E- BusinessE- Business
What is E businessWhat is E business
IntroductionIntroduction
 Digital enablement of transactions andDigital enablement o...
 Businesses are using electronic mediumBusinesses are using electronic medium
to distribute information and provideto dis...
Concept of E-BusinessConcept of E-Business
 E- business refers to all those commercialE- business refers to all those com...
TheThe three primary processesthree primary processes that arethat are
enhanced in e- business are –enhanced in e- busines...
E- Commerce vs. E-BusinessE- Commerce vs. E-Business
 Electronic commerce describes the buying
and selling of products, s...
Few E- business Applications –Few E- business Applications –
 E- Bidding/ e-auctionE- Bidding/ e-auction
 E- communicati...
Advantages of E- businessAdvantages of E- business
 Lower CostLower Cost
 ConvenienceConvenience
 SpeedSpeed
 Global r...
Factors affecting e - business successFactors affecting e - business success
 Network EffectNetwork Effect
 New business...
E- CommerceE- Commerce
 E commerce means buying and selling ofE commerce means buying and selling of
products and/or serv...
 It focuses on digitally enabled commercialIt focuses on digitally enabled commercial
transactions between and amongtrans...
Electronic Commerce: IntroductionElectronic Commerce: Introduction
E-Business
E-Commerce
Internet
Commerce
Commerce
Seven Unique Features of E-commerce TechnologySeven Unique Features of E-commerce Technology
and Their Business Significan...
Major types of E- commerceMajor types of E- commerce
 Market relationshipsMarket relationships
– Business-to-Consumers (B...
 Business-to-Consumers (B2C)Business-to-Consumers (B2C)
Business that sells products or provides services to
end-user con...
 Peer-to-Peer (P2P)Peer-to-Peer (P2P)
Enables Internet users to share files and computerEnables Internet users to share f...
Benefits of E- commerce to organizationBenefits of E- commerce to organization
 Reduced cost on paperReduced cost on pape...
Limitations and Barriers of E commerceLimitations and Barriers of E commerce
Non Technical Limitation-Non Technical Limita...
1. Business to Consumer Business1. Business to Consumer Business
ModelModel
 Online Businesses seek to reach individualOn...
2.2. E-Tailor- online retail storeE-Tailor- online retail store
i)i) Virtual merchantVirtual merchant (online retail store...
3.Content Provider-3.Content Provider- distributes informationdistributes information
content, such as digital news, music...
5.Market Creator5.Market Creator –– builds a digital environmentbuilds a digital environment
where buyers and sellers can ...
2.2. B to B Business Model-B to B Business Model- Business sell to otherBusiness sell to other
businessesbusinesses
A)A) N...
3)3)ExchangeExchange –an independent digital electronic–an independent digital electronic
marketplace for direct inputs to...
B.B. Private Industrial Networks-Private Industrial Networks-
networks that bring together a small no. of strategicnetwork...
3.3. C to C Business ModelC to C Business Model (help consumers(help consumers
connect with other consumers to conductconn...
E commerce enablers-E commerce enablers- focus on providingfocus on providing
the infrastructure necessary for e-commercet...
Value chains in E commerceValue chains in E commerce
 Value chain is the set of activities performed in anValue chain is ...
Two broad categories of value activitiesTwo broad categories of value activities
1)1) Primary Activities:Primary Activitie...
2) Support Activities:2) Support Activities: Activities which provide Input orActivities which provide Input or
infrastruc...
Porter’s “Value
Chain”
Firm Infrastructure
Human Resources Management
Technology Development
Procurement
Inbound
Logistics...
• No vendor loyally
• No switching costs
• Time-insensitive
• Short-term
• Casual
• Many vendors
• Products differentiated...
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Unit 1 a

  1. 1. E- BusinessE- Business
  2. 2. What is E businessWhat is E business IntroductionIntroduction  Digital enablement of transactions andDigital enablement of transactions and processesprocesses withinwithin a firm, involvinga firm, involving information systems under the control ofinformation systems under the control of the firm.the firm.  E-business primarily involves theE-business primarily involves the applications of digital technologies toapplications of digital technologies to business processes within the firm.business processes within the firm.
  3. 3.  Businesses are using electronic mediumBusinesses are using electronic medium to distribute information and provideto distribute information and provide customer support and these activitiescustomer support and these activities are called as e-business activities.are called as e-business activities.  The E-business applications turn intoThe E-business applications turn into e-commerce when an exchange of valuee-commerce when an exchange of value takes place.takes place.
