Bachelor of Business
Administration Program
©Mathieu CHAUVET – 2014/2015
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Welcome on board!
 Ramkhamhaeng Institute of International Studies and
I are pleased to welcome you on this module of
« Introduction to E-Commerce and Information for
International Business »
 « Safety » and Identity controls
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This is your « captain » speaking
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Your destination
 This course provides a global study of roles and
procedures of electronic commerce in order to manage
business information in arrangement of planning,
controlling production and planning of administration.
 As practical objectives, the aim of this class is to describe
you:
- how to market on the Web legally and ethically,
- how to plan for electronic commerce
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Agenda
 Introduction to Electronic Commerce: The Internet and
the World Wide Web
 Selling on the Web: Revenue Models and Building a Web
Presence
 Marketing on the Web
 Business-to-Business Activities
 Online Auctions, Virtual Communities, and Web Portals
 The Environment of Electronic Commerce: Legal, Ethical,
and Tax Issues
 Electronic Commerce: Technologies and Infrastructure
 Integration: Planning for Electronic Commerce
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Bachelor of Business
Administration Program
©Mathieu CHAUVET – 2014/2015
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Learning objectives
In this chapter, we will address:
 What electronic commerce is and how it has evolved into
a second wave of growth
 Why companies concentrate on revenue models and the
analysis of business processes instead of business models
when they undertake electronic commerce initiatives
 How economic forces have created a business
environment that is fostering the second wave of
electronic commerce
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I) Internet and the
World Wide Web
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Origins of the Internet
 Early 1960s
 US Defense Department and risks of nuclear attacks
 Started to use powerful computers (large mainframes)
 But used leased telephone company lines
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Single connection
Wish to communicate by using multiple channels (packets)
 1969 Advanced Research Projects Agency (ARPA)
 Packet network connected four computers
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ARPANET: earliest network (became the Internet)
Academic research use (1970s and 1980s)
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New uses for the Internet
 1970s: other uses
 E-mail (1972)
 Networking technology
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Remote file transfer and computer access
 Mailing lists
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E-mail address forwards message to subscribed users
 1979: Usenet (User’s News Network)
 Read and post articles
 Newsgroups (topic areas)
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 1980s: personal computer use explosion
 1989: National Science Foundation (NSF) permitted two
commercial e-mail services
 MCI Mail and CompuServe
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Commercial enterprises could send e-mail
 1995: privatization of the Internet
 Operations turned over to privately owned companies
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Internet based on four network access points (NAPs)
 Emergence of network access providers
 Sell Internet access rights directly to larger customers
 Use Internet service providers (ISPs)
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Sell to smaller firms and individuals
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II) E-Commerce:
Definition and types
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Definition
 Electronic commerce
 Shopping on the Web
 Businesses trading with other businesses
 Internal company processes
 Broader term: electronic business (e-business)
 Electronic commerce includes:
 All business activities using Internet technologies
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Internet and World Wide Web (Web)
Wireless transmissions on mobile telephone networks
 Dot-com (pure dot-com)
 Businesses operating only online
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Types of E-Commerce
 Business-to-consumer (B2C)
 Consumer shopping on the Web
 Business-to-business (B2B): e-procurement
 Transactions conducted between Web businesses
 Supply management (procurement) departments
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Negotiate purchase transactions with suppliers
 Business processes
 Using Internet technologies to support organization selling
and purchasing activities
 Consumer-to-consumer (C2C)
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III) Evolution of the
E-Commerce
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E-Commerce evolution
 Electronic commerce history
 Mid-1990s to 2000: rapid growth
 “Dot-com boom” followed by “dot-com bust”
 2000 to 2003: overly gloomy news reports
 2003: signs of new life
 Sales and profit growth return
 Electronic commerce growing at a rapid pace
 Electronic commerce becomes part of general economy
 2008 general recession
 Electronic commerce hurt less than most of economy
 Second wave underway
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Why such a development?
