UNIT-III:CONSUMER ORIENTED E-COMMERCE APPLICATIONS: Introduction - Mercantile Process Model: Consumers Perspective and Merchant’s Perspective - Electronic Payment Systems: Legal Issues & Digital Currency - E-Cash & E-Cheque - Electronic Fund Transfer (EFT) - Advantages and Risks - Digital Token-Based E-Payment System - Smart Cards.
UNIT-IV:ELECTRONIC DATA INTERCHANGE: Introduction - EDI Standards - Types of EDI - EDI Applications in Business – Legal - Security and Privacy issues if EDI - EDI and E-Commerce - EDI Software Implementation.
Unit-1
Q1). Define E-Commerce. Explain its advantages and limitations? Or Give some potential benefits of E-commerce.?
Ans:
Definition of E-Commerce:
The
term “Electronic Commerce” can be defined as:
“The
use of electronic
transmission medium (
telecommunications ) to
engage in the
exchange including buying and selling of products and
services requiring transportation either physically or
digitally from location
to location”.
(OR)
Electronic commerce (e-commerce) describes the buying, selling, and exchanging of products, services, and information by using Internet.
Advantages of E-Commerce :
E-Commerce
advantages can be broadly classified into three major categories:
I.
Advantages to Organizations
II.
Advantages to Consumers
III. Advantages to Society
I)
Advantages to Organizations:
Using
E-Commerce, organization can
expand their market
to national and
international markets with
minimum capital investment.
- E-commerce improves the brand image of the company.
- E-commerce helps organization to provide better
customer services.
- E-Commerce
helps to simplify
the business processes and
make them faster and efficient.
- Lowers telecommunications costs
- Helps small businesses compete against large companies.
Advantages to Customers:
Provides less expensive products and
services by allowing consumers to conduct quick online comparisons.
- Gives consumers more choices and quick delivery of
products
- Enables customers to shop 24 hours a day, from almost
any location.
- Delivers relevant and detailed information in seconds.
- Makes it
possible for people to work and study at home.
- Allows
consumers to interact in electronic communities and to exchange ideas and
compare experiences.
Advantages
to Society:
Customers need
not to travel
to shop a
product thus less
traffic on road
and low air pollution.
- E-Commerce
helps reducing cost of products so more number of people can purchase
products.
- E-Commerce has
enabled access to
services and products
to rural areas
as well which are otherwise not available to them.
- E-Commerce helps government to deliver public services like healthcare, education, social services at reduced cost and in improved way.
Limitations of E-Commerce:
Technical
Limitations:
- There can be lack of system security, reliability or
standards.
- Software development industry is still evolving and
keeps changing rapidly.
- In many countries, there is an insufficient
telecommunication bandwidth available.
- Special types of web server or other software might be
required by the vendor
- Sometimes, it becomes difficult to integrate E-Commerce
software or website with the existing application or databases.
- There could be software/hardware compatibility issue
Non-Technical Limitations:
- Initial cost: The
cost of creating
/ building E-Commerce application in-house may be
very high.
- User
resistance: User may not
trust the site being unknown faceless seller.
Such
doubt makes it difficult to attract users to online/virtual stores.
- Security /
Privacy: Difficult to
ensure security or
privacy on online transactions.
- Lack of touch or feel of products during online
shopping.
- E-Commerce applications are still evolving and changing
rapidly.
Internet access may not available for many customers living in remote villages.
Q2). Define E-Business.?
Ans:
E-Business:
E-Business refers to, not just buying and selling, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organization.
Though, some use E-Commerce and
e-business interchangeably, they are distinct concepts. In E-Commerce,
information and communications technology (ICT) is used in inter-business or inter
organizational transactions and in business-to consumer transactions .
In e-business, on the other hand, ICT
is used to enhance one’s business. It includes any process that a business
organization conducts over a computer-mediated network.
Three primary processes enhanced in e-business
are:
1. Production processes: These
processes include procurement, ordering and replenishment of stocks, processing
of payments and electronic links with suppliers and production control
processes etc.
2. Customer-focused processes: These
processes focus on promotional and marketing efforts, selling over the
Internet, processing of customers’ purchase orders and payments, and customer
support etc.
