BUS 237 Chapter Notes - Chapter 9: Enterprise Resource Planning, Retail, Disintermediation

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Ch. 9 – E-commerce, Social Networking, and Web 2.0
Q1: What is e-commerce, and how is it used?
- e-commerce = buying & selling goods/services over public & private computer networks
 subset of electronic business
 usu described as everything having to do w/ application of info & communication technologies
to the conduct of business b/t orgs, company to consumer, consumer to consumer
- modern consumers less likely to use single info channel & often know more about product/service than person
who is actually facilitating the sale
- implications of e-commerce:
1) additional infrastructure will probably be required
 large orgs provide & support many of these capabilities internally
 smaller orgs may outsource many requirements
 e-commerce may req interconnectedness of entire enterprise resource planning (ERP) process
2) management & govs
 orgs need to ensure all aspects of business operate smoothly & do not operate at cross purposes
 companies need o ensure end-to-end customer security enabled & info only shared
appropriately & w/ customer permission
- merchant companies = take title to goods they sell, buy goods & resell them
1) sell directly to consumers 2) sell to companies 3) sell to gov
- business-to-consumer (B2C) e-commerce = sales b/t supplier & retail customer
 typical IS for B2C provides web-based appl/web storefront, which customers enter & manage orders
- business-to-business (B2B) = e-commerce = sales b/t companies
 for raw materials, suppliers use B2B sys to sell to manufactures, manufacturers use B2B sys to sell to
distributors, & distributors use B2B sys to sell to retailers
- business-to-gov (B2G) e-commerce = sales b/t companies & gov orgs
- # of companies engaged in B2B & B2G commerce far exceeds those in B2C
- nonmerchant companies = arrange for purchase & sale of goods w/o ever owning/taking title to those goods
 most common: auctions (i.e. eBay) & clearinghouses
- e-commerce auctions = match buyers & sellers by using e-commerce version of standard auction
 enables auction company to offer goods for sale & to support competitive-bidding process
- clearinghouses = provide goods & services at stated price & arrange for delivery of goods, but never take title
 electronic exchanges that match buyers & sellers (like stock exchange)
- e-commerce leads to greater market efficiency
- effect of e-commerce: disintermediation (removal of intermediaries b/t parties)
 results in higher revenues for manufacturers & lower consumer prices
 but much of Canadian economy involved distribution, large portion of economy could be eliminated
 however manufacturers found it difficult to eliminate intermediaries
 intermediation/re-intermediation = distribution channels have become more efficient, new players
inserted into sales & distribution processes
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