  4. 4. Concept of E-BusinessConcept of E-Business  E- business refers to all those commercialE- business refers to all those commercial activities performed over the internet by usingactivities performed over the internet by using web based technologies.web based technologies.  It creates value and strengthens relationshipIt creates value and strengthens relationship with customers, suppliers, business partners,with customers, suppliers, business partners, shareholders and employee by connectingshareholders and employee by connecting them via internet, intranet and extranets.them via internet, intranet and extranets.
  5. 5. TheThe three primary processesthree primary processes that arethat are enhanced in e- business are –enhanced in e- business are –  Production processesProduction processes (procurement,(procurement, ordering, payment, links with suppliers andordering, payment, links with suppliers and vendors)vendors)  Customer focused processesCustomer focused processes (promotional &(promotional & marketing efforts, sales over internet,marketing efforts, sales over internet, purchasing, payment, customer support &purchasing, payment, customer support & feedback)feedback)  Internal management processesInternal management processes (recruiting,(recruiting, employee services, training and internalemployee services, training and internal information sharing)information sharing)
  6. 6. E- Commerce vs. E-BusinessE- Commerce vs. E-Business  Electronic commerce describes the buying and selling of products, services, and information via computer networks including the Internet, where e-Business includes not only e- commerce but also other electronically conducted business functions such as production, accounting, inventory management, acconting, finance and hrm.  E business applications turn into e-commerce precisely when an exchange of value occurs.
  7. 7. Few E- business Applications –Few E- business Applications –  E- Bidding/ e-auctionE- Bidding/ e-auction  E- communication (e-promotion)E- communication (e-promotion)  E- delivery of goods (videos, software ,e booksE- delivery of goods (videos, software ,e books etc.)etc.)  E- trading (online buying and selling of sharesE- trading (online buying and selling of shares etc.)etc.)
  8. 8. Advantages of E- businessAdvantages of E- business  Lower CostLower Cost  ConvenienceConvenience  SpeedSpeed  Global reach/ AccessGlobal reach/ Access  DisintermediationDisintermediation  Expansion of MarketExpansion of Market  Acquire greater business visibilityAcquire greater business visibility  Maximize Customer relationship and improvesMaximize Customer relationship and improves responsivenessresponsiveness
  9. 9. Factors affecting e - business successFactors affecting e - business success  Network EffectNetwork Effect  New business marketing ideasNew business marketing ideas  ScalabilityScalability  Ease of entry into marketsEase of entry into markets  Accepting ChangeAccepting Change
  10. 10. E- CommerceE- Commerce  E commerce means buying and selling ofE commerce means buying and selling of products and/or services over the internet byproducts and/or services over the internet by means of computers sending andmeans of computers sending and processing electronic transmission to eachprocessing electronic transmission to each other.other.  Definition-Definition- ““ E- commerce describes the process ofE- commerce describes the process of buying and selling or exchanging ofbuying and selling or exchanging of products, services and information viaproducts, services and information via computer networks including the internet.”computer networks including the internet.”
  11. 11.  It focuses on digitally enabled commercialIt focuses on digitally enabled commercial transactions between and amongtransactions between and among organizations and individuals.organizations and individuals. Digitally enabled transactionsDigitally enabled transactions include allinclude all transactions mediated by digital technologytransactions mediated by digital technology (occur on internet and web)(occur on internet and web) Commercial transactionsCommercial transactions involve theinvolve the exchange of value (e.g, money) acrossexchange of value (e.g, money) across organizational or individual boundaries inorganizational or individual boundaries in return for products and services.return for products and services.
