2013
Introduction to e-Business & e-Commerce
Instructional Material
Anna Loretta Q. Capanang
College of Information and Communications
Technology
6/3/2013
Table of Contents
Introduction to e-Business and e-Commerce ............................................................................................... 3
Learning Objectives:.................................................................................................................................. 3
PreTest ...................................................................................................................................................... 4
What is e-Business? .................................................................................................................................. 5
Creation of Value ...................................................................................................................................... 5
4 Key Quadrants of e-Business ................................................................................................................. 6
Key Principles of e-Business ...................................................................................................................... 7
Benefits and Opportunities in e-Business ................................................................................................. 7
Challenges and Hindrances in e-Business ................................................................................................. 9
What is e-Commerce?............................................................................................................................. 11
Electronic Fund Transfers (EFTs) ............................................................................................................. 11
Characteristics of Electronic Commerce ................................................................................................. 11
Unique Features of e-Commerce ............................................................................................................ 12
Main Divisions of e-Commerce ............................................................................................................... 12
Drivers of e-Commerce Adoption ........................................................................................................... 12
Barriers of e-Commerce Adoption .......................................................................................................... 13
Categories of e-Commerce ..................................................................................................................... 14
e-Commerce Stages ................................................................................................................................ 14
e-Commerce Cycle .................................................................................................................................. 15
e-Commerce Payment Methods ............................................................................................................. 15
Business Models, Revenue Models and Business Processes .................................................................. 16
Merchandising Role in e-Commerce ....................................................................................................... 16
Unit Quiz ................................................................................................................................................. 17
Answer Key: ............................................................................................................................................ 18
Post Test.................................................................................................................................................. 19
References .............................................................................................................................................. 20
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Introduction to e-Business and e-Commerce
Learning Objectives:

To define the meaning and scope of e-Business and e-Commerce and their different
elements

To understand the complexity of e-commerce and its many facets.

To explore how e-business and e-commerce fit together.

To identify the impact of e-commerce.

To recognize the benefits and limitations of e-commerce.

To use classification frameworks for analysing e-commerce.

To identify the main barriers to the growth and development of e-commerce in
organizations

To summarize the reasons for e-Commerce adoption and how to deal with barriers of
adopting e-Commerce
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PreTest
Essay.
Discuss in 3-5 sentences the following:
1. Differentiate e-Business with e-Commerce. How do they differ? What are their
similarities?
Possible answers would be that e-Commerce is one business activity under e-Business
since e-Commerce uses the tools being implemented in e-Business.
2. What are the different types of e-commerce? How are they implemented?
Possible answers would be that e-Commerce can be an individual with a business entity,
a business entity with another business entity, and business entity with the government.
3. How does e-Business affect e-Commerce?
Possible answers would be that the tools used to conduct e-Business are the ones used
for e-Commerce, including payment schemes and mode of selling and/or transaction.
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What is e-Business?
e-Business refers to the integration within the
company of tools based on information and
communications technologies to improve their
functioning in order to create value for the
enterprise, its clients and partners.
It applies both to the virtual companies (click and
mortar) whose activities are based on the Net and
the traditional companies (brick and mortar), as
well. It also refers to the utilization of ICT to
maximize efficiency in business operations, with
respect to internal and external processes.
e-Business is also defined as doing business
electronically in support of organizational goals.
Creation of Value
The goal of any e-Business is to create value thru:




