E COMMERCE FOR MBA STUDENTS

E – BUSINESS Model
IT
BUSINESS
INTERNET
Data processing
Storage,
Data processing
Storage,
NetworksInformation
sharing
NetworksInformation
sharing
Sound BIZ
model
Sound BIZ
model

E BUSINESS
Definition
• E-business is the conduct of business on the
Internet, not only buying and selling but
also servicing customers and collaborating
with business partners.

E BUSINESS
Definition
• E-business is the transformation of key
business processes through the use of
• Internet technologies.

E BUSINESS
Definition
• E-business can broadly be defined as the processes
orareas involved in the running and operation of an
organisation that are electronic or digital in nature...........
These include
• direct business activities
• Such as marketing, sales and human resource management but also
indirect activities
• such as business process re-engineering and change management,
• which impact on the improvement in efficiency and integration of
business processes and activities.

OLD VS E BUSINESSOLD VS E BUSINESS
OLDOLD
• Brick& mortarBrick& mortar
• Internally focussedInternally focussed
process centricprocess centric
• Hierchical Set upsHierchical Set ups
• Arm length relationshipsArm length relationships
• Customers less informedCustomers less informed
E BIZE BIZ
• Click& MortarClick& Mortar
• Externally focusse –Externally focusse –
Goal CentricGoal Centric
• Cross functional setCross functional set
upsups
• NetworkedNetworked
relationshipsrelationships
• Customers moreCustomers more
informedinformed

RESULTS OF INTEGRATIONRESULTS OF INTEGRATION
E CommerceE Commerce
SCMSCM
CRMCRM
ERPERP
BPO/KPOBPO/KPO
MIS etcMIS etc
IT
BIZ MODELINTERNET

E commerce
Definition
Process of buying selling and exchange of
products services and information via
computer Network including Internet

E commerce
Definition
• Electronic Commerce (EC) is where
business transactions take place via
• telecommunications networks, especially
the Internet.

E COMMERCE MODELSE COMMERCE MODELS
 Ad models -- Search engins portals etcAd models -- Search engins portals etc
 Merchant -- B2CMerchant -- B2C
 Manufacturer/ wholesaler- B2BManufacturer/ wholesaler- B2B
 Subscription -- ISP, e JORNALS etcSubscription -- ISP, e JORNALS etc
 Brokerage/ Market place exchange modelBrokerage/ Market place exchange model
 Info intermediary model.Info intermediary model.

E COMMERCE -EVOLUTIONE COMMERCE -EVOLUTION
 1996-99 11996-99 1STST
STAGE-STAGE-
 Web presence.InformationWeb presence.Information
services,News ,Cataloguesservices,News ,Catalogues

 1997-20 2ndSTAGE –1997-20 2ndSTAGE –
 Interactive sites- search features ,accessInteractive sites- search features ,access
to databases, .,Personalised sites etcto databases, .,Personalised sites etc

 1998-2000 3rdSTAGE.1998-2000 3rdSTAGE.
 Transaction capability-E PaymentTransaction capability-E Payment
systems etcsystems etc

 Beyond 2000-4thSTAGE-Beyond 2000-4thSTAGE-
 Integrated enterprises –SCM integration -Integrated enterprises –SCM integration -

E COMMERCE…. Key driversE COMMERCE…. Key drivers
 1.Technological factors – The degree of1.Technological factors – The degree of
advancement of the telecommunicationsadvancement of the telecommunications
 infrastructure which provides access toinfrastructure which provides access to
the new technology for business andthe new technology for business and
consumers…consumers…
 band width..band width..
 Telecom infrastructure 3G,4G,Telecom infrastructure 3G,4G,

 22 Political factors – including thePolitical factors – including the
role of government in creatingrole of government in creating
governmentgovernment
 E-RedinessE-Rediness
 E-legislation,E-legislation,
 E-initiatives and funding to support the useE-initiatives and funding to support the use
and development of e-commerce andand development of e-commerce and
information technology. etcinformation technology. etc

 33 Social factors – incorporating theSocial factors – incorporating the
level and advancement in ITlevel and advancement in IT
educationeducation
 Skill level,Skill level,
 PC penetration,andPC penetration,and
 Training which will enable both potentialTraining which will enable both potential
buyers and the workforce To understandbuyers and the workforce To understand
and use the newand use the new
echnology.Technophilia..echnology.Technophilia..

