Introduction to Electronic Business School of International Economy and TradeSchool of International Economy and TradeElectronic Business DepartmentElectronic Business Department Maoyanni263.netMaoyanni263.net1381396639813813966398毛彦妮2021/8/62021/8/61 1Interdisciplinary Nature of ECMarketingComputer scienceConsumer behavior and psychologyFinanceEconomicsManagement information systemAccounting and auditingManagementBusiness law and EthnicOthersAbout E-Commerce Course2021/8/62021/8/62 2Foundation of ECFoundation of ECNetwork EconomyNetwork EconomyInfrastructure for ECInfrastructure for ECE-marketsE-marketsElectronic Payment systemsElectronic Payment systemsLogistics and Supply chain ManagementLogistics and Supply chain ManagementInformation ManagementInformation ManagementThe Framework of the course电子商务四要素：商流、资金流、物流、信息流电子商务四要素：商流、资金流、物流、信息流2021/8/62021/8/63 3The methods of studyFinishing your work with Internet Good reading habitFinal ScoreCheck on attendance 10%Experiment 10%Home work 10% Final test 70%2021/8/62021/8/64 4CHAPTER1 Foundations of Electronic Commerce1.1 Definitions and Content of EC1.2 Classification of EC1.3 Benefits and Limitations 14 The Driving forces of E-commerce1.5 The development of EC in China2021/8/62021/8/65 5The case of marks & spencer Why E-Commerce(The problem)?Competition was intenseProfit margin was dropping downCustomer service and supply chain activities was inefficient2021/8/62021/8/66 62021/8/62021/8/67 7The solutionTaking EC as “A new way of doing business”.Selling product on the Website,at a lower price than physical store.Tracking transaction data in real time for securityBased on warehouse management system for inventory replenishment decision makingRunning the warehouse operation and deliveries from third-party logistics service providersConnecting supply chain partners(including customer) through EDI networks and integrating EDI with Back Office system.2021/8/62021/8/68 8The case of M&S (The Result)Saved a lot of money with help of new information dissemination method.Built a stronger relationship with their business partners.Increase customers service and open up markets to more customers. Kept the leading position in the retailing market.2021/8/62021/8/69 91.1.1 1Definitions and Content of EC 1.1.1 A Brief History of EC（1）EFT（Electronic Funds Transportation）（2）EDI（Electronic Data Interchange）（3）EC (Electronic Commerce)（4）EB（Electronic Business）2021/8/62021/8/61010（1 1）EFT(Electronic FundsEFT(Electronic Funds Transfer)Transfer) It It started started in in early early 1970s, 1970s, funds funds routed routed electronically electronically from from one one organization organization to to another another ,limited ,limited to to large large corporations, corporations, financial financial institutions, institutions, and and few few daring daring small businesses.small businesses. 2021/8/62021/8/61111（2 2）EDIEDI（Electronic Data InterchangeElectronic Data Interchange）EDI EDI is is a a system system that that standardizes standardizes the the process process of of trading trading and and tracking tracking routine routine business business documents,such documents,such as as purchase purchase orders,invoices, orders,invoices, payments, payments, shipping shipping manifests, manifests, and and delivery delivery schedules.EDI schedules.EDI enlarged enlarged the the participating participating companies companies from from financial financial institutions institutions to to manufacturers, manufacturers, retailers, retailers, services, services, and so on.and so on.2021/8/62021/8/61212（3）EC(Electronic Commerce) With the commercialization of the Internet in the early With the commercialization of the Internet in the early 1990s and its rapid growth to millions of potential 1990s and its rapid growth to millions of potential customers,the term electronic commerce was coined.customers,the term electronic commerce was coined.Electronic Commerce is an emerging concept that describes the process of buying and selling or exchanging of products, services, and information via computer networks including the Internet.2021/8/62021/8/61313 E-business :A broader definition of EC, which includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners and conducting electronic transactions within an organization. In this book we use the broadest meaning of EC, which is basically equivalent to EB.