Intro To Ecommerce 18160 Essay Example

the Internet enhances responsiveness by informing customers about new products tailored to their interests and generating customized offers. Furthermore, through Internet utilization, international companies can acquire knowledge of consumer behaviors, identify trends, and establish enduring customer relationships based on consumer statistics.

Electronic commerce activities

Electronic commerce is intended to improve the execution of business transactions across different networks. Transactions happen when one economic entity sells a product or service to another entity. These transactions are enabled through a unique technological interface that connects buyers and sellers. In the electronic marketplace, buyer/seller transactions occur in various ways, involving the accessing, absorbing, arranging, and selling of information. Business transactions can be categorized into four main types: Business to Business (B2B), Business to Customer (B2C), Business to Administration, and Consumer to Administration.

A popular example of B2B electronic commerce involves a company using a network to perform various tasks such as placing orders with suppliers, receiving invoices, and making payments.

The B2C category, which is primarily linked to electronic retailing, has experienced significant growth since the emergence of the World Wide Web. Currently, there are numerous online shopping malls on the Internet that provide a wide range of consumer products including cakes, wine, computers, and motor cars.

The business administration category encompasses different interactions between companies and government organizations. In the USA, for example, details about future government procurements are accessible online, allowing companies to electronically submit their responses. Although still in its initial phase, this category has the potential to expand quickly as governments leverage their operations to promote electronic commerce. Alongside public procurement, administrations may also facilitate electronic exchange for transactions like filing VAT returns and making corporate tax payments.

The consumer

administration category is beginning to emerge following the growth of both the business consumer and business administration categories. Governments may expand electronic interaction to areas such as welfare payments and self-assessed tax returns.

B2B e-commerce was born out of a need to solve an administrative problem, which led to the creation of a computer standard known as EDI (Electronic Data Interchange). Today, B2B sites use XML, a simpler and lighter data interchange standard that evolved from EDI. In 1992, basic e-commerce sites emerged as virtual catalogs featuring product listings. At first, orders were placed through offline methods such as email, phone calls, or fax. However, by 1996, advancements in technology allowed for the development of virtual stores with shopping carts and client accounts. The introduction of protocols like Secure Socket Layer (SSL) enabled customers to directly order and pay for their purchases online using credit cards.

E-commerce has become popular among consumers and suppliers due to its convenience in comparing products, prices, and services. It allows suppliers to reach a global audience 24/7, resulting in cost reduction. Currently, e-commerce is widely used and growing rapidly. According to IDC, the B2B market is projected to make up two-thirds of worldwide e-commerce this year, making it the largest and most profitable sector. The B2C sector is also expected to grow as high-speed internet through broadband connections becomes more accessible. Furthermore, there are anticipated advancements in digital money, e-wallets, and personalized agents that assist users in finding desired items. Websites have the potential for collaboration with fulfillment centers to enhance customer service and provide valuable supplier information. Additionally, there is a rising trend towards human interaction in e-commerce customer service

which websites can support.

The Internet is revolutionizing opportunities for customers and businesses, seemingly without limit. However, its rapid pace of change and abundance of choices can be overwhelming for both parties. Moreover, web businesses succeed by embracing rules that diverge from those governing traditional companies. E-commerce seems to circumvent the historical constraints faced by traditional companies.

Through effective management of an e-commerce environment and innovative customization of products and services, win-win situations can be created. This allows customers to acquire the appropriate product at the correct time and price, while also enabling companies to establish new benchmarks for efficiency and profitability.

The different divisions of e-commerce activities include:

There are two essential components of online marketing: searching and advertising.

Companies display a collection of their products or services on their websites.

People who are browsing through online catalogs.

One or more users are being represented by software agents who perform searches.

Electronic requests are used by users to specify the particular product or services they need.

Negotiating

Both buyers and sellers have the liberty to participate in conversations and come to agreements about different elements of a transaction. This encompasses exchanging goods or services and determining payment terms. These negotiated terms may encompass various rights such as copying, copyright or licensing agreements, usage rights, distribution rights, refund policies, and specific payment conditions.

