Goa University BCA E-Commerce Introduction

Goa University Bachelor of Computer Applications
INTRODUCTION TO
E-COMMERCE
UNIT-I
BCA61 : e-Commerce Applications

Unit I : Introduction to e-Commerce
Definition
e- Commerce is defined by
– “ any form of business transaction in which the
parties interact electronically rather than physical
exchanges of documents or direct meetings
amongst officials”
– “ doing business online”
– “business conducted exclusively thru’ electronic
format”
2

Various Definition
1. Doing business online
2. Buying Products and Services through web store fronts
2.a. Products – physical products
2.b. Services – distant education, online medical
consultation – abroad
3.Buying & selling, marketing & servicing, delivery &
payment of products, service & info. over Internet,
Intranet, extranet etc.
4. Technology, Strategy, System, Mystery etc.
5. e-business –use Net as medium of exchange, B2B, B2C
6. Doing business to cut costs – improving quality, increasing
speed of services
3

Meaning of e-Commerce
4

Meaning e-Commerce
• It covers : Online point-of-sale & Transaction
processing
• Electronic Data Interchange (EDI)
• Electronic Funds Transfer
• Electronic Banking
• Interactive Marketing
• Supply Chain Management
• Enterprise Collaboration includes :
e-mail, voice mail, forums, Data conferencing,
video conferencing, electronic meeting
systems
5

Scope of e - Commerce
6

Supply Chain Management
• E-Commerce is directly or indirectly applicable in all areas of our
life from banking, entertainment, on line order processing cycle or
Supply Chain Management
• Supply Chain – network of facilities & distribution options that
performs the functions of procurement of materials (from
Supplier), transformation of materials into intermediate &
finished products (manufacturing), and distribution of finished
products to Customers
• A supply chain, logistics network, or supply network is a
coordinated system of entities, activities, information and
resources involved in moving a product or service from supplier to
customer
7

Example
8

Supply Chain
• Entities – of supply chain consists of
manufacturers, service providers, distributors
& retail outlets
• Objective of Supply Chain – to fulfill customer
demands thru’ efficient use of resources
9

Supply Chain …
• Ever-greater demands are being placed on business
which are –
 to provide products & services quicker
 with greater added value
 to the current location
 with no relevant inventory position
Supply Chain Management – transforming
company’s “supply chain” into optimally efficient,
customer-satisfying process
10

Business Applications
• e-Commerce applications in Manufacturing
• e-Commerce applications in Wholesale
• e-Commerce applications in Retail
• e-Commerce applications in Service Sector
11

e-commerce in Manufacturing
• Transformation of raw materials into finished goods
for sale is Manufacturing
• Production of goods or services in a complex web of
contracts & co-operation is supply chain or value
system
• Manufacturing requires various components, Sub-
assemblies including transportation, storage, paper
work (Fig.1.3)
• Supply chain transaction adds cost without intrinsic
value
• E-commerce applied to Supply Chain reduce cost or
improve service
12

Fig.1.3.(Manufacturing)
13

E-Commerce in Wholesale
• Sale of goods & services in large quantities at lower
prices to someone other than consumers –
Wholesale
• Sale of goods to retailers, to industrial, commercial,
other business users – middle person or distributors
– WHOLE SALE
• Physical assemble, sort & grade goods in large lots,
breaking bulk, repacking & redistributing in smaller
lots is all Wholesale
• E.g. Pharmaceuticals – store, refrigerate, deliver &
install goods, engage in sales promotion
14

E-Commerce in Wholesale …
Problems of Traditional wholesale system :-
1. Wholesale markets can’t compete with foreign wholesale
enterprises with advanced management & operation methods
2. Wholesale Operating Costs including staffing, setting up local
warehouses, establishing distribution centers are High
3. Staff quality and large land supply & other resources affect
wholesale market
4. Wholesale sector is characterized by its high input & low output
15

e-Commerce in Wholesale …
• Role of e-Commerce in Wholesale :-
1. Lower Operating costs, access to information
& quick response
2. Global marketing in less time & low cost
3. Gaining the competitive edge by wholesalers
as like MNC’s
4. Intermediaries are affected
5. It offers wide range of information,
intermediary and business services
16

e-Commerce in Retail
• Selling Products or Services to consumers for personal use is
Retailing
• E.g., Department stores, Discount stores – Services providers like
dentist, hotels, on-line stores like Amazon.com
• Retailers provides link between consumers & manufacturers –
adding value to products by making sales easy
• Services by retailers make it less risky & more fun to buy products
• Retailers answers questions, display products for consumers to
see before buying
• Retailers provides extra services from personal shopping to gift
wrapping & delivery
17

E-Commerce in Retail…
• Role of E-Commerce in Retailing :-
1. Internet made retailing an exciting & challenging
field recently
2. Nature of business due to this reason is undergoing
fundamental changes
3. On-line retailers like Amazon.com bring
assortments of products for sale as like mortal
retailers do
4. Traditional retailers are needed for those who
need personal check of products, and for personal
services which need face-to-face interaction with
the consumer
18

e-Commerce for Service Sector
• Service Sector one of 3 main industrial categories of
developed economy
• Tertiary sector of industry involves provision of services
like transportation, distribution & sale of goods to other
businesses & for consumers e.g.-Pest Control,
entertainment
• Focus of service on people to people
• It includes “soft” parts of economy like Insurance, tourism,
banking, education etc.
• Public utilities are part of tertiary sector
19

e-Commerce for Service Sector…
Issues for service providers
1. Services are intangible, hence difficult to
make consumers understand about the
benefits
2. No special technology as like in
manufacturing to attract people
3. Quality of service depends on quality of
individual providing services
20

e-Commerce for Service Sector…
Role of e-Commerce in Service Sector
1. Gaining competitive advantage by providing strategies
for differentiation and cost leadership and customer
satisfaction
2. e-Commerce will improve speed of transactions,
reduce mgmt. expenditure, increase competitiveness
3. Helps banking, insurance & financial sectors, real
estate, construction, telecom, tourism, postal &
logistics services
21

Global Trading Environment & Adoption of
e-Commerce
e-Commerce provides global platform for
business –
Seller treat world as global market & buyers
have wide choice to buy
World is like single market in e-Commerce
22

Global Trading Environment…
• Some factors to make e-commerce successful are :-
• Providing value to customers
• Providing service & performance
• Providing an attractive website
• Providing incentive for customers by providing
special offers, discounts
• Providing personal attention thru’ personalized
websites, etc. like face-to-face human interaction
• Providing sense of community thru’ Chat rooms,
discussion boards etc.
23

• Providing reliability & security thru’ firewalls, parallel
servers, information encryption etc.
• Providing 360 degree view of customer relationship
• Owning customer’s total experience
• Streamlining business processes, thru’ re-engineering
& I.T.’s
• Self –serving sites help assists customers
• Constructing commercially sound business model
24

• Operating on or near the cutting edge of technology &
staying there as technology changes
• Setting up an organization of sufficient alertness –
respond quickly to any changes economically, socially
& physically
• On-line product/service suitability – digital products –
e.g., Google, eBay, Schwab etc.
• Virtual marketers sell non-digital product/services to
consumers in remote locations
• For spare parts, e-comm. provides exact & reliable
info. about part number for the relevant model or
version of a product – e.g., parts lists keyed by serial
number
25

Goa University BCA E-Commerce Introduction

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