（4）EB（Electronic Business） Today the term EC seems to be fairly narrow to some people. Thus, many use the term E-business.2021/8/62021/8/614141.1.2Definitions of EC.It can be define form these perspectivesLearningLearningan enabler of online training and education an enabler of online training and education in schools, universities, and other in schools, universities, and other organizations, including businessesorganizations, including businessesCollaborativeCollaborativethe framework for inter- and the framework for inter- and intraorganizational collaborationintraorganizational collaborationCommunityCommunityprovides a gathering place for provides a gathering place for community members to learn, transact, community members to learn, transact, and collaborateand collaborate2021/8/62021/8/61515Perspec-tivesDefinitionCommun-icationsDelivery of information, products/services, or payment over telephone lines, computer networks, or any other electronic means.Business ProcessThe application of technology toward the automation of business transactions and workflow.ServiceA tool that addresses the desire of firms, consumers, and management to cut service costs while improving the quality of goods and increasing the speed of service delivery.CommercialProviding the capability of buying and selling products and information on the Internet and other online services.2021/8/62021/8/616161.1.3Characteristic of ECThe global nature of the tech.(技术的全球性) Potential to reach billions of peopleNo time and place limitation.Low cost.Interactive nature.（互动性）Variety of possibility.（应用的多样性）Resourcefulness and rapid growth of its supporting infrastructures2021/8/62021/8/617171.1.4The Dimensions of Electronic CommercePure versus partial EC( figure1.1)Physical agentDigital agentDigital ProductPhysical ProductPhysical processDigital processVirtual processVirtual delivery agentVirtual productPartialElectronic commerce areasThe pure of electronic commerceTraditional commerce2021/8/62021/8/61818Brick-and-Mortar organizations：old-economy organizations that perform most of their business off-line, selling physical products by means of physical agents.Virtual organizations: organization that conduct their business activities solely online.Click-and-mortar organization: that conduct some e-commerce activities, but do their primary business in the physical world.2021/8/62021/8/619191.1.5The Framework of EC (the contents of EC )yexhibit 1.2 shows that the EC applications are supported by infrastructures, and their implementation is dependent on five major areas (shown as supporting pillars) people, public policy,marketing and advertisingSupport services and business partnerships.yThe EC management coordinates the applications, infrastructures, and pillars.2021/8/62021/8/62020A Framework for Electronic CommerceElectronic Commerce Applications Stocks Jobs On-line banking Procurement and purchasing Malls On-line marketing and advertising Home shopping Auctions Travel On-line publishingPeople:Buyers, sellers,intermediaries,services, IS people,and managementPublicpolicy,legal, andprivacyIssuesSupport services Logistics,Payments,contentSecurity systemDevelopment Business Partnership: affiliatePrograms, joint ventures, exchangesE-marketplace Support services(1)Common businessservices infrastructure(security smartcards/authenticationelectronic payment,directories/catalogs)(2)Messaging andinformation distributioninfrastructure(EDI, e-mail, Hyper TextTransfer Protocol)(3)Multimedia contentand networkpublishing infrastructure(HTML, JAVA, WorldWide Web, VRML)(4)Network infrastructure(Telecom, cable TVwireless, Internet)(VAN, WAN, LAN,Intranet, Extranet)(5)Interfacinginfrastructure(The databases,customers, andapplications)ManagementMarketing and advertisement: market research, promotions, and web content2021/8/62021/8/621211.2Classification of ECBusiness-to-business(B2B):businesses make online transactions with other businesses. Business-to-Consumer (B2C) : online transactions are made between businesses and individual consumers.Consumer-to-Consumer(C2C): online transactions are made between individual consumers .2021/8/62021/8/62222Consumer-to-Business (C2B):e-commerce model in which individuals use the Internet to sell products or services to organizations or individuals seek sellers to bid on products or services they need.Business-to-Business-to-Consumer (B2B2C): e-commerce model in which a business provides some product or service to a client business that maintains its own customers.peer-to-peer (P2P): technology that enables networked peer computers to share data and processing with each other directly; can be used in C2C, B2B, and B2C e-commerce.2021/8/62021/8/62323mobile commerce (m-commerce): e-commerce transactions and activities conducted in a wireless environment.location-based commerce (l-commerce): m-commerce transactions targeted to individuals in specific locations, at specific times2021/8/62021/8/62424Intra-business EC: e-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organizationbusiness-to-employees (B2E): e-commerce model in which an organization delivers services, information, or products to its individual employees2021/8/62021/8/62525collaborative commerce (c-commerce): e-commerce model in which individuals or groups communicate or collaborate onlinee-learning: the online delivery of information for purposes of training or education2021/8/62021/8/62626exchange-to-exchange (E2E): e-commerce model in which electronic exchanges formally connect to one another the purpose of exchanging informatione-government: e-commerce model in which a government entity buys or provides goods, services, or information to businesses or individual citizens2021/8/62021/8/627271. 