Ordering

Buyers typically submit a contractual agreement when purchasing an item. This agreement outlines the terms of exchange, usage, and payment and is usually in the form of an order that specifies the price and other transaction details. The order can be transmitted verbally, through written documentation, or electronically. To guarantee its authenticity, cryptographic techniques like digital signatures can be used to electronically validate

the agreement.

Billing

The bill can be sent to the buyer at various times, such as before, during, or after the delivery of the product or service. Typically, it includes remittance information that provides payment details (including who, where, and how to pay). These details can be obtained by filling out order or request forms.

Payment and settlement

The purchaser has the option to use different credit cards, including Visa, for making electronic payments. These payments can come in the form of contracts or obligations that are authenticated payment instructions or they can involve transferring value like digital cash. Along with the payment, remittance information is usually provided and sent to the seller. The payment can be for a single item or based on usage, or it can cover multiple items or usage within one transaction. Settlement occurs when either the seller or their representative verifies and examines the payment and remittance information to ensure its validity before completing the actual transfer of funds.

Production

Even though electronic commerce and collaborative design and manufacturing have similarities, they do not completely meet each other's needs. Collaborative design and manufacturing entail multiple specialized firms collaborating through network platforms. These firms participate in negotiations, contracts, purchases, sales, distribution, and assembly of various components necessary for a product or service. An example is Dell Computers offering customers the option to personalize their own computer online.

Distribution and Receipt

Before, after, or simultaneously with the payment, the seller arranges the delivery of the bought product or service to the buyer. The buyer then furnishes evidence of receiving the delivery. It is crucial to include discussions and policies regarding customer satisfaction and returns in the contract between both

parties.

Accounting

This activity is essential for both corporate customers and suppliers. It involves the reconciliation of all electronic transactions in accounts receivable, accounts payable, inventory information, and accounting systems by both the buyer and seller. Moreover, it is necessary to update records of account and management information systems. In certain situations, third parties may be engaged when businesses decide to outsource their accounting services.

Customer Service

Activities that may be included in customer service can consist of:

Keeping the buyer informed about the progress of the transaction in a timely manner.

It is crucial to address customer requirements when transactions do not go as intended. This involves handling mistakes, disputes, or complaints related to product quality, delivery, or payment. It also means resolving these issues and offering expert guidance and support on utilizing the products and services.

Information and Knowledge Processing

One essential activity in electronic commerce is the gathering, organization, examination, and understanding of different data to enhance transaction-related decisions.

Enhanced technologies of the Internet, the World Wide Web, and Value Added Networks enable e-commerce.

The Internet is a worldwide network of interconnected computer networks that collaborate to exchange data using a shared software standard. Users can communicate and share information in different formats via telephone wires and satellite links. The extensive size, scope, and structure of the Internet allow easy connectivity for users with regular personal computers and local phone numbers. Users can send electronic mail (E-mail) to friends and colleagues who have internet accounts, publish accessible and regularly updated information, access multimedia content like sound, photos, and videos, as well as gain exposure to diverse perspectives from various global regions.

The Internet functions without a central governing body, such as "Internet, Inc.",

overseeing its operations. Although there are boards responsible for setting policies and standards, the lack of a single organization means that there are few regulations and no one entity controlling the governance of the Internet.

The history of the Internet can be traced back to its origins.

Despite what many people believe, the Internet is not a recent creation. Its foundation dates back over 25 years. Originally called ARPAnet, it was established by the U.S. Department of Defence as a nationwide computer network with the purpose of maintaining continuous connectivity in case of major network disruption caused by nuclear warfare or natural disasters.

The Internet was primarily utilized by academic institutions, scientists, and the government for research and communication during the following two decades. These entities were drawn to the network as it enabled them to link their computing systems and databases while also facilitating data exchange via E-mail.

