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Chapter 2

Chapter 2. E-Commerce in Business. The E-Environment. E-Commerce - Business conducted via electronic methods E-Business - Any process a business conducts over a computer network. E-Commerce vs. E-Business. E-Commerce. E-Business.

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Chapter 2

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  1. Chapter 2 E-Commerce in Business

  2. The E-Environment • E-Commerce - • Business conducted via electronic methods • E-Business - • Any process a business conducts over a computer network

  3. E-Commerce vs. E-Business E-Commerce E-Business • A business buying office supplies through an online auction • Withdrawing funds from an ATM machine • Purchasing a book over the Internet • A government employee reserves a hotel room over the Internet • Production process including procurement, ordering, automated stock replenishment, payment processing, and other links with suppliers • Customer Process including marketing, selling, processing of orders and payments • Management processes including employees services, training, information sharing

  4. Why People Buy Online

  5. Benefits • Limitless Buyers • Open 24/7 • Advertise Market and Analyze • Brand Loyalty - a customer’s preference for a particular product • Coke vs. Pepsi • Managing Inventory

  6. Benefits • Meeting Customer Needs • Mass Customization - the production of goods that offer specialized choices to mainstream buyers • Value Chain - the sequence of design, production, and marketing efforts a business conducts to deliver its products at the right place and time • Streamline the value chain - increase productivity and profitability

  7. Benefits • Starting Out • Purchase domain name • Build the site • Select business model • Photos of products • Establish and ship goods

  8. Benefits • Pricing Competitively • Online community makes it easier to compare prices • Elastic demand - pricing changes will create a change in the amount of goods or services consumers are willing to buy at the certain price

  9. Think about it… How can e-commerce weaken or add to a local economy?

  10. Did you pay attention? • What does it mean for a company to “manage” its inventory? • How is an online company’s inventory easier to manage than that of a bricks-and-mortar business? • How can a company streamline its value chain? • Why is it difficult to charge more than your competitors in an e-commerce marketplace?

  11. Conducting Business on the Web You make the call… You are in the market for a new laptop. You use several manufacturers’ Web sites to research the different models available. After making your decision, you call the company’s toll-free number to place your order. Is this an e-commerce transaction?

  12. Conducting Business on the Web Since no ownership of goods or services actually took place over the computer network, this is not technically an e-commerce transaction even though all of the components (hardware, buyer, seller) are present.

  13. E-Commerce Business Models • Online transactions occur 24/7 • Buy a shirt from AmericanEagle.com • File your income tax return electronically • Computer manufacturer purchases componants from a suppler in China • Bid on an item on eBay • Business Model - a system of policies, operations, resources, and technologies used to generate revenue.

  14. Common Business Models • Business-to-Business (B2B) • Business-to-Consumer (B2C) • Consumer-to-Consumer (C2C) • Consumer-to-Business (C2B) • Business-to-Government (B2G) • Government-to-Consumer (G2C) • Intermediary Hub

  15. Business-To-Business • Applies when a business transacts information, goods, or services with another business • Oldest and fastest growing form of e-commerce • Example: A manufacturer in New Jersey uses Paychex for its payroll service

  16. Business-To-Consumer • Any business or organization that uses the Internet to sell its products of services to consumers or end users • Amazon.com • fnfg.com • WebMD.com

  17. Business-To-Consumer • Studies show that the longer a customer stays on a site, the more likely they are to buy • Keep customers busy with a variety of products, services and information. • Offer easy navigation, a secure way to purchase products, as well as offer a reason to return

  18. Consumer-To-Consumer • Allows customers to interact with one another online to transact goods and services • eBay - the most successful online auction site. • 30 million people buy and sell more than $20 billion annually • More than the GDP of all but 70 countries in the world

  19. Other Models • Business-to-Government - connecting private sector to the government marketplace • Bids for government contracts • Government-to-Consumer - allows consumers to easily access relevant information from government agencies • irs.gov

  20. What’s a hub? • Intermediary Hub - a business that does not provide goods or services but instead acts as a middleman, bringing buyers and sellers together • Vertical Hubs - match buyers and sellers within a particular industry • Horizontal Hub - provide the same types of products or services across various industries

  21. Value Line in the Energy Chain

  22. How did you do? • Why do e-commerce businesses strive to keep potential customers on their sites as long as possible? • What are some of the key challenges facing the B2C model? • How might the G2C model be helpful to the average consumer?

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