Electronic Commerce: Applications and Issues
Overview of E-Business and E-Commerce
Electronic Commerce(EC or E-Commerce) :describe the process of buying, selling, transferring, or exchanging products, services, or information via computer networks, including the internet.
Electronic Business(EB or E-Business) :is a broader definition of EC, including :
- buying and selling of goods and services.
- servicing customers.
- collaborating with partners.
- conducting e-learning.
- conducting electronic transactions within an organization.
Electronic Commerce can take several forms depending on the degree of digitization involved.
the degree of digitization is the extent to which the commerce has been transformed from physical to digital. so the:
The product can be physical or digital.
The process can be physical or digital.
The delivery agent can be physical or digital
Pure vs Partial EC:
Brick-and-Mortar Organization : also called (Purely Physical Organization) in which the product, the process, and the delivery agent are all physical.
Click-and-Mortar Organization : are those that conduct some e-commerce activates, yet carry out their primary business in the physical world (a common alternative to the term "click-and-mortar" is "brick-and-mortar"), Therefore it is example of partial EC.it also known as organization that do business in both the physical and digital dimensions. (multichanneling).
e.g. order physical book from Amazon.Pure-Play Organization : also called (virtual organizations) in which the product, the process, and the delivery agent are all digital. These are the organizations that are engaged only in EC.
e.g. order and download book from Amazon.
Types of E-Commerce:
☆Business-to-Consumer(B2C)⇨ In B2C, the sellers are organizations, and the buyers are individuals.
☆Business-to-Business(B2B)⇨ In B2B,both the sellers and buyers are business organizations. The vast majority of EC volume is of this type.
☆Consumer-to-Consumer(C2C)⇨ In C2C (also called " customer-to-customer''), an individ-ual sells products or services to other individuals. The major strategies for conducting C2C on the Internet are auctions and classified ads.
☆Business-to-employee(B2E)⇨In B2E, an organization uses EC internally to provide information and services to its employees. For example, companies allow employees to manage their benefits and to take training classes electronically. In addition, employees can buy discounted insurance, travel packages, and tickets or events on the corporate intranet. They also can order supplies and materials electronically. Finally, many companies have electronic corporate stores that sell the company's products to its employees, usually at discount.
☆E-Government⇨ E-government is the use of internet technology in general and ehcommerce in particular to deliver information and public services to citizens (called government-to-citizen or G2C EC) and to business partners and suppliers(called government-to-business or G2B EC).
E-government is also an efficient way of conducting business transactions with citizens and within the governments themselves.E-government makes government more efficient and effective, especially in delivery of public service.
☆Mobile commerce (m-commerce)⇨the term m-commerce refers to e-commerce that is conducted entirely in a wireless environment.
e.g⇨ using cell phones to shop over the internet.
Each of the above types of EC is executed in one or more business models.
Business model⇨ is the method by which a company generates revenue to sustain itself.
E-Commerce and search:
The development of e-commerce has proceeded in phases. Offline and online brands initially were kept distinct and then were awkwardly merged. Initial e-commerce efforts consisted of flashy brochure sites, with rudimentary shopping carts and checkout systems. They were replaced with systems that tried to anticipate customer needs and accelerate checkout.
☆E-Government⇨ E-government is the use of internet technology in general and ehcommerce in particular to deliver information and public services to citizens (called government-to-citizen or G2C EC) and to business partners and suppliers(called government-to-business or G2B EC).
E-government is also an efficient way of conducting business transactions with citizens and within the governments themselves.E-government makes government more efficient and effective, especially in delivery of public service.
☆Mobile commerce (m-commerce)⇨the term m-commerce refers to e-commerce that is conducted entirely in a wireless environment.
e.g⇨ using cell phones to shop over the internet.
Each of the above types of EC is executed in one or more business models.
Business model⇨ is the method by which a company generates revenue to sustain itself.
E-Commerce and search:
The development of e-commerce has proceeded in phases. Offline and online brands initially were kept distinct and then were awkwardly merged. Initial e-commerce efforts consisted of flashy brochure sites, with rudimentary shopping carts and checkout systems. They were replaced with systems that tried to anticipate customer needs and accelerate checkout.
Major E-commerce Mechanisms
There are many mechanisms through which businesses and customers can buy and sell on the internet. The most widely used are electronic catalogs, electronic auctions, e-storefronts, e-maills,and e-marketplaces.
There are many mechanisms through which businesses and customers can buy and sell on the internet. The most widely used are electronic catalogs, electronic auctions, e-storefronts, e-maills,and e-marketplaces.
