Assignment # 1
1. Electronic Commerce Definition
Electronic commerce, commonly written as e-commerce, is the trading in products or services using computer networks, such as the Internet. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction's life cycle, although it may also use other technologies such as e-mail.
E-commerce businesses may employ some or all of the following:
- Online shopping web sites for retail sales direct to consumers
- Providing or participating in online marketplaces, which process third-party business-to-consumer or consumer-to-consumer sales
- Business-to-business buying and selling
- Gathering and using demographic data through web contacts and social media
- Business-to-business electronic data interchange
- Marketing to prospective and established customers by e-mail or fax (for example, with newsletters)
- Engaging in pretail for launching new products and services
2. Electronic Commerce Category
Business-to-Business (B2B) e-commerce encompasses all electronic transactions of goods or services conducted between companies. Producers and traditional commerce wholesalers typically operate with this type of electronic commerce.
2. Business-to-Consumer (B2C)
The Business-to-Consumer type of e-commerce is distinguished by the establishment of electronic business relationships between businesses and final consumers. It corresponds to the retail section of e-commerce, where traditional retail trade normally operates.
These types of relationships can be easier and more dynamic, but also more sporadic or discontinued. This type of commerce has developed greatly, due to the advent of the web, and there are already many virtual stores and malls on the Internet, which sell all kinds of consumer goods, such as computers, software, books, shoes, cars, food, financial products, digital publications, etc.
When compared to buying retail in traditional commerce, the consumer usually has more information available in terms of informative content and there is also a widespread idea that you’ll be buying cheaper, without jeopardizing an equally personalized customer service, as well as ensuring quick processing and delivery of your order.
3. Consumer-to-Consumer (C2C)
Consumer-to-Consumer (C2C) type e-commerce encompasses all electronic transactions of goods or services conducted between consumers. Generally, these transactions are conducted through a third party, which provides the online platform where the transactions are actually carried out.
4. Consumer-to-Business (C2B)
In C2B there is a complete reversal of the traditional sense of exchanging goods. This type of e-commerce is very common in crowdsourcing based projects. A large number of individuals make their services or products available for purchase for companies seeking precisely these types of services or products.
Examples of such practices are the sites where designers present several proposals for a company logo and where only one of them is selected and effectively purchased. Another platform that is very common in this type of commerce are the markets that sell royalty-free photographs, images, media and design elements, such as iStockphoto.
5. Business-to-Administration (B2A)
This part of e-commerce encompasses all transactions conducted online between companies and public administration. This is an area that involves a large amount and a variety of services, particularly in areas such as fiscal, social security, employment, legal documents and registers, etc. These types of services have increased considerably in recent years with investments made in e-government.
6. Consumer-to-Administration (C2A)
The Consumer-to-Administration model encompasses all electronic transactions conducted between individuals and public administration.
- Internet Commerce Broad term covering all commercial activity on the internet, including auctioning, placing orders, making payments, transferring funds, and collaborating with trading partners. Internet commerce is not a synonym for electronic commerce (e-commerce) but one of its subsets.
- Electronic Data Interchange (EDI) is the electronic interchange of business information using a standardized format; a process which allows one company to send information to another company electronically rather than with paper. Business entities conducting business electronically are called trading partners.
- Electronic markets (or electronic marketplaces) are information systems (IS) which are used by multiple separate organizational entities within one or among multiple tiers in economic value chains. In analogy to the market concept which can be viewed from a macroeconomic (describing relationships among actors in an economic systems, e.g. amonopoly) as well as from a microeconomic (describing different allocation mechanisms, e.g. public auctions of telephone frequencies) perspective, electronic markets denote networked forms of business with many possible configurations
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| BloomIdea |
Advantage of E commerce
- Faster buying/selling procedure, as well as easy to find products.
- Buying/selling 24/7.
- More reach to customers, there is no theoretical geographic limitations.
- Low operational costs and better quality of services.
- No need of physical company set-ups.
- Easy to start and manage a business.
- Customers can easily select products from different providers without moving around physically.
- Any one, good or bad, can easily start a business. And there are many bad sites which eat up customers’ money.
- There is no guarantee of product quality.
- Mechanical failures can cause unpredictable effects on the total processes.
- As there is minimum chance of direct customer to company interactions, customer loyalty is always on a check.