3 Benefits and Limitations1.3.1Benefits 1. 1.Benefits to organizations2. 2.Global reachGlobal reach3. 3.Cost reductionCost reduction4. 4.Supply chain improvementsSupply chain improvements5. 5.Extended hoursExtended hours6. 6.CustomizationCustomization7. 7.New business modelsNew business models2021/8/62021/8/62828Vendors specializationRapid time-to-marketLower communication costsEfficient procurementImproved customer relationsUp-to-date company materialNo city business permits and feesOther benefits2021/8/62021/8/629292.Benefits to consumersUbiquityMore products and servicesCheaper products and servicesInstant deliveryInformation availabilityParticipation in auctionsElectronic communitiesGet it your wayNo sales tax2021/8/62021/8/630303. Benefits to societyTelecommuting Higher standard of living Hope for the poorAvailability of public services2021/8/62021/8/631311.3.2Limitations1. 1.Technical limitations of ECLack of standards for quality, security,and reliability.Lack of standards for quality, security,and reliability.Insufficient telecommunications bandwidth.Insufficient telecommunications bandwidth.Software development tools are still evolving.Software development tools are still evolving.It is difficult to integrate the Internet and EC software with some It is difficult to integrate the Internet and EC software with some existing applications and databases.existing applications and databases.Special web servers are needed in addition to the network servers.Special web servers are needed in addition to the network servers.Internet accessibility is still expensive and inconvenientInternet accessibility is still expensive and inconvenientOrder fulfillment of large-scale B2C requires special automated Order fulfillment of large-scale B2C requires special automated warehouseswarehouses2021/8/62021/8/632322. Nontechnical LimitationsSecurity and privacy concerns deter customers from Security and privacy concerns deter customers from buying .buying .Lack of trust in EC and in unknown sellers hinders Lack of trust in EC and in unknown sellers hinders buying buying Many legal and public policy issues, including Many legal and public policy issues, including taxation, are as yet unresolvedtaxation, are as yet unresolvedNational and international government regulations National and international government regulations sometimes get in the waysometimes get in the wayIt is difficult to measure some benefits of EC.It is difficult to measure some benefits of EC.Customers are resistant to the change from a real to a Customers are resistant to the change from a real to a virtual store.virtual store.2021/8/62021/8/63333People do not yet sufficient trust paperless, faceless transactionsInsufficient number of sellers and buyers for critical massAn increasing amount of fraud on the InternetIt is difficult to obtain venture capital due to the dot-com disaster2021/8/62021/8/63434nStrong competition(how to reduce the transaction cost)nGlobal economynFrequent and significant changes in marketsnIncreased power of consumers1.Economy and Business Pressures1.4The Driving forces of E-commerce2021/8/62021/8/635352.Technological PressuresIncreasing innovations and new technologies Rapid technological obsolescenceInformation overloadRapid decline in technology cost vs. performance ratio2021/8/62021/8/636363、Organization responsesStrategic systems（EC-supported strategic systems）Continuous improvement efforts and business process reengineeringCustomer relationship managementBusiness alliances:virtual corporationElectronic markets2021/8/62021/8/63737Reductions in cycle time and time-to-marketCycle time: the time it takes for a business to complete a productive activity from its beginning to end.Time-to-market: the time from the inception of an idea to its implementationEmpowerment of employeesSupply chain improvements2021/8/62021/8/63838Mass customization: make-to-order in large quantities in an efficient mannerIntrabusiness :from sales force automation to inventory controlKnowledge management KM: the process of creating or capturing knowledge, storing and protecting it , updating and maintaining it, and using it.2021/8/62021/8/639391.5The development of EC in China1.What are the status of Chinese EC?2.2.What are the main issues of the Chinese EC development?2021/8/62021/8/64040