↘Electronic catalogs⇨ consist of a product database, directory and search capabilities, and a presentation function. They are the backbone of most e-commerce sites.
↖Electronic auction⇨(e-auctions) an auction which held over the internet.
e-auction generally increase revenues for sellers by broadening the customer base and shortening the cycle time of the auction. Buyers generally benefit from e-auction because they can bargain for lower 
↖Electronic auction⇨(e-auctions) an auction which held over the internet.
price. In addition, they don't have to travel to an auction at a physical location.
Forward auctions→ are auctions that sellers use as a channel to many potential buyers. Usually, sellers place items at sites for auction, and buyers bid continuously for them. The highest bidder wins the auction. both sellers and buyers can be individuals or businesses.
e.g. → eBay.com.
Reverse auctions→ an auction in which one buyer, usually an organization, seeks to buy a product or a service, so they post a request for quotation(RFQ) on its website or an third party site. The RFQ provides detailed information on the desired purchase. The suppliers study the RFQ and then submit bids electronically. The lowest-price bidder wins the auction. the revers auction is the most common auction model for large purchases.
↘Electronic storefront⇨ is website that represents a single store.
↖Electronic mall⇨ also known as a cybermall or e-mall, is a collection of individual shops under one internet address. E-storefronts and e-malls are closely associated with B2C EC.
↘Electronic marketplace(e-marketplace)⇨is a central, virtual market space on the web where many buyers and many sellers can conduct e-commerce and e-business activates. Electronic marketplaces are associated with B2B EC.
↖Name-your-own-price⇨ customers decide how much they want to pay.
e.g.→ www.priceline.com
↘Find-the-best-price⇨ customers specify a need and an intermediary compares providers and shows the lowest price.
↖Affiliate marketing⇨ vendors ask partners to place logos or banners on partners site. If customers click on logo, go to the vendors site, and buy, then the vendor pays commission to partners.
↘Viral marketing⇨ receivers send information about your product to their friends.
e.g.→ E-Coops.
↘Product customization⇨ customers use the internet to self-configure products or services. Sellers then price them and fulfill them quickly.
e.g.→www.dell.com & www.bluenile.com .
↖Deep discounters⇨ company offers deep price discounts. Appeals to customers who consider only price in their purchasing decisions.
↘Membership⇨ only members can use the services provided, including access to certain information, conducting trade, etc.
Benefits of E-Commerce :
Benefits to organizations:
✔Makes national and international markets more accessible.
✔Lowering costs of processing, distributing, and retrieving information.
Benefits to customers :
✔Access a vast number of products and services around the clock(24/7/365).
Benefits to society :
✔Ability to easily and conveniently deliver information, services and products to people in cities, rural areas and developing countries.
Limitations of E-Commerce :
Technological Limitations:
✘Lack of universally accepted security standards.
✘Insufficient telecommunications bandwidth.
✘Expensive accessibility.
Non-Technological Limitation :
✘Perception that EC is unsecure.
✘Unresolved legal issues.
✘Lacks a critical mass of sellers and buyers.
Business-to-Consumer (B2C) Electronic Commerce :
Electronic Storefronts :
As noted earlier, electronic storefront⇨ is a website that represents a single store. Some electronic storefronts are extensions of physical stores such as Hermes, The Sharper Image, and Wal-Mart. Other are new businesses started by entrepreneurs who discovered a niche on the web.e.g.→(Resturant.com & Alloy.com). Manufacturers→ ( www.dell.com) and retailers→(www.officedepot.com) also use storefronts.
Electronic Malls :
Electronic mall⇨ also known as cybermall or an e-mall, is a collection of individual shops grouped under is a single internet address.
e.g.→http://www.e-mall.com.sa/
There are two types of cybermalls:
✳The first type, known as referral malls → e.g.→(www.hawaii.com), you cannot buy anything. Instead, you are transferred from the mall to a participating storefront.
✳The second type, e.g.→(http://shopping.yahoo.com), you can actually make only a purchase. At this type of mall, you might shop at several stores, but make only one purchase transaction at the end. You use an electronic shopping cart to gather items from different vendors and pay for all of them in a single transaction. The mall organizer such as
Yahoo! take commission from the sellers for thus service.
Online Service Industries :
Online services such as buying an airline ticket and purchasing stocks or insurance can be delivered entirely through e-commerce, often with considerable cost reduction.
One of the most pressing EC issues relating to online services is disintermediation.
The intermediaries have two functions :
(1) They provide information.