 People more and more engaging in global commerce:
 Adopt available tools and technologies
 Internet
 Changed way people buy, sell, hire, organize business
activities
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More rapidly than any other technology
 Electronic Funds Transfers (EFTs)
 Wire transfers
 Electronic transmissions of account exchange information
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Uses private communications networks
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E-commerce waves of development
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International nature of E-Commerce
 Internet connects computers worldwide
 When companies start using Web to improve business
process, they automatically operate in global environment
 Emergence of key international-commerce issues
 Trust
 Culture
 Language
 Government
 Infrastructure
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Trust issues on the Web
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Trust issues on the Web
 Privacy and identity theft
 Important to establish trusting relationships with
customers
 Rely on established brand names
 Difficult for online businesses
 Anonymity exists in Web presence
 Difficult to precisely determine an actor’s size or how well
established it is
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Cultural issues
 Culture
 Combination of language and customs
 Varies across national boundaries, regions within nations
 Important element of business trust
 Anticipating how the other party to a transaction will act in
specific circumstances
Examples: - Privacy in Europe Vs. USA
- Trust in payment methods
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Language issues
 Languages may require multiple translations
 Separate dialects
 Business must adapt to local cultures
 “Think globally, act locally”
 Provide local language versions of Web site
 Customers more likely to buy from sites translated into their
own language
 50 percent of Internet content in English
 Half of current Internet users do not read English
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In 2015, it is expected that 70% of e-commerce transaction will
involve at least one party outside of the United States
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Government issues
 Online discussion inhospitable to cultural environments
 Government controls in some cultures
 Unfettered communication not desired
 Unfettered communication not considered acceptable
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Denounced Internet material content
 Unrestricted Internet access forbidden
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Filter Web content
 Regularly reviews ISPs and their records
 Impose language requirements…
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Infrastructure issues
 Internet infrastructure
 Computers and software connected to Internet
 Communications networks’ message packets travel
 Infrastructure variations and inadequacies exist
 Local connection costs
 Inability to handle order
 Example: Google lays fibre network in Uganda's capital
Kampala with “Project Link”
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IV) E-Commerce:
Benefits and disadvantages
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Advantages
 E-commerce increases sales and decreases costs
 Virtual community: gathering of people online
 Using Web 2.0 technologies
 E-commerce buyer opportunities
 Increases purchasing opportunities
 Identifies new suppliers and business partners
 Efficiently obtains competitive bid information
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Easier to negotiate price and delivery terms
 Increases speed, information exchange accuracy
 Wider range of choices available 24 hours a day
 Immediate access to prospective purchase information
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Benefits towards general society welfare
 Lower costs to issue and secure:
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Electronic payments of tax refunds
Public retirement
Welfare support
 Provides faster transmission
 Provides fraud, theft loss protection
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Electronic payments easier to audit and monitor
 Reduces commuter-caused traffic, pollution
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Due to telecommuting
 Products and services available in remote areas
Amazon Prime Air
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Disadvantages of Electronic Commerce
 All items cannot be sold through electronic commerce
 Perishable foods and high-cost, unique items
 Disadvantages will disappear when:
 E-commerce matures
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Becomes more available to and accepted by general population
 Critical masses of buyers become equipped, willing to buy
through Internet
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Online grocery industry example
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 Intensified problems
 Calculating return on investment
 Recruiting and retaining employees
 Technology and software issues
 Cultural differences
 Consumers resistant to changes
 Conflicting laws
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Summary
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 Electronic commerce
 Application of new Internet and Web technologies
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Helps individuals, businesses, other organizations conduct
effective business
 Adopted in waves of change
 First wave ended in 2000
 Second wave focuses on improving specific business processes
 Technology improvements
 Create new products and services
 Improved promotion, marketing, delivery of existing
offerings
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 Technology improvements (continued)
 Improve purchasing and supply activities
 Identify new customers
 Operate finance, administration, human resource
management activities more efficiently
 Reduce transaction costs
 Create network economic effects
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Leads to greater revenue opportunities
Electronic commerce fits into markets, hierarchies,
networks…but depend on multiple variable and issues
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