  12. 12. Electronic Commerce: IntroductionElectronic Commerce: Introduction E-Business E-Commerce Internet Commerce Commerce
  13. 13. Seven Unique Features of E-commerce TechnologySeven Unique Features of E-commerce Technology and Their Business Significanceand Their Business Significance 13
  14. 14. Major types of E- commerceMajor types of E- commerce  Market relationshipsMarket relationships – Business-to-Consumers (B2C)Business-to-Consumers (B2C) – Business-to-Business (B2B)Business-to-Business (B2B) – Consumer-to-Consumer (C2C)Consumer-to-Consumer (C2C)  Technology-basedTechnology-based – Peer-to-Peer (P2P)Peer-to-Peer (P2P) – Mobile Commerce (M-commerce)Mobile Commerce (M-commerce)
  15. 15.  Business-to-Consumers (B2C)Business-to-Consumers (B2C) Business that sells products or provides services to end-user consumers e.g, Amazon.com  Business-to-Business (B2B)Business-to-Business (B2B) Business that sells products or provides services to other businesses e.g, eSteel.com  Consumer-to-Consumer (C2C)Consumer-to-Consumer (C2C) Consumers sell directly to other consumers e.g, eBay.com
  16. 16.  Peer-to-Peer (P2P)Peer-to-Peer (P2P) Enables Internet users to share files and computerEnables Internet users to share files and computer resources directly without having to go through aresources directly without having to go through a central web servercentral web server e.g, Gnutella is a software application that permitse.g, Gnutella is a software application that permits exchange of musical tracks,Skypeexchange of musical tracks,Skype  Mobile Commerce (M-commerce)Mobile Commerce (M-commerce) E-commerce transactions and activities conducted in a wireless environment e.g, cell phones or PDA (personal digital assistance)
  17. 17. Benefits of E- commerce to organizationBenefits of E- commerce to organization  Reduced cost on paperReduced cost on paper  Low barriers to entryLow barriers to entry  Improved customer service, cost savingImproved customer service, cost saving  Access to international marketsAccess to international markets  Minimizes Supply chain inefficiencies, reducesMinimizes Supply chain inefficiencies, reduces delivery delaysdelivery delays Benefits to societyBenefits to society  Work from home, less traveling for shopping,Work from home, less traveling for shopping, save time, distant learning and education,save time, distant learning and education, enjoy the availability of product at doorstepenjoy the availability of product at doorstep
  18. 18. Limitations and Barriers of E commerceLimitations and Barriers of E commerce Non Technical Limitation-Non Technical Limitation- people’speople’s attitude, lack of trust, facelessattitude, lack of trust, faceless transactions, resistance to change,transactions, resistance to change, Customers Can't Touch and Feel a Product ,,No Sales Staff Means No Chance of Up-Selling,, Language Barrier,, Geographical Barrier Technical Limitation-Technical Limitation- related to security,related to security, databases, standards, applications etc.databases, standards, applications etc. Costs, security, legal issues etc.Costs, security, legal issues etc.
  19. 19. 1. Business to Consumer Business1. Business to Consumer Business ModelModel  Online Businesses seek to reach individualOnline Businesses seek to reach individual consumers.consumers. BusinessBusiness ModelModel variationvariation EgEg DescriptionDescription RevenueRevenue model (R.M.)model (R.M.) 1.Portal1.Portal (offer users web(offer users web search tool assearch tool as well aswell as integrated pkgintegrated pkg of content andof content and services all inservices all in one placeone place HorizontHorizont alal (general)(general) YahooYahoo AOLAOL MSNMSN integrated pkg ofintegrated pkg of content andcontent and servicesservices AdvertisingAdvertising SubcriptionSubcription feesfees TransactionTransaction feesfees VerticalVertical (specializ(specializ ed)ed) iBoatsiBoats Offers servicesOffers services and products toand products to specific marketspecific market SearchSearch googlegoogle Focuses primarilyFocuses primarily on searchon search servicesservices AdvertisingAdvertising AffiliateAffiliate referralreferral
  20. 20. 2.2. E-Tailor- online retail storeE-Tailor- online retail store i)i) Virtual merchantVirtual merchant (online retail store)(online retail store) amazon (R.M-sales of goods)amazon (R.M-sales of goods) ii)ii) Bricks and ClicksBricks and Clicks (online distribution channel(online distribution channel also have physical stores)-also have physical stores)- Walmart (R.M-sales of goods)Walmart (R.M-sales of goods) iii)iii) Catalog merchantCatalog merchant (online version of direct(online version of direct mail catalog) –LLBean (R.M-sales of goods)mail catalog) –LLBean (R.M-sales of goods) iv)iv) Manufacturer DirectManufacturer Direct (manufacturer uses(manufacturer uses online channel to sell directly to customer)-online channel to sell directly to customer)- Dell, Sony (R.M-sales of goods)Dell, Sony (R.M-sales of goods)
