E COMMERCE FOR MBA STUDENTS

E – BUSINESS Model

IT

BUSINESSINTERNET

Data processingStorage,

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Sound BIZ model

E BUSINESS

Definition • E-business is the conduct of business on the

Internet, not only buying and selling but also servicing customers and collaborating with business partners.

E BUSINESS

Definition • E-business is the transformation of key

business processes through the use of• Internet technologies.

E BUSINESS

Definition• E-business can broadly be defined as the processes orareas

involved in the running and operation of an organisation that are electronic or digital in nature........... These include

• direct business activities • Such as marketing, sales and human resource management but also

indirect activities • such as business process re-engineering and change management,• which impact on the improvement in efficiency and integration of

business processes and activities.

OLD VS E BUSINESSOLD VS E BUSINESS

OLDOLD• Brick& mortar Brick& mortar • Internally focussedInternally focussed process centricprocess centric• Hierchical Set upsHierchical Set ups• Arm length relationshipsArm length relationships• Customers less informedCustomers less informed

E BIZE BIZ• Click& MortarClick& Mortar• Externally focusse –Externally focusse –

Goal CentricGoal Centric• Cross functional set Cross functional set

upsups• Networked Networked

relationshipsrelationships• Customers more Customers more

informedinformed

RESULTS OF INTEGRATIONRESULTS OF INTEGRATION

E CommerceE CommerceSCMSCMCRMCRMERPERPBPO/KPOBPO/KPOMIS etcMIS etc

IT

BIZ MODELINTERNET

E commerce

Definition Process of buying selling and exchange of

products services and information via computer Network including Internet

E commerce

Definition • Electronic Commerce (EC) is where

business transactions take place via• telecommunications networks, especially

the Internet.

E commerce

E COMMERCE MODELSE COMMERCE MODELS

Ad models -- Search engins portals Ad models -- Search engins portals etcetc

Merchant -- B2C Merchant -- B2C Manufacturer/ wholesaler- B2BManufacturer/ wholesaler- B2B Subscription -- ISP, e JORNALS etcSubscription -- ISP, e JORNALS etc Brokerage/ Market place exchange Brokerage/ Market place exchange

modelmodel Info intermediary model.Info intermediary model.

E COMMERCE -EVOLUTIONE COMMERCE -EVOLUTION

1996-99 11996-99 1STST STAGE- STAGE-

Web presence.Information Web presence.Information services,News ,Cataloguesservices,News ,Catalogues


1997-20 2ndSTAGE –1997-20 2ndSTAGE –

Interactive sites- search Interactive sites- search features ,access to features ,access to databases, .,Personalised sites etcdatabases, .,Personalised sites etc


1998-2000 3rdSTAGE.1998-2000 3rdSTAGE.

Transaction capability-E Payment Transaction capability-E Payment systems etcsystems etc


Beyond 2000-4thSTAGE-Beyond 2000-4thSTAGE-

Integrated enterprises –SCM Integrated enterprises –SCM integration -integration -

E COMMERCE…. Key driversE COMMERCE…. Key drivers

1.Technological factors – The degree 1.Technological factors – The degree of advancement of the of advancement of the telecommunicationstelecommunications

infrastructure which provides access infrastructure which provides access to the new technology for business to the new technology for business and consumers…and consumers…

band width..band width.. Telecom infrastructure 3G,4G,Telecom infrastructure 3G,4G,


2 2 Political factors – including the Political factors – including the role of government in creating role of government in creating governmentgovernment

E-RedinessE-Rediness E-legislation, E-legislation, E-initiatives and funding to support the E-initiatives and funding to support the

use and development of e-commerce use and development of e-commerce and information technology. etcand information technology. etc


3 3 Social factors – incorporating the Social factors – incorporating the level and advancement in IT level and advancement in IT educationeducation

Skill level, Skill level, PC penetration,andPC penetration,and Training which will enable both Training which will enable both

potential buyers and the workforce To potential buyers and the workforce To understand and use the new understand and use the new echnology.Technophilia..echnology.Technophilia..


