What is E-commerce?

E-commerce is the buying and selling of good or services via the internet, and the transfer of
money and data to complete the sales. It's also known as electronic commerce or
internet commerce. These services provided online over the internet network.
Transaction of money, funds, and data are also considered as E-commerce.

Online stores like Amazon, Flipkart, Shopify, Myntra, Ebay, Quikr, Olx are examples of E-
commerce websites.

E-commerce refers to the paperless exchange of business information using the following ways:

• Electronic Data Exchange (EDI)

• Electronic Mail (e-mail)

• Electronic Bulletin Boards

• Electronic Fund Transfer (EFT)

• Other Network-based technologies

Features of E-Commerce

E-Commerce provides the following features:

• Non-Cash Payment: E-Commerce enables the use of credit cards, debit cards, smart cards,
electronic fund transfer via bank's website, and other modes of electronics payment.

• 24x7 Service availability: E-commerce automates the business of enterprises and the way they
provide services to their customers. It is available anytime, anywhere.

• Advertising/Marketing: E-commerce increases the reach of advertising of products and

services of businesses. It helps in better marketing management of products/services.

• Improved Sales: Using e-commerce, orders for the products can be generated anytime,
anywhere without any human intervention. It gives a big boost to existing sales volumes.

• Support: E-commerce provides various ways to provide pre-sales and post-sales assistance to
provide better services to customers.

• Inventory Management: E-commerce automates inventory management. Reports get generated

instantly when required. Product inventory management becomes very efficient and easy to
maintain.
 • Communication improvement: E-commerce provides ways for faster, efficient, reliable
communication with customers and partners

Types of e-commerce

As commerce continues to evolve, so do the ways that it’s conducted. Following are the most
traditional types of e-commerce models:

1. Business to Consumer (B2C): B2C e-commerce is the most popular e-commerce

model. Business to consumer means that the sale is taking place between a business
and a consumer, like when you buy a rug from an online retailer.

2. Business to Business (B2B): B2B e-commerce refers to a business selling a good or

service to another business, like a manufacturer and wholesaler, or a wholesaler and a
retailer. Business to business e-commerce isn’t consumer-facing, and usually involves
products like raw materials, software, or products that are combined. Manufacturers
also sell directly to retailers via B2B ecommerce.

3. Direct to Consumer (D2C): Direct to consumer e-commerce is the newest model of

ecommerce. D2C means that a brand is selling directly to their end customer without
going through a retailer, distributor, or wholesaler. Subscriptions are a popular D2C
item, and social selling via platforms like InstaGram, Pinterest, Facebook, SnapChat,
etc. are popular platforms for direct to consumer sales.

4. Consumer to Consumer (C2C): C2C e-commerce refers to the sale of a good or

service to another consumer. Consumer to consumer sales take place on platforms like
eBay, Etsy, Fivver, etc.

5. Consumer to Business (C2B): Consumer to business is when an individual sells their

services or products to a business organization. C2B encompasses influencers offering
exposure, photographers, consultants, freelance writers, etc..

Advantages of e-commerce

The advantages of e-commerce can be broadly classified into three major categories:
• Advantages to Organizations

• Advantages to Consumers

• Advantages to Society
Advantages to Organizations

• Using e-commerce, organizations can expand their market to national and

international markets with minimum capital investment. An organization can easily
locate more customers, best suppliers, and suitable business partners across the globe.
• E-commerce helps organizations to reduce the cost to create process, distribute,
retrieve and manage the paper based information by digitizing the information.

• E-commerce improves the brand image of the company.

• E-commerce helps organizations to provide better customer service.

• E-commerce helps to simplify the business processes and makes them faster and
efficient.

• E-commerce reduces the paper work.

• E-commerce increases the productivity of organizations. It supports "pull" type

supply management. In "pull" type supply management, a business process starts
when a request comes from a customer and it uses just-in-time manufacturing way.