The Internet experienced a major transformation in 1992 when the U.S. government relinquished network management and commercial entities took over providing public Internet access. This shift marked the beginning of the Internet's remarkable expansion.

The internet's growth aligns with the availability of inexpensive personal computers featuring user-friendly graphical operating systems. Consequently, more individuals have joined the network as new computer users, fostering opportunities to leverage diverse multimedia capabilities.

The influence of electronic commerce is significant.

The idea of electronic commerce is no longer remote, but rather a present reality that has been validated through numerous successful instances. The United States, Japan, and Europe have spearheaded the movement in making it a worldwide sensation. This swift progression and drive can be credited to the heightened utilization of EDI (Electronic Data Interchange) and the substantial

expansion of the Internet and World Wide Web.

The impact of electronic commerce will have a wide-ranging effect on both companies and society. Companies that fully embrace its potential can undergo considerable transformations, altering customer expectations and generating fresh markets. Nonetheless, even companies that opt to disregard these novel technologies will still be impacted by market changes and shifts in customer expectations. Concurrently, individuals in society will acquire new chances for buying goods, accessing information and services, as well as interacting with government agencies. As a result, lifestyle modifications may resemble the proliferation of car ownership or the diffusion of the telephone.

The extent of Electronic Commerce

Electronic Commerce, in a broad sense, encompasses all types of business transactions conducted over telecommunications networks. These transactions can take place among companies, between companies and their customers, or between companies and public administrations.

The vast scope of Electronic Commerce involves various activities, particularly related to the commercial transaction cycle. It covers the electronic exchange of physical goods, services, and digital content. Additionally, it involves advertising, promoting products and services, facilitating connections between traders, providing market insights, assisting with pre- and post-sales support, electronic procurement, and supporting shared business processes.

Electronic Commerce has a significant influence on numerous business activities.

Marketing, sales, and sales promotion are crucial for any business.

? Pre-sales, subcontracts, supply

Financing and insurance

Commercial transactions encompass various processes, including ordering, delivery, and payment.

? Product service and maintenance

Co-operative product development

? Collaborative work that is distributed

? Utilization of both public and private services

Business-to-administrations refers to the interaction between businesses and government administrations in areas such as concessions, permissions, tax, customs, and other related matters.

Transportation and logistics

Public procurement refers to the process by which governments

and other public entities purchase goods, services, and construction works. It involves a series of steps, such as identifying the need, evaluating potential suppliers, and awarding contracts. Public procurement is subject to regulations and guidelines that aim to promote fairness, transparency, and competition.

Automatic trading of digital goods is the process in which goods are exchanged electronically without manual intervention.

Accounting

? Dispute resolution

Electronic support can encompass the entire commercial transaction, such as ordering, transportation, delivery, invoicing, and payment. This electronic support is particularly advanced when it comes to dealing with public authorities for customs, tax affairs, and statistics. Nonetheless, there are still several concerns and matters that need to be taken into account in the electronic commerce business environment. These include security, protection of intellectual property rights (IPR), legal queries, and procedures.

The text emphasizes the need to differentiate between two types of electronic trading. The first type involves the exchange of physical goods and services, while the second type pertains to the exchange of information-based contents. These contents include images, voice recordings, text documents, software, and others. Both types of electronic trading occur directly through the network.

The electronic trading of physical goods and services is an advancement in current methods of trading. It utilizes technology to improve efficiency by reducing costs and widening market potential. Additionally, it enables better customer satisfaction and facilitates innovation through interaction between customers and suppliers. This form of e-commerce is predicted to greatly influence competitiveness while minimally affecting employment.

The trading of electronic material, such as software, video, music, images, multimedia works, and games, is a revolutionary way of commerce. It enables the entire commercial transaction cycle, including

delivery, to be conducted simultaneously using the same network. This type of trading necessitates specific requirements for the integration of payment methods and intellectual property rights control. Depending on what solutions are successful in the market, "electronic goods" could potentially create new markets and transform industries like publishing. This innovative form of electronic commerce is projected to have a significant impact on competitiveness and job creation.