4 4 Economic factors – including the Economic factors – including the general wealth and commercial general wealth and commercial health health of the nation and the elements of the nation and the elements that contribute to it.that contribute to it.

GDP (India 7%,china 6.9%,pakistan4.1%)GDP (India 7%,china 6.9%,pakistan4.1%) Cost of internet accessCost of internet access Cost of IT tools Cost of IT tools Economic growth etcEconomic growth etc


5.Organisational culture 5.Organisational culture – – attitudes to research and attitudes to research and

development (R&D);development (R&D);E readyness-willingness to innovate E readyness-willingness to innovate

and use technology to achieve and use technology to achieve objectives.objectives.


6. 6. Commercial benefits Commercial benefits cost savings cost savings improved efficiencyimproved efficiencyCustomer satisfactionCustomer satisfaction

........that impact on the financial ........that impact on the financial performance of the firm.performance of the firm.


7.Skilled and committed workforce 7.Skilled and committed workforce – – that understands, that understands, - willing and able to willing and able to implement new implement new

technologies and processes.technologies and processes.


88 Requirements of customers and Requirements of customers and suppliers – in terms of product and suppliers – in terms of product and serviceservicedemand and supply.demand and supply.


9.9.Competition – ensuring the Competition – ensuring the organisation stays ahead of or at organisation stays ahead of or at least keepsleast keepsup with competitors and industry up with competitors and industry leaders.leaders.

E COMMERCE…. IT’S IMPACTE COMMERCE…. IT’S IMPACT

1.Marketing – 1.Marketing – Online advertising, Online advertising, Global marketingGlobal marketing marketing strategies -Dis marketing strategies -Dis

intermedation..mass customisationintermedation..mass customisation Consumer behaviour and cultures. Consumer behaviour and cultures.


2.Production and operations management 2.Production and operations management – –

The impact of on-line processing The impact of on-line processing has led to has led to reduced cycle times. It takes seconds to reduced cycle times. It takes seconds to process orders/ deliver digitized products process orders/ deliver digitized products and services electronically; and services electronically;


Production and operations management Production and operations management (manufacturing) – (manufacturing) –

moving from moving from mass production(Push type) mass production(Push type) to demand-driven(Pull type), to demand-driven(Pull type),

--


Production and operations management Production and operations management

E BiddingE Bidding Sourcing through collaboration and Sourcing through collaboration and

coordination(B2B)..Automobile companies coordination(B2B)..Automobile companies for common supplies like tyre ,light etcfor common supplies like tyre ,light etc


3. Management information systems – 3. Management information systems – analysis, design and implementationanalysis, design and implementationof e-business systems within an of e-business systems within an organisation; issues of integration oforganisation; issues of integration offront-end and back-end front-end and back-end systems.Facilitates information flowssystems.Facilitates information flows


4.Human resource management – 4.Human resource management – issues of on-line recruiting, issues of on-line recruiting, home working..home working..


5.5.Business law and ethics – the different Business law and ethics – the different legal and ethical issues that havelegal and ethical issues that havearisen as a result of a global ‘virtual’ arisen as a result of a global ‘virtual’ market. Issues such as ....market. Issues such as ....copyright laws,copyright laws, privacy of customer information,privacy of customer information, legality of electronic contracts,etc..legality of electronic contracts,etc..

