MIS Chapter 7

Electronic commerce (e-commerce, EC)
describes the buying, selling, transferring or
exchanging of products, services or information via computer networks, including the Internet.
broader definition of EC, including buying and selling of goods and services, and also servicing customers, collaborating with partners, conducting e-learning and conducting electronic transactions within an organization.
Brick-and-mortar organizations
purely physical organizations.
Virtual organizations
companies that are engaged only in EC. (Also called pure play)
Click-and-mortar organizations
organizations that conduct some e-commerce activities, yet their business is primarily done in the physical world. i.e. partial EC.
Business-to-consumer (B2C)
type of e-commerce where the sellers are organizations and the buyers are individuals
Business-to-business (B2B)
type of e-commerce where both the sellers and buyers are business organizations. This represents the vast majority of e-commerce.
Consumer-to-consumer (C2C)
type of e-commerce where an individual sells products or services to other individuals.
Business-to-employee (B2E)
type of e-commerce where an organization uses e-commerce internally to provide information and services to its employees. Companies allow employees to manage their benefits, take training classes electronically; buy discounted insurance, travel packages, and event tickets.
the use of Internet Technology in general and e-commerce in particular to deliver information about public services to citizens (called Government-to-citizen [G2C EC]), business partners and suppliers (called government-to-business [G2B EC]),
Mobile Commerce (m-commerce)
refers to e-commerce that is conducted in a wireless environment. For example, using cell phone to shop over the Internet.
competitive process in which either a seller solicits consecutive bids from buyers or a buyer solicits consecutive bids from sellers.
forward auction
Sellers use this type of auction as a channel to many potential buyers. Note that Sotheby’s uses forward auctions. In general, result in higher prices over time.
reverse auctions
In these types of auctions, one buyer, usually an organization, wants to buy a product or a service. The buyer posts a request for quotation (RFQ) on its Web site or on a third-party Web site. The RFQ contains detailed information on the desired purchase. Suppliers study the RFQ and submit bids, and the lowest bid wins the auction.
In general, results in lower prices over time
Online direct marketing
type of e-commerce business model where manufacturers or retailers sell directly to customers. Ex) Dell.com
Electronic tendering system
type of e-commerce business model where businesses (or governments) request quotes from suppliers; uses B2B (or G2B) with reverse auctions.
type of e-commerce where customers decide how much they want to pay. Ex) Priceline.com
type of e-commerce where customers specify a need and an intermediary compares provider and shows the lowest price. Ex) Hotwire.com
Affiliate marketing
type of e-commerce business model where Vendors ask partners to place logos or banners on partner’s site. If customers click on logo, go to vendor’s site, and buy, then vendor pays commission to partners.
Viral marketing
type of e-commerce business model where receivers send information about your product to their friends.
Group purchasing
type of e-commerce business model where small buyers aggregate demand to get a large volume; then the group conducts tendering or negotiates a lower price.
Online auctions
type of e-commerce business model where companies run auctions of various types on the Internet.
Product customization
type of e-commerce business model where customers use the Internet to self-configure products or services. Sellers then price them and fulfill them quickly.
Deep discounters
type of e-commerce business model where the company offers deep price discounts
type of e-commerce business model where only members can use the services provided
Benefits of e-commerce to organizations
Makes national and international markets more accessible
Lowering costs of processing, distributing, and retrieving information
Benefits of e-commerce to customers
Access a vast number of products and services around the clock (24/7/365)
Benefits of e-commerce to society
Ability to easily and conveniently deliver information, services and products to people in cities, rural areas and developing countries.
Technological Limitations of e-commerce
Lack of universally accepted security standards
Insufficient telecommunications bandwidth
Expensive accessibility
Non-technological Limitations of e-commerce
Perception that EC is unsecure
Unresolved legal issues
Lacks a critical mass of sellers and buyers
electronic storefront
is a Web site that represents a single store.
Electronic malls
collections of individual shops under a single Internet address.

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