prefect future

1. Session 06: Electronic Commerce system
Management Information System
(MIS)
1
Academic Session: 2023/2024
Faculty Information Technology

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Objectives
In this chapter, you will learn about:
• What is “Internet Commerce”
• What electronic commerce is and how it is
experiencing a second wave of growth with a new
focus on profitability
• Why companies now concentrate on revenue models
and the analysis of business processes instead of
business models when they undertake electronic
commerce initiatives
• Difference of E-Commerce and Traditional
Commerce

3. 3
Objectives (continued)
• How economic forces have created a
business environment that is fostering the
second wave of electronic commerce
• How businesses use value chains and SWOT
analysis to identify electronic commerce
opportunities

4. What is “Internet Commerce”?
• By Internet commerce, we mean the use of the global Internet
for purchase and sale of goods, services, including service and
support after sale.
• Internet commerce brings some new technology and new
capabilities to business, but the fundamental business problems
are those that merchants have faced for hundred - even
thousands - of years.
• you must have something to sell, make it known to potential
buyers, accept payment deliver the goods or services, and
provide appropriate service after the sale.
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Electronic Commerce: The Second
Wave
• Electronic commerce (e-commerce)
– Businesses trading with other businesses and
internal processes
• Electronic business (e-business)
– The transformation of key business processes
through the use of Internet technologies

6. Con…
• EC can be defined from these perspectives:
– Business process
– Service
– Learning
– Collaboration
– Community
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8. Why Study E-commerce?
• Technology is different and more powerful
than other technologies
• Has challenged much traditional business
thinking
• Has a number of unique features that help
explain why we have so much interest in e-
commerce
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Categories of Electronic
Commerce
• Five general e-commerce categories:
– Business-to-consumer
– Business-to-business
– Business processes
– Consumer-to-consumer
– Business-to-government

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Categories of Electronic Commerce
(continued)
• Transaction
– An exchange of value
• Business processes
– The group of logical, related, and sequential
activities and transactions in which businesses
engage

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The Development and Growth of
Electronic Commerce
• Electronic funds transfers (EFTs)
– Also called wire transfers
– Electronic transmissions of account exchange
information over private communications networks
• Electronic data interchange (EDI)
– Transmitting computer-readable data in a
standard format to another business

12. The Future of EC
– Web 2.0
The second-generation of Internet-based services
that let people collaborate and share information
online in perceived new ways—such as social
networking sites, wikis, communication tools, and
folksonomies
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13. digital economy
An economy that is based on digital
technologies, including digital communication
networks, computers, software, and other
related information technologies; also called
the Internet economy, the new economy, or
the Web economy
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14. Business Environment Drives EC
• The Business Environment
– The business environment impact model
– Business pressures
– Organizational response strategies
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16. Benefits and Limitations of EC
• Benefits to
– Organizations
– Consumers
– Society
• Limitations
– Technological
– Nontechnological
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17. Social networks
Web sites that connect people with specified
interests by providing free services such as
photo presentation, e-mail, blogging, etc.
• Business-oriented networks are social
networks whose primary objective is to
facilitate business
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Business Models, Revenue Models,
and Business Processes
• Business model
– A set of processes that combine to yield a profit
• Revenue model
– A specific collection of business processes used
to:
• Identify customers
• Market to those customers
• Generate sales to those customers

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Advantages of Electronic
Commerce
• Electronic commerce can increase sales and
decrease costs
• If advertising is done well on the Web, it can
get a firm’s promotional message out to
potential customers in every country
• Using e-commerce sales support and order-
taking processes,

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Advantages of Electronic
Commerce (continued)
• It increases purchasing opportunities for
buyers
• Negotiating price and delivery terms is easier
• The following cost less to issue and arrive
securely and quickly:
– Electronic payments of tax refunds
– Public retirement
– Welfare support

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Disadvantages of Electronic
Commerce
• Perishable grocery products are much harder
to sell online
• It is difficult to:
– Calculate return on investment
– Integrate existing databases and transaction-
processing software into software that enables e-
commerce
• Cultural and legal obstacles also exist

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Economic Forces and Electronic
Commerce
• Economics
– Study of how people allocate scarce resources
• Two conditions of a market
– Potential sellers of a good come into contact with
potential buyers
– A medium of exchange is available

23. Differences between Electronic Commerce
and traditional commerce
The major difference is the way information is exchanged and
processed:
Traditional commerce:
•face-to-face, telephone lines , or mail systems
•manual processing of traditional business
transactions
•individual involved in all stages of business
transactions
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Transaction Costs
• Transaction costs are the total costs that a
buyer and seller incur
• Significant components of transaction costs:
– Cost of information search and acquisition
– Investment of the seller in equipment or in the
hiring of skilled employees to supply products or
services to the buyer

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Network Economic Structures
• Network economic structures
– Neither a market nor a hierarchy
– Companies coordinate their strategies, resources,
and skill sets by forming long-term, stable
relationships with other companies and individuals
based on shared purposes

26. Understanding E-commerce: Organizing
• Technology:
– Development and mastery of digital computing and
communications technology
• Business:
– New technologies present businesses with new ways
of organizing production and transacting business
• Society:
– Intellectual property, individual privacy, public policy
Slide 1-26

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SWOT Analysis: Evaluating
Business Unit Opportunities
• In SWOT analysis:
– An analyst first looks into the business unit to
identify its strengths and weaknesses
– The analyst then reviews the operating
environment and identifies opportunities and
threats

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