Chapter 6
Introduction To
E-Commerce and
E-Business
E-Commerce and
E-Business Concepts
 E-commerce
• The exchange or buying and selling of
goods and services by electronic means
 E-business
• The use of information and communication
technologies to perform business functions
Chapter 6
Slide 2
E-Commerce and
E-Business Concepts
 Value Chain Concepts
• Value chain
The series of processes by which a company
turns raw materials into finished goods and
services
Chapter 6
Slide 3
E-Commerce and
E-Business Concepts
Figure 6-1
Chapter 6
Slide 4
E-Commerce and
E-Business Concepts
 Value Chain Concepts
• Extended value chain
The sequence of value-adding activities that
extend beyond the company boundaries
Chapter 6
Slide 5
E-Commerce and
E-Business Concepts
Figure 6-2
Chapter 6
Slide 6
Benefits of Doing Business
Electronically
 Reducing The Cost of Executing
Transactions
 Increasing the Speed of Business
 Doing Business Any Time Anywhere
 Improving Workflow
 Reducing Errors and Improving
Quality
Chapter 6
Slide 7
Benefits of Doing Business
Electronically
 Collaborating With Suppliers
• Joint product design
• Synchronized production
• Servicing end customers
Chapter 6
Slide 8
Electronic Business Models
 Pure Play vs. Multi Channel
• Pure play
The initial wave of companies to popularize the
Web for B2C e-commerce sold only through the
Web channel
Chapter 6
Slide 9
Electronic Business Models
 Pure Play vs. Multi Channel
• Click-and-mortar
Clicks and bricks offering the same Web
channel that the pure-plays provide (the “click”)
but also providing stores (the “mortar”) where
customers can return items more easily
• Channel Conflict
Direct sales through Web channel may
jeopardize relationships with distributors
Chapter 6
Slide 10
Electronic Business Models
 What Is A Business Model?
• Business model
A broad plan for what products or services a
company plans to sell and how it plans to earn
its revenue
Chapter 6
Slide 11
Electronic Business Models
 Producer Models
• Producer earns revenue by selling the
products that it builds, manufactures,
grows, or creates the services it provides
 Distributor Models
• Distributor buys in bulk and resells in
smaller quantities
Chapter 6
Slide 12
Electronic Business Models
 Aggregator Models
• Aggregator adds value by providing onestop shopping
 Advertisement Revenue Models
• Advertisement runners earn revenue by
selling advertising
Click-through advertising
Web portals
Chapter 6
Slide 13
Electronic Business Models
 Maker Market Models
• A market maker earns revenue by bringing
together buyers and sellers
Electronic Auctions
B2B exchanges
 Infomediary Models
• Infomediary earns revenue by collecting
and selling information
Chapter 6
Slide 14
Electronic Business Models
 E-Government
• E-government
The model of government in which information
technology is used to the extent possible to
facilitate interaction between the government
and its suppliers, government and the public,
government and its employees, and among
government agencies and different
governmental bodies
Chapter 6
Slide 15
E-Commerce Technologies
 Electronic Data Interchange (EDI)
• Automated exchange of electronic
documents between computers at different
companies
• Standards at general and industry levels
• Mapping software translates application
input/output for EDI transmission/reception
• Web interfaces exist
Chapter 6
Slide 16
E-Commerce Technologies
 Web Forms
 Extended Markup Language (XML)
• Adds tags to Web page so that data on
page can be processed by computer
 Web Services
• Software that accepts commands over the
Web and optionally returns results over the
Web
Chapter 6
Slide 17
E-Commerce Implementation Issues
 Resolving Channel Conflict
• Make distributor transparent
• Direct orders and queries to distributors
 Doing Business Internationally
• Language choice on Web page selection
• Currency conversion
• Product branding and design issues
Chapter 6
Slide 18
E-Commerce Implementation Issues
 Security Management
• Need to encrypt transactions
• Weak security at partners can compromise
your own security
Chapter 6
Slide 19
End of
Chapter 6
Introduction To
E-Commerce and
E-Business