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Introduction to E-commerce by Mind Map: Introduction to E-commerce
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Introduction to E-commerce

Simple Definitions

Electronic Commerce - business trading with other businesses and internal processes that companies use to support their buying, selling, hiring, planning, and other activities.

Electronic Business - the transformation of key business processes through the use of Internet technologies.

Transaction - Exchange of value, such as a purchase or a sale

Commodity item - product/service that is hard to distinguish from the same products provided by other sellers

Strategic Business Unit - a particular combination of product, distribution channel, and customer type

Strategic Alliance - stable relations with other companies based on shared purposes

Law of Diminishing Returns - Characteristic of most activities to yield less value as amount of consumption increases

Network Effect - Increase in value of a netowrk to its participants, which occurs as more people or organizations participate in the network. Ie: what email was in terms of value and what is it today

Industry Value Chain - Larger stream of activities in which a particular business unit's value chain is embedded

Categories of E-com

Business-to-Consumer (B2C)

Consumer shopping on the Web

Business-to-Business (B2B)

Transactions conducted between businesses on Web, can also be called "E-producment"

Business Processes

Group of logical, related, and sequential activities in which businesses engage

Consumer-to-Consumer (C2C)

Individuals that buy and sell among themselves

Business-to-Gov. (B2G)

Business transactions with Gov. agencies

Development and Growth of E-com

Electronic Funds Transfers (EFTs)

Electronic transmissions of account exchange info over private communications networks

Electronic Data Interchange (EDI)

Process of one business transmitting computer- readable data in standard format to another bus.

E-com Waves

First Wave

E-com dominated by U.S. companies

Most E-com websites are in English

Easy access to start-up capital led to an overemphasis on creating large enterpises to exploit E-com opportunities

Internet technologies were slow and inexpensive

Bar codes and scanners were used to track inventories and production

Sceond Wave

Global enterprises in many countries participate in E-com

Websites in multiple languages

Rapid increase in broadband users

B2B E-com is increasingly integrated with radio-frequency identification

Advantages of E-com

Can help increase profits

Can increase sells and decrease costs

Well done advertising on the Web can be powerful

Used to reach small groups of clients that are geographically scattered

Increases purchasing opportunities of the buyer

Can be used to identify new suppliers and business partners

E-com increases speed and accuracy with which businesses can exchange info

Electronic payments can be easier to audit and monitor then non electronic payments, better security

Disadvantages of E-com

Newness and rapid growing pace of tech. may cause some business to be unable to keep up.

Some products are extremely hard to sell online, ie: food items

Cost to get started and to maintain tech. can be high

Many businesses can face cultural and legal barriers to conducting E-com

Economic Forces and E-com

Transaction costs

Total costs a buyer and seller incur as info. is gathered to negotiate a purchase-sale transaction

Markets and Hierarchies

Economic form of organization. Business channel where starting products goes through the chain to the retailer

Reducing transaction cost

By improving flow of info and increasing coordination of actions

Value Chain Management

Primary Activities

Identify Customers


Purchase Materials and Supplies

Manufacture product or create service

Market and Sell


Secondary Activities

Finance and Admin

Human Resources

Tech. Development

Identifying Business Unit Opportunities

SWOT Analysis

Strengths, What does the co. do well? Is it strong in the market?

Weaknesses, What does the company do poorly? What problems could be avoided?

Opportunities, Do new markets exist for the companies products?

Threats, What is competition doing well?

Internation Nature of E-com

Trust issues on the Web

Relying on E-com client to ensure business is being accomplished

Language Issues

Knowing what is expected of internation clients by means of language barriers

Cultural Issues

Research to build reputations will international clients can build online business

Culture and Government

Many different international laws may exist on an international scale

Infrastructure Issues

Communications in networks in which a message packet travels