THE ROLE OF E-COMMERCE

IN BUSINESS

By:
Dhifa Apriliana Rosadi
NIM: 185030207141005

Brawijaya University
Faculty of Administrative Science
MALANG
2018
 PREFACE

Thanks to Allah SWT who has given the bless to the writer for finishing
The Introduction of Bussiness paper assignment entitled “The Role of e-
commerce in business”
The writer also wish to express his deep and sincere gratitude for those
who have guided in completing this paper. This paper contains some
information about the process of making decisions in organizations.
Hopefully, this paper can help the readers to expand their knowledge about
making decisions.

Malang, 9th May 2019

Dhifa Apriliana Rosadi

2
 TABLE OF CONTENTS

COVER............................................................................................... 1

PREFACE.......................................................................................... 2

TABLE OF CONTENTS.................................................................. 3

CHAPTER I: INTRODUCTION

1.1 Background.................................................................................... 4

1.2 Formulation of the Problem........................................................... 4

1.3 Objective of the Research.............................................................. 5

CHAPTER II: RESULT AND DISCUSSION

2.1 The Definition of e-commerce...................................................... 6

2.2 The Types of e-commerce Model of business.............................. 7

2.3 The Impact of e-commerce in business ....................................... 8

2.3 The Benefits of e-commerce in business...................................... 9

2.4 The Barriers of e-commerce in business..................................... 11

CHAPTER III: CLOSURE

3.1 Conclusion.................................................................................. 12

3.2 Suggestion.................................................................................. 12

BIBLIOGRAPHY.......................................................................... 13

3
 CHAPTER I
INTRODUCTION

1.1. Background
Today's world is a world of IT, BT and Beauty. In the age of
Globalization, tremendous progress in science and technology has brought
changes in to the world of trade, commerce,banking & marketing. Electronic
commerce expands the marketplace to national and international markets. E-
Commerce is the process of buying and selling or exchanging of product,
services and information via computer networks including the internet. It is
the application of technology toward the automation of business transaction
and work flow. It is the delivery of information; Products, Services, or
payments over telephone lines, computer network, or ant other electronic
means. It is a tool that addresses that desire of firms, consumers and
management to cut service costs while improving the speed of service
delivery. E-commerce has revolutionized business, changing the shape of
competition with internet (The NET), the computer communication network
creating a e-commerce market place for consumers and business . With
developments in the Internet and Web-based technologies, distinctions
between traditional markets and the global electronic marketplace-such as
business capital size, among others-are gradually being narrowed down.

1.2.Formulation of the problem

from that background we can take the formulation of the problems are:
1. What is the definition of e-commerce?
2. What are the types of e-commerce models of business?
3. What is the impact of e-commerce on business?
4. What is the benefits of e-commerce to business, consumers, and
society?
5. What are the barriers of e-commerce?

4
1.3.Objective of the Research
from that background we can take the purpose of this paper are:
categories of decisions
1. To find out the definition of e-commerce
2. To find out the types of e-commerce models
3. To find out the impact of e-commerce in business
4. To find out the benefits of e-commerce to business, consumers, and
society
5. To find out the barriers of e-commerce on business

5
 CHAPTER II
RESULT AND DISCUSSION

2.1. The Definition of E-commerce

Electronic commerce or e-commerce refers to a wide range of online
business activities for products and services. It also pertains to "any form of
business transaction in which the parties interact electronically rather than by
physical exchanges or direct physical contact. E-commerce is usually
associated with buying and selling over the Internet, or conducting any
transaction involving the transfer of ownership or rights to use goods or
services through a computer-mediated network. Though popular, this
definition is not comprehensive enough to capture recent developments in this
new and revolutionary business phenomenon. A more complete definition is
E-commerce is the use of electronic communications and digital information
processing technology in business transactions to create, transform, and
redefine relationships for value creation between or among organizations, and
between organizations and individuals
Is e-commerce the same as e-business? While 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 (transactions between and among
firms/organizations) and in business-to-consumer transactions (transactions
between firms/organizations and individuals). In e-business, on the other
hand, ICT is used to enhance one's business. It includes any process that a
business organization (either a for-profit, governmental or a non-profit entity)
conducts over a computer-mediated network. A more comprehensive
definition of e-business is "The transformation of an organization's processes
to deliver additional customer value through the application of technologies,
philosophies and computing paradigm of the new economy." E-business is
more general term than e-commerce, because every business transaction
finally is involved in selling or buying products or services. And the term of
e-commerce is more widespread than the term e-business.

