Chapter 5 Notes

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Published on 10 Oct 2011
School
UTSC
Department
Financial Accounting
Course
MGAC70H3
Chapter 5 Notes
Introduction
electronic commerce (e-commerce) is commerce, but it is commerce accelerated and enhanced by IT, particularly Internet
e-commerce enables customers, consumers, and companies to form powerful new relationships that would not be possible
without the enabling technologies; and it breaks down business barriers such as time, geography, language, currency, and culture
path-to-profitability (P2P) is a formal business plan that outlines key business issues such as customer targets (by demographic,
industry, etc.), marketing strategies, operations strategies (e.g., procurement, production, transportation, and logistics), and
projected targets for income statement and balance sheet items
running an e-commerce operation is no different from running a traditional bricks-and-mortar business
E-Commerce Business Models
Business to Business (B2B) E-Commerce
business to business (B2B) e-commerce occurs when a business sells products and services to customers that are other businesses
B2B e-commerce is where all the money is right now in the e-commerce world
B2B e-marketplaces are virtual marketplaces in which businesses buy from and sell products to each other, share information (as
in information partnerships discussed in Chapter 2), and perform other important activities
businesses are increasingly aware that they must create supply chain management systems, drive down costs, create information
partnerships with other businesses, and even collaborate with other businesses on new product and service offerings
B2B e-marketplaces offer tremendous efficiencies to businesses for performing all of these tasks
Business to Consumer (B2C) E-Commerce
business to consumer (B2C) e-commerce occurs when a business sells products and services to customers who are individuals
B2C e-commerce is the model that fuelled the early growth of e-commerce in the 1990s
B2C e-commerce is very much a cut-throat environment, no matter what the product and service
Other E-C ommerce
business to government (B2G) e-commerce occurs when a business sells products and services to a government entity
consumer to business (C2B) e-commerce occurs when an individual sells products and services to a business
consumer to consumer (C2C) e-commerce occurs when an individual sells products and services to another individual
consumer to government (C2G) e-commerce occurs when an individual sells products and services to a government entity
government to business (G2B) e-commerce occurs when a government entity sells products and services to businesses
government to consumer (G2C) refers to the electronic commerce activities performed between a government and its citizens or
consumers, including paying taxes, registering vehicles, providing information and services, and so on
government to government (G2G) e-commerce refers to electronic commerce activities performed within a nation’s government
vertical government integration refers to electronic integration of agencies, activities, and processes up and down federal,
provincial/territorial, and local government levels
horizontal government integration refers to electronic integration of agencies, activities, processes across a level of government
Developing Marketing Mixes for Customers
Business to Consumer
first, the marketing mix needs to be determined, which in B2C e-commerce usually includes some or all of the following—
registering with search engines, online ads, viral marketing, and affiliate programs
online ads (called banner ads) are small advertisements that appear on other sites; variations include pop-up and pop-under ads
a pop-up ad is a small Web page containing an ad that appears on your screen outside current Web site loaded into your browser
a pop-under ad is a form of a pop-up ad that you do no see until you close your current browser window
viral marketing encourages users of product/service supplied by B2C e-commerce business to encourage friends to join as well
affiliate program is an arrangement made between two e-commerce sites that directs viewers from one site to the other
a click-through is a count of the number of people who visit one site, click on an ad, and are taken to the site of the advertiser
a conversion rate is the percentage of potential customers who visit your site who actually buy something
Business to Business
business customers prefer to actively participate in e-marketplaces to find suppliers
within an e-marketplace, an organization can participate in a reverse auction to find a supplier
relationships among businesses in B2B are very important, which extend into the IT realm
Move Money Easily and Securely
Security: The Pervasive Concern
encryption scrambles the contents of a file so that it can’t be read without having the right decryption key; can be achieved in
many ways: by scrambling letters in a known way, replacing letters with other letters or perhaps numbers, and other ways
some encryption technologies use multiple keys
in this instance, public key encryption (PKE) would be used—an encryption system that uses two keys: a public key that
everyone can have and a private key for only the recipient
a securities sockets layer (SSL) (1) creates a secure and private connection between a Web client computer and a Web server
computer, (2) encrypts the information, and (3) then sends the information over the Internet
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Document Summary

), marketing strategies, operations strategies (e. g. , procurement, production, transportation, and logistics), and projected targets for income statement and balance sheet items running an e-commerce operation is no different from running a traditional bricks-and-mortar business. Business to business (b2b) e-commerce business to business (b2b) e-commerce occurs when a business sells products and services to customers that are other businesses. B2b e-commerce is where all the money is right now in the e-commerce world. B2b e-marketplaces offer tremendous efficiencies to businesses for performing all of these tasks. Other e-c business to consumer (b2c) e-commerce occurs when a business sells products and services to customers who are individuals. B2c e-commerce is the model that fuelled the early growth of e-commerce in the 1990s. Summary: student learning outcomes revisited: describe the nine major e-commerce business models. Business-to-business (b2b) e-commerce businesses selling products and services to other businesses. Business-to-consumer (b2c) e-commerce businesses selling products and services to individual consumers.