Advantages to Customers

• It provides 24x7 support. Customers can enquire about a product or service and
place orders anytime, anywhere from any location.

• E-commerce application provides users with more options and quicker delivery of
products

. • E-commerce application provides users with more options to compare and select
the cheaper and better options.

• A customer can put review comments about a product and can see what others are
buying, or see the review comments of other customers before making a final
purchase.

• E-commerce provides options of virtual auctions.

• It provides readily available information. A customer can see the relevant detailed
information within seconds, rather than waiting for days or weeks.
 • E-Commerce increases the competition among organizations and as a result,
organizations provides substantial discounts to customers.

Advantages to Society

• Customers need not travel to shop a product, thus less traffic on road and low air
pollution.

• E-commerce helps in reducing the cost of products, so less affluent people can also
afford the products.

• E-commerce has enabled rural areas to access services and products, which are
otherwise not available to them

• E-commerce helps the government to deliver public services such as healthcare,

education, social services at a reduced cost and in an improved manner.

Disadvantages of E-Commerce
The disadvantages of e-commerce can be broadly classified into two major categories:
• Technical disadvantages
• Non-technical disadvantages

Technical Disadvantages
• There can be lack of system security, reliability or standards owing to poor
implementation of e-commerce.
• The software development industry is still evolving and keeps changing rapidly.
• In many countries, network bandwidth might cause an issue.
• Special types of web servers or other software might be required by the vendor, setting
the e-commerce environment apart from network servers.
• Sometimes, it becomes difficult to integrate an e-commerce software or website with
existing applications or databases.
• There could be software/hardware compatibility issues, as some e-commerce software
may be incompatible with some operating system or any other component.

Non-Technical Disadvantages
• Initial cost: The cost of creating/building an e-commerce application in-house may be
very high. There could be delays in launching an e-Commerce application due to mistakes,
and lack of experience.
• User resistance: Users may not trust the site being an unknown faceless seller. Such
mistrust makes it difficult to convince traditional users to switch from physical stores to
online/virtual stores.
• Security/ Privacy: It is difficult to ensure the security or privacy on online transactions.
• Lack of touch or feel of products during online shopping is a drawback.
• E-commerce applications are still evolving and changing rapidly.
 • Internet access is still not cheaper and is inconvenient to use for many potential
customers, for example, those living in remote villages.

Difference between Traditional Commerce and E-commerce :

S.No.TRADITIONAL COMMERCE E-COMMERCE

Traditional commerce refers to the E-commerce refers to the
commercial transactions or commercial transactions or
exchange of information, buying exchange of information, buying
or selling product/services from or selling product/services
person to person without use of electronically with the help of
01. internet. internet.

In traditional commerce it is In traditional commerce it is

difficult to establish and maintain easy to establish and maintain
02. standard practices. standard practices.

In traditional commerce indirect

In traditional commerce direct interaction through seller and
interaction through seller and buyer occurs using electronic
03. buyer is present. medium and internet.

Traditional commerce is carried E-commerce is carried out by

out by face to face, telephone lines internet or other network
04. or mail systems. communication technology.

In traditional commerce
processing of transaction is In e-commerce processing of
05. manual. transaction is automatic.

In traditional commerce delivery In e-commerce delivery of

06. of goods is instant. goods takes time.

Its accessibility is for limited time Its accessibility is 24×7×365

07. in a day. means round the clock.

Traditional commerce is done

where digital network is not E-commerce is used to save
08. reachable. valuable time and money.

Traditional commerce is a older E-commerce is a newer concept

method of business style which of business style which comes
09. comes under traditional business. under e-business.

Its resource focuses on supply Its resource focuses on demand

10. side. side.
 In traditional commerce customers In e-commerce customers can
can inspect products physically not inspect products physically
11. before purchase. before purchase.

Its business scope is worldwide

Its business scope of business is a as it is done through digital
12. limited physical area. medium.

