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In the Beginning

In the Beginning Chapter 1 OBJECTIVES What we need to do business online? What is E-Commerce? Advantages and Limitations of E-Commerce Strategy in E-Commerce Value Chains in E-Commerce E-Commerce Integration Introduction

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In the Beginning

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  1. In the Beginning Chapter 1

  2. OBJECTIVES • What we need to do business online? • What is E-Commerce? • Advantages and Limitations of E-Commerce • Strategy in E-Commerce • Value Chains in E-Commerce • E-Commerce Integration

  3. Introduction • If you have PC and connect to the Internet with a browser you can do business online. • The backbone of the electronic commerce is the Internet • Changing during past 2 decades are • Computer • Information Technology • Networking ( Internet )

  4. WHAT IS E-COMMERCE? • Electronic Presentation of Goods and Services • EC:- the marketing, buying, and selling of products and services on the internet. • EC required • Automated Customer Account Inquiries • Online Order Taking and Payments • Online Transaction Handling • Automated Supply Chain Management Solutions

  5. EC definition • Communication: ability to deliver products, services, information via network • Interface: involve various information and transaction exchange. (B2B, B2C, C2C, B2G) • Business process: activities that directly support commerce electronically by network connection.

  6. EC definition • Online: electronic environment that makes it possible to buy and sell (P,S,I) on the internet. • Structural: EC involves various media: data. Text, web page, …

  7. E-business • E-commerce is not E-business • E-business:- connecting critical business systems and constituencies directly via internet, Extranets, and Intranets. • Goes behind web site on the internet to affect all aspect of business

  8. E-business • E-business enables organization to accomplish the following goals • Reach new markets • Create new products or services • Build customer loyalty • Make the best use of existing technologies

  9. E-Commerce • Commerce with anyone, anywhere, anytime with more effective transaction • Transaction: a block of information exchange between the merchant and its customer via website. • Reasons why it is difficult to understand EC is the speed with which is growing

  10. EC breaking rules of commerce • Companies do not share information with competitors • Supplier do not share information with buyers especially price • No financial transaction occurs without involvement of a bank

  11. WHY E-COMMERCE? • Digital Convergence • Anytime, Anywhere, Anyone • Changes in Organization’s Make-up • Widespread Access to IT • Increasing Pressure on Operating Costs and Profit Margins • Demand for Customized Products and Services • Speed or Time Reduction

  12. E-COMMERCE MYTHS • Setting up a Web site is easy • E-commerce is cheap when compared to purchasing a mainframe • E-commerce means end of mass marketing • Everyone is doing it • E-commerce is lucrative • E-commerce is revolutionary

  13. E-COMMERCE MYTHS (Cont’d) • Online retailing is always the low-cost channel • All products can be sold online using identical business models • Customers can be bought • Online firms face less pressure to grow and achieve economies of scale • Size is not important for online firms • The middleman is out

  14. ADVANTAGES OF E-COMMERCE • Lower Cost • Economical • Higher Margins • Better and Quicker Customer Service • Comparison Shopping • Productivity Gains

  15. ADVANTAGES OF E-COMMERCE (Cont’d) • Helps People Work Together • Creates Knowledge Markets • Promotes Information Sharing, Convenience and New Customer Control • Swapping Goods and Services • Allows High Product Customization

  16. LIMITATIONS OF E-COMMERCE • Security • System and Data Integrity • System Scalability • Not Free-for-All • Consumer Search

  17. LIMITATIONS OF E-COMMERCE (Cont’d) • Fulfillment • Customer Relations • Types of Products • Corporate Vulnerability • Blueprint Development • Risk

  18. SELL CYCLE IN E-COMMERCE

  19. PRIMARY ACTIVITIES • Inbound Logistics • Supply line of business • The business must be capable of exchanging data with suppliers quickly regardless of the electronic format • Operations • Conversion of raw materials into finished products • Center of value chain where value-added occurs • Outbound Logistics • Storing, distributing and shipping of final product

  20. PRIMARY ACTIVITIES (Cont’d) • Marketing and Sales • Deals with ultimate customer • Service • After-sale service to customer

  21. SUPPORT ACTIVITIES • Corporate Infrastructure • Backbone of business unit • Human Resources • Matching the right people to the right job • Technology Development • Product and business processes improvement • Procurement • Prerequisite for production

  22. E-COMMERCE INTEGRATION

  23. SUPPLY CHAIN MANAGEMENT • Reduces Cycle Times • Raise Order Fulfillment • Minimize Excess Inventory • Improve Customer Service

  24. INTRANET • Low Development and Maintenance Costs • Friendly Environment • High Information Availability and Shareability • Timely Information • Easy Dissemination of Information

  25. In the Beginning Chapter 1 WWW

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