 44 Economic factors – including theEconomic factors – including the
general wealth and commercialgeneral wealth and commercial
healthhealth of the nation and the elementsof the nation and the elements
that contribute to it.that contribute to it.
 GDP (India 7%,china 6.9%,pakistan4.1%)GDP (India 7%,china 6.9%,pakistan4.1%)
 Cost of internet accessCost of internet access
 Cost of IT toolsCost of IT tools
 Economic growth etcEconomic growth etc

5.Organisational culture5.Organisational culture
–– attitudes to research and developmentattitudes to research and development
(R&D);(R&D);
E readyness-willingness to innovate and useE readyness-willingness to innovate and use
technology to achieve objectives.technology to achieve objectives.

6.6. Commercial benefitsCommercial benefits
cost savingscost savings
improved efficiencyimproved efficiency
Customer satisfactionCustomer satisfaction
........that impact on the financial........that impact on the financial
performance of the firm.performance of the firm.

7.Skilled and committed workforce7.Skilled and committed workforce
–– that understands,that understands,
- willing and able towilling and able to implement newimplement new
technologies and processes.technologies and processes.

88 Requirements of customers and suppliersRequirements of customers and suppliers
– in terms of product and service– in terms of product and service
demand and supply.demand and supply.

9.9.Competition – ensuring the organisationCompetition – ensuring the organisation
stays ahead of or at least keepsstays ahead of or at least keeps
up with competitors and industry leaders.up with competitors and industry leaders.

E COMMERCE…. IT’S IMPACTE COMMERCE…. IT’S IMPACT
 1.Marketing –1.Marketing –
 Online advertising,Online advertising,
 Global marketingGlobal marketing
 marketing strategies -Dis intermedation..massmarketing strategies -Dis intermedation..mass
customisationcustomisation
 Consumer behaviour and cultures.Consumer behaviour and cultures.

 2.Production and operations management –2.Production and operations management –
 The impact of on-line processingThe impact of on-line processing has led tohas led to
reduced cycle times. It takes seconds to processreduced cycle times. It takes seconds to process
orders/ deliver digitized products and servicesorders/ deliver digitized products and services
electronically;electronically;

 Production and operations managementProduction and operations management
(manufacturing) –(manufacturing) –
 moving frommoving from mass production(Push type) tomass production(Push type) to
demand-driven(Pull type),demand-driven(Pull type),
 --

 Production and operations managementProduction and operations management
 E BiddingE Bidding
 Sourcing through collaboration andSourcing through collaboration and
coordination(B2B)..Automobile companies forcoordination(B2B)..Automobile companies for
common supplies like tyre ,light etccommon supplies like tyre ,light etc

3. Management information systems –3. Management information systems –
analysis, design and implementationanalysis, design and implementation
of e-business systems within anof e-business systems within an
organisation; issues of integration oforganisation; issues of integration of
front-end and back-endfront-end and back-end
systems.Facilitates information flowssystems.Facilitates information flows

4.Human resource management –4.Human resource management –
issues of on-line recruiting,issues of on-line recruiting,
home working..home working..

5.5.Business law and ethics – the differentBusiness law and ethics – the different
legal and ethical issues that havelegal and ethical issues that have
arisen as a result of a global ‘virtual’arisen as a result of a global ‘virtual’
market. Issues such as ....market. Issues such as ....
copyright laws,copyright laws,
privacy of customer information,privacy of customer information,
legality of electronic contracts,etc..legality of electronic contracts,etc..