As a result of an increase in margins, i.e. reduction in production costs or an increase in
profits.
As a result of increased in staff motivation, i.e. transition from a traditional activity to an
e-Business activity ideally motivates associates, via team work, etc.
As a result of customer satisfaction, i.e. improves listening to clients
As a result of privileged relationships with the partners, i.e. creation of communication
channels with the suppliers permits.
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4 Key Quadrants of e-Business
1. e-Business strategy and direction
Addressing the threats and opportunities of e-Business
2. relationships and commitments
Interaction with key stakeholders: customers, partners, employers, trading partners,
competitors and/or government agencies
3. communications and information
How an enterprise can improve, enrich, change the information flow with stakeholders
through e-Business.
4. process and culture
the effect that e-Business has on the processes at the core of a business organization
and on current business culture.
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Key Principles of e-Business
1. e-Business is global. It simplifies international business.
2. e-Business should make choice available to consumers where appropriate, under
appropriate circumstances.
3. e-Business should pursue a high level of trust in the global information infrastructure
and services with mutual agreement
4. e-Business has both industry and enterprise level impacts.
5. e-Business has significant effects within the organizations.
Benefits and Opportunities in e-Business
Benefits and opportunities in e-Business are related to its strategies and are commonly
multiple.
1. e-Business creates new Business models and additional revenue
2. e-Business has extended hours: 24/7 -- 365 days access and availability
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3. e-Business can improve marketing with its global reach and up-to-date company
materials
4. e-Business reduce and save costs thus improve operational efficiency
5. e-Business improve customer relations and services.
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Challenges and Hindrances in e-Business
e-Business as a very young sector has its challenges and hindrances.
Figure 1 Where do I start?
Figure 2 How do I address cultural divide?
1. Cultural issues due to automated business processes builds suspicion and resistance
among others.
2. Outdated legacy systems proves to be a barrier since modifications of systems would be
too costly and takes a long time to be implemented.
3. A high cost in automating business processes using the latest system is perceived.
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Figure 3 How do I fit in?
Figure 4 Costly to implement
4. Technological issues such as standards, network infrastructure is a source of challenge.
5. Financial issues on venture capital due to so many dot-com failures.
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What is e-Commerce?
It is the use of the global Internet for purchase and sale of goods, services, including service and
support after sale. It automates the conduct of business among enterprises, their customers,
suppliers and employees - anytime, anywhere. e-Commerce is just one part of e-Business.
e-Commerce encompasses one or more of the following:
•Electronic Data Interchange (EDI) is an activity where one business transmits data in a
standard format to another business using ICT.
•EDI on the Internet
•E-mail on the Internet
•Shopping on the World Wide Web
•Product sales and services on the Web
•Electronic banking or funds transfer
•Outsourced customer and employee care operations
e-Commerce incur expenses when they perform a buy-and-sell business activity. This is known
as transaction cost. Transaction pertains to the conduct of business in exchange for monetary
value.
Electronic Fund Transfers (EFTs)
Also known as wire transfers, are electronic transmissions of account exchange information over private
communication networks. It is one of the means how banks have made online shopping possible for
many businesses and individuals.
Characteristics of Electronic Commerce
1. The tools are electronic but the application is commerce.
o Commerce is not accounting or decision support or any other internally focuses
function.
o Commerce is externally focused on those with whom you do business.
o Commerce is doing business, not reporting on it or sending messages about it.
2. Information exchanged and processed by a communications network and computers, as
well as e-commerce software.
3. Most transactions are processed automatically.
4. Pulls together a gamut of business support services, such as
o Inter-organizational e-mail, on-line directories
o Trading support systems for commodities
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o
o
o
o
Products, and customized products
Custom-built goods and services
Ordering and logistic support system supports
Management and statistical reporting systems
Unique Features of e-Commerce
