E-Commerce: Applications and issues

1) Overview of E-Business and E-Commerce:

⭐E-Commerce (EC): describe the process of buying, selling, transferring or exchanging products, service, or information via computer networks, including the Internet.

⭐ E-Business: is a broader definition of EC, including:

       ✅ Buying and selling of goods and services.

       ✅ Servicing customers.

       ✅ Collaborating with partners.

       ✅ Conducting e-learning.

       ✅ Conducting electronic transactions within an organization.

  - Pure versus Partial EC depends on the degree of digitization involved:

       🔹The product can physical or digital.

       🔹The process can be physical or digital.

       🔹The delivery agent can be physical or digital.

 - Brick-and-mortar: purely physical organizations.

 - Click-and-mortar: organizations are those that conduct some EC activities, yet their business is primarily done in the physical world [multichanneling].

- Pure play: organiztions that are engaged only in EC.

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♣ Types of E-Commerce:

      ▶Business - to - customer (B2C): the sellers are organizations, and the buyers are individuals.

      ▶Business- to - Business  (B2B): both sellers and buyers are business organization's.

      ▶Consumer- to - consumer (C2C): both the sellers and buyers are individuals.

      ▶Business- to - Employee (B2E): An organization uses e-commerce internally to provide information and services to its employees.

      ▶E - Government (E- Gov.): the use of internet technology to deliver information about public services to citizens (Government - to - Citizen [G2C]), business partners and suppliers (called government - to - business [G2B]) and between governments [G2G].

     ▶Mobile Commerce (m- commerce): e-commerce that is conducted using a mobile phone.

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♣ E-Commerce Business Models:
- Business Models: is the method by which a company generates revenue to sustain itself.
     🔹 Online direct marketing: manufacturers sell directly to customers.

     🔹 Electronic tendering system: businesses (or governments) request quotation from suppliers (uses B2B or G2B)
     🔹 E-auction: an auction which is held over the Internet.
          - Forward Auction: the highest bidder wins the auction.
          - Reverse Auction: the lowest bidder wins the auction.

     🔹 Name-your-own-price: customers decide how much they want to pay.

     🔹 Find-the-best-price: customers specify a need and an intermediary compares providers and shows the lowest price.

     🔹 Affiliate marketing: vendors ask partners to place logos or banners on partner's site. If customers click on logo, go to the vendor's site, and buy, then the vendor pays commission to partners.

    🔹 Viral marketing: receivers send information about your product to their friends.
    🔹 Group purchasing: small buyers aggregate demand to get a large volume discount [E- Coops].
    🔹 Product customization: customers use the Internet to self- configure products or services. Sellers then price them and fulfill them quickly.
    🔹 Deep discounters: company offers deep price discount. Appeals to customers who consider only price in their purchasing decisions.
    🔹 Membership: only members can use the services provided, including access to certain information, conducting trades, etc.(www.egreetings.com).

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♣ Benefits of E-Commerce:
    ● Benefits to organizations:
      ✅ Makes national and international markets more accessible.
      ✅ Lowering costs of processing, distributing, and retrieving information.
    ● Benefits to customers:
      ✅ Access a vast number of products and services around the clock (24/7/365).
   ● Benefits to society:
      ✅ Ability to easily and conveniently deliver information, services and products to people in cities, rural areas and developing countries.

♣ Limitations of E-Commerce:

     ● Technological Limitations:
         ✖ Lack of universities accepted security standards.
         ✖ Insufficient telecommunications bandwidth.
         ✖ Expensive accessibility.
     ● Non - Technological Limitations:
         ✖ Perception that EC is unsecure.
         ✖ Unresolved legal issues.
         ✖ Lacks a critical mass of sellers and buyers.
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2) Business-to-Consumer (B2C) Electronic Commerce:

♣ Electronic Storefronts and Malls:
      • Electronic Retailing (e-tailing): is the direct sale of products and services through Internet.

      • Electronic Marketplace: a central, virtual market space on the web where many buyers and sellers can conduct E-Commerce and E-Business activities.
      • Electronic Storefront: is a Web site that represent a single store.
            - Example: www.dell.com
      • Electronic Mall/ Cybermall: is a collection of individual shops grouped under a single Internet address.
           - Example: www.bing.com/shopping

♣ Online Service Industries:
   - One of the most pressing EC issues relating to online services is disintermediation.
   🔹 Cyberbanking: involves conducting banking activities from home, a place of business or on the road instead of at a physical bank location.

