Chapter 6: E-Business & E-Commerce
Two Advantages of E-Commerce: 1. It increases an organization’s reach, i.e. the number of customers
the company market its products both nationally and internationally 2. It removes start up barriers and cost
for entrepreneurs and small businesses
Electronic-Commerce (EC): It describes the process of buying, selling, transferring, or exchanging product,
services, or information via computer networks, including the Internet.
E-Business: It a broader concept, that refers to servicing customers, collaborating, with business partners,
and performing electronic transactions within an organization.
The Degree of Digitization of E-commerce: Extent to which the commerce has been transformed from
physical to digital.
1) The product of series being sold
2) The process by which the product or services produced
3) The delivery gent or intermediary.
Brick-and-Mortar Organization: purely physical organizations
Virtual Organization (pure-play): Companies engaged only in electronic commerce
Clicks-and-Mortar Organization: An organization that conducts some e-commerce activities over the
Internet, yet its primary business is conducted in the physical world.
Types of E-Commerce:
1) B2C: The sellers are organizations and the buyers are individuals.
Electronic Retailing (e-Tailing): The direct sale of products and services through electronic storefronts
or electronic malls, designed around an electronic catalogue format and/or auctions.
Channel Conflict: Click-and-mortar companies face a conflict with their regular distributors when they
sell directly to customers on-line.
Multi-channelling: Integrating a company’s on-line and traditional selling channels to increase
synergy between the two organizational channels and reduce expenses.
Electronic Storefront: Is a website that represents a single store. E.g. future shop, tigerdirect.com
Electronic Malls: Collection of individual shops under a single internet address, providing one stop shop
Disintermediation: Process of eliminating intermediaries (middle men) when conducting business
transactions, which provide information and value-added services, e.g. consulting. This is brought by EC
Cyberbanking (E-banking): It involves conducting various banking activities from home, at place of
business or on the road instead of a t a physical bank location. Providing lower fees and saves time.
Virtual Banks: Banks with only an Internet presence
On-line Security Trading: Offers cheaper trading fees.
On-line Job Market:
Travel Services: purchasing airline tickets, reserve hotel room, discounted vacation deals.
Online Advertising: the practice of dimidiating information in an attempt to influence a buyer-seller
transaction. Internet ads can reach a large number of potential buyers, cheaper, more interactive and
target specific interest groups. Methods of on-line advertising are:
i. Banners: Electronic billboards contain a short text or graphical message to promote a
ii. Pop-up ad or Pop-under ad: they are contained in a new browser window that is automatically
launched when you enter or exit a website.
iii. Spamming: Is the indiscriminate distribution of electronic ads without the permission of the receiver.
iv. Permission Marketing: it asks consumers to give their permission to voluntarily accept on-line
advertising and e-mail.
v. Viral Marketing: On-line work-of-mouth marketing, involving people forwarding messages to friends
and family. Social Networking sites rely on this and Banners to generate revenue. 2) B2B: In B2B transactions both the sellers and the buyers are business organizations. The majority of EC.
Sell-Side Marketplace: Organizations attempt to sell their products/services to other organizations
electronically from their own private e-marketplace website or from a third-party website.
Buy-Side Marketplace: Is a model in which organizations attempt to buy needed product services form
other organizations electronically, using as