1. E-Commerce in Business
Chapter 2
E-Commerce in Business

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

3. E-Commerce vs. 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 Reason % of Surveyed Shoppers Save time 70%
Shop off hours
69%
Avoid holiday crowds
68%
Find better prices
59%
Find products more easily
52%
Products not available in stores
50%
Easier to compare prices
47%
Have gifts sent direct
36%
Avoid wrapping gifts
13%
Earn loyalty points
Purchase from wish list
10%

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. How can e-commerce weaken or add to a local
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?