(2) They perform value-added services such as consulting.
The first function can be fully automated and the most likely will be assumed by e-marketplaces and portals that provide information for fee. When this occurs, the intermediaries who perform only (or primarily) this function are likely to be eliminated. This process called disintermediation.
Disintermediation⇨ Elimination of intermediaries in electronic commerce.
Cyberbanking :
Cyberbanking⇨ also known as electronic banking, it involve various banking activities conducted electronically from home, business, or on the road instead of at a physical bank location.
Electronic banking →For customers → it save time and is convenient.
→For banks → it offers an inexpensive alternative to branch banking.
→It also enables banks to attract remote customers.
In addition to regular banks with added online services, virtual banks, which are dedicated solely to internt transactions are emerging.
e.g. of virtual bank→First Internet Bank of Indiana (www.firstib.com).
An example of support for EC global trade is provided by TradeCard in conjection with MasterCard.
TradeCard→is an international company that provides a secure method for buyers and sellers to make digital payments anywhere on the global.
Online Securities Trading :
Emarketer.com estimates that some 40 million people in the United States use computers to trade stocks, bonds, and other financial instruments. In fact, several well-known securities companies, including E*Trade, Ameritrade, and Charles Schwab offer only online trading. In South Korea more than half of stock traders are already using the internet for that purpose, because it is cheaper than full-service or discount broker. Further, on the web, investors can find a considerable amount of information regarding specific companies or mutual funds in which to invest.
e.g.→(http:// money.cnn.com & www.bloomberg.com).
The Online Job Market :
The internet offers promising new environment for job seekers and for companies searching for hard-to-find employees.Thousands of companies and government agencies advertise avaliable positions, accept resumes, and take applications via the internet.
e.g.→(www.monster.com & www.simplyhired.com).
Travel Services :
The internet is an ideal place to plan, explore, and arrange almost any trip economically. Online travel services allow you to purchase airline tickets, reserve hotel rooms, and rent cars. Most sites also offer a fare-tracker feature that sends you e-mail massages about low-cost flights. Example of comprehensive online travel services are :
→Expedia.com
→Travelocity.com
→Orbitz.com
Other e.g. of Online Travel Services:
→Real Estate→http://www.findaproperty.com
→Hotels→www.hotels.com
Online Advertising :
Advertising⇨ is the practice of disseminating information in an attempt to influence a buyer- seller transaction.
Internet advertising ⇨ redefines the advertising process, making it media-rich, dynamic, and interactive.
The benefits of internet advertising:
→Internet ads can be updated any time at minimal cost and therefore can be kept current.
→these ads can reach very large number of potential buyers all over the world.
→They are cheaper than radio, television, and print ads.
→Internet ads can be interactive and targeted to specific interest groups and/or individuals.
Advertising Methods :
➡Banners⇨ simply electronic billboards. A banner contains a short text or graphical message that promotes a product or a vendor.it may contain a video clips and sound.
Advantages of banners :
✔They can be customized to the target audience.
Disadvantages of banners :
✘They can convey only limited information due to their small size.
✘Many viewers simply ignore them.
➡pop-up ad⇨ appear in front of the current browser window.
➡pop-under ad⇨ appears underneath the active window and whem the active window is closed the ad appears.
Many users strongly object to these ads which they consider intrusive. Modern browsers let users block pop-up ads but this feature must be used with caution because some websites depend on pop-up capabilities to present content other than advertising.
➡E-mail⇨ is emerging as an Internet advertising and marketing channel . It is generally cost effective to implement and it provides a better and quicker response rate than other advertising channels.
➡Spamming ⇨ is the indies-criminate distribution of electronic ads without the permission of the receiver .Unfortunately spamming is becoming worse over time.
Two important responses to spamming are :
→permission marketing→ asks consumers to give their permission to voluntarily accept online advertising and e-mail. Permission marketing it the basis of many Internet marketing strategies. Permission marketing is also extremely important for market research .
In one particularity interesting form of permission marketing, companies such as Clickdough.com, express Paid Surveys.com, and CashSurfers.com have built customer lists of millions of people who are happy to receive advertising massages whenever they are on the web.
→Virtual marketnig→ refers to online "word-of-mouth" marketing. The strategy behind viral marketing is to have people forward messages to friends, family, members, and other acquaintances suggesting they "check this out". For example, a marketer can distribute a small game program embedded with a sponsor's e-mail that is easy to forward.
➡Online Advertising on Social Networks⇨ online advertising on social networks has become more successful over time. This type of advertising takes several forms, including:
→Self-service advertising.