3. Internal management processes: These
processes include employee services, training, internal information-sharing,
video conferencing, and recruiting etc.
E-Commerce is about much more than
buying, selling and marketing. It impacts significantly on all the functional
areas of business models for improving efficiency and performance.
Introduction
of electronic based transactions in the business showed significant impact on
already existing traditional business models
· Q3). Explain impact of E-Commerce on traditional business models?
Ans:
The
impacts of E-Commerce on traditional business models
The
following are the key impacts of E-Commerce on traditional business models:
1.
Impacts of E-Commerce on Marketing
(a)
Marketing strategy has become increasingly effective which is easier to
reach markets online.
(b)
Product life cycles are shortened by eliminating lot of manual process.
(c)
Digital promotion is used to great extent to track effectiveness of promotion.
(d)
Multiple distribution channels are used by brands and retailers to reach the
customers effectively.
(e) Dynamic pricing is used to maximise revenues.
2.
Impacts of E-Commerce on Human Resource Management
(a) Employees need to have a broader range of
digital skills .
(b)
Workforce planning to support highly seasonal demand
(c) Increased use of automation in E-Commerce changes the workforce needs.
3.
Impacts of E-Commerce on Operations
(a)
Logistics behind large-scale E-Commerce platforms are complex.
(b)
Economies of scale are becoming increasingly important.
(d) It is now relatively easy for smaller firms to sell online; sophisticated E-Commerce software is widely available.
4.
Impacts of E-Commerce on Finance
(a)
Significant investment required to set-up E-Commerce platforms and to integrate
them with other systems.
(b)
E-Commerce likely to involve greater use of multi-currency transactions.
(c) Significant financial systems are used to balance tax systems of different nations as E-Commerce is a global business.
E-Commerce
Business Strategy Models:
Though
many business strategy models are used worldwide, two popular models are
discussed here. They are
1.
ICDT Business Model
2. Three pillars of E Commerce Model
Q4). Discuss about the ICDT Model. (OR ) Discuss about angehrn’s Model.?
Ans:
1. ICDT Business Model
ICDT business model is proposed by
Albert Angehrn and is used as a systematic framework to guide the companies for
building their business on Internet.
ICDT business model takes its name from
the four virtual spaces .
The four virtual spaces are
1. Virtual Information Space (VIS)
2. Virtual Communication Space (VCS)
3. Virtual Distribution Space (VDS)
4. Virtual Transaction Space (VTS)
1. Virtual Information Space (VIS)
a) This space is where a firm displays
information about their organization, products, or services.
b) This space is the easiest space for
a business to enter
E-commerce major concerns are:
- The information that it displays is accurate and
current.
- The information that it displays is only viewed
by authorized users.
- Customers can easily find the site.
- The site accessible without long unit times.
. Virtual Communication Space (VCS)
This space is used to enable relationship building, negotiations and exchange of ideas such as chat room, virtual communities , forums etc.
3. Virtual Distribution Space (VDS)
This space is used to deliver the product or services purchased by the consumer. For virtual delivery to occur , the products being delivered must be digital or the service performed digitally (ex – online broker).
E-Commerce major concerns are:
- Delivery of products and services to legitimate
customers only.
- Reliable delivery of product and services.
4. Virtual Transaction
Space:
This space is used to initiate and execute the sales order /transactions. A part from those companies engage in virtual distribution space, most companies were not interested to enter this space.
The major problem here is ‘data
security’.
E-Commerce major concerns are:
- security over data
- Accuracy and integrity of processing data methods.
- Privacy concerns by customers.
Q5).
Explain the three pillars of Electronic Commerce Model.
Ans:
Three Pillars of Electronic Commerce
model
.
This model was proposed by ‘Peter Finger’.
The Three Pillars of Electronic
Commerce model are:
(I)
Electronic Information Pillar
(II)
Electronic Relationships Pillar
(III) Electronic Transactions Pillar
Thus this model builds on existing market space and utilizes electronic mechanism as an enabler of supporting open market processes.
The
first pillar i.e.
Electronic information Pillar is similar to angrehn’s virtual information space. Constructing an electronic information pillar is easy. Most of the word processing software packages will easily convert documents into a web readable format. The challenge is to construct a good, sold pillar that does not freeze up or do not lead a visitor to a dead end.
