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Chapter 1

Chapter 1. Introduction to Electronic Commerce. Traditional Commerce and Electronic Commerce. What is e-commerce? How long has it been around?. Traditional Commerce and Electronic Commerce.

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Chapter 1

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  1. Chapter 1 Introduction to Electronic Commerce

  2. Traditional Commerce and Electronic Commerce • What is e-commerce? • How long has it been around?

  3. Traditional Commerce and Electronic Commerce • Electronic commerce refers to business activities conducted using electronic data transmission via the Internet and the World Wide Web. • The three main elements of e-commerce are: • Business-to-consumer • Business-to-business • The transactions and business processes that support selling and purchasing activities on the Web • The fourth category is called consumer-to-consumer.

  4. Electronic Commerce

  5. Electronic Commerce • Electronic Funds Transfers (EFTs) have been used by banks for many years. • Electronic Data Interchange (EDI) occurs when one business transmits computer-readable data in a standard format to another business.

  6. Electronic Commerce • Businesses who engage in EDI with each other are called trading partners. • The standard formats used in EDI contain the same information that businesses have always included in their standard paper invoices, purchase orders, and shipping documents. • Firms, such as General Electric and Wal-Mart, have been pioneers in using EDI to improve their purchasing process.

  7. Value Added Network (VAN) • A value added network is an independent firm that offers connection and EDI transaction forwarding services to buyers and sellers engaged in EDI. • VANs are responsible for ensuring the security of transmitted data. • VANs charge a fixed monthly fee plus a per-transaction charge to subscribers.

  8. Comparing Traditional Commerce and Electronic Commerce

  9. Business Process Suitability to Type of Commerce

  10. Sales • Cost of goods sold • = Gross margin • -expenses • Wages • Rent • Insurance • Phone • Advertising • Postage • Electric • =Net income Income Statement

  11. Advantages of Electronic Commerce • can increase sales and decrease costs. • Web advertising reaches a large amount of potential customers throughout the world. • virtual communities for specific products or services. • A business can reduce its costs by using electronic commerce in its sales support and order-taking processes. • increases sale opportunities for the seller. • increases purchasing opportunities for the buyer.

  12. Disadvantages of Electronic Commerce • Some business processes are difficult to be implemented through electronic commerce. • Return-on-investment is difficult to apply to electronic commerce. • Businesses face cultural and legal obstacles to conducting electronic commerce.

  13. International Electronic Commerce • About 60 percent of all electronic commerce sites are in English, therefore many language barriers need to be overcome. • The political structures of the world present some challenges. • Legal, tax, and privacy are concerns of international electronic commerce.

  14. Economic Forces and Electronic Commerce

  15. Economic Forces and Electronic Commerce

  16. The Role of Electronic Commerce

  17. Strategic Business Unit Value Chains

  18. Industry Value Chain

  19. Dell Computer Buy-hold-sell versus sell-source-shippage 48

  20. SWOT Analysis:Evaluating Business Unit Opportunities

  21. Growth of the Internet, 1991 - 2001

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