e Commerce

Principles of Information Systems, Sixth Edition

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Electronic Commerce


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Chapter Outline

• An Introduction to Electronic Commerce

• E-Commerce Applications• Technology Infrastructure• Electronic Payment Systems• Threats to E-Commerce• Strategies for Successful e-

Commerce


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An Introduction to Electronic Commerce


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Introduction to Electronic Commerce

• Most common types of e-commerce:• Business-to-consumer (B2C) e-

commerce• Business-to-business (B2B) e-

commerce• Consumer-to-consumer (C2C) e-

commerce


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Multistage Model for E-commerce

• 1. Search and identification

• 2. Selection and negotiation

• 3. Purchasing products and services electronically

• 4. Product and service delivery

• 5. After-sales service


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Multistage Model for E-commerce


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Product and Service Delivery


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E-Commerce Model


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E-Commerce Challenges

• Changing distribution systems & work processes

• Split-case distribution• Integrating web-based order processing

with traditional systems


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The E-Commerce Supply Chain

• Supply chain management– Demand planning– Supply planning– Demand fulfillment

• Increased revenues and decreased costs

• Improved customer satisfaction• Inventory reduction across the supply

chain


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The E-Commerce Supply Chain


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Supply Chain Management


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Business-to-Business

• Allows manufacturers to buy at low price worldwide

• Enterprise can sell to a global market


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Global E-Commerce

• Steps in localization– recognizing and conforming to the

nuances, subtleties, and tastes of local cultures

– supporting basic trade laws such as each country’s currency, payment preferences, taxes, and tariffs

– ensuring that technological capabilities match local connection speeds


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Global E-Commerce

• Determine which global markets make the most sense for selling products or services on-line

• Decide whether Web content should be generated or updated centrally or locally


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E-Commerce Applications


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Retail and Wholesale

• Electronic retailing

• Cybermalls

• Wholesale e-commerce: B2B


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Manufacturing


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Marketing

• Market segmentation

• Technology-enabled relationship management


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Investment and Finance

• On-line stock trading

• On-line banking– Electronic bill presentment


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Technology Infrastructure


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Technology Infrastructure


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Hardware

• Storage capacity– Software– Volume of e-commerce

transactions• Website hosting


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Web Server Software

• Security and identification– Denial of service attack

• Web site tracking– Web log file

• Web site development tools• Retrieving and sending Web pages• Web page construction software

– Static Web page– Dynamic Web page


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E-Commerce Software

• Catalog management• Product configuration• Shopping cart


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E-Commerce Transaction Processing

• Automates transaction processes from order placement to reconciliation

• Web traffic data analysis


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Electronic Shopping Cart


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Network and Packet Switching

• All e-commerce depends on a type of network to securely transmit data– Internet– Extranet– Value-added network (VAN)– Virtual private network (VPN)

• All EC approaches rely on packet switching and use routers

• Cost, availability, reliability, security, and redundancy must be considered when choosing a network


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Electronic Payment Systems


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Electronic Payment Systems

• Digital certificates– Certificate authority– Secure sockets layer (SSL)

• Electronic cash• Electronic wallets• Smart, credit, charge, and debit cards


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Threats to E-Commerce


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Threats to E-Commerce

• E-commerce incidents

• Theft of intellectual property– Patents on business processes

• Fraud

• Privacy Issues


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Fraud

• On-line auction fraud

• Spam

• Pyramid schemes

• Investment fraud

• Stock scams


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Invasion of Consumer Privacy

• On-line profiling

• Clickstream data

• Safe harbor principles


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TRUSTe Seal


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BBB On-line Privacy Seal


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How to Protect Your Privacy While On-Line


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Strategies for Successful E-Commerce


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Developing an Effective Web Presence

Visitors to a web site should be able to:

• Obtain general information about the organization

• Obtain financial information for making an investment decision

• Learn the organization’s position on social issues

• Learn about the products or services that the organization sells


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Putting up a Web Site

• Web site hosting services

• Storefront brokers


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Building Traffic to Your Web Site

• Domain names

• Meta tags

• Traffic data analysis


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Maintaining and Improving Your Web Site

• Be alert to new trends

• Be prepared to take advantage of new opportunities

• Personalization

– Explicit

– Implicit


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Summary

• E-commerce - enables consumers and companies to gain access to worldwide markets

• Electronic retailing (e-tailing) - the direct sale from business-to-consumer through electronic storefronts designed around an electronic catalog and shopping cart model

• E-commerce shoppers - must be on constant guard to protect their rights, security, and personal privacy


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Principles and Learning Objectives

• E-commerce is a new way of conducting business, and as with any other new application of technology, it presents both opportunities for improvement and potential problems.– Identify several advantages of e-commerce.– Outline a multistage model that describes how e-

commerce works.– Identify some of the major challenges companies

must overcome to succeed in e-commerce.– Identify several e-commerce applications.


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• E-commerce requires the careful planning and integration of a number of technology infrastructure components.– Outline the key components of technology

infrastructure that must be in place for e-commerce to succeed.

– Discuss the key features of the electronic payments systems needed to support e-commerce.


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• Users of the new e-commerce technology must take safeguards to protect themselves. – Identify the major issues that represent significant

threats to the continued growth of e-commerce.

• Organizations must define and execute a strategy to be successful in e-commerce. – Outline the key components of a successful e-

commerce strategy


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End of Chapter

e Commerce

Documents

learning objectives

key components

web site

technology

multistage

information

packet switching

sixth edition