1. Ubiquitous – business can be done anytime, anywhere by anyone using any medium
2. Global – business is done in any part of the globe
3. Adhere to universal standards – business must adhere to the universal standards of web
posting, and the language used internationally
4. Richness – business is loaded with different aspects of global marketing and culture
5. Interactivity – business is interactive since availability and access to the business is 24/7
6. Information Density – information about products and services offered must be
complete and easy to understand
7. Personalization/Customization – delivery of service is personal since mostly, the
medium to deliver it is with the use the many-to-one business communication mode.
Main Divisions of e-Commerce
1. Buy-side e-commerce
2. Sell-side e-commerce
o Transactional
o Services-oriented
o Brand-building
o Portal or media ownership
Drivers of e-Commerce Adoption
1. Content
Web catalogues are the digital translation of a physical product or service catalogue.
Thus, it is more appealing since you reach out to as many clients and consumers online.
2. Customization
Customization of e-commerce websites happens to address company goals and the
needs of clients.
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3. Community
The community is a factor that affects e-Commerce adoption. If you belong to a
community that is very much into internet technologies, the business has no other
choice but to join the wagon of e-commerce.
4. Convenience
e-Commerce websites offer convenience since you can buy or sell products even at the
comforts of your home, with just a click of a mouse or a touch on your mobile devices.
5. Choice
Availability of choices is very wide since it offers a variety of products and services that
can be offered by a certain business entity. Even payment methods has now been varied
with the advent of e-commerce.
6. Cost Reduction
The transaction costs incurred will be reduced because you need not rent a space for
product display, or go to some place to visit a shop and check for possible purchases.
Barriers of e-Commerce Adoption
Although there’s a good number of a benefit in e-commerce adoption, most businesses still
are wary to adopt it. Some business owners think that there’s no benefit in doing business
online. Security issues arises since there is lack of trust to whom you are dealing with. Others
are not that literate with the ins and outs of the internet technology. And some who would
wish to do full-blown e-commerce knows that it entails a high cost of maintenance, from the
introduction of your own domain, down to its maintenance.
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Categories of e-Commerce
1. Business to Consumer (B2C) – sell products or services to individual consumers
Can be transactional, relationship-building, brand-building, media owner and
comparison intermediary
2. Business to Business (B2B) – sell products or services to other businesses
Can be transactional, relationship-building, media owner and marketplaces
3. Consumer to Consumer (C2C) – participate in an online market trade
Can be transactional, relationship-building, peer-to-peer, social network, product
recommendations
4. Business to Government (B2G) – sell products or services to government and NGOs
Can be transactional, relationship-building, feedbacking to government and NGOs
5. Peer to Peer (P2P) – consumers share products or services without the intervention of
market makers
6. Mobile Commerce (m-Commerce) – sell products or services thru mobile devices
e-Commerce Stages
1. Experimentation
This is the stage where potential sellers are on the stage of testing the waters or the market if
their products and services will be availed by potential buyers. Things to consider includes the
design of a particular site, how their products are displayed or posted online, the color, font
styles and catchy phrases used in offering their products and services.
2. Retrenchment and Sobriety
Once you’ve learned which of the things must be removed from your website to gain traffic, you
will then employ the things that must be included so that you will have a following among the
market.
3. Sustainability
Maintaining this market will then be a challenge to e-commerce site owners. You need to think
of business and revenue models that will be implemented in your websites to create web
presence and generate revenue from it.
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4. Focus and Fragmentation
Your goal is to grow with the technology so as to have a stable source of revenue. This stage
would mean that you need to be aware of the changes in the environment, how business is
done and how you are going to adapt with these changes.
e-Commerce Cycle
Searching  Buying  Payment  Shipping  Post-sale Service  Marketing
e-Commerce Payment Methods
1. E-Wallet
Ex. G-Cash
2. Real-Time Banking
Ex. BDO online banking
3. E-Cheque
Ex. Paypal check issuance
4. E-Cash
Ex. G-Cash spent to pay for purchases or bills
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Business Models, Revenue Models and Business Processes
