Universiti Malaysia Sabah

Universiti Malaysia Sabah

Objectives Chapter 1
Introduction to Electronic Commerce
Differences between e-commerce and traditional commerce Advantages and disadvantages of using e-commerce to conduct business International nature of e-commerce Utilizing value chains The Internet and WWW

Universiti Malaysia Sabah

Universiti Malaysia Sabah

What is Electronic Commerce?

Also known as e-commerce More than on-line shopping Encompasses other business activities Sometimes used interchangeably with Electronic Business but not the same.

Types of e-commerce : EFT and EDI (early ecommerce)

Electronic Funds Transfers (EFT) 30yrs ago Used by the banking industry to exchange account information over secured networks Electronic Data Interchange (EDI) 1960s Used by businesses to transmit data from one business to another

Universiti Malaysia Sabah

Universiti Malaysia Sabah

(B2C) ? Consumer shopping online (B2B) ? Transaction between business on the web (B2G) ? Transaction between business and the government done on the web (C2C) ? Consumer shopping and selling online among other consumers Business Processes

E-commerce Categories:

Traditional Commerce
The exchange of valuable objects or services between at least two parties. Includes all activities that each party undertakes to complete the transaction. Barter System eventually was the starting point for the use of currency.

Universiti Malaysia Sabah

Universiti Malaysia Sabah

Element of Traditional Commerce: The Buyer Side

Element of Traditional Commerce: The Seller Side

Universiti Malaysia Sabah

Universiti Malaysia Sabah

Traditional Commerce Vs Electronic Commerce

Paper Base

Advantages of Electronic Commerce

Increased sales
Reach narrow market segments in geographically dispersed locations Create virtual communities

Decreased costs
Electronic Base

Handling of sales inquiries Providing price quotes Determining product availability

>> Next

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Universiti Malaysia Sabah

Virtual Communities

Price Quotes

<< Back

<< Back

Universiti Malaysia Sabah

Universiti Malaysia Sabah

Disadvantages of Electronic Commerce

Some business are difficult to implement via EC.
Ex: Art, Perishable foods and custom-designed jewelry.

International Electronic Commerce issues:

Language barriers must be overcome Culture Political structures
Currency conversion Tariffs and import/export restrictions

Rapid developing pace of underlying technologies

Example: Programming language (HTML -> XML)
Hardwares (LAN -> Wireless)

Legal, tax, and privacy concerns

Who has jurisdiction to levy taxes? How is personal information handled?

Difficult to calculate return on investment (ROI) Cultural and legal barriers

Universiti Malaysia Sabah

Universiti Malaysia Sabah

Value Chains in Electronic Commerce Value chain is a way of organizing the activities undertaken to design, produce, promote, market, deliver, and support the products or services a business sells.

Value Chains in Electronic Commerce

Value chains of Primary Activities and Support Activities

Universiti Malaysia Sabah

Universiti Malaysia Sabah

Value Chain in EC: [Primary Activities]

Identify customers Design
Market research, customer satisfaction surveys Concept research, engineering, test marketing Vendor selection, quality and timeliness of delivery

Value Chain in EC: [Primary Activities] (Cont..)

Manufacture
Fabrication, assembly, testing, packaging

Market and sell

Advertising, promotion, pricing, monitoring sales and distribution channels

Deliver
Warehousing, materials handling, monitoring timeliness of delivery

Purchase materials and supplies

Provide after-sale service and support

Installation, testing, maintenance, repair, warranty replacement, replacement parts

Universiti Malaysia Sabah

Universiti Malaysia Sabah

Value Chain in EC: [Support Activities]

Finance and administration
Accounting, bill payment, borrowing, regulations, compliance with laws

Role of Value Chains in Electronic Commerce

Reducing costs Improving product quality Reaching new customers or suppliers Creating new ways of selling existing products

Human resources
Recruiting, hiring, training, compensation, benefits

Developing technology
Research, development, improvement studies, maintenance procedures

Universiti Malaysia Sabah

Universiti Malaysia Sabah

The Internet and World Wide Web What is Internet? Is the Internet and World Wide Web the same?
The Internet is a large system of interconnected networks that spans the globe The World Wide Web (WWW) is part of the Internet and allows users to share information with an easy-to-use interface

Universiti Malaysia Sabah

Universiti Malaysia Sabah

The Internet

Origins of the Internet

Developed by the U.S. Department of Defense in the early 1960s with the goal to provide a network for messaging even in war. This communication method then became widely used until researchers at universities developed internet application (ex: emails, newsgroup and search utilites). More Internet history in chapter 2 next week..

The Internet consists of many interconnected networks

Universiti Malaysia Sabah

Universiti Malaysia Sabah

New Uses for the Internet

E-mail
The ability to send messages to one or many across the Internet

New Uses for the Internet

World Wide Web (WWW)
The ability to access information using a common interface

File Transfer Protocol (FTP)

The ability to transfer data files from one computer to another

Videoconferencing
The ability to use video across the Internet for conferencing purposes

Telnet
The ability to remotely logon to another computer

Multimedia
The ability to use video, audio, and animations across the Internet

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THE END