→Brand advertising.
→Performance-based advertising.
→Impression based advertising.
Issues in E-Tailing :
Channel conflict: occurs when manufacturers disinter mediate their channel partners such as distributors, retailers, dealers, and sales representatives, by selling their products directly to consumers, usually over the Internet through e-commerce.
[Ford allows customers to configure a car online but requires them to pick it up from a dealer, where they arrange financing, warranties and services]
Multichanneling: is a process in which a company integrates its offline and online channels.
Order fulfillment: finding the product to be shipped; packaging the product; arrange for speedy delivery to the customer; and handle the return of unwanted or defective products.
Order fulfillment: finding the product to be shipped; packaging the product; arrange for speedy delivery to the customer; and handle the return of unwanted or defective products.
Business-to-Business (B2B) Electronic Commerce :
In B2B e-commerce, the buyers and sellers are organizations.
There are several business models for B2B applications:
Sell-Side Marketplaces :
In the sell-side marketplace, organizations sell their products or services to other organizations electronically from their own Web site and/or from a third-party Web site.
This model is similar to the B2C model in which the buyer comes to the seller’s site, views catalogs, and places an order. In the B2B sell-side marketplace, the buyers are organizations.
This model is similar to the B2C model in which the buyer comes to the seller’s site, views catalogs, and places an order. In the B2B sell-side marketplace, the buyers are organizations.
Buy-Side Marketplace :
The buy-side marketplace is a model in which organizations buy needed products and services from other organizations electronically. 
A major method of buying goods and services in the buy-side model is reverse auction.
E-Procurement ⇨purchasing by using electronic support. E-procurement uses revers auction, particularly group purchasing.
Group Purchasing⇨ multiple buyers combine their orders so they constitute a large volume and therefore attract more seller attention.
Electronic Exchanges :
Private exchanges have one buyer and many sellers. E-marketplace called public exchanges or just exchange.
Exchanges⇨are independently own by a third party and connect many buyers and many sellers.
Vertical Exchanges: connects buyers and sellers in a given industryPrivate exchanges have one buyer and many sellers. E-marketplace called public exchanges or just exchange.
Exchanges⇨are independently own by a third party and connect many buyers and many sellers.
www.plasticsnet.com www.papersite.com
Horizontal Exchanges: connects buyers and sellers across many industries, and are used mainly for MRO materials
www.alibaba.com
Functional Exchanges: needed services
such as temporary help or extra office
space are traded on an “as-needed” basis
www.employease.com
Electronic Payments :
Implementing EC typically requires electronic payments.
Electronic payment systems⇨ enable you to pay for goods and services electronically rather than by writing a check or using cash.
Electronic Checks:
Electronic Credit Cards :
Electronic credit (e-credit) cards : allow customers to change online payments to their credit card account. These cards are used primarily in B2C and in shopping by small-to-medium enterprises(SMEs).
Several major credit cards issuers are offering customers the option of shopping online with virtual, single-use credit cards numbers. The goal is to thwart criminals by using a different, random card number every time you shop online.
Purchasing Cards :
Electronic Cash :
Stored-value money cards They are form of e-cash. Allow you to store a fixed amount of prepaid money and then spend it as necessary. For example this card can be used to pay for photocopies in the library, for transportation, and for telephone calls.
Smart cards contain a chip called a microprocessor that can store a considerable amount of information and are multipurpose – can be used as a debit card, credit card or a stored-value money card.
Person-to-person payments are a form of e-cash that enables two individuals or an individual and a business to transfer funds without using a credit card. they can be used for sending money to students at college, paying for an item purchased at an online auction, or sending gift for a family member.
e.g. of the companies that offer this service : PayPal(an eBay company). AOL Quick Cash, One's Bank eMoneyMail and WebCartificate.
E-wallet
Ethical and legal Issues in E-Business :
Ethical Issues :
Privacy: ecommerce provides opportunities for businesses to track online consumers using cookies or special spyware Legal and Ethical Issues Specific to E-Commerce :
Fraud on the Internet :
It has grown faster than Internet use itself ..
are assigned by central nonprofit organizations that check for conflict and possible infringement of trademarks.
Cybersquatting :
refers to the practice of registering domain names solely for the purpose of selling them later at a higher price.
www.ou.edu.om
The original owner of www.tom.com received $8 million for the name
Domain tasting: its not illegal practice but many well be unethical.
when and where (and in some cases whether) electronic sellers should pay taxes
protecting intellectual property in e-commerce and enforcing copyright laws is extremely difficult
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