- There are many hackers who look for opportunities, and thus an e commerce site, service, payment gateways, all are always prone to attack.
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| EsalesTrack |
5. Threat of Electronic Commerce
Management Issues
One of the greatest internal threats to an e-commerce website is poor management. If management is not committed to ensuring security and providing budgets for purchasing antivirus software licenses and for keeping the internal networks robust, the e-commerce website is vulnerable to attack. Any internal systems to which it is connected are also vulnerable. Ideally, management should commit to regular IT security audits of the system to ensure that security is optimized and any potential problems are prevented or handled as soon as they occur. In smaller businesses, management may have other priorities and leave the e-commerce site vulnerable by default.
Fraud Exposure
An e-commerce website is vulnerable to fraud from both internal and external sources. Fraudulent activities include credit card fraud, which exposes the site to threat from customers and external sources, and internal fraud, such as fraudulent transactions being entered into the system from the back-end by rogue employees. Fraudulent transactions can also be introduced into the system by hackers or Trojan horses, with such fraudulent transactions appearing identical to real customers' transactions.
Security Issues
E-commerce security issues relate to the internal business network and the interface between the customer’s transactions and the network. Hackers pose a threat to the security of the network with denial of service attacks, which can overwhelm a site and knock it offline or theft of customer personal financial information when they gain access to internal systems via an e-commerce website's vulnerabilities. These threats can be mitigated by using a firewall between the website and the internal network, and by encrypting the transactional data in such a way that prevents decoding.
Virus Attacks
Computer viruses and malicious software are some of the biggest threats to an e-commerce website. Viruses originate from external sources and can corrupt files if introduced into the internal network. They can completely halt or destroy a computer system and disrupt the operations of the website. Malicious software such as Trojan horses or worm-type viruses pose an even greater threat as they can destroy or capture information on the client side before any encryption software can take effect. They can also impersonate customers and pass bad or malicious codes into the server running the website, where it becomes an internal problem.
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6. Features of Electronic Commerce
There are 8 unique features of e-commerce:
1. Ubiquity: Because E-Commerce is ubiquitous, the market is able to extend its traditional operating hours. Online the stores never close, it is available everywhere at anytime. Ubiquity lowers transaction costs for the consumer/buyer.
2. Global Reach: Global Reach is a great feature of e-commerce. It takes the marketplace to market space. E-commerce extends local markets to global markets. The Internet and Web sites allow international visitors all over the globe to access company Web sites, purchase products and make business interactions. Ecommerce technology permits commercial transactions to cross cultural and national boundaries far more conveniently and cost effectively than is true in traditional commerce [3] ecommerce technologies enable a business to easily reach across geographic boundaries.
3. Universal Standards: Universal Standards are standards shared by the world. To use E-Commerce features, Individuals, businesses and governments only use one set of technological, media and Internet standards. So universal standards help simplify interactions. Universal standards can greatly influence market entry costs. Consider the cost of setting up a virtual, web-based store, verses a real store. Universal standard benefits have forced traditional businesses into improving on their customer service.
4. Information Richness: Advertising and branding are an important part of commerce. E Commerce can deliver video, audio, animation, etc. to introduce products. Individual may see information richness if a post contains a video related to a product and hyperlinks that allow him to look at or purchase the product and send information about the post via text message or email.
5. Interactivity: Consumer can interact with the content. The Web offers a two way communication process which was not afforded through traditional mediums such as newspapers, magazines, radio and television. The Web allows consumers to control what information will be presented, in what order, and for how long. A Web site can be categorized according to the control of the consumer over the communication process; therefore, different levels of interactivity may be found [4]. E-commerce can collect information from consumers more easily and efficiently with forms and surveys
6. Information density: The total amount and quality of information available to all market participants . The e-commerce technology reduces information costs and raises the quality of information. It makes information accurate, inexpensive and plentiful.
7. Personalization and Customization: Technologies within E-Commerce allow for the personalization and customization of marketing messages groups or individuals receives. Personalization and Customization are tailoring messages and products to consumers based on their preferences. Websites like MSN let you customize your homepage to all the information you want and they also place advertising on your page based on your preferences.
8. User-Generated Content: Social networks use E-Commerce technologies to allow members, the general public, to share content with the worldwide community. Consequently, consumers with accounts can share personal and commercial information to promote a product or service.
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