E Commerce Analysis Essay Example

costly before the Internet became widely used due to expensive private networks.

In summary, the adoption of EDI systems was mainly limited to financially stable multinational corporations who used their influence and subsidies to convince smaller suppliers to implement the systems, despite the high cost. By 1996, the usage of EDI was relatively low, with only 50,000 companies in Europe and 44,000 in the USA utilizing it, which represented less than 1 per cent of the total number of companies in each continent. According to Swags, the emergence of the Internet has significantly transformed electronic commerce and traditional e-commerce is swiftly transitioning to the Internet.

The Internet has transformed e-commerce, which includes the exchange of physical goods and intangible assets like information. E-commerce covers various aspects of trade, such as online marketing, ordering, payment, delivery support, after-sales assistance, and online legal advice. It also involves collaboration among companies through virtual teams for design, engineering, and business consultancy. The media defines electronic commerce as business transactions conducted via telecommunications networks, particularly the Internet. This encompasses buying and selling products, services, and information through computer networks like the Internet. Electronic commerce refers to conducting business electronically and is commonly known as e-commerce or simply commerce. The wide range of e-commerce activities has led to different terms being used in different industries to describe this phenomenon. Some terms specifically focus on purchasing from online stores on the Internet.

Due to the use of the Internet and the Web for transactions, various terms such as l-commerce (Internet commerce), commerce, and Web-commerce have been suggested but are now uncommonly used. Other terms used for selling products online include e-tailing, virtual-stores,

or cyber stores. These virtual stores are sometimes grouped together in a Virtual mall' or 'cybercafe'. As for e-business (electronic business), it shares a similar situation with e-commerce, having multiple definitions and being used in various contexts.

MOM was one of the pioneers to use the term "e-business" in October 1997 during its campaign centered around this concept. Nowadays, large companies are reconsidering their operations in relation to the Internet and its unique culture and capabilities, which is what some define as e-business. E-business encompasses not only buying and selling online but also providing customer service (e-service) and collaborating with business partners. It involves transforming essential business processes through the utilization of Internet technologies.

E-business refers to a company that can effectively adjust and respond to ongoing changes. It includes the development of intranet and extranet, which are integral to the back-end systems within an organization. While e-commerce and e-business are often used interchangeably, some analysts and online business individuals believe that e-business encompasses much more than just business objectives. The attempt to differentiate between e-commerce and e-business appears to be driven by marketing purposes rather than substantial differences.

The term "E-commerce," "E-business," or any other similar term is a means to achieve a specific objective. The different names and definitions mentioned earlier are examples of terms coined by marketing departments, media outlets, consultants, and businesses to promote, describe, justify, adopt and implement new technology. However, there is no universally accepted definition for e-commerce or e-business.

The various terms are employed to depict different viewpoints and emphases of individuals in diverse organizations and business sectors. Some argue that it is illogical to confine the definition

of e-commerce since reaching a consensus on a singular, unique interpretation is unlikely. There will inevitably be futile debates of confusing origins, much like attempting to answer the question: "If one synchronized swimmer drowns, would the others follow?" (10) Given this prevailing trend, it is imperative to clearly define any term within the context and environment in which it is being used when embarking on any electronic commerce, electronic business, or any other e-related project or assignment. To provide clarity, this book differentiates between e-commerce and business based on the respective terms commerce and business. Commerce refers to the concept of trade and the exchange of merchandise on a large scale between different countries. Consequently, e-commerce can be understood to encompass the electronic medium (07) used for this exchange.

Electronic commerce, also known as e-commerce, involves the exchange of goods between countries using the Internet. It encompasses socio-economic factors, telecommunications technology, and commercial infrastructure at a macro level. This is the foundation of e-commerce.

On the other hand, business refers to the ongoing operations of a commercial enterprise. E-business includes electronic processes and areas involved in running an organization, such as sales, marketing, human engineering, change management, and integrating business activities for improved efficiency.

Figure 1.1 illustrates the distinctions between e-commerce and e-business. E-commerce has a broader definition that relates to the macro-environment while e-business focuses more on the micro-level of a firm. Despite their differences, these two concepts are closely integrated and reliant on each other.

To compare different countries' levels of advancement in e-commerce, it is crucial to identify key drivers.The text discusses claims that suggest the USA is more advanced in e-commerce

than Europe. Various criteria can determine this level of advancement which are summarized in Table 1.

The text emphasizes the importance of various criteria in the development of technology.These criteria can be categorized into technological factors, political factors, social factors, and economic factors.

The text recognizes that technological factors, such as internet penetration and telecommunications infrastructure, play a significant role in providing business and consumer access to new technology. It also acknowledges that political factors encompass government policies and initiatives that promote e-commerce and information technology. Social factors involve education and training in IT, enabling individuals to effectively comprehend and utilize new technology. Economic factors are linked to a country's prosperity and commercial well-being. Furthermore, the text highlights the influence of organizational culture, innovation, and the use of technology for achieving goals on e-business.

The implementation of e-business provides commercial advantages by improving the firm's performance. It necessitates a skilled and dedicated workforce capable of understanding and implementing new technologies and processes. Furthermore, it addresses the demands and supply requirements of customers and suppliers, as well as the need to stay ahead or keep pace with competitors and industry leaders. These key drivers for e-business can be related to the classic economic equation of supply and demand, illustrated in Figure 1.

