E-COMMERCE
UNIT -2 LESSON -2
E- marketing, E-tailing, Online Services, E- auctions, Online Portal
E- marketing
All e-commerce solution is a solution to conduct business. through an intra-. extra- or Internet solution. Business-to-business e-commerce (B2B) involves companies selling to other businesses. The interaction with system takes place in almost real time and reduces lag time between discussion and purchase.
Trade Cycle: A trade cycle is the Series of exchanges between a customer and supplier that take place when a commercial exchange is executed. Trade cycle consists of four phases
1 Pre-Sales: This Phase consists or venous tasks in finding a supplier and agreeing the terms This phase can he further classified in
•Search- finding a supplier
•Negotiate- agreeing the terms of trade
2 Execution: This Phase consist of various tasks in selecting goods and taking delivery This phase can be further classified in
•Order. • Delivery
Settlement: This Phase consists of venous tasks ill invoice (if any) and payment. This phase can be further classified in
. •Invoice. •. Payment
After-Sales: This Phase consists of various tasks in following up complaints or providing maintenance
Generic Trade cycles
3 Generic trade cycles :
1. Repeat trade cycle : These trade cycles contains regular, repeat transactions. between commercial trading partners
2. Credit trade cycle : These trade cycle contains irregular transactions in once-off. trading relationship (commercial or retail).
The third generic trade cycle is the non-repeating commercial trade cycle and Internet e-commerce an electronic market is the appropriate e-technology for this.
SUPPLY CHAIN: Supply chain is a network of facilities and distribution options that performs the functions of procurement or materials (from supplier), transformation of these materials into intermediate and finished products (manufacturing), and the distribution of these -finished products. In customers (to customer) This network adds value for customers through the manufacture and delivery of products.
Supply Chain Management "Supply Chain Management" is the new way of managing a company's "supply chain" - meaning the effectivity of the whole supply chain is more important than each individual department. The capabilities of Internet technology will change the way we do business with our suppliers and customers, as well as change the face of business, according to Microsoft CEO Satya Nadella.
Porter's Value Chain model. In his book Competitive Advantage, Michael Porter introduced a generic value chain model that comprises a sequence of found to be common to a wide range of firms. The business system is broken down into a series or value-generating activities referred to as the value chain.
The primary value chain activities are:
Inbound Logistics: the receiving and warehousing of raw materials. and then distribution to manufacturing, as they are required.
Operations: (Production) the processes of transforming inputs into finished products and services.
Outbound Logistics: the warehousing and distribution of finished goods.
Marketing & Sales: the identification or customer needs and the generation sales
Service: the support of customers after the products and services arc sold to them. These primary activities are supported by (Support activities):
The infrastructure of the firm: organizational structure, control systems, Company culture, etc
Human resource management: employee recruiting, hiring, training, development. And compensation
Technology development: technologies support value-creating activities.
Procurement: purchasing inputs such as materials, supplies, and equipment.
Linked Value Chains. Value chain activities are not isolated from one another but rather have inter-dependencies which affect one another. Linkages may exist between primary activities and also between primary and support activities.
Role of Electronic Commerce in Value Chain
Intranet IS a secured network of web pages and applications, which can be accessed by anyone within a company firewall.
Internet is a collection of servers and networks, which allow users access to information and applications outside of the company firewall.
Extranet is a collaborative [private/secure] network that uses Internet technology to link businesses with their suppliers, customers, or partners that share: common goals.
E-Commerce is buying and selling electronically. And E-Business is using the capabilities of Internet technology to conduct business electronically
E-commerce enhances value chain by providing:
Electronic Value Chain: through electronic value chain, e-commerce enhances business by supporting.
• Reduced time frame
• Changed cost structures
Re-engineered Value Chain: through re-engineered value chain, e-commerce enhances business by supporting:
• Just-in-time manufacture
• Quick response supply
• Efficient document processing
Competitive advantage: e-commerce supports a company for gaining Competitive advantage.
Online Marketing
Online Marketing provides product boundary extension new products services creation new markets,' channel creation.
advantages of online marketing are:
Market segment Share
Customer Reach
E-tailing
E-Tailing is a way of selling of goods on the Internet and many of the websites we are using for shopping online namely as amazon, flipkart, Naaptol and Jio etc. It is a combination of ecommerce and retail. Beneficial to the customer and the retailer.
Advantages of E-tailing
1 Cost: The cost of the product without mediator is always less only delivery company is involved in this type of business.
2 Access: A customer has not to go anywhere. All the products shown can be deliver to his/her place only payment methods customer would like to pay for the product.
3. Inventory: Large no of variety of products are available there is not restriction of limited products. The range can be on the basis of money and age.
Online Services
E-Procurement. Reduced cost/cycle time, improved efficiency, increased customer reach, compliance and customer reach.