The second pillar i.e.
Electronic Relationships Pillar is the central pillar and is similar to angrehn’s virtual communication space. This pillar is about building a site that has the feeling of being a part of entry into an Electronic community. In order to attract users again and again to a site it must be innovative, it must provide information and interaction not otherwise available.
The third pillar i.e.
Electronic Transactions pillar is similar to angrehn’s Virtual Transaction Space and also include angrehn’s Virtual distribution space. Many business have built an electronic information pillar and some have but or are building an electronic community pillar and fewer have constructed electronic transactions pillar.
The two hurdles to construct this
pillar are the ability to engage in meaningful and sufficient negotiation
process and security of transaction data.
The following figure illustrates the
Three pillars of e-commerce model:
Q6). Explain the classification of E-Commerce. (OR) Explain the types of E-Commerce.
Ans:
Classification of E-Commerce (OR)
Types of E-Commerce :
By the nature of the transactions, E-Commerce applications can be classified into the following:
Business-to-Business EC (B2B): In which two or more businesses make transactions or collaborate electronically. B2B is the major type of electronic commerce.
Business-to-consumers (B2C): In this case the sellers are organizations, the buyers are individuals. These are retailing transactions with individual shoppers.
Consumer-to-consumer (C2C): In this case an individual sells products (or services) to other individuals. Here consumers sell directly to consumers. Examples are individual selling of residential property, cars etc.
Intra-Business (intra-organizational) commerce: In this case an organization uses E-Commerce internally to improve its operations. A special case of this is known as B2E (business to its employees)
Non-Business E-Commerce: In this case non business institutions such as academic institutions, social organization activities usually performed on intranets that involves exchange of information , goods and services.
Government-to-citizens (G2C) and to others: In this case the government provides services to its citizens via E-Commerce technologies. Governments can do business with other governments (G2G) as well as with businesses (G2B).
Q7). Explain about the E-Commerce applications.
Ans:
E-Commerce Applications:
1.Entertainment: Home entertainment is an application area of e-commerce. Entertainment services are expected to play a major role in e-commerce. For example Movie on Demand. A customer wishes to watch a movie. Then he/she browses through an online catalog to select a movie. After selecting a movie, the cost of the movie might be paid online. Then the distributor transfers the movie to the customer.
The online gaming services industry offers on-demand gaming services such as Sega channel. Gaming is expected to be a successful application that is gaining popularity among adults and children. In the home entertainment area, the key element is the idea of customer control over programming. Entertainment on-demand is expected to give each viewer total control over what, when and where to watch.
|
2.EMarketing: |
Any marketing activity that is conducted online through the use of internet technologies is known as Electronic Marketing. It is also known as online marketing or internet marketing.
It not only includes advertising that is shown on websites, but other kinds of online activities like email and social networking. Every aspect of E- marketing is digital. It means that it is electronic information that is transmitted on a computer or similar device
Advantages of E-Marketing:
E-Marketing has many advantages. Some of them are:
Global Reach: The use of Internet for E-marketing eliminates the geographical boundaries.
Easy Marketing: Consumers can easily acquire product knowledge and compare products in the global market.
Economics: E-Marketing saves the money to be spent on printing catalogs, brochures and other promotional material in traditional method.
Dynamic Content: It allows the immediate change of content, add new products and services in adynamic fashion.
More Attractive:E-Marketing uses GUI environment. It provides product information with the help of graphics and animations.
Disadvantages of E-Marketing:
- Lack of personal approach
- Dependence on technology
- Security, Privacy issues
- Maintenance Costs
- Worldwide competition
3)E-Advertising: It is also
known as online advertising it is a form of promotion that uses internet and
world wide web to deliver marketing messages to attracts customers. Example:
Banner ads, Social network advertising, online classified advertising etc.
The growth of these particular media
attracts the attention of advertisers as a more productive source to bring in
consumers.
An online advertisement also offers
various forms of animation.
The term online advertisement comprises all sorts of banner advertisement, email advertising, in game advertising and key soon.
