Chapter Six: E-Business and E-Commerce

Section 6.1 - Before You Go On…

Question One: Define e-commerce and distinguish it from e-business.

Electronic commerce (e-commerce, EC) describes the buying, selling, transferring or exchanging of products, services or information via computer networks, including the Internet.

E-business is a broader definition of EC, including buying and selling of goods and services, it also services customers, collaborating with partners, conducting e-learning and conducting electronic transactions within an organization.

Quesiton Two: Distinguish among B2C, B2B, C2C and B2E electronic commerce.

Business-to-consumer (B2C): the sellers are organizations and the buyers are individuals

Business-to-business (B2B): both the sellers and buyers are business organizations. B2B represents the vast majority of e-commerce.

Consumer-to-consumer (C2C): an individual sells products or services to other individuals.

Business-to-employee (B2E): An organization uses e-commerce internally to provide information and services to its employees. Companies allow employees to manage their benefits, take training classes electronically; buy discounted insurance, travel packages, and event tickets.

Question Three: List some benefits and limitations of e-commerce.

E-commerce benefits organizations, customers and society as a whole. It benefits organisation by making national and international markets more accessible and by lowering costs of processing, distributing, and retrieving information. E-commerce benefits customers as there is access a vast number of products and services around the clock (24/7/365). E-commerce benefits society through its ability to easily and conveniently deliver information, services and products to people in cities, rural areas and developing countries.

E-commerce does have its limitations; these can be divided up into technological and non-technological. Technological limitations of e-commerce include the lack of universally accepted security standards, insufficient telecommunications bandwidth and expensive accessibility. The non-technological limitations of e-commerce include the perception that it is unsecure, the unresolved legal issues and it lacks a critical mass of sellers and buyers.

Section 6.2 - Before You Go On…

Question One: What are spamming, permission marketing and viral marketing?

Spamming is the indiscriminate distribution of e-mail without the receiver’s permission. Permission marketing is a method of marketing that asks consumers to give their permission to voluntarily accept online advertising and email whereas, viral marketing is the online word of mouth marketing.

Section 6.4 - Before You Go On…

Question One: What are micropayments?

Micropayments are small payments that can be made online or via a wireless device e.g. e-tag.

Question Two: What is Multichanneling?

Multichanneling is a process through which a company integrates its online and offline channels.

Section 6.5 - Before You Go On…

Question One: List some ethical issues in EC.

Ethical ecommerce issues include:

- piracy

- no human element (consumer/ seller unknown)

- web tracking (cookies)

Question Two: List the major legal issues of EC.

The value of domain names, taxation of online businesses and how to handle legal issues in a multi country environment are major legal concerns. Other legal issues include protection of customers, sellers and intellectual property is important.