TYPES OF E COMMERCETYPES OF E COMMERCE

The major types of e-commerce are :The major types of e-commerce are :1.1. B2C amazon.in.B2C amazon.in.2.2. B2B alibaba.comB2B alibaba.com3.3. C2C e bayC2C e bay4.4. P2P P2P 5.5. B2G sbi.comB2G sbi.com6.6. G2C keala.gov.inG2C keala.gov.in7.7. M-CommerceM-Commerce

B2C E COMMERCEB2C E COMMERCE

CharacteristicsCharacteristics

Between business and consumersBetween business and consumers Large in terms of transactionLarge in terms of transaction Enabled by internetEnabled by internet

B2C E COMMERCEB2C E COMMERCE

B2C : (Business-to-Consumer)B2C : (Business-to-Consumer)Within the B2C category there are many Within the B2C category there are many

different types of business models: portals , different types of business models: portals , online retailers , content providers , transaction online retailers , content providers , transaction brokers , market creators , service providers , brokers , market creators , service providers , and community providers.and community providers.

B2C E commerceB2C E commerce

Management FocusManagement Focus

Managing HitsManaging HitsConnectivityConnectivityDelivering ValueDelivering ValueSecurity issuesSecurity issues

B2C Critical success factorsB2C Critical success factors

COMMUNICATION INFRASTRUCTURECOMMUNICATION INFRASTRUCTURE PROCESS MANAGEMENTPROCESS MANAGEMENT SERVICE MANAGEMENTSERVICE MANAGEMENT TRANSACTION CAPABILITIESTRANSACTION CAPABILITIES

B2C Critical Success Factors

COMMUNICATION INFRASTRUCTURE:

• Technical infrastructure• PC penetration• Processor features


• PROCESS MAANGEMENT• A2A integration• Managing HITS


SERVICE MANAGEMENT

• Good Site Architecture-Catching eye balls• Ethical compliance• Customer value


TRANSACTION CAPABILITIES

• Payment systems– Credit cards,debit cards. Digital cash , COD

Cheque, Draft etc• Security

B2B E COMMERCEB2B E COMMERCE

CharacteristicsCharacteristics

Between business housesBetween business houses Large in terms of valueLarge in terms of value Represent major part of e commerce bizRepresent major part of e commerce biz Enabled by extranet/vpn/internetEnabled by extranet/vpn/internet

B2B E COMMERCEB2B E COMMERCE

B2B MODELB2B MODEL

Between business housesBetween business houses Large in terms of valueLarge in terms of value Enabled by extranet/vpn/internetEnabled by extranet/vpn/internet

B2B E COMMERCEB2B E COMMERCEB2B typesB2B types

BUYER CONTROLLED-Automobile companies join to BUYER CONTROLLED-Automobile companies join to gather to obtain bids for compnantsgather to obtain bids for compnants

SELLER CONTROLLED-Group of sellers for a product join SELLER CONTROLLED-Group of sellers for a product join to gather to reduce price wars offer products –Eg agri to gather to reduce price wars offer products –Eg agri marketingmarketing

THIRD PART CONTROLLED-E commerce provider creates THIRD PART CONTROLLED-E commerce provider creates a platform where buyer and seller meets –alibaba.coma platform where buyer and seller meets –alibaba.com

C2C E COMMERCE C2C E COMMERCE

Consumer-to-Consumer (C-to-C) In this category Consumer-to-Consumer (C-to-C) In this category consumers interact directly-consumers interact directly-

They exchange information such as:They exchange information such as: 1 1 Expert knowledge where one person asks a question Expert knowledge where one person asks a question

about anything and about anything and gets an e-mail reply from the gets an e-mail reply from the community of other individuals, as in the case of the community of other individuals, as in the case of the New New York Times-affiliated abuzz.com website.York Times-affiliated abuzz.com website.

2. 2. Opinions about companies and products, for example Opinions about companies and products, for example epinions.com.epinions.com.

33.Exchange of goods .Exchange of goods between people both with between people both with consumer auction sites such as e-bay.com OR consumer auction sites such as e-bay.com OR Swapitshop.com, where individuals swap goods with each Swapitshop.com, where individuals swap goods with each other without the exchange of moneyother without the exchange of money

C2B E COMMERCE C2B E COMMERCE

Customer to BusinessCustomer to Business

CUSTOMER DRIVENCUSTOMER DRIVEN Bids for requirements..airline tickets..Hotel Bids for requirements..airline tickets..Hotel

accommodationaccommodation

Service providers negotiate and fix the dealService providers negotiate and fix the deal

Price line.com…elance.com..noukari.comPrice line.com…elance.com..noukari.com

G2B E COMMERCE

The exchange of information, services and products between government agencies and business organisations.

