E commerce

E-business and How it E-business and How it Levels the Playing FieldLevels the Playing Field

What is e-Business?What is e-Business?

Electronic Business or e-Business, also known as electronic commerce and e-commerce, refers to the use of computers and electronic communications networks to do business.

It refers to every type of business transaction or interaction in which the participants prepare or conduct business electronically.  This covers a wide range of activities, ranging from the use of electronic mail (email) and Electronic Funds Transfer at Point of Sale (EFTPOS), through Internet based sales and transactions and web-based marketing.  e-Business is a business issue rather than a technology issue.

What are the 2 main What are the 2 main types of e-commerce?types of e-commerce?

There are 2 types of e-commerce applications: ◦(1) Business-to-business (B2B); and ◦(2) business-to-consumer (B2C).

B2B applications:B2B applications:

Supply Management. Electronic applications in this area aid in expediting business partnerships through the reduction of purchase order (PO) processing costs and cycle times, and by maximizing the number of Pos processed with fewer people.

B2B applications:B2B applications:

◦ Inventory Management. Electronic applications make the order-ship-bill cycle shorter. For instance, if most of a business’s partners are linked electronically, any information sent by mail can be transmitted instantly. Businesses can easily keep track of their documents to make sure that they were received. Such a system improves auditing capabilities, and helps reduce inventory turns, and eliminate out-of-stock occurrences.

B2B applications:B2B applications:

◦Distribution Management. Electronic-based applications make the transmission of shipping documents a lot easier and faster. E-commerce also enables more efficient resource management by certifying that documents contain more accurate data.

B2B applications:B2B applications:

◦Channel Management. E-commerce allows for speedier dissemination of information regarding changes in operational conditions of trading partners. Technical, product, and pricing information can be posted with much ease on electronic bulletin boards.

B2B applications:B2B applications:

◦Payment Management. An electronic payment system allows for a more efficient payment management system by minimizing clerical errors, increasing the speed of computing invoices, and reducing transaction fees and costs.

Business to ConsumerBusiness to Consumer

B2C applications involve customers gathering information, purchasing, and receiving products over an electronic network. It may be used in the following transactions:

◦ Purchasing products and information. Electronic applications make it possible for consumers to look up online information about existing and new products/services.

◦ Personal finance management. In this field, electronic applications (e.g. Quicken) aid the consumers in managing investments and personal finances through the use of online banking tools.

E-business BenefitsE-business BenefitsCosts:

◦ Lower transaction expenses. Labor costs associated with administration can be slashed.

◦ Reduced supply costs. More Internet based information affords firms a wider choice of suppliers and by extension, more competitive prices.

◦ Publication and distribution fees fall. Publishing a brochure online enables a vast number of people to access it, while also allowing the company to update and then add to the contents.

◦ The role of the Middleman becomes less important as companies can sell direct to the customer.

E-business BenefitsE-business Benefits

Marketing: ◦ It helps build brand awareness offering new

avenues of promotion. ◦ Customer loyalty deepens because web

based purchasing affords customers the opportunity to communicate with the company.

◦ Conversely, a web site also allows the firm to offer better service to consumers. 

E-business BenefitsE-business Benefits

Competitiveness: ◦ E-business offers a reliable, cost effective

and a voluntary means of doing business. Routine tasks are automated and customers, if they wish, can avail themselves of a 24-hour sales service.

◦ More players will enter the market as technology enables firms to penetrate overseas. 

◦ Companies need to be aware of market changes.

What are the different What are the different aspects of E-business aspects of E-business infrastructure?infrastructure?

The information infrastructure◦ composed of many types of transport systems. It is a synthesis

of various forms of high-speed transport systems – land-based telephones, wireless, modem-based PC, or satellite based. For example, an email sent from a desktop in Laos PDR to a laptop in Singapore may travel through several types of transport networks which are interconnected before it reaches its destination. This infrastructure is the transportation foundation that provides the means for content transmission.

The players in this industry are called the information transport providers. These include:◦ Telecommunications companies, which supply the phone lines;◦ Cable TV systems, which set-up coaxial cables and direct

broadcast satellite networks;◦ Wireless companies, which provide the mobile radio and

satellite networks;◦ Computer networks, which include both private networks (e.g.

AOL) and public networks (e.g. Internet)

The E-business The E-business InfrastructureInfrastructureThe second aspect of the e-business

infrastructure is multimedia content and network publishing. At present, the most common architecture for network is the World Wide Web (WWW). The Web allows companies to create product information (content) and provides them with the means to publish it in a distribution center (i.e. a network server)

The E-business The E-business InfrastructureInfrastructure

The third aspect of the infrastructure is messaging and information distribution. How exactly is this done? To begin with, we know that information content transported over the network is made up of text, numbers, pictures, audio and video. All content is digital – that is, in combinations of ones and zeroes. The moment content is created and stored on a server, it is carried across the network through vehicles, or messaging and information distribution methods. This messaging vehicle is called the middleware software, which is positioned between the web servers and the end-user applications. Messaging and information distribution systems also have translators which interpret and transform data formats.

The E-business The E-business InfrastructureInfrastructureCommon business services infrastructure

makes up the fourth aspect of e-commerce infrastructure. This includes methods which facilitate online buying and selling processes. The purchaser transmits an electronic payment (say, a form of electronic check or digital cash) together with some remittance information to the seller. There is settlement from the moment the seller accepts and validates the payment and remittance information.

In summaryIn summary

E-business provides the opportunity even for small businesses to be able to compete.

The e-business potential must be harnessed correctly in order to bring business success. But to do this, we must learn and familiarize ourselves with the nuances of this manner of doing business.

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