For customer support, information For customer support,

exchange there is no such uniform information exchange there is
13. platform. exists uniform platform.

Scope of E-Commerce

• E-Commerce is a general concept covering any form of business transaction or

information exchange executed using information and communication technologies ((ICT’s).

• It includes electronic trading of goods, services and electronic material.

It takes place between companies, between companies and their customers or between
companies and public administrations.

❖ Electronic Markets:-

An electronic market is the use of information and communication technology to present a

range of offerings available in a market segment so that the purchaser can compare the prices
of the offerings and make a purchase decision

e.g. Airline Booking System

❖ Electronic Data Interchange:-

• It provides a standardized system for coding trade transactions so that they can be
communicated from one computer to another without the need for printed orders and
invoices & delays & errors in paper handling.
• It is used by organizations that make a large no. of regular transactions.
e.g. EDI is used in the large supermarket chains for transactions with their suppliers.

❖ Internet Commerce:-

• Information and communications technologies can be used to advertise & make sales
of wide range of goods & services.
• This application is both for business to business & business to consumer transactions.

e.g. The purchase of goods that are then delivered by post or the booking of tickets that can
be picked up by the clients.

E-Commerce Applications

• E-Marketing

• E-Advertising

• E-Banking

• E-Learning

• Mobile Commerce

• Online Shopping

• Entertainment

• E-Marketing:-

• E-Marketing also known as Internet Marketing, Online Marketing, Web Marketing.

• It is the marketing of products or services over the internet.
• It is consider to be broad in scope because not refers to marketing on the internet but
also done in Email and wireless media.
• E-Marketing ties together the creative and technical aspects of the internet, including
design development, advertising and sales.
• Internet marketing is associated with several business models i.e., B2C, B2B, C2C.
• Internet marketing is inexpensive when examine the ratio of cost to the reach of the
target.

• E-Advertising:-

• It is also known as online advertising it is a form of promotion that uses internet and
World Wide Web to deliver marketing messages to attracts customers.
• Example: Banner ads, Social network advertising, online classified advertising etc.
• The growth of these particular media attracts the attention of advertisers as a more
productive source to bring in consumers.
• E-Banking:-

• Means any user with a personal computer and browser can get connected to his
banks, website to perform any of the banking functions. In internet banking system
the bank has a centralized data base i.e., web-enabled.
• Best example for E-Banking is ATM.
• An ATM is an electronic fund transfer terminal capable of handling cash deposits,
transfer, Balance enquiries, cash withdrawals, and pay bills.
• SERVICES THROUGH E-BANKING:
a) Bill Payment Service
b) Fund Transfer
c) Investing through Internet Banking
d) Shopping

• E-Learning:-

• E-Learning comprises all forms of electronically supported learning and teaching.

• E-Learning applications and processes include web-based learning, computer-based
learning.
• Content is delivered via. The internet, intranet/extranet, audio, or video tape, satellite
TV.
• E-Learning is naturally suited to distance and flexible learning, but can also be used
conjunction with face-to-face teaching.
• E-Learning can also refer to the educational website such as those offering learning
scenarios worst and interactive exercises for children.
• A learning management system (LMS) is software used for delivering, tracking, and
managing training /education.

• Mobile Commerce:-

• Mobile Commerce also known as M-Commerce, is the ability to conduct, commerce

as a mobile device, such as mobile phone.
• Banks and other financial institutions use mobile commerce to allow their customers
to access account information and make transactions, such as purchasing,
withdrawals etc.,
• Using a mobile browser customers can shop online without having to be at their
personal computer.
• SERVICES ARE:
a) Mobile ticketing
b) Mobile contract purchase and delivery mainly consumes of the sale of ring tones,
wallpapers and games of mobile phones.
c) Local base services
• Local discount offers

• Local weather

d) Information services

• News

• Sports, Scores

• Online Shopping:-

• Online shopping is the process whereby consumers directly buy goods or services
from a sell in real time, without intermediