1. e Commerce Business A PRESENTATION CREATED BY MR ANIL KUMAR.
BY ANIL KUMAR KABARAK UNIVERSITY

2. Overview of E-Business & E-Commerce
Business-to-Consumer (B2C) E-Commerce
Business-to-Business (B2B) E-Commerce
Electronic Payments
Ethical and Legal Issues in E-Business
BY ANIL KUMAR KABARAK UNIVERSITY

3. OBJECTIVES OF MY PRESENTATION
Describe electronic commerce, including its scope, benefits, limitations, and types.
Distinguish between pure and partial electronic commerce.
Understand the basics of how online auctions work.
BY ANIL KUMAR KABARAK UNIVERSITY

4. OBJECTIVES OF MY PRESENTATION (continued)
Differentiate among business-to-consumer, business-to-business, consumer-to-consumer, business-to-employee and government-to-citizen electronic commerce.
Describe the major e-commerce support services, specifically payments and logistics.
Discuss some ethical and legal issues relating to e-commerce.
BY ANIL KUMAR KABARAK UNIVERSITY

5. Overview Electronic Commerce (E-Commerce, EC) Describes the
buying, selling, transferring or exchanging of products,
services or information via computer networks, including
the Internet.
E-Business is a broader definition of EC, including
buying and selling of goods and services, and also
servicing customers, collaborating with partners,
conducting e-learning and conducting electronic
transactions within an organization.
Electronic commerce (e-commerce, EC) describes the buying, selling, transferring or
exchanging of products, services or information via computer networks, including the Internet.
E-business is a broader definition of EC, including buying and selling of goods and services,
and also servicing customers, collaborating with partners, conducting e-learning and conducting
electronic transactions within an organization.
BY ANIL KUMAR KABARAK UNIVERSITY

6. Overview (continued)
Pure versus Partial Electronic Commerce depends on the degree of digitization involved.
Brick-and-mortar organizations
Virtual organizations
Click-and-mortar organizations
Pure vs. Partial EC
--The product can be physical or digital.
--The process can be physical or digital.
--The delivery agent can be physical or digital.
Brick-and-mortar organizations are purely physical organizations.
Virtual organizations are companies that are engaged only in EC. (Also called pure play)
Click-and-mortar organizations are those that conduct some e-commerce activities, yet their
business is primarily done in the physical world. i.e. partial EC.
BY ANIL KABARAK UNIVERSITY

7. Types of E-Commerce Business-to-Consumer (B2C)
Business-to-Business (B2B)
Consumer-to-Consumer (C2C)
Business-to-Employee (B2E)
E-Government
Mobile Commerce (m-commerce)
Business-to-consumer (B2C): the sellers are organizations and the buyers are individuals.
Business-to-business (B2B): both the sellers and buyers are business organizations.
B2B represents the vast majority of e-commerce.
Consumer-to-consumer (C2C): an individual sells products or services to other individuals.
Business-to-employee (B2E): An organization uses e-commerce internally to provide information
and services to its employees. Companies allow employees to manage their benefits, take training classes electronically; buy discounted insurance, travel packages, and event tickets.
E-Government: the use of Internet Technology in general and e-commerce in particular to deliver
information about public services to citizens (called Government-to-citizen [G2C EC]), business partners
and suppliers (called government-to-business [G2B EC]),
Mobile Commerce (m-commerce) refers to e-commerce that is conducted in a wireless environment.
For example, using cell phone to shop over the Internet.
BY ANIL KUMAR KABARAK UNIVERSITY

8. B2B and B2C Electronic Commerce
This image shows B2B and B2C electronic commerce, and illustrates the difference between
the two types of EC.
BY ANIL KUMAR KABARAK UNIVERSITY

9. E-Commerce Business Models
Online direct marketing
Electronic tendering system
Name-your-own-price
Find-the-best-price
Online direct marketing: manufacturers or retailers sell directly to customers.
Electronic tendering system: businesses (or governments) request quotes from suppliers;
uses B2B (or G2B) with reverse auctions. Image above is the Hong Kong Government’s
electronic tending system homepage.
Name-your-own-price: customers decide how much they want to pay.
Image above is William Shatner, Priceline’s spokesman.
Find-the-best-price. customers specify a need and an intermediary compares providers
and shows the lowest price.
Note: clicking on the images will take you to the respective Web pages.
BY ANIL KUMAR KABARAK UNIVERSITY

10. E-Commerce Business Models (continued)
Affiliate marketing
Note the Sony logo at the top of this Web page
Affiliate marketing: Vendors ask partners to place logos or banners on partner’s site.
If customers click on logo, go to vendor’s site, and buy, then vendor pays commission
to partners.
Note: clicking on image above will take you to the Web page.
BY ANIL KUMAR KABARAK UNIVERSITY

11. E-Commerce Business Models (continued)
Viral marketing
Group purchasing
Online auctions
Viral marketing: receivers send information about your product to their friends.
Group purchasing: small buyers aggregate demand to get a large volume; then
the group conducts tendering or negotiates a lower price.
Online auctions: companies run auctions of various types on the Internet.
Note: clicking on the bottom two images will take you to the respective Web pages.
BY ANIL KUMAR KABARAK UNIVERSITY

12. E-Commerce Business Models (continued)
Product customization
Deep discounters
Membership
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 discounts.
Membership: only members can use the services provided.
Note: clicking on the images above will take you to the respective Web pages.
(We address Electronic marketplaces and exchanges in later PowerPoints.)
BY ANIL KUMAR KABARAK UNIVERSITY

13. E-Commerce Business Models (continued)
Bartering online
Bartering online: an intermediary administers online exchange of surplus products,
and/or company receives “points” for its contribution, and the points can be used
to purchase other needed items.
BY ANIL KUMAR KABARAK UNIVERSITY

14. 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)
BY ANIL KUMAR KABARAK UNIVERSITY

15. Benefits of E-Commerce (continued)
Benefits to Society
Ability to easily and conveniently deliver information, services and products to people in cities, rural areas and developing countries.
BY ANIL KUMAR KABARAK UNIVERSITY

16. Limitations of E-Commerce
Technological Limitations
Lack of universally 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
BY ANIL KUMAR KABARAK UNIVERSITY

17. Business-to-Consumer (B2C) Electronic Commerce
Electronic storefronts
Electronic malls
An electronic storefront is a Web site that represents a single store.
Electronic malls are collections of individual shops under a single Internet address.
Note: clicking on the images above will take you to the respective Web sites.
BY ANIL KUMAR KABARAK UNIVERSITY

18. Leading E-Tailing Websites
B2C electronic commerce is also known as e-tailing. Examples of e-tailing Websites include:
BY ANIL KUMAR KABARAK UNIVERSITY

19. Online Service Industries
A key issue is disintermediation
Online service involves customers accessing services via the Web.
Intermediaries or middlemen provide information and/or provide value-added services.
When the function(s) of these intermediaries can be automated or eliminated, this
process is called disintermediation.
BY ANIL KUMAR KABARAK UNIVERSITY

20. Disintermediation example
Online diamond broker
Blue Nile is an online diamond broker that disintermediates the diamond
supply chain.
Note: clicking on the image above will take you to the Blue Nile homepage.
BY ANIL KUMAR KABARAK UNIVERSITY

21. Use Blue Nile’s decision support system to specify your own diamond
If you click on the image above, you will go to this Blue Nile Web page.
By moving the five slide bars, you can narrow your search parameters.
I have my female students specify the diamonds that they would want, with
no input from my male students. The reactions of the males are very
interesting!
BY ANIL KUMAR KABARAK UNIVERSITY

22. Online Service Industries
Cyberbanking
Online securities trading
Online job market
Travel services
Cyberbanking involves conducting banking activities from home, a place of business,
or on the road instead of at a physical bank location.
Virtual banks are dedicated only to Internet transactions.
Note: Clicking on images above will take you to the respective Web sites. However,
NetBank has been acquired by ING Direct, so the NetBank image has no link.
BY ANIL KUMAR KABARAK UNIVERSITY

23. Online Advertising
Advertising is an attempt to disseminate information in order to influence a buyer-seller transaction.
Online Advertising methods
Banners
Pop-up ad
Pop-under ad
Permission marketing
Viral marketing
Banners are simply electronic billboards.
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 .
Viral marketing refers to online “word-of-mouth” marketing.
BY ANIL KUMAR KABARAK UNIVERSITY

24. Drivers of today’s online advertising
The emergence of “communitainment.”
The increasing popularity of Usites.
Mainstreaming of the Internet.
Declining usage of traditional media.
Fragmentation of content consumption.
Consumers are multitasking and they do not like ads.
PiperJaffray is an investment bank. See PiperJaffray at
Source: PiperJaffrey
BY ANIL KUMAR KABARAK UNIVERSITY

25. Communitainment
PiperJaffray, an investment bank, defines communitainment as the blending of community, communication, and entertainment into a new form of online activity driven by consumers.  
The bank predicts that consumers will shift more than 50% of their content consumption over the next decade to communitainment formats (e.g., social networking, video, and photo sharing sites), displacing traditional forms of media content like TV, magazines, and large Internet sites. 
This trend presents a major challenge for advertisers.
BY ANIL KUMAR KABARAK UNIVERSITY

26. Usites
PiperJaffray defines Usites as Web sites with user generated content comprising all or most of their content.
Yelp hosts an online database of user-generated reviews of local businesses.
StumbleUpon is a web browser plugin that allows its users to discover and
rate webpages, photos, videos, and news articles.
Broadcaster is a video entertainment community and live webcam social network.
The site allows users to create personal profiles, post pictures, upload videos,
and chat with the site's other users through a live webcam chat feature.
BY ANIL KUMAR KABARAK UNIVERSITY

27. Mainstreaming of the Internet
BY ANIL KUMAR KABARAK UNIVERSITY

28. Declining usage of traditional media
BY ANIL KUMAR KABARAK UNIVERSITY

29. Fragmentation of content consumption
Source: PiperJaffray
BY ANIL KABARAK UNIVERSITY

30. And…consumers don’t like ADS
Source: PiperJaffray
BY ANIL KUMAR KABARAK UNIVERSITY

31. Eight Types of Web sites for Advertising
Portals: most popular; best for reach but not targeting
Search: second largest reach; high advertising value
Source: PiperJaffray
BY ANIL KUMAR KABARAK UNIVERSITY

32. Eight types of sites (continued)
Commerce: high reach; not conducive to advertising
Entertainment: large reach; strong targetability
Mall of Hawai’i
BY ANIL KUMAR KABARAK UNIVERSITY

33. Eight types of sites (continued)
Community: emphasize being a part of something; good for specific advertising
Communications: not good for branding; low targetability
BY ANIL KUMAR KABARAK UNIVERSITY

34. Eight types of sites (continued)
News/weather/sports: poor targetability
Games: good for very specific types of advertising
BY ANIL KUMAR KABARAK UNIVERSITY

35. What the eight categories mean for advertisers
Portals and Search have the greatest reach.
Community and Games have the highest level of engagement.
Search and News/Weather/Sports have the highest monetization.
BY ANIL KUMAR KABARAK UNIVERSITY

36. A graphical look at the eight categories
Portals maintain the highest reach, but the fastest growing category of destinations
is communitainment sites, such as FaceBook, MySpace, etc.
BY ANIL KUMAR KABARAK UNIVERSITY

37. Business-to-Business (B2B) Electronic Commerce
In B2B e-commerce, the buyers and sellers are organizations.
BY ANIL KUMAR KABARAK UNIVERSITY

38. B2B Sell-Side Marketplace
Key mechanisms: electronic catalogs and forward auctions
In the sell-side marketplace, organizations sell their products or services to other organizations
Electronically from their own Web site and/or from a third-party Web site.
This model is similar to the B2C model in which the buyer comes to the seller’s site, views
catalogs, and places an order. In the B2B sell-side marketplace, the buyers are organizations.
BY ANIL KUMAR KABARAK UNIVERSITY