6
2.2. The types of E-commerce models
Creating an e-commerce solution mainly involves creating and deploying
an e- commerce site. The first step in the development of an e-commerce site
is to identify the e- commerce model. Depending on the parties involved in
the transaction, e-commerce can be classified into main 4 models.

1. Business-to-Business (B2B) Model

B2B e-commerce is simply defined as e-commerce between
companies. Business that sells products or provides services to other
businesses. About 80% of e-commerce is of this type, and most
experts predict that B2B ecommerce will continue to grow faster than
the B2C segment. B2B model involves electronic transactions for
ordering, purchasing, as well as other administrative tasks between
houses. It includes trading goods, such as business subscriptions,
professional services, manufacturing, and wholesale dealings.
2. Business-to-Consumer (B2C) Model
Business that sell product or provides services to end-user
consumer. These sites display product information in an online
catalog and store it in a database and it also includes services online
banking, travel services, and health information, e-book. The B2C
model of e-commerce is more prone to the security threats because
individual consumers provide their personal information on the site of
a business organization. B2C reduces transactions costs by increasing
consumer access to information and allowing consumers to find the
most competitive price for a product or service.
3. Consumer-toConsumer (C2C)
C2C is simply commerce between private individuals or
consumers. a consumer sells directly toanother consumer. This type
of e-commerce is characterized by the growth of electronic
marketplaces and online auctions, particularly in vertical industries
where firms/businesses can bid for what they want from among
multiple suppliers. Online auction Web sites that provide a consumer
to advertise and sell their products online to another consumer

7
 4. Consumer-to-Business (C2B)
C2B model involves a transaction that is conducted between a
consumer and a businessorganization. It is similar to the B2C model,
however, the difference is that in this case theconsumer is the seller
and the business organization is the buyer. In this kind of a
transaction, theconsumers decide the price of a particular product
rather than the supplier. This category includesindividuals who sell
products and services to organizations.

The various models in the E-Governance scenario are:

 Government-to-Government (G2G) model: transactions between 2

governments. For example, if the Indian government wants to by oil
from the Arabian government.
 Government-to-Consumer (G2C) model: the government transact
with a consumer. For example, a government can enforce laws
pertaining to tax payments on individual consumers over the Internet
 Consumer-to-Government (C2G) model: an individual consumer
interactswith the government. For example, a consumer can pay his
income tax or house tax online.
 Government-to-Business (G2B) model: transactions between a
government and business organizations. For example, the government
plans to build a flyover. For this, the government requests for tenders
from various contractors.
 Business-to-Government (B2G) model: the business houses
transact with the government over the Internet. For example, similar
to an individual consumer,business houses can also pay their taxes on
the Internet.

2.3. The Impact of e-commerce on Business

E-Commerce and E-Business are not solely the Internet, websites or
companies. It is about a new business concept that incorporates all previous
business management and economic concepts. As such, E-Business and E-

8
 Commerce impact on many areas of business and disciplines of business
management studies.

 Management Information Systems – Analysis, design and

implementation of e-business systems within an organization; issues
of integration of front-end and back-end systems
 Human Resource Management – Issues of online recruiting, home
working and ‘Intrapreneurs’ works on a project by project basis
replacing permanent employees.
 Finance and Accounting –issues of transaction costs; accounting
and auditing implications where ‘intangible’ assets and human capital
must be tangibly valued in an increasingly knowledge based
economy.
 Economics –The impact of e-commerce on local and global
economies; understanding the concepts of a digital and knowledge-
based economy and how this fits into economic theory
 Production and Operations Management –The impact of online
processing has led to reduced cycle times. Production systems are
integrated with finance marketing and other functional systems as
well as with business partners and customers.
 Marketing – Issues of online advertising, marketing strategies and
consumer behavior and cultures. One of the areas in which it impacts
particularly is direct marketing.
 Computer Sciences – Development of different network, computing
technologies and languages to support e-commerce and e-business.
 Business Law and Ethics – The different legal and ethical issues that
have arisen as a result of aglobal ‘virtual’ market issues.

2.4. The Benefits of E-commerce to Business, Consumers and Society

Benefits of e-commerce to Business

 International Marketplace - a single physical marketplace located in a

geographical area has now become a borderless marketplace including
national and international markets.