• 1. Information, guidance and advice for business on international trading,

• 2. A database of laws, regulations and government policy for industry

• sectors.• 3. On-line application and submission of official forms (such as

company• and value added tax).• 4. On-line payment facilities.

G2C E COMMERCEG2C E COMMERCE

Government-to-Consumer (G-to-B) Government-to-Consumer (G-to-B) (Also known as e-governance). (Also known as e-governance).

Government Government sites offering information, sites offering information, forms and facilities to conduct forms and facilities to conduct transactions for individuals,transactions for individuals,

including paying bills and submitting including paying bills and submitting official forms on-line such as tax returns.official forms on-line such as tax returns.

E COMMERCE positives

• 1.International marketplace. • borderless marketplace • businesses now have access to people all

around the world. • e-commerce businesses have become

virtual multinational corporations.


• 2.Operational cost savings. The cost of creating, processing, distributing,

• storing and retrieving paper-based information has decreased


• 3.Mass customisation.• The pull-type processing allows for products

and Introduction• services to be customised to the customer’s

requirements• Example - customers can configure a car

according to their specifications within minutes on-line via the www.ford.com website.


• 4.Enables reduced inventories and overheads by facilitating ‘pull’-type supply

• chain management – this is based on collecting the customer order and

• then delivering through JIT (just-in-time) manufacturing/networking with supplier


• 5. Lower telecommunications cost. • The Internet is much cheaper than

traditional communication systems


6.Digitisation of products and processes. Particularly in the case of software

• and music/video products, which can be downloaded or e-mailed directly

• to customers via the Internet in digital or electronic format.


7.24/7 working environment-• Any time business model


8. Level playing ground…….Cyber space will ease size differences

E- COMMERCEE- COMMERCE CHALLENGES CHALLENGES

Shopping style differencesShopping style differences Logistics issuesLogistics issues FraudsFrauds Internet infrastructureInternet infrastructure PC penetrationPC penetration Privacy issuesPrivacy issues

E COMMERCE SECURITYE COMMERCE SECURITY

OBJECTIVESOBJECTIVESReduce system break downReduce system break downAsset safeguardingAsset safeguardingMaintain confidentialityMaintain confidentialityIntegrity and reliabilityIntegrity and reliabilityUn interrupted serviceUn interrupted serviceComply with LawsComply with LawsSystem effectiveness and efficencySystem effectiveness and efficency


SECURITY THREATSSECURITY THREATS1.EXTERNAL ATTACKS-Denial of Service 1.EXTERNAL ATTACKS-Denial of Service (DOS)(DOS)2.Intrusion.. Gaining accesss-Pass word 2.Intrusion.. Gaining accesss-Pass word hacking/Social engineering..hacking/Social engineering..3.Hacking/ Cracking3.Hacking/ Cracking4.Sniffing networks4.Sniffing networks 5.Introducing Virus5.Introducing Virus


SECURITY MEASURESSECURITY MEASURES1.Security policies-COVERING HARDWARE/ 1.Security policies-COVERING HARDWARE/ SOFTWARE/ PEOPLESOFTWARE/ PEOPLE2. Acccess control systems-Passwaords/Bio metric 2. Acccess control systems-Passwaords/Bio metric systemssystems3. Fire walls-3. Fire walls-4Authentication-Digital signatures4Authentication-Digital signatures5. Encryption5. Encryption6. Intrusion detection & monitoring software6. Intrusion detection & monitoring software

E COMMERCE FOR MBA STUDENTS

Education