39. Ariba (sell-side marketplace)
BY ANIL KUMAR KABARAK UNIVERSITY

40. (Sell-side marketplace)
BY ANIL KUMAR KABARAK UNIVERSITY

41. (Sell-side marketplace)
BY ANIL KUMAR KABARAK UNIVERSITY

42. B2B Buy-Side Marketplace
Key mechanism: reverse auctions
The buy-side marketplace is a model in which organizations buy needed products and
services from other organizations electronically.
BY ANIL KUMAR KABARAK UNIVERSITY

43. United Sourcing Alliance
The United Sourcing Alliance is an example of a buy-side marketplace.
BY ANIL KUMAR KABARAK UNIVERSITY

44. Electronic Exchanges Exchanges have many buyers and many sellers.
BY ANIL KUMAR KABARAK UNIVERSITY

45. Boeing PART Boeing PART is an example of an electronic exchange.
BY ANIL KUMAR KABARAK UNIVERSITY

46. PlasticsNet (Vertical Exchange)
Vertical exchanges connect buyers and sellers in a given industry.
BY ANIL KUMAR KABARAK UNIVERSITY

47. The Paper Site (Vertical Exchange)
BY ANIL KUMAR KABARAK UNIVERSITY

48. Horizontal Exchange
Horizontal exchanges connect buyers and sellers across many industries and are used
mainly for MRO materials.
BY ANIL KUMAR KABARAK UNIVERSITY

49. Functional Exchange
In functional exchanges, needed services such as temporary help or extra office space
are traded on an “as-needed” basis.
BY ANIL KUMAR KABARAK UNIVERSITY

50. Electronic Payments Electronic payment systems enable you to pay
for goods and services electronically.
Electronic checks (e-checks)
Electronic credit cards
Purchasing cards
Electronic cash
Stored-value money cards
Smart cards
Person-to-person payments
Electronic checks (e-checks) are similar to paper checks and are used mostly in B2B.
Electronic credit cards allow customers to charge online payments to their credit card account.
Purchasing cards are the B2B equivalent of electronic credit cards and are typically used for unplanned B2B purchases.
Electronic cash
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 e-cash that enables two individuals or an individual and a business to transfer funds without using a credit card.
BY ANIL KUMAR KABARAK UNIVERSITY

51. How E-Credit Cards Work
BY ANIL KUMAR KABARAK UNIVERSITY

52. Ethical and Legal Issues
Ethical Issues
Privacy
Disintermediation
Privacy: ecommerce provides opportunities for businesses and employers to track individual activities on the WWW using cookies or special spyware. This allows private/personal information to be tracked, compiled, and stored as an individual profile. This profile can be used or sold to other businesses for target marketing or by employees to aide in personnel management decisions (i.e., promotions, raises, layoffs).
Disintermediation: middlemen or intermediaries (1) provide information, and (2) perform value-added services such as consulting. The first function can be fully automated, and the second can be partially automated through e-marketplaces and portals for free thereby causing job loss among intermediaries.
BY ANIL KUMAR KABARAK UNIVERSITY

53. Legal Issues Specific to E-Commerce
Fraud on the Internet
Domain Names
Domain Tasting
Cybersquatting
Taxes and other Fees
Copyright
Fraud on the Internet i.e. stocks, investments, business opportunities, auctions.
Domain Names problems with competition.
Domain Tasting is a practice of registrants using the five-day "grace period" at the beginning of a domain registration to profit from pay-per-click advertising.
Cybersquatting refers to the practice of registering domain names solely for the purpose of selling them later at a higher price.
Taxes and other Fees when and where (and in some cases whether) electronic sellers should pay business license taxes, franchise fees, gross-receipts taxes, excise taxes, …etc.
Copyright protecting intellectual property in e-commerce and enforcing copyright laws is extremely difficult.
BY ANIL KUMAR KABARAK UNIVERSITY

54. THANK YOU
BY ANIL KUMAR KABARAK UNIVERSITY