9
 Operational Cost Savings - The cost of creating, processing,
distributing,storing and retrieving paper-based information has decreased.
 Mass Customization - E-commerce has revolutionized the way
consumers buy goods and services. The processing allows for products
and services to be customized to the customer’s requirements.
 Lower Telecommunications Cost - The Internet is much cheaper than
valueadded networks (VANs) which were based on leasing telephone
lines for thesole use of the organization and its authorized partners.
 Digitization of Products and Processes - Particularly in the case of
softwareand music/video products, this can be downloaded or e-mailed
directly to customers via the Internet in digital or electronic format.
 No more 24-hour-time Constraints - Businesses can be contacted by
orcontact customers or suppliers at any time.

Benefits of E-Commerce to Consumers

 24/7Access-Enables customers to shop or conduct other transactions 24

hours a day, all year round from almost any location.
 More Choices - Customers not only have a whole range of products
thatthey can choose from and customize, but also an international
selection of suppliers.
 Price Comparisons - Customers can ‘shop’ around the world and
conduct comparisons on the price.
 Improved Delivery Processes - This can range from the immediate
delivery of digitized or electronic goods such as software or audio-visual
files by downloading via the Internet, to the online tracking of the
progress of packages being delivered by mail or courier.
 An Environment of Competition - Where substantial discounts can be
foundor value added, as different retailers vie for customers.

Benefits of E-Commerce to Society

 Enables more Flexible Working Practices -This enhances the quality

of life for a whole host of people in society, enabling them to work from

10
 home. Notonly is this more convenient and provides happier and less
stressful working environments.
 Connects People - Enables people in developing countries and rural are
as to enjoy and access products, services, information and other people
whichotherwise would not be so easily available to them.
 Facilitates Delivery of Public Services - For example, health services
available over the Internet and filing taxes over the Internet.

2.5. The Barriers of e-commerce

The drivers of e-commerce were identified and summarized there are
barriers to the growth and development of e-commerce. The issues that are
relevant to one organization may not be relevant to another. Overall, it is
have similar barriers but with different emphases for discuss as follows:

 Commercial Infrastructure - Relates to issues such as international

trade agreements, taxation laws and other legal agreements that
facilitate all kinds of on-line trading and so is a barrier relevant to all
types of businesses.
 Technology Infrastructure - Deals with issues of standardization of
systems and applications, which is a particular concern for larger
organizations who want to implement solutions such as value chain
integration and e-supply chain management.
 Internet Infrastructure - Deals with issues such as availability and
quality of the Internet in terms of speed and reliability. This barrier is
of particular concern to Business to Consumer organizations, since
their business relies more on general consumers, and so the ease with
which the general public can connect to the Internet has a direct
impact on their Web-based business.
 Security - In its broadest term is one of the most significant barriers
toe-commerce both within the organization and external to it.
 Lack of Qualified Personnel- This is a particularly strong concern
because internally they do not have sufficient resources to attract and
maintain their own support staff to develop a sophisticated
technology infrastructure.

11
 CHAPTER III

CLOSURE

3.1 Conlusion
E-commerce is the use of electronic communications and digital
information processing technology in business transactions to create,
transform, and redefine relationships for value creation between or among
organizations, and between organizations and individuals, in the other hand e-
business is The transformation of an organization's processes to deliver
additional customer value through the application of technologies, philosophies
and computing paradigm of the new economy. E-business is more general term
than e-commerce, because every business transaction finally is involved in
selling or buying products or services. And the term of e-commerce is more
widespread than the term e-business. Creating an e-commerce solution mainly
involves creating and deploying an e- commerce site, that is by identify the
model and it is depending on the parties involved in the transaction. All of the
transaction that happening is giving an impacts on business works and benefits
that show in the process of e-commerce.

3.2 Suggestion
E-commerce is nothing bad but usefull in our daily life (in organization
nor individuals), but we still have to be a wise consumer in terms of using that.

12
 BIBLIOGRAPHY

Coward, Chris. 2002. Obstacles to Developing an Offshore IT-Enabled

Services. Australia: Scibe.

Cronin, Mary J.1998. Banking and Finance on the Internet. U.S.A.: John
Wiley & Sons.

Whitley, David. 2004. ‘E-Commerce’. New Delhi: Tata Mcgraw Hill

Publication.

J.Suresh Reddy, ‘Impact of E-Commerce on Marketing’ Indian Journal of

Marketing. Vol. - XXXIII No. 5 May 2003.

Kutz, Matin. 2016. Introduction to E-Commerce: Combining Business and

Information Technology. London: bookboon.com

13