  21. 21. 3.Content Provider-3.Content Provider- distributes informationdistributes information content, such as digital news, music, photos,content, such as digital news, music, photos, videos, artwork over the webvideos, artwork over the web E,g. CNN, ESPN, (E,g. CNN, ESPN, (R.M-Advertising,R.M-Advertising, Subscription fees, Affiliate referral fee)Subscription fees, Affiliate referral fee) 4.Transaction Broker-4.Transaction Broker- Site that processesSite that processes transactions for consumers that are normallytransactions for consumers that are normally handled in person, by phone or by mail (helphandled in person, by phone or by mail (help customer to get things done faster)customer to get things done faster) e.g, E-Trade, hotels.com, expedia, monstere.g, E-Trade, hotels.com, expedia, monster (R.M.-Transaction fees)(R.M.-Transaction fees)
  22. 22. 5.Market Creator5.Market Creator –– builds a digital environmentbuilds a digital environment where buyers and sellers can meet, displaywhere buyers and sellers can meet, display products, search for products and establish aproducts, search for products and establish a price for product.price for product. e.g. eBay, priceline (e.g. eBay, priceline (R.M- transaction feeR.M- transaction fee)) 6.Service provider6.Service provider –– offer services onlineoffer services online e.g, Visanow.com (R.M- sales of Service)e.g, Visanow.com (R.M- sales of Service) 7.Community Provider7.Community Provider –– sites where individualssites where individuals with particular interests, hobbies ,commonwith particular interests, hobbies ,common experiences or social n/ws can come together andexperiences or social n/ws can come together and meet online.meet online. e.g, facebook,myspacee.g, facebook,myspace ((R.M-Advertising,R.M-Advertising, Subscription fees, Affiliate referral fee)Subscription fees, Affiliate referral fee)
  23. 23. 2.2. B to B Business Model-B to B Business Model- Business sell to otherBusiness sell to other businessesbusinesses A)A) Net Market PlaceNet Market Place (where buyers and sellers(where buyers and sellers exchanges goods and services for money)exchanges goods and services for money) 1)1)E-DistributorE-Distributor –company that supplies products–company that supplies products and services directly to individual businesses.and services directly to individual businesses. e.g, Grainger.com, parts store (R.M.-Sales ofe.g, Grainger.com, parts store (R.M.-Sales of good)good) 2)2)E-ProcurementE-Procurement – Single firm creating digital– Single firm creating digital markets where sellers and buyers transact formarkets where sellers and buyers transact for indirect inputsindirect inputs e.g, perfectcommerce (R.M- fees for markete.g, perfectcommerce (R.M- fees for market making services)making services)
  24. 24. 3)3)ExchangeExchange –an independent digital electronic–an independent digital electronic marketplace for direct inputs to productionmarketplace for direct inputs to production and short term contactsand short term contacts e.g,farms.com (R.M- fees and commisions one.g,farms.com (R.M- fees and commisions on transactions)transactions) 4)4) Industry ConsortiumIndustry Consortium – industry owned– industry owned vertical digital market open to select suppliersvertical digital market open to select suppliers e.g,Elemica, quadrem (mining) (R.M.-e.g,Elemica, quadrem (mining) (R.M.-fees andfees and commisions on transactions)commisions on transactions)
  25. 25. B.B. Private Industrial Networks-Private Industrial Networks- networks that bring together a small no. of strategicnetworks that bring together a small no. of strategic partners who collaborate with one another to developpartners who collaborate with one another to develop higfhly efficient supply chains and to satisfy customerhigfhly efficient supply chains and to satisfy customer demand for product.demand for product. 1)Single firm-1)Single firm- company owned network to coordinatecompany owned network to coordinate supply chains with a limited set of partners.supply chains with a limited set of partners. E.g, Walmart, proctor & Gamble (R.M-cost absorbed byE.g, Walmart, proctor & Gamble (R.M-cost absorbed by n/w owner and recovered through production andn/w owner and recovered through production and distribution efficiencies)distribution efficiencies) 2)Industry wide-2)Industry wide- industry owned n/w to set standards,industry owned n/w to set standards, coordinate supply and logistics for the industrycoordinate supply and logistics for the industry E.g, Agentrics (same as above)E.g, Agentrics (same as above)
  26. 26. 3.3. C to C Business ModelC to C Business Model (help consumers(help consumers connect with other consumers to conductconnect with other consumers to conduct business)business) e.g, olx (R.M- transaction fee)e.g, olx (R.M- transaction fee) 4.4. P to P Business ModelP to P Business Model (technology(technology enabling consumers to share files and servicesenabling consumers to share files and services via the webvia the web e.g, whatsapp (R.M- subscription fee, transactione.g, whatsapp (R.M- subscription fee, transaction fee, advertising)fee, advertising) 5.5. M CommerceM Commerce (extending business(extending business application through wireless technology)application through wireless technology) e.g,Paypal mobile (R.M- sales of goods ande.g,Paypal mobile (R.M- sales of goods and services)services)