E-Collaboration. E-Collaboration provides cross-enterprise technology/design interaction (customer & supplier). Various advantages of e-Procurement are:
• Design cycle time
• Design synergy, reuse
• Revenue
Integrated Planning / Manufacturing
Integrated planning/manufacturing provides Cross-enterprise planning/execution, System to system integration, and Outsourced manufacturing visibility. Various advantages of integrated planning/Manufacturing are as follows: • Lead time margin
• accuracy,
• flexibility,
•On-time delivery and visibility into inventory levels.
Integrated Delivery Integrated Delivery provide cross-enterprise logistics management/consignment visibility. Various advantages or integrated Delivery are Logistics cycle cycle rime. Reduced cost Lead time, improved efficiency and increased customer satisfaction.
Online Marketing Online Marketing provides product boundary extension new products services creation new markets,' channel creation. Different aspects of online marketing are discussed in detail in later part of the book. Various advantages of online marketing are:
• Market segment share
• Customer reach
E-AUCTIONS
What is E-Auctions and what is E-procurement?
Electronic procurement (e-Procurement) is the use of electronic tools and systems to increase efficiency and reduce costs during each stage of the purchasing process. It can he divided in two parts direct-material procurement and indirect material procurement where raw materials or components needed for production are procured from supply chain partners.
E-Procurement for direct materials : Organizations need to focus on different issues like the integration of suppliers, methods for integrating them and inventory management to ensure they are ordered in the correct quantities.
E-Procurement for indirect materials : An organization can save money and other resources by using the internet to order items that are not critical to the main production process. The three ways in which these materials can he procured online are given below:
• Seller silk solutions,
• Buyer Side solutions and
• Third-party solutions.
A buy side e-procurement Solution should be user friendly and help employees place goods/service order and purchase goods from their desktop. It should provide a list of amount of preferred suppliers for each product and help reduce non-compliance with the services from organization's business rule for purchasing. Collaborative e-procurement is being adopted by many companies to realize high levels of process efficiencies. Global companies established direct linkages between suppliers and employees to facilitate faster procurement of goods/services. Developing separate procurement system IS not efficient and the cost of developing, implementing and maintaining them is quite high.
Drivers for e-Procurement
The UK government has been driving the adoption of eCommerce across the public sector since 1983. Recent studies show that the UK' eCommerce environment is one of the strongest in the world. e-Procurement has an indirect effect on cash savings by providing the access to good deals.
The Quick Wins Approach
To modernise procurement processes certain 'e-tools' will be required, but how best to implement them is often a matter of prioritising and prioritising them in the right order.
Online Portal
Online Portal for Manufacturing
E-Commerce Application in Manufacturing
Manufacturing is the transformation of raw materials into finished good for sale, or intermediate processes involving the production or finishing of semi-manufactures. E-commerce can be applied to the supply chain to reduce costs and improve service levels as well as enhance efficiency and accuracy.
E-Commerce Application in Wholesale
Wholesale consists of the sale of goods/merchandise to retailers, to industrial, commercial, institutional, or other professional business users or to other wholesalers and related subordinated services. Wholesalers physically assemble, sort and grade goods in large lots, break bulk, repack and redistribute in smaller lots.
Problems of Traditional Wholesale System Traditional wholesale companies are no longer the mainstream operators. Instead, specialized national or regional wholesale markets have emerged as major players. The operating costs of an enterprise using wholesale markets as its distribution channel are high. Further, as wholesale markets require large land supply and other supporting social resources, they create burden and wastage for the economy.
Role of E-commerce. In Wholesale
In a sound market economy, low operating costs, access to information and quick response are the key to success for an enterprise. Through advanced information technology, enterprises can reach out to the global market and at the same time obtain information from around the world at low cost and high speed.
Lower Transaction Costs E-commerce provides a fundamental solution to the problem of diminishing profit margin and brings new opportunities to the stagnant traditional wholesale business. It supports:
• Low operating costs
• Access to information
• Quick response
• Through the Internet, wholesalers can now gain the competitive edge that could only be enjoyed by multinational companies in the past.
E-commerce poses serious threats to intermediaries in the supply chain. It weakens the role of traditional wholesalers who are unable to adapt to the network economy. Wholesalers will be much smaller in scalar enquiries less staff and less physical space.
Online Learning
School of Open Learning and IGNOU are popular in online learning and all the contents are available on the website like study material, video lectures e pustakdavar online library. Many books from different libraries can be collected using these library facilities. Online material of various universities can be obtain from this portal.
E-Publishing & E-entertainment
1. Establish e-Procurement chain goals : Some of the objectives of e- procurement are: to automate the buying process, obtain accurate purchase reports and eliminate unauthorized purchases.
2. Construct a Procurement Audit: The organization should evaluate its existing process and determine whether it can be require some modifications. If all the purchasing information is not available at single location, or if it is not accurate or easily accessible, the procurement processes need to be modified. The most widely used technique for systematic measurement of e-procurement effectiveness is Return on Asset (ROA).
3. Develop Supplier integration matrix : Some suppliers produce critical components to the business and maintaining long-term relationships with is crucial to the organization's success. An organization cannot maintain the same kind of relationship with all its suppliers. It has to formulate It relationship strategy depending on the contribution of each supplier to the success of the company.
