E-Business And E-Commerce

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Electronic commerce (EC or e-commerce)

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describes the process of buying, selling, transfer- ring, or exchanging products, services, or information via computer networks, including the Internet.

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E-busines

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is a somewhat broader concept. In addition to the buying and selling of goods and services, e-business also refers to servicing customers, collaborating with busi- ness partners, and performing electronic transactions within an organization.

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bricks-and-mortar organizations

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n traditional commerce all three dimensions are physical. Purely physical organizations are referred to as bricks-and-mortar organizations.

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virtual (or pure-play) organizations

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Companies engaged only in EC

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Clicks-and-mortar organizations

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are those that conduct some e-commerce activities, yet their primary business is done in the physical world.

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Business-to-consumer (B2C)

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In B2C, the sellers are organizations, and the buyers are individuals.

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Business-to-business (B2B)

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In B2B transactions, both the sellers and the buyers are business organizations. The vast majority of EC volume is of this type.

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Consumer-to-consumer (C2C)

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In C2C, an individual sells products or services to other individuals. (You also will see the term C2C used as “customer-to-customer.” The terms are interchangeable, and we use both in this book.) The major ways that C2C is con- ducted on the Internet are auctions and classified ads.

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Business-to-employee (B2E)

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In B2E, an organization uses EC internally to provide infor- mation and services to its employees. Companies allow employees to manage their benefits and to take training classes electronically. In addition, employees can buy discounted insur- ance, travel packages, and tickets to events on the corporate intranet.

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E-governmentE-government

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E-government is the use of Internet technology in general and e-commerce in particular to deliver information and public services to citizens (called government-to- citizen or G2C EC) and business partners and suppliers (called government-to-business or G2B EC).

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Mobile commerce (m-commerce)

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The term m-commerce refers to e-commerce that is conducted entirely in a wireless environment. An example is using cell phones to shop over the Internet.

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business model

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is the method by which a company generates revenue to sustain itself.

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auction

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is a competitive process in which either a seller solicits consecutive bids from buyers or a buyer solicits bids from sellers. The primary characteristic of auctions is that prices are determined dynamically by competitive bidding.

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Forward auctions

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are auctions that sellers use as a channel to many potential buyers. Usually, sellers place items at sites for auction, and buyers bid continuously for them.

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reverse auctions

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one buyer, usually an organization, wants to buy a product or a ser- vice. The buyer posts a request for quotation (RFQ) on its Web site or on a third-party Web site. The RFQ provides detailed information on the desired purchase. The suppliers study the RFQ and then submit bids electronically. Everything else being equal, the lowest-price bidder wins the auction. The buyer notifies the winning supplier electronically. The reverse auction is the most common auction model for large purchases (in terms of either quantities or price). Governments and large corporations frequently use this approach, which may provide considerable savings for the buyer.

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Technological limitations

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include the lack of universally accepted security standards, insufficient telecommunications bandwidth, and expensive accessibility.

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Non-technological limitations

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include the perceptions that EC is insecure, has unresolved legal issues, and lacks a critical mass of sellers and buyers.

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Advertising

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is the practice of disseminating information in an attempt to influence a buyer–seller transaction.

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Banners

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are simply electronic billboards.

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pop-up ad

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appears in front of the current browser window.

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pop-under ad

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appears underneath the active window: when users close the active window, they see the ad.

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disintermediation

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Elimination of intermediaries in elec- tronic commerce.