4) E-Banking Or Internet Banking: Means any user with a personal computer and browser can get connected to his banks, website to perform any of the banking functions. In internet banking system the bank has a centralized data base i.e., web-enabled.
Best example for E-Banking is ATM.
An ATM is an electronic fund transfer
terminal capable of handling cash deposits, transfer between ALCS, Balance
enquiries, cash withdrawals, and pay bills.
SERVICES THROUGH E-BANKING:
• Bill payment service.
• Fund Transfer
• Investing through internet Banking
• Shopping
Customers should never share personal
information’s like pin nos., passwords, etc., with any one.
Through internet banking, you can check your transactions at any time of the day, and as many times as you want.
5) Mobile-Commerce: Mobile
Commerce also known as M-Commerce, is the ability to conduct, commerce as a
mobile device, such as mobile phone.
SERVICES ARE:
1. Mobile ticketing
2. Mobile Vouchers, Coupons and
3. Mobile contract purchase and
delivery mainly consumes of the sale of ring tones, wallpapers and games of
mobile phones.
4. Local base services
Local discount offers
Local weather
5. Information services
·
News
·
Sports, Scores
6.MOBILE BANKING: Banks and other
financial institutions used mobile commerce to allow their customers to assess
account information and make transactions, such as purchasing, withdrawals
etc.,
7. MOBILE BROWSING: Using a mobile browser- A www browser on mobile device customers can shop online without having to be at their personal computer.
6) E-Learning: E-Learning comprises all forms of electronically supported learning and teaching.E-Learning is essentially the computer and network-enabled transfer of skills and knowledge. E-Learning applications and processes include web-based learning, computer-based learning.Content is delivered via. The internet, intranet/extranet, audio, or video tape, satellite TV, and ED-ROM. Computer-Based Learning, sometimes abbreviated to CBL, refers to the use of computers as a key component of the education environment. E-Learning is naturally suited to distance and flexible learning, but can also be used conjunction with face-to-face teaching. E-Learning can also refer to the educational website such as those offering learning scenarios worst and interactive exercises for children. Communication technologies are used in E-Learning. A learning management system (LMS) is software used for delivering, tracking, and managing training /education.
7) E- Shopping:-
E-shopping is the process where by consumer directly buy goods or services from a sell in real time, without an intermediary services over the internet .it is a form of E-commerce. An online shop, e-shop, e-store, internet shop web shop, web store, online store, or virtual shop evokes the physical analogy of buying products or services in a shopping center. The process is called business-to-consumer (B2C) online shopping. When a business buys from another business it is called business-to-business (B2B) online shopping. In order to shop online, one must be able to have access to a computer, a bank account and debit card. Online shopping widened the target audience to men and women of the middle class. Online shoppers commonly use credit card to make payments , however some systems enable users to create accounts and pay by alternative means ,such as
1. Billing to mobile phones and
landline.
2. Cheque.
3. Debit cards.
4. Gift cards
5. Postal money order.
Online stores are usually available 24 hours a day, and many consumers have internet access both at work and at home. Online stores must describe products for sale with text, phones, and multimedia files .One advantage of shopping online is being able to quickly seek out deals for items or services with many different vendors. Another major advantage for retailers is the ability to rapidly switch suppliers and vendors without disrupting users shopping experience.
8) Search Engine:-
A web search engine is designed to search for information on the WWW and FTP servers. The search results are generally presented in list of result and are often called hits. The information may consist of web pages, images, information, and other types of files. Some search engines also mine data available in database or open directories. Search engines work by storing information about many web pages, which they retrieve from the HTML it self.
When a user enters a query into a
search engine (typically by using keywords), the engine examines its index and
provides a listing of best matching according to its criteria.
Most search engines support the use of Boolean operator AND, OR, and NOT.Some search engines, such as GOOGLE, store all or part of the source page as well as information about the web pages.
9) E-Trading:-
An E-trading community provides participants with a structured method for trading bantering (exchanging goods with goods) or selling goods and services. These communities often have forums and chat rooms, designed to facilitate communication between the members.A formal trading community consists of a website or network of websites that facilitates and track made transactions.While trading any used items online, be sure to include the condition and quality of the product so as the receiver can determine its overall value.A trading circle is a form of online trading design to facilitate viewing of television series and episode media.
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