INFORMATION SYSTEM.

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Week 9

E - Business and E - Commerce

ISYS 111

Fundamentals of Business Information Systems

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Why are we doing this?

By completing the activities in this week, you should be able to:

1. Describe the six common types of electronic commerce.

2. Describe and give examples of the various e-tailing and online services

of B2C e-commerce.

3. Describe and give examples of the three business models for B2B

ecommerce.

4. Identify the ethical and legal issues related to e-commerce

5. Demonstrate the practical database skill to create basic queries

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Essential Question

What is e-commerce and how does it work?

• What is commerce?

• Have you participated in any e-commerce activities?

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E-Commerce

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Definitions and concepts

Electronic commerce (e-commerce, EC) • Buying, selling, transferring, or exchanging of products, services, or information via

computer networks, including the internet

Electronic business (E-business) • A broader definition of EC

• Buying and selling goods and services

• Servicing customers

• Collaborating with partners

• Conducting e-learning

• Conducting electronic transactions within an organisation

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Types of e-commerce Business-to-consumer (B2C)

• The sellers are organizations and the buyers are individuals

Business-to-business (B2B) • Both the sellers and buyers are business organisations

• Larger volume than B2C

Consumer-to-consumer (C2C) • An individual sells products or services to other individuals

Business-to-employee (B2E) • An organisation uses e-commerce internally to provide information and services to its employees

• Examples: Manage benefits, conduct training, buy discounted tickets

E-government • Government-to-citizen (G2C) and government-to-business (G2B)

• Use of internet technology and e-commerce to deliver information about public services to citizens,

business partners, and suppliers

Mobile commerce (m-commerce)

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• E-commerce conducted in a wireless environment

Examples of ….

B2C :

B2B:

C2C:

Degree of digitisation

Extent to which the commerce has been transformed from physical to digital

Bricks-and-mortar:

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• purely physical. For eg. purchasing books from a physical store

Partial EC (clicks-and-mortar): • mixed digital / physical. E-commerce activities with primary business in physical

world. Eg. purchasing a book from an online store

Pure-play (virtual organisations): • completely digital. Eg., purchasing e-books from an online store

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What is a business model?

A business model is the way in which a company generates revenue

and makes a profit from company operations

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Some e-commerce business models Model name Explanation / Example

Online direct marketing Manufacturer sells directly to customers.

www.dell.com.au

Electronic tendering system Businesses request quotes from suppliers.

Use B2B with reverse auction

Name your own price Intermediary tries to match named prices with

providers. www.priceline.com

Find the best price Intermediary compares prices and shows the

best prices. www.hotwire.com/au

Affiliate marketing Vendor places logos on partner’s site, pays

commission per clicks that result in purchase

Viral marketing Receivers send information about your

product to their friends

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Group purchasing (e-coops) Small buyers aggregate demand and

negotiate a lower price

Some e-commerce business models (cont.) Model name Explanation / Example

Online auction Very popular in C2C. www.ebay.com.au

Product customisation Customer use the internet to self configure

products or services. www.jaguar.com/au/en

Electronic marketplace and

exchange

Transactions are conducted efficiently (more

information, lower transaction cost)

Bartering online Intermediary administers online exchange of

surplus products and/or companies receive

“points” for its contribution and the points can

be used to purchase other needed items.

www.smartbarter.com.au

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Deep discounters www.yelp.com.au

Membership Members only services.

www.catchoftheday.com.au

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B2C e-commerce

Purchasing of products: E-tailing • Mechanism: electronic catalogues and/or auctions

• E-storefront: a website that represents a single store

• E-mall: collection of individual shops under 1 internet address.

• Regular e-mall: customers can buy, eg. Westfield Shopping Mall

• Referral e-mall: customers are transferred to a participating storefront, eg. www.hawaii.com

Accessing online services • Cyberbanking, eg., Netbank. Virtual bank, eg. www.ingdirect.com.au

• Online securities trading: eg., www.nabtrade.com.au

• Online job market, eg., www.seek.com.au

• Travel service: eg., www.expedia.com.au

• Online advertising: banner ad, pop-up ad, pop-under ad, email

• Permission marketing

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• Viral marketing

B2B e-commerce

Sell-side marketplace • Organisations sell own or third party products / services to other organisations

• Mechanism: e-catalogues and forward auctions

• Examples: Ariba, Dell Auction

Buy-side marketplace • E-procurement and group purchasing

• Key mechanism: reverse auction

• Example: United Sourcing Alliance

Exchanges • Connect many buyers and many sellers

• Vertical exchanges: In a given industry Go2Paper

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• Horizontal exchanges: Across many industries TradersCity

• Functional exchanges: Needed services such as temporary help or extra office space are traded on an “as-needed” basis Skilled.

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Ethical and legal issues in e-business

• Privacy

• Protecting buyers’ identities and tracking. E.g..,clickstream tracking

• Job loss

• How should the company handle layoffs? Should they be required to retrain employees? Compensate or assist displaced workers?

• Fraud on the internet

• Domain name conflicts

• Cybersquatting

• Registering domain names solely to resell at higher prices

• Taxes and other fees

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• GST on the internet sales. • Business license taxes, franchise fees, privilege taxes, etc

• Copyright

• Enforcing copyright laws is extremely difficult

Chapter Summary

This chapter focused on • The SIX common types of electronic commerce

• B2C models

• B2B models

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• Ethical and legal issues related to e-commerce