4. Select an e-Procurement application : The selection of e-procurement application is critical and should be guided by factors like application should improve current procurement process and leverage the investments already made by the organization in ERP/SRP system. It should be flexible enough to accommodate new procurement practices.
5. Focus on Integration: Each area of Operating Resource Management (ORM) and the requirements of employees, buyers and suppliers should be considered in the design of the e-Procurement application.
E-Procurement.gov.in is a comprehensive e- infrastructure that will help the government and the citizens realize the vision of fuelling growth via profitable B2B e-commerce. The Andhra Pradesh Government envisions providing good governance by establishing a committed, Accountable, Responsive, Inspiring, Nationalist, Genuine Government Caring Government e-procurements.
Sourcing Activity (eSourcing)
Electronic tendering and e-Sourcing tools can help buyers establish optimum contracts with suppliers, and manage them effectively. The tools include supplier databases and electronic tendering tools, evaluation, collaboration and negotiation tools. Also included arc e-Auction tools and those tools which support contract management activity.
Transactional Purchasing (ePurchasing) The Government Procurement Card (GPC) is an established and widely-accepted programme. Implementing the GPC will provide most organizations with immediate process efficiency gains. The cAuction tools are now a mature technology that can generally be implemented more quickly them other eSourcing tools.
Purchasing cards (P-Cards): P-cards are similar in principle to smart cards used by consumer-s but have extra features which make them more suitable for business-to-business purchasing. These include the ability to restrict card use to particular commodity areas, as well as monthly and annual expenditure limits.
Implementing P-Cards: P-Cards enable each card holder to be allocated a spend limit pc. transaction and a total spend limit per month. Individual transaction data is captured by the suppler at time of sale and transmitted to the issuing hank. A monthly consolidated statement is provided in paper format or electronically to the purchasing organisation for approval and payment.
Benefits of P-Cards:
Prompt payment discounts reduce the amount paid for goods and services
Guaranteeing prompt payment is a significant benefit 1) suppliers, particularly small and medium sized enterprises as it generates cash flow Increased compliance with contracts.
E-Auctions: In an e-Auction potential suppliers compete online and in 'real time', providing prices for the goods services under auction. Prices start at one level and gradually, throughout the course or tilt. E-Auctions can be based on price alone or can be weighted to account for other criteria such as quality, delivery or service levels.
E-Auction benefits
Improved preparation and planning for the tendering process
Opportunity for suppliers to submit revised hid-, for a contract (ac-; opposed to the formal tendering process)
increased market knowledge for buyers and suppliers, Suppliers particularly benefit from increased awareness of competitor pricing
Provides a more level playing field for suppliers Improved quality' of service
Porter's 5 Forces Model
Business Insight uses thousands of "rules" to evaluate hundreds of marketing and business concepts as they relate to the user's unique circumstances. This results in a set of analyses, including a success potential rating in eleven key areas and a list of strategic strengths and weaknesses.
E-entertainment: With a wifi connection or Mobile data all the online videos can be seen. No of channels can be access using mobile, TV using jio fiber connections. There are many apps like hotstar, netflix, jio TV and many other popluar apps helps in watching online movies and other entertainments live.
Online Shopping
Online Shopping and Retail
E-COMMERCE APPLICATION IN RETAIL
Retailing involves selling products and services to consumers for their personal use. Department stores, discount stores and specialty stores like jewelers, toys are all examples of retail stores. Service providers, like dentist, hotels and hair salons and online stores, like Amazon.com are also retailers.
Importance of Retailing
As the final link between consumers and manufacturers, retailers are a vital part of the business world. Retailers all value to products by making it easier for manufactures to sell and consumers to buy. They also provide services that make it less risky and more fun to buy products.
Role of E-commerce in Retailing
The nature of the business and the way retailing is done are undergoing fundamental changes. Advances in technology, like the Internet, have helped make retailing an even more challenging field. Traditional retailers with physical stores will continue to be necessary as well as on-line retailers like Amazon.
E-COMMERCE APPLICATION, IN SERVICE SECTOR
The service sector or the service industry is one of the three main industrial categories of a developed economy. Services may involve the transport, distribution and sale of goods from producer to consumer. Public utilites are often considered part of the tertiary sector as they provide services to people.
Issues for service providers
Services such as consulting and investment services offer no guarantees of the value for price paid. Charging a premium for services is usually an option only for the most established firms. whereas manufacturer may use technology to lower the cost of goods sold, the service provider offer faces an unrelenting pattern of increasing costs.
Role of E-commerce in Service Sector
E-commerce will be helpful in the banking, insurance and financial sector's and real estate, construction, telecom, tourism, postal and Logistics services. It will improve the speed of transactions, reduce management expenditure increases.
The summary of UNIT -2 LESSON -2 E- marketing, E-tailing, Online Services, E- auctions, Online Portal
summarise from the content of Book of School of Open Learning. © School of Open Learning
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