TABLE 1.1 displays the key drivers for e-commerce along with their measurement criteria. These criteria encompass technological factors such as telecommunications infrastructure, backbone infrastructure and architecture, industry players and competition, pricing, internet service providers, range of services available (e.g., ADDS, KIDS), ownership (private or public sector), access to new technology developments.

Bandwidth is also crucial along with the speed at which new technology is developed and implemented

within each industry sector.

Political factors include government incentives and programs to support technology use and development. Legislation refers to laws and policies that govern electronic data, contracts, and financial transactions. This includes laws that recognize the validity of electronic documentation in a court of law, the enforcement of digital signatures, and the regulations surrounding public policies and electronic transactions.

The success of e-business depends on several factors, such as electronic tax filing, the national education curriculum, training in Social Economic Skills, the number of online users, PC penetration rate, level of education and computer literacy, technophobia culture, economic growth, average income, technology cost, access to telecommunications infrastructure cost, availability of commercial infrastructure, and innovative business models. E-commerce provides the necessary framework and environment for conducting e-business activities. The implementation of e-business relies on an organization's ability to meet demand through supply. Demand is primarily driven by cost reduction objectives, efficiency enhancement goals, maintaining competitive advantage aims,and meeting stakeholder expectations.

To achieve these business goals, it is necessary to provide a technological infrastructure that enhances organizational processes. Additionally, there needs to be a willingness, ability, and commitment to integrate new technology and improve working practices within the organization. Allocating resources is also important in achieving these goals. The impact of electronic commerce extends beyond the Internet, websites, or dot com companies. It encompasses a new business concept that includes all previous business management and economic concepts. Therefore, e-business and e-commerce have implications for various areas of business and disciplines of business management studies such as marketing issues related to online advertising, marketing strategies, consumer behavior, and cultures.

One of the areas in which it particularly

impacts is direct marketing. In the past, direct marketing primarily consisted of door-to-door, home parties (like the Departure parties), and mail order using catalogues or leaflets. However, with advancements in telephone and television technology, direct marketing shifted to telemarketing and TV selling. Eventually, e-marketing emerged, giving rise to customer relationship management (CRM), data mining, and other methods to create new channels for direct sales and promotion. This development is supported by computer sciences, which have created various network and computing technologies and languages to facilitate e-commerce and e-business, such as integrating front and back office legacy systems with web technology.

Finance and accounting - the issues of transaction costs in on-line banking and the implications of accounting and auditing when valuing 'intangible' assets and human capital in a knowledge-based economy. Economics - the impact of e-commerce on local and global economies and understanding the concepts of a digital and knowledge-based economy in relation to economic theory. Production and operations management - the reduced cycle times brought about by the impact of on-line processing. Digitized products and services can be delivered electronically in seconds, and order processing time can be reduced by over 90%, from days to minutes. Production systems are integrated with finance customers (refer to Intel mint-case).

Intel revolutionized their operations in summer 1998 by launching an online business. This move resulted in a remarkable achievement, as sales skyrocketed from zero to $1 billion per month within the first month of operation. The key to this success was Intel's complete redesign of their processes, specifically tailored for small and medium-sized businesses. Previously, only larger customers could connect with Intel through expensive EDI networks, leaving

smaller companies with limited options like sending faxes or placing phone orders and requirements. To address this issue, Intel focused on procurement and customer support for various products such as computer chips and microprocessors. They developed an extranet that utilized internet technology to link multiple intranets together securely, effectively creating virtual private networks.

The extranet was used by authorized small and medium-sized business partners to place orders, track orders, and view product documentation. This resulted in significant savings for Intel and their customers, eliminating 45,000 axes in a quarter to Taiwan alone. These savings included time, telephone charges, and fax paper. Eleven larger Intel companies were also connected to another system that allowed Intel to link to customer plants across the Internet for tracking part consumption. The shift from mass production to demand-driven, mass customization customer pull was evident in the production and operations management.

Web-based Enterprise Resource Planning (ERP) systems have the potential to streamline production processes by enabling orders to be directly sent to designers and/or the production floor in seconds. This capability can significantly decrease production cycle times, particularly when manufacturing plants, engineers, and designers are situated in different countries. In companies that handle sub-assembly tasks and utilize components from various manufacturers, effective communication, collaboration, and coordination are vital. Electronic bidding aids in securing more cost-effective components while adaptable procurement systems allow for quick changes at minimal expense, resulting in reduced inventories and cost savings. Management information systems involve analyzing, designing, and implementing e-business systems within an organization by integrating front-end and back-end systems.

With pull-type processing, products and 013 services can be customized to meet the customer's specific requirements. In the early

days of Ford's motor car production, customers were limited to black cars. However, now customers can easily configure their desired car specifications through the Ford website. This approach enables reduced inventories and overhead costs by employing 'pull'-type supply chain management. This method involves collecting customer orders and delivering through Just-in-Time (JIT) manufacturing. This is particularly advantageous for high technology companies, as holding stocks of components can quickly become outdated within months.

Companies such as Motorola (mobile phones) and Dell (computers) receive and transmit customer orders electronically for manufacturing customized products. The Internet, being much cheaper than value-added networks (VANs) based on leased telephone lines, enables this process. Sending faxes or emails over the Internet is also more cost-effective than direct dialing. Additionally, the Internet facilitates the digitization of software, music, and video products, allowing for direct downloads or emails to customers. Furthermore, businesses can now be readily reached or reach out to customers or suppliers at any time without time constraints.