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Electronic Commerce for the
Competence Examination
Dr. Basil Dudin
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Definitions and Concepts
Electronic Commerce: The process of buying, selling,or exchanging products, services, or information viacomputer netor!s.
Electronic Business: " broader definition of EC thatincludes not #ust the buying and selling of goods andservices, but also servicing customers, collaboratingith business partners, and conducting electronic
transactions ithin an organi$ation. Defined through the perspectives of communications,
business process, services, learning and collaboration.
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Dimensions of Electronic Commerce
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%rganisations in E&Commerce
EC organizations
Brick-and-mortar organizations
%ld&economy organi$ations 'corporations( that perform
most of their business off&line, selling physical products bymeans of physical agents
Virtual (pure-play) organizations
%rgani$ations that conduct their business activities solelyonline
Click-and-mortar (click-and-brick) organizations
%rgani$ations that conduct some e&commerce activities, butdo their primary business in the physical orld
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)rameor! for Electronic Commerce
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*a#or Business +ressures and oles of
Electronic Commerce
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Business Environment Drivers for E&
Commerce
%rgani$ational response strategies
-trategic systems
-"gile systems
-Continuous improvement efforts and business
process restructuring
-Customer relationship management
-Business alliances
-Electronic mar!ets
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Business Environment Drivers for E&
Commerce eductions in Cycle Time and Time&to&*ar!et
cycle time reduction
hortening the time it ta!es for a business to complete aproductive activity from its beginning to end
Empoerment of Employees
EC allos the decentrali$ation of decision ma!ing andauthority via empoerment and distributed systems, butsimultaneously supports a centrali$ed control
upply Chain /mprovementsEC can help reduce supply chain delays, reduce inventories,and eliminate other inefficiencies
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Business Environment Drivers for E&
Commerce
-*ass Customi$ation: *a!e&to&%rder in 0arge1uantities
mass customization
+roduction of large 2uantities of customi$ed items-/ntrabusiness: )rom ales )orce "utomation to
/nventory Control
knowledge anagement (!)
The process of creating or capturing !noledge,storing and protecting it, updating and maintainingit, and using it
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E&Commerce Business *odels
Typical EC Business *odels
-%nline direct mar!eting
-Electronic tendering systems:
tendering 'reverse auction(
*odel in hich a buyer re2uests ould&be sellers to submit
bids3 the loest bidder ins
&4ame&your&on&price model:
*odel in hich a buyer sets the price he or she is illing to
pay and invites sellers to supply the good or service at that
price
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E&Commerce Business *odels
Typical EC Business *odels
- )ind the best price
affiliate marketing
"n arrangement hereby a mar!eting partner 'a business,an organi$ation, or even an individual( refers consumers to
the selling company5s 6eb site
"iral marketing
6ord&of&mouth mar!eting in hich customers promote aproduct or service to friends or other people
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E&Commerce Business *odels
Typical EC Business *odels
group purchasing
1uantity purchasing that enables groups of
purchasers to obtain a discount price on theproducts purchased
#Es
mall&to&medium enterprises
e-co-ops
"nother name for online group purchasingorgani$ations
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E&Commerce Business *odels
Typical EC Business *odels
-%nline auctions
-+roduct and service customi$ation
customization
Creation of a product or service according to the
buyer5s specifications
-Electronic mar!etplaces and exchanges
-/nformation bro!ers
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E&Commerce Business *odels
Typical EC Business *odels
-Bartering
-Deep discounting
-7alue&chain integrators
-7alue&chain service providers
-upply chain improvers
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%rganisational Benefits
8lobal each
Cost eduction
upply Chain
/mprovements Extended 9ours
Customi$ation
4e Business *odels
7endors5 peciali$ation
apid Time&to&*ar!et
0oer CommunicationCosts
Efficient +rocurement
/mproved Customerelations
p&to&Date Company*aterial
4o City Business+ermits and )ees
%ther Benefits
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Consumer Benefits
bi2uity
*ore +roducts and
ervices
Customi$ed +roducts
and ervices
Cheaper +roducts and
ervices
/nstant Delivery
/nformation "vailability
+articipation in
"uctions
Electronic Communities
4o ales Tax
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ocietal Benefits
-Telecommuting
-9igher tandard of 0iving
-9omeland ecurity
-9ope for the +oor
-"vailability of +ublic ervices
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Electronic *ar!etplaces
*ar!et space components
-Customers
-ellers
-+roducts and services
digital products
8oods that can be transformed into digital format
and delivered over the /nternet
-/nfrastructure
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Electronic *ar!etplaces
*ar!et space components
front end
The portion of an e&seller5s business processes through hich
customers interact, including the seller5s portal, electroniccatalogs, a shopping cart, a search engine, and a payment
gateay
back end
The activities that support online order&ta!ing. /t includes
fulfillment, inventory management, purchasing from
suppliers, payment processing, pac!aging, and delivery
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Electronic *ar!etplaces
*ar!et space components
intermediary
" third party that operates beteen sellers and
buyers.