Specific business benefits of electronic commerce are illustrated through the following examples:

? Lowered expenses for advertising

Cost of delivery has been reduced, especially for goods that can be delivered electronically.

Reduced design and manufacturing cost

Improved market intelligence and strategic planning

? There is greater potential for niche marketing.

? Equal access to markets, specifically for small and medium-sized enterprises (SMEs) compared to larger corporations

? Access to new markets

? The involvement of customers in the innovation of products and services.

Electronic provision of market intelligence, including data on specific markets and countries, market surveys, and automated marketing statistics generation, can enhance the business environment. However, there are several concerns, such as privacy, that need to be taken into account.

On-line business directories and national/regional information relay centres can facilitate contacts between companies. Various means, such as on-line advertising and shopping malls, can support contact between companies and consumers. Detailed information on products and services, including technical specifications, usage guidance, and FAQs, can be provided by companies. These can be supported by comprehensive navigation and search facilities.

Efforts to enhance business efficiency and responsiveness have led to a merging of interactions between companies and customers. This leads to a collaboration among companies as they carry out shared processes, blurring company boundaries. One notable example is the "virtual enterprise"

where participating companies work together in a closely cooperating network to address specific market opportunities.

Major shifts in the structure of industries can be anticipated when companies come together to form a single virtual enterprise that addresses various aspects such as production, distribution, and sales. One instance of this can be seen in the potential impact of teleshopping on the balance of power between consumer goods producers and the retail chain, as it allows for a partial bypassing of the distribution chain. As a result, the traditional boundaries between manufacturing and distribution sectors become less significant. Furthermore, the healthcare industry also experiences a structural change due to the influence of electronic commerce. This enables healthcare management companies (HMCs) to emerge as significant intermediaries between various entities including doctors, major healthcare purchasers, pharmaceutical industry, and government agencies.

In this scenario, electronic commerce refers to the electronic sharing of health care-related information among market players. These health management companies (HMCs) have become increasingly significant, leading to a recent trend of vertical integration in the pharmaceutical industry. Manufacturers are acquiring healthcare companies to gain access to their extensive information databases.

Examples of Generic Business Strategies Derived from Electronic Commerce

Electronic Marketplace Presence includes sales promotion and interactive TV / Internet shopping.

Efficient Consumer Response Management

Electronic Trading

Supply Chain Management

Vendor Managed Inventory

Electronic commerce also allows for the implementation of industry-specific tactics, such as Value Added Banking.

Potentially, electronic commerce has the ability to offer extensive assistance for shared business processes, irrespective of their nature and the participants' geographical and time separation. Arguably, these shared business processes are the broadest form of electronic commerce, with the other aspects mentioned earlier being specific instances of this broader form.

The

previous reasoning and examples support the idea that electronic commerce should be viewed from multiple policy and market sectors.

Electronic commerce offers both suppliers and customers various opportunities and benefits.

According to table 1, electronic commerce provides various opportunities for suppliers and corresponding advantages for customers. These opportunities and benefits include:

Supplier opportunity: Customer benefit

Global presence and global choice.

Enhanced competitiveness and improved quality of service

Mass customisation and "customerisation" refer to the concept of offering personalised products and services.

Reduce or eliminate supply chains for a quick response to needs

Substantial cost savings and price reductions.

Discover fresh business opportunities through novel products and services.

Table 1: Opportunities and benefits

Global presence / Global choice

Electronic commerce is not limited by geography or national borders; rather, it is determined by the reach of computer networks. As major networks have worldwide coverage, even small suppliers can participate in global electronic commerce and transact business on a global scale.

The customer benefit is having a global selection - the ability to choose from all possible suppliers of a product or service, regardless of their location.

Enhancement of competitiveness and improvement of service quality

Electronic commerce allows suppliers to enhance their competitiveness by establishing a closer relationship with the customer. For instance, numerous companies are utilizing electronic commerce technology to provide better pre- and post-sales support, including increased access to product information, guidance on product usage, and prompt responses to customer inquiries. As a result, customers benefit from improved quality of service.