TYPES OF E COMMERCETYPES OF E COMMERCE
The major types of e-commerce are :The major types of e-commerce are :
1.1. B2C amazon.in.B2C amazon.in.
2.2. B2B alibaba.comB2B alibaba.com
3.3. C2C e bayC2C e bay
4.4. P2PP2P
5.5. B2G sbi.comB2G sbi.com
6.6. G2C keala.gov.inG2C keala.gov.in
7.7. M-CommerceM-Commerce

B2C E COMMERCEB2C E COMMERCE
CharacteristicsCharacteristics
 Between business and consumersBetween business and consumers
 Large in terms of transactionLarge in terms of transaction
 Enabled by internetEnabled by internet

B2C E COMMERCEB2C E COMMERCE
B2C : (Business-to-Consumer)B2C : (Business-to-Consumer)
Within the B2C category there are manyWithin the B2C category there are many
different types of business models: portals ,different types of business models: portals ,
online retailers , content providers , transactiononline retailers , content providers , transaction
brokers , market creators , service providers ,brokers , market creators , service providers ,
and community providers.and community providers.

B2C E commerceB2C E commerce
Management FocusManagement Focus
Managing HitsManaging Hits
ConnectivityConnectivity
Delivering ValueDelivering Value
Security issuesSecurity issues

B2C Critical success factorsB2C Critical success factors
 COMMUNICATION INFRASTRUCTURECOMMUNICATION INFRASTRUCTURE
 PROCESS MANAGEMENTPROCESS MANAGEMENT
 SERVICE MANAGEMENTSERVICE MANAGEMENT
 TRANSACTION CAPABILITIESTRANSACTION CAPABILITIES

B2C Critical Success Factors
COMMUNICATION INFRASTRUCTURE:
• Technical infrastructure
• PC penetration
• Processor features

• PROCESS MAANGEMENT
• A2A integration
• Managing HITS

SERVICE MANAGEMENT
• Good Site Architecture-Catching eye balls
• Ethical compliance
• Customer value

TRANSACTION CAPABILITIES
• Payment systems
– Credit cards,debit cards. Digital cash , COD
Cheque, Draft etc
• Security

B2B E COMMERCEB2B E COMMERCE
CharacteristicsCharacteristics
 Between business housesBetween business houses
 Large in terms of valueLarge in terms of value
 Represent major part of e commerce bizRepresent major part of e commerce biz
 Enabled by extranet/vpn/internetEnabled by extranet/vpn/internet

B2B MODELB2B MODEL
 Between business housesBetween business houses
 Large in terms of valueLarge in terms of value
 Enabled by extranet/vpn/internetEnabled by extranet/vpn/internet

B2B typesB2B types
 BUYER CONTROLLED-Automobile companies join toBUYER CONTROLLED-Automobile companies join to
gather to obtain bids for compnantsgather to obtain bids for compnants
 SELLER CONTROLLED-Group of sellers for a productSELLER CONTROLLED-Group of sellers for a product
join to gather to reduce price wars offer products –Egjoin to gather to reduce price wars offer products –Eg
agri marketingagri marketing
 THIRD PART CONTROLLED-E commerce providerTHIRD PART CONTROLLED-E commerce provider
creates a platform where buyer and seller meets –creates a platform where buyer and seller meets –
alibaba.comalibaba.com

C2C E COMMERCEC2C E COMMERCE
 Consumer-to-Consumer (C-to-C) In this categoryConsumer-to-Consumer (C-to-C) In this category
consumers interact directly-consumers interact directly-
 They exchange information such as:They exchange information such as:
 11 Expert knowledge where one person asks a question aboutExpert knowledge where one person asks a question about
anything andanything and gets an e-mail reply from the community of othergets an e-mail reply from the community of other
individuals, as in the case of theindividuals, as in the case of the New York Times-affiliatedNew York Times-affiliated
abuzz.com website.abuzz.com website.
 2.2. Opinions about companies and products, for exampleOpinions about companies and products, for example
epinions.com.epinions.com.
 33.Exchange of goods.Exchange of goods between people both with consumerbetween people both with consumer
auction sites such as e-bay.com OR Swapitshop.com,auction sites such as e-bay.com OR Swapitshop.com,
where individuals swap goods with each other without thewhere individuals swap goods with each other without the
exchange of moneyexchange of money