A business model is a set of processes that is combined t achieve a company’s goal of yielding profit. A
good business model is expected to lead to rapid sales growth and market dominance. A revenue model
on the other hand, is a specific collection of business processes that is used to identify customers, the
market and how to generate sales from these customers. Market can be the potential seller, buyer
and/or medium of exchange.
Merchandising Role in e-Commerce
Merchandising is the combination of store design, layout, and product display knowledge that help
convince buyers to buy. The skills of merchandising must be felt in e-Commerce sites with the creation
of web presence.
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Unit Quiz
Part 1. Identification of Terms. Read the definitions below and identify their appropriate terms.
1. It is referred to as a way of carrying business communications and transactions using
computers over the Internet or any other form of network.
2. It is where businesses sell products or services to individual consumers.
3. It is where businesses sell products or services to other businesses.
4. It is where participants in an online market trade with each other.
5. It is where businesses sell products or services to governments and government agencies.
6. An exchange of products and services and financial instruments.
7. Another term for wire transfers.
8. It is an activity where one business transmits data in a standard format to another business
using ICT.
9. Processes combined to yield profit.
10. Processes to identify stakeholders to generate sales.
11. Activity to help convince buyers to buy.
12. It means that your market is located anywhere on the globe.
13. Pertains to potential sellers, buyers and the medium of exchange.
14. Addresses the threats and opportunities of e-Business
15. An example of how customer satisfaction creates value for the business.
16. Refers to the use of ICT to maximize efficiency in business operations.
Part 2. Enumeration
17-20. Enumerate the 4 Key Quadrants of E-Business
21-25. What are the 5 Benefits and Opportunities of e-Business?
26-30. What are the 5 Challenges and Hindrances of e-Business?
31-35. Give the 5 Key Principles of e-Business.
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Answer Key:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
E-commerce
B2C
B2B
C2C
B2G
Transaction
Electronic Fund Transfer
Electronic Data Transfer
Business Model
Revenue Model
Merchandising
Global
Market
Strategy and direction of eBusiness
15. Improve listening to clients
16. e-Business
4 Key Quadrants of e-Business
17. strategy and direction
18. relationships and
commitments
19. communications and
information
20. process and culture
Benefits and Opportunities
21. creates new business
models/revenues
22. extended hours
23. improve marketing
24. cost reduction
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25. improve customer relations
Challenges and Hindrances
26. cultural issues
27. outdated legacy systems
28. high cost in automation
29. technological issues
30. financial issues on venture
capital
Key Principles
31. global
32. available choice
33. high level of trust
34. has industry and enterpriselevel impacts
35. significant effects within
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Post Test
Essay.
Discuss in 3-5 sentences the following:
1. Differentiate e-Business with e-Commerce. How do they differ? What are their
similarities?
Possible answers would be that e-Commerce is one business activity under e-Business
since e-Commerce uses the tools being implemented in e-Business.
2. What are the different types of e-commerce? How are they implemented?
Possible answers would be that e-Commerce can be an individual with a business entity,
a business entity with another business entity, and business entity with the government.
3. How does e-Business affect e-Commerce?
Possible answers would be that the tools used to conduct e-Business are the ones used
for e-Commerce, including payment schemes and mode of selling and/or transaction.
Prepared by: Capanang, Anna Loretta Q.
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References
Andam, Zorayda Ruth. (2003). E-Commerce and e-Business. Philippines: E-ASEAN Task Force.
Retrieved: May 30, 2013.
http://www.kau.edu.sa/Files/830/Files/61164_Ecommerce%20and%20E%20Business.pdf
Gao, Jerry. (1999). Introduction to e-Commerce. Jordan: Petra University (Petra Education Co.)
Retrieved: May 30, 2013.
https://www.uop.edu.jo/download/research/members/introduction.pdf
Introduction to e-Business and e-Commerce. Jordan: Princess Sumaya University for Technology.
Retrieved: May 30, 2013. http://psut.edu.jo/sites/raad/eBusiness_notes/Chapter01.pdf
Laudon, K., Trever, C.G. (2013). e-Commerce 2013: Business Technology Society (9th ed). USA:
Prentice Hall.
Schneider, Gary P. (2010). Introduction to e-Business. Philippines: Cengage Learning.
Tassabehji, Rana. (2003). Applying e-Commerce to Business. Sage Publications. Retrieved: May
30, 2013. http://www.sagepub.com/upm-data/9598_019964Ch1.pdf
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