In the Beginning Chapter 1

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall OBJECTIVES What is E-Commerce? Advantages and Limitations of E-Commerce Strategy in E-Commerce Value Chains in E-Commerce E-Commerce Integration

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall WHAT IS E-COMMERCE? Electronic Presentation of Goods and Services Automated Customer Account Inquiries Online Order Taking and Payments Online Transaction Handling Automated Supply Chain Management Solutions

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 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

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 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

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 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

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall ADVANTAGES OF E-COMMERCE Lower Cost Economical Higher Margins Better and Quicker Customer Service Comparison Shopping Productivity Gains

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 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

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall LIMITATIONS OF E-COMMERCE Security System and Data Integrity System Scalability Not Free-for-All Consumer Search

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall LIMITATIONS OF E-COMMERCE (Cont’d) Fulfillment Customer Relations Types of Products Corporate Vulnerability Blueprint Development Risk

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall STRATEGY IN E-COMMERCE Critical Success Factors for E-Commerce –Sound Strategy –Clear Aim –Promotion of Sell Cycle –Full Technology Utilization –Scalable and Integrated Business Process

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall SELL CYCLE IN E-COMMERCE Selling Process PhaseWhat You Want to Do AttractionAdvertising, Promotions ConversionEase of Use, Effective Presentation Service and SupportProduct Info/Status, Fulfillment PersonalizationSite Customization, Support SecurityTransaction, Authentication InfrastructureScalability, Availability, Hosting

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall VALUE CHAIN IN E-COMMERCE Corporate Infrastructure HR Management Technology Development Procurement Inbound Logistics OperationsOutbound Logistics Marketing & Sales Service Primary Activities Support Activities

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall PRIMARY ACTIVITIES Inbound Logistics –Supply line of business Operations –Conversion of raw materials into finished products –Center of value chain where value-added occurs Outbound Logistics –Storing, distribution and shipping of final product

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall PRIMARY ACTIVITIES (Cont’d) Marketing and Sales –Deals with ultimate customer Service –After-sale service to customer

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall 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

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall E-COMMERCE INTEGRATION ElementINTERNETEXTRANETINTRANET E-Commerce Type Business-to- Consumer Business-to- Business Internal Procurement AccessUnrestrictedRestricted SecurityMinimalFirewalls & Restricted Access Payment Method Credit CardPredefined Credit Agreement Within Business Charges

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall SUPPLY CHAIN MANAGEMENT Reduces Cycle Times Raise Order Fulfillment Minimize Excess Inventory Improve Customer Service

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall INTRANET Low Development and Maintenance Costs Friendly Environment High Information Availability and Shareability Timely Information Easy Dissemination of Information

In the Beginning Chapter 1