-%ther business partners
-upport services
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Types of Electronic *ar!etplaces
Electronic torefronts
storefront
" single company5s 6eb site here products or
services are sold *ost common mechanisms are a'n(:
- electronic catalog
- search engine
- electronic cart
- e&auction facilities
-payment gateay
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Types of Electronic *ar!etplaces
e-mall (online mall)
"n online shopping center here many onlinestores are located
Types of tores and *alls-8eneral stores;malls
-peciali$ed stores;malls
-egional versus global stores-+ure online organi$ations versus clic!&and&mortar
stores
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Types of Electronic *ar!etplaces
e-mall (online mall)
"n online shopping center here many onlinestores are located
Types of tores and *alls-8eneral stores;malls
-peciali$ed stores;malls
-egional versus global stores-+ure online organi$ations versus clic!&and&mortar
stores
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Types of Electronic *ar!etplaces
Types of E&*ar!etplaces
e-marketplace
"n online mar!et, usually B
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Types of Electronic *ar!etplaces
Types of E&*ar!etplaces
sell-side e-marketplace
" private e&mar!etplace in hich a company sells
either standard or customi$ed products to 2ualified
companies
buy-side e-marketplace
" private e&mar!etplace in hich a company
ma!es purchases from invited suppliers
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Types of Electronic *ar!etplaces
public e-marketplaces
B
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Types of Electronic *ar!etplaces
ix ma#or types of portals
-Commercial 'public( portals
-Corporate portals
-+ublishing portals
-+ersonal portals
-*obile portals
-7oice portals
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Types of Electronic *ar!etplaces
mobile portal
" portal accessible via a mobile device
"oice portal
" portal accessed by telephone or cell phone
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/ntermediation in Electronic
Commerce
infomediaries
Electronic intermediaries that control information flo in cyberspace, oftenaggregating information and selling it to others
)ive limitations of direct interaction
- earch costs- 0ac! of privacy
- /ncomplete information
- Contract ris!
- +ricing inefficiencies
e-distributor"n e&commerce intermediary that connects manufacturers 'suppliers(ith business buyers by aggregating the catalogs of many suppliers inone place=the intermediary5s 6eb site
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/ntermediation in Electronic
Commerce
disintermediationElimination of intermediaries beteen sellers and
buyers
reintermediation
Establishment of ne intermediary roles for
traditional intermediaries that have beendisintermediated
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Electronic etailing
%vervie of Electronic etailing
electronic retailing (e-tailing)
etailing conducted online, over the /nternet
e-tailers
etailers ho sell over the /nternet
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Electronic etailing
Characteristics of uccessful E&Tailing- 9igh brand recognition
- " guarantee provided by highly reliable or ell&!non
vendors- Digiti$ed format
- elatively inexpensive items
- )re2uently purchased items
- Commodities ith standard specifications
- 6ell&!non pac!aged items that cannot be opened even in
a traditional store
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Electronic etailing Business *odels
Classification by Distribution Channel
>. *ail&order retailers that go online
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Electronic etailing Business *odels
direct marketing
Broadly, mar!eting that ta!es place ithout
intermediaries beteen manufacturers andbuyers3 in the context of this boo!, mar!eting
done online beteen any seller and buyer
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Electronic etailing Business *odels
"irtual (pure-play) e-tailers
)irms that sell directly to consumers over the
/nternet ithout maintaining a physical sales
channel
click-and-mortar retailers
Bric!&and&mortar retailers that offer a transactional
6eb site from hich to conduct business
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Electronic etailing Business *odels
brick-and-mortar retailers
etailers ho do business in the non&
/nternet, physical orld in traditional bric!&and&mortar stores
multichannel business model
" business model here a company sells inmultiple mar!eting channels simultaneously
'e.g., both physical and online stores(
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Electronic etailing Business *odels
etailing in %nline *alls
- eferring Directories
- *alls ith hared ervices
epresentative B