C2B E COMMERCEC2B E COMMERCE
 Customer to BusinessCustomer to Business
 CUSTOMER DRIVENCUSTOMER DRIVEN
 Bids for requirements..airline tickets..Hotel accommodationBids for requirements..airline tickets..Hotel accommodation
 Service providers negotiate and fix the dealService providers negotiate and fix the deal
 Price line.com…elance.com..noukari.comPrice line.com…elance.com..noukari.com

G2B E COMMERCE
The exchange of information, services and products between
government agencies and business organisations.
• 1. Information, guidance and advice for business on
international trading,
• 2. A database of laws, regulations and government policy
for industry
• sectors.
• 3. On-line application and submission of official forms
(such as company
• and value added tax).
• 4. On-line payment facilities.

G2C E COMMERCEG2C E COMMERCE
 Government-to-Consumer (G-to-B)Government-to-Consumer (G-to-B)
(Also known as e-governance).(Also known as e-governance).
 GovernmentGovernment sites offering information,sites offering information,
forms and facilities to conductforms and facilities to conduct
transactions for individuals,transactions for individuals,
 including paying bills and submittingincluding paying bills and submitting
official forms on-line such as tax returns.official forms on-line such as tax returns.

E COMMERCE positives
• 1.International marketplace.
• borderless marketplace
• businesses now have access to people all
around the world.
• e-commerce businesses have become virtual
multinational corporations.

• 2.Operational cost savings. The cost of
creating, processing, distributing,
• storing and retrieving paper-based
information has decreased

• 3.Mass customisation.
• The pull-type processing allows for
products and Introduction
• services to be customised to the customer’s
requirements
• Example - customers can configure a car
according to their specifications within
minutes on-line via the www.ford.com
website.

• 4.Enables reduced inventories and
overheads by facilitating ‘pull’-type supply
• chain management – this is based on
collecting the customer order and
• then delivering through JIT (just-in-time)
manufacturing/networking with supplier

• 5. Lower telecommunications cost.
• The Internet is much cheaper than
traditional communication systems

6.Digitisation of products and processes.
Particularly in the case of software
• and music/video products, which can be
downloaded or e-mailed directly
• to customers via the Internet in digital or
electronic format.

7.24/7 working environment-
• Any time business model

8. Level playing ground…….
Cyber space will ease size differences

E- COMMERCEE- COMMERCE
CHALLENGESCHALLENGES
 Shopping style differencesShopping style differences
 Logistics issuesLogistics issues
 FraudsFrauds
 Internet infrastructureInternet infrastructure
 PC penetrationPC penetration
 Privacy issuesPrivacy issues

E COMMERCE SECURITYE COMMERCE SECURITY
OBJECTIVESOBJECTIVES
Reduce system break downReduce system break down
Asset safeguardingAsset safeguarding
Maintain confidentialityMaintain confidentiality
Integrity and reliabilityIntegrity and reliability
Un interrupted serviceUn interrupted service
Comply with LawsComply with Laws
System effectiveness and efficencySystem effectiveness and efficency

SECURITY THREATSSECURITY THREATS
1.EXTERNAL ATTACKS-Denial of Service1.EXTERNAL ATTACKS-Denial of Service
(DOS)(DOS)
2.Intrusion.. Gaining accesss-Pass word2.Intrusion.. Gaining accesss-Pass word
hacking/Social engineering..hacking/Social engineering..
3.Hacking/ Cracking3.Hacking/ Cracking
4.Sniffing networks4.Sniffing networks
5.Introducing Virus5.Introducing Virus

SECURITY MEASURESSECURITY MEASURES
1.Security policies-COVERING HARDWARE/1.Security policies-COVERING HARDWARE/
SOFTWARE/ PEOPLESOFTWARE/ PEOPLE
2. Acccess control systems-Passwaords/Bio metric2. Acccess control systems-Passwaords/Bio metric
systemssystems
3. Fire walls-3. Fire walls-
4Authentication-Digital signatures4Authentication-Digital signatures
5. Encryption5. Encryption
6. Intrusion detection & monitoring software6. Intrusion detection & monitoring software

E COMMERCE FOR MBA STUDENTS

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