  27. 27. E commerce enablers-E commerce enablers- focus on providingfocus on providing the infrastructure necessary for e-commercethe infrastructure necessary for e-commerce companies to exist, grow and prosper. Thesecompanies to exist, grow and prosper. These are called as internet infrastructure company.are called as internet infrastructure company. They provide the h/w ,operating system s/w,n/wThey provide the h/w ,operating system s/w,n/w and communication technology, applicationand communication technology, application s/w, web designss/w, web designs HardwareHardware – IBM, Dell, HP, Sun– IBM, Dell, HP, Sun SoftwareSoftware – Microsoft, RedHAt, Linux, Sun– Microsoft, RedHAt, Linux, Sun NetworkingNetworking- Cisco- Cisco Payment SystemsPayment Systems – Verisign ,Paypal– Verisign ,Paypal DatabaseDatabase- Oracle, Microsoft, IBM- Oracle, Microsoft, IBM
  28. 28. Value chains in E commerceValue chains in E commerce  Value chain is the set of activities performed in anValue chain is the set of activities performed in an industry or in a firm that transforms raw inputs intoindustry or in a firm that transforms raw inputs into final products and services.final products and services.  A value chain is a way of organizing the activities of aA value chain is a way of organizing the activities of a business so that each activity adds value orbusiness so that each activity adds value or productivity to the total operations of the business.productivity to the total operations of the business.  Porter model of value chainPorter model of value chain -- Porters model was essentially concerned with thePorters model was essentially concerned with the internal activities of the company.internal activities of the company. - These activities are divided into- These activities are divided into primary activityprimary activity andand secondary activity.secondary activity.
  29. 29. Two broad categories of value activitiesTwo broad categories of value activities 1)1) Primary Activities:Primary Activities: Activities connected with theActivities connected with the Physical Creation of the Firm’s Product and Service,Physical Creation of the Firm’s Product and Service, its Marketing and Delivery and provision of After-saleits Marketing and Delivery and provision of After-sale support.support. a)a) Inbound Logistics-Inbound Logistics- Procurement, storage, flow of i/p,Procurement, storage, flow of i/p, vendor selection, negotiation supply contacts etcvendor selection, negotiation supply contacts etc b)b) OperationsOperations- Machining, assembly, packaging,- Machining, assembly, packaging, maintenance, testing etc.maintenance, testing etc. c)c) Outbound logisticsOutbound logistics-- collection, storage & physicalcollection, storage & physical distribution, warehousing etc.distribution, warehousing etc. d)d) Marketing and Sales-Marketing and Sales- Advertising, sales promotion,Advertising, sales promotion, channel selection, channel relation, pricing.channel selection, channel relation, pricing. e)e) ServiceService-- to enhance & maintain the value like repair,to enhance & maintain the value like repair, installation supply of partsinstallation supply of parts
  30. 30. 2) Support Activities:2) Support Activities: Activities which provide Input orActivities which provide Input or infrastructure for Primary Activities to be performed.infrastructure for Primary Activities to be performed. a)a) ProcurementProcurement- purchase of materials and service- purchase of materials and service inputs.inputs. b)b) Technology Development-Technology Development- perfection & upgradationperfection & upgradation c)c) HRMHRM-recruitment, training & development of manpower-recruitment, training & development of manpower d)d) Firm Infrastructure-Firm Infrastructure- general management,general management, accounting, finance ,legal affairs ,strategic planning.accounting, finance ,legal affairs ,strategic planning. In e business value chain ,internet and web technologiesIn e business value chain ,internet and web technologies Competitive AdvantageCompetitive Advantage -- is achieved when anis achieved when an organization links the activities in its value chain moreorganization links the activities in its value chain more cheaply and more efficiently than its competitors.cheaply and more efficiently than its competitors.
  31. 31. Porter’s “Value Chain” Firm Infrastructure Human Resources Management Technology Development Procurement Inbound Logistics Operations Outbound Logistics Marketing & Sales Service Profit Margi n Porter’s Value Chain ModelPorter’s Value Chain Model
  32. 32. • No vendor loyally • No switching costs • Time-insensitive • Short-term • Casual • Many vendors • Products differentiated on price, image • Relationship-based • Very high switching costs • Extremely time-sensitive • Long-term • Mission-critical • Few partners • Partners differentiated on reliability, flexibility Business-to-ConsumerBusiness-to-Consumer Business-to-BusinessBusiness-to-Business Business-to-Business vs. Business-to-Business-to-Business vs. Business-to- ConsumerConsumer

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