Electronic Commerce
Chapter 8
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Principles and Learning Objectives
• E-commerce is a new way of conducting
business, and as with any other new application
of technology, it presents both opportunities for
improvement and potential problems.
– Identify several advantages of e-commerce.
– Outline a multistage model that describes how ecommerce works.
– Identify some of the major challenges companies
must overcome to succeed in e-commerce.
– Identify several e-commerce applications.
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Principles and Learning Objectives
• E-commerce requires the careful planning and
integration of a number of technology
infrastructure components.
– Outline the key components of technology
infrastructure that must be in place for e-commerce to
succeed.
– Discuss the key features of the electronic payments
systems needed to support e-commerce.
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Principles and Learning Objectives
• Users of the new e-commerce technology must
take safeguards to protect themselves.
– Identify the major issues that represent significant
threats to the continued growth of e-commerce.
• Organizations must define and execute a
strategy to be successful in e-commerce.
– Outline the key components of a successful ecommerce strategy.
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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An Introduction to
Electronic Commerce
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Introduction to Electronic Commerce
• Business-to-consumer (B2C) e-commerce
• Business-to-business (B2B) e-commerce
• Consumer-to-consumer (C2C) e-commerce
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Multistage Model for E-commerce
• Search and identification
• Selection and negotiation
• Purchasing products and services
electronically
• Product and service delivery
• After-sales service
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Multistage Model for E-commerce
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Product and Service Delivery
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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E-Commerce Model
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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E-Commerce Challenges
• Change distribution systems & work processes
• Split-case distribution
• Integrate web-based order processing with
traditional systems
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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The E-Commerce Supply Chain
• Supply chain management
– Demand planning
– Supply planning
– Demand fulfillment
• Increased revenues and decreased costs
• Improved customer satisfaction
• Inventory reduction across the supply chain
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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The E-Commerce Supply Chain
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Supply Chain Management
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Business-to-Business
• Allows manufacturers to buy at low price
worldwide
• Enterprise can sell to a global market
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Global E-Commerce
• Steps in localization
– recognizing and conforming to the nuances,
subtleties, and tastes of local cultures
– supporting basic trade laws such as each
country’s currency, payment preferences,
taxes, and tariffs
– ensuring that technological capabilities match
local connection speeds
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Global E-Commerce
• Determine which global markets make the most
sense for selling products or services on-line
• Decide whether Web content should be
generated or updated centrally or locally
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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E-Commerce Applications
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Retail and Wholesale
• Electronic retailing
• Cybermalls
• Wholesale e-commerce: B2B
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Manufacturing
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Marketing
• Market segmentation
• Technology-enabled relationship
management
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Investment and Finance
• On-line stock trading
• On-line banking
– Electronic bill presentment
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Investment and Finance
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Investment and Finance
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Technology Infrastructure
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Technology Infrastructure
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Hardware
• Storage capacity
– Software
– Volume of e-commerce transactions
• Website hosting
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Web Server Software
• Security and identification
– Denial of service attack
• Web site tracking
– Web log file
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Web Server Software
• Web site development tools
• Retrieving and sending Web pages
• Web page construction software
– Static Web page
– Dynamic Web page
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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E-Commerce Software
• Catalog management
• Product configuration
• Shopping cart
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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E-Commerce Transaction Processing
• Automates transaction processes from order
placement to reconciliation
• Web traffic data analysis
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Electronic Shopping Cart
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Network and Packet Switching
• All e-commerce depends on a type of network to
securely transmit data
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–
–
–
Internet
Extranet
Value-added network (VAN)
Virtual private network (VPN)
• All approaches rely on packet switching and use
routers
• Cost, availability, reliability, security, and
redundancy must be considered when choosing
a network
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Electronic Payment
Systems
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Electronic Payment Systems
•
•
•
•
•
•
Digital certificate
Certificate authority
Secure sockets layer (SSL)
Electronic cash
Electronic wallets
Smart, credit, charge, and debit cards
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Threats to E-Commerce
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Threats to E-Commerce
• E-commerce incidents
• Theft of intellectual property
– Patents on business processes
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Fraud
•
•
•
•
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On-line auction fraud
Spam
Pyramid schemes
Investment fraud
Stock scams
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Invasion of Consumer Privacy
• On-line profiling
• Clickstream data
• Safe harbor principles
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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TRUSTe Seal
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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BBB On-line Privacy Seal
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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How to Protect Your Privacy
While On-Line
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Strategies for Successful
E-Commerce
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Developing an Effective Web
Presence
Visitors to a web site should be able to:
• Obtain general information about the
organization
• Obtain financial information for making an
investment decision
• Learn the organization’s position on social
issues
• Learn about the products or services that the
organization sells
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Putting up a Web Site
• Web site hosting services
• Storefront brokers
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Building Traffic to Your Web Site
• Domain names
• Meta tags
• Traffic data analysis
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Maintaining and Improving Your Web
Site
• Be alert to new trends
• Be prepared to take advantage of new
opportunities
• Personalization
– Explicit
– Implicit
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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Summary
• E-commerce - enables consumers and companies to
gain access to worldwide markets
• Electronic retailing (e-tailing) - the direct sale from
business-to-consumer through electronic storefronts
designed around an electronic catalog and shopping cart
model
• E-commerce shoppers - must be on constant guard to
protect their rights, security, and personal privacy
MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan
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