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. 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. 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. 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. 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. 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. 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. 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. 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. 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.
13. Seven Unique Features of E-commerce TechnologySeven Unique Features of E-commerce Technology
and Their Business Significanceand Their Business Significance
13
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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. • 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