Mass customisation and personalised products and services

Through electronic interaction, suppliers can retrieve extensive information on the requirements of each customer and automatically customize products and services accordingly. This leads to personalized products similar to those provided by specialized suppliers, but

at affordable prices for the general public. A straightforward illustration is an online magazine that is personalized for each reader upon accessing it, highlighting articles that are likely to be of interest while excluding ones that have already been read.

Shorten or eliminate supply chains and quickly respond to needs.

Electronic commerce can significantly reduce the length of traditional supply chains. Instead of goods going through multiple stages like a wholesaler's warehouse, retailer's warehouse, and retail outlet, they can be shipped directly from the manufacturer to the end consumer. The main benefit of electronic commerce is not the ability to enable direct distribution, which could also be done through paper catalogues and telephone or postal ordering. Instead, electronic commerce makes it practical in terms of cost and time. The most extreme example is when products and services can be delivered electronically, eliminating the need for a supply chain altogether. This has major implications for industries such as entertainment (film, video, music, magazines, newspapers), information and publishing (all forms of publishing), and companies involved in computer software development and distribution.

The advantage for customers is that they can quickly get the exact product they need, even if it is not currently available from local suppliers.

Substantial cost savings and substantial price reductions.

Electronic commerce has a significant impact on reducing transaction costs. Compared to business transactions that rely on human interaction, electronic transactions can be done at a much lower cost, often just a few cents. This means that any business process involving regular interactions between people has the potential for considerable cost savings. Ultimately, these savings can be passed on to customers in the form of lower prices.

Emerging business opportunities and the introduction of new products and services.

Electronic commerce not only redefines markets for existing products and services, but also creates opportunities for entirely new offerings. These can include network supply and support services, directory services, contact services (such as facilitating initial connections between potential customers and suppliers), as well as various types of online information services.

Although these opportunities and benefits are different, they are also interconnected. Mass customization can improve competitiveness and quality of service, while shortening supply chains can lead to cost savings and price reductions.

Examples within the field of electronic commerce

The current activity in electronic commerce is evident in numerous well-established examples across various industry sectors and application areas.

? Retail: - The Internet Book Shop. Virtual Vineyards

can beand unified as:

? Retail: - Online stores like The Internet Book Shop and Virtual Vineyards

? Finance - Barclays Bank. Electronic Share Information

Distribution: -DIPA GmbH. Oracle

? Pre/post sales support: -Hewlett Packard. GE Plastics

Engineering design at Ford is a part of the Global Engineering network.

Business support: -CitiusNet.

? Publishing: -The Times. The Irish Independant

? Shared business processes: - Tesco.

The shared business processes at Tesco.The different levels of electronic commerce.

Illustrating the various levels at which electronic commerce can be conducted, examples above range from a simple network presence to electronic support for processes jointly owned and enacted by multiple companies.

The table above presents different levels of electronic commerce. International electronic commerce is more intricate compared to intranational electronic commerce due to factors like taxation, contract law, customs payments, and variations in banking practices. This emphasizes the differentiation between national and international transactions. It is important to note that the sources of this

distinction are not related to technology; electronic commerce is fundamentally a global concept, but rather the laws governing it.

The basic levels of electronic commerce involve establishing an online presence for a company, promoting it, and providing support before and after sales. These levels can be easily implemented and cost-effective by utilizing existing technologies that are readily available. Many small companies have already found success through these approaches.
On the other hand, more advanced forms of electronic commerce present challenges that are not just technological, but also legal and cultural. These complex issues do not have pre-built solutions, so companies have to create their own custom systems to address them. As a result, it is currently the larger and wealthier companies that are taking the lead in these advancements.
However, as time passes, the definition of what is considered commonplace in electronic commerce will evolve to include the more complex levels. This will lead to the development of additional off-the-shelf technologies that support these higher levels, just as they have been developed for the lower levels.

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