   🔹 Virtual Bank/ Cyber Bank: a bank is dedicated only to Internet transactions.
   🔹 Online Securities Trading.

   🔹 The Online Job Market: the Internet offers a promising new environment for job seekers and for companies searching for hard - to- find employees.

   🔹 Travel Services: the Internet is an ideal place to plan, explore and arrange almost any trip economically.

   🔹 Online Advertising:

        - Advertising: an attempt to disseminate information in order to influence a buyer - seller transaction.

       - Online Advertising methods:
         • Banner: simply electronic billboard [can be customized].
         • Pop up ad: appears in front of the current browser window.
         • Pop under ad: appears underneath the active window.
         • Permission marketing: asks consumers to give their permission to voluntarily accept online advertising and e-mail. [ sometimes customers are paid to view online advertisements].
        • Viral marketing: refers to online "word - of -mouth" marketing.
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♣ Issues in E-Tailing:
     ● Channel conflict: occurs when manufacturers disintermediate their channel partners such as distributors, retailers, dealers, and sales representatives, by selling their products directly to consumers, usually over the Internet through e-commerce.
       - Example: Ford allows customers to configure a car online but requires them to pick it up from a dealer, where they arrange financing, warranties and services.
    ● Multichanneling: is a process in which a company integrates its offline and online channels.
    ● Order fulfillment: finding the product to be shipped, packaging the product; arrange for speedy delivery to the customer; and handle the return of unwanted or defective products.
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3) Business-to-Business (B2B) Electronic Commerce:
- In business to business (B2B) e-commerce,  the buyers and sellers are business organizations.
- There are several business models for B2B applications:

     🔹 Sell - Side Marketplaces: organizations attempt to sell their products or services to other organizations electronically from their own web site and/or from a third party web site.

      - This method is similar to the B2C model in which the buyer is expected to come to the seller's site, view catalogs, and place an order. In the B2B sell side marketplace,however, the buyer is an organization.
     - The key mechanisms are electronic catalogs and forward auctions.

      🔹 Buy - Side Marketplaces: is a model in which organizations buy needed products and services from other organizations electronically.
    - The key mechanism is reverse auctions.
    - Example: E - procurement.

      🔹 Electronic Exchanges:
            • Exchange: independently own by a third party and connect many buyers and many sellers.
             - Vertical Exchanges: connects buyers and sellers in a given industry.(www.plasticsnet.com)             - Horizontal Exchanges: connects buyers and sellers across many industries, and are used mainly for MRO materials.(www.alibaba.com)
            - Functional Exchanges: needed services such as temporary help or extra office space are traded on an "as-needed" basis.(www.emloyease.com)

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4) Electronic Payments:
- Implementing EC typically requires electronic payments.

- Electronic payment systems enable you to pay for goods and services electronically.

♣ Electronic Check: encrypted check with digital signature that is similar to a paper check, and is used mostly in B2B.
♣ Electronic Credit Card: allows customers to charge online payments to their credit card account, and is used mostly in B2B.

♣ Purchasing Card: is the B2B equivalent of electronic credit cards and is typically used for unplanned B2B purchases.
♣ Electronic Cash: appears in three major forms:
         ♢ Stored - Value Money Cards: allow you to store a fixed amount of prepaid money and then  spend it as necessary.
         ♢ Smart Cards: contain a chip called a microprocessor that can store a considerable amount of information and are multipurpose- can be used as a debit card, credit card or a stored - value money card.

         ♢ Person-to- Person Payments: are a form of card that enables two individuals or an individual and a business to transfer funds without using a credit card.

         ♢ E-wallet.

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5) Ethical and Legal Issues:

   ● Privacy: e-commerce provides opportunities for businesses to track online consumers using cookies or special spy ware.

   ● Fraud on the Internet.
      - Internet fraud has grown even faster than Internet use itself.

  ● Domain Names: are assigned by central nonprofit organizations that check for conflicts and possible infringement of trademarks.
  ● Cybersquatting: refers to the practice of registering domain names solely for the purpose of selling them later at a higher price.
    - The original owner of www.tom.com received $8 million for the name.
  ● Taxes and other Fees: when and where (and in some cases whether) Electronic sellers should pay taxes.
  ● Copyright: protecting intellectual property in e-commerce and enforcing copyright laws is extremely difficult.