E-Commerce

1
Back to Table of Contents
2
Chapter 2
The Nature ofE-Commerce
Characterizing E-Commercein Business
Conducting Business on the Web
2
3
Section 2-1Why Its Important

• E-commerce has impacted the economy in countless
  ways.
• Successful e-commerce entrepreneurs are aware of
  the specific advantages and disadvantages of
  conduction business online and plan accordingly.

3
Section 2-1
4
Section 2-1 Key Terms

• e-business
• brand loyalty
• mass customization

• value chain
• elastic demand

4
Section 2-1
5
E-Commerce Environment

• Business in the old economy focused almost
  exclusively on manufacturing physical goods.
• Today, in the new, electronic economy, knowledge
  production is the primary business driver.

5
Section 2-1
6
E-Commerce versus E-Business

• In Chapter 1 you learned that e-commerce is
  business conducted via electronic methods.
•  
• E-commerce also refers to electronic transactions
  involving the transferring of ownership of goods
  or services. The buyer and seller have to agree
  on an exchange, whether monetary or non-monetary.
  

6
Section 2-1
7
E-Commerce versus E-Business

• Government, not-for-profit organizations, and
  corporations all conduct e-business.

e-business any process a business conducts over
a computer network
7
Section 2-1
8
Benefits and Characteristics of E-Commerce

• In the era of e-commerce, the number of potential
  buyers is limitless.

8
Section 2-1
9
Benefits and Characteristics of E-Commerce

• The electronic marketplace is open 24 hours a
  day, 7 days a week. In this respect, it has made
  the retail marketplace more customer-focused.
•  
• All-hours e-commerce poses various challenges to
  businesses, which must now be able to operate
  effectively at any time.

9
Section 2-1
10
Benefits and Characteristics of E-Commerce

• E-commerce offers businesses a multitude of
  effective and inexpensive ways to reach new and
  existing customers.

10
Section 2-1
11
Benefits and Characteristics of E-Commerce

• Web sites enable businesses to track customers
  purchasing habits.

11
Section 2-1
12
Benefits and Characteristics of E-Commerce

• If a customer will not accept a substitute, even
  when there are many other comparable products
  available, he or she is demonstrating brand
  loyalty.

brand loyalty refers to a customers preference
for a particular product
12
Section 2-1
13
Benefits and Characteristics of E-Commerce

• Online retailers may be able to bypass many
  difficult decisions regarding inventory.
•  
• Customers can not shoplift from a virtual store.

13
Section 2-1
14
Benefits and Characteristics of E-Commerce

• With e-commerce, there is a trend toward mass
  customization.

mass customization the production of goods that
offer specialized choices to mainstream buyers
14
Section 2-1
15
Benefits and Characteristics of E-Commerce

• Mass customization influences all aspects of the
  value chain.

value chain the sequence of design, production,
and marketing efforts a business conducts to
deliver its products at the right price and time
When a company streamlines its value chain,
productivity and profitability generally
increase.
15
Section 2-1
16
Benefits and Characteristics of E-Commerce

• A virtual storefront is much faster, easier, and
  cheaper to set up than a bricks-and-mortar store.
  
•  
• Online businesses can also be grown quickly,
  whether through alliances with other
  e-businesses or by offering additional goods
  and services.

16
Section 2-1
17
Benefits and Characteristics of E-Commerce

• The e-commerce environment fosters elastic
  demand.

elastic demand when pricing changes create a
change in the amount of goods or services
consumers are willing to buy at a certain price
17
Section 2-1
18
Section 2-1 Review
1.

• What does it mean for a company to manage its
  inventory? How is an online companys inventory
  easier to manage than that of a bricks-and-mortar
  business?
• How can a company streamline its value chain?
• Why is it difficult to charge a higher price for
  an item than your competitors in the e-commerce
  marketplace?

2.
3.
18
Section 2-1
19
Section 2-2Why Its Important

• There are a variety of business models available
  for online businesses to follow.
• You can maximize your chances for e-commerce
  success by familiarizing yourself with the models
  and using them to your advantage.

Section 2-2
19
20
Section 2-2Key Terms

• business model
• business-to-business
• business-to-consumer
• consumer-to-consumer

• consumer-to-business
• business-to-government
• government-to-consumer

Section 2-2
20
21
The Process of Buying and Selling Online

• The rest of this chapter explores the different
  types of business models common in e-commerce.

21
Section 2-2
22
E-Commerce Business Models

• If you plan to launch a business on the Web,
  youll want to pay close attention and select the
  best business model for your e-commerce venture.

business model a system of policies,
operations, resources, and technologies used to
generate revenue
22
Section 2-2
23
E-Commerce Business Models
business-to-business (B2B)
business-to-consumer (B2C)
intermediary hub
Common Business Models
consumer-to-consumer (C2C)
government-to-consumer (G2C)
consumer-to-business (C2B)
business-to-government (B2G)
23
Section 2-2
24
E-Commerce Business Models

• The oldest and fastest-growing form of
  e-commerce, business-to-business (B2B) allows
  e-business to collaborate, partner, and share
  research and complex data with other businesses.

business-to-business (B2B) business model that
applies when a business transacts information,
goods, or services with another business
24
Section 2-2
25
E-Commerce Business Models

• Turning browsers into buyers, building customer
  loyalty, and fulfilling customer orders in a
  timely and satisfactory way are all concerns for
  business-to-consumer (B2C) sites.

business-to-consumer (B2C) business model that
applies to any business or organization that uses
the Internet to sell its products or services to
consumers
25
Section 2-2
26
E-Commerce Business Models

• Online auctions are the most common forum for
  consumer-to-consumer (C2C) e-commerce.

consumer-to-consumer (C2C) business model that
allows consumers to interact with one another
online to transact goods and services
26
Section 2-2
27
E-Commerce Business Models

• A consumer-to-business (C2B) model uses a
  reverse-auction scenario The business responds
  to the consumers requested product and its
  price.

consumer-to-business (C2B) business model in
which the customer initiates the transaction,
posting an intent or desire to buy a certain
product at a certain price
27
Section 2-2
28
E-Commerce Business Models

• Businesses that bid on government contracts use
  the business-to-government (B2G) business model.

business-to-government (B2G) business model that
connects the private sector to the government
marketplace
28
Section 2-2
29
E-Commerce Business Models

• The government-to-consumer (G2C) business model
  allows citizens to interact with government
  agencies online.

government-to-consumer (G2C) business model that
allows consumers to easily access relevant
information from government agencies
29
Section 2-2
30
E-Commerce Business Models

• Some businesses dont buy or sell products or
  purchase services themselves. Instead they act as
  an intermediary, bringing buyers and sellers
  together.
•  
• An intermediary hub is a business that acts as a
  third party or go-between in moving products from
  the manufacturer to the end user.

Section 2-2
30
31
Section 2-2 Review
1.

• Why do e-commerce businesses strive to keep
  potential customers on their sites as long as
  possible?
• What are some key challenges facing the B2C
  model?
• How might the G2C model be helpful to the average
  consumer?

2.
3.
31
Section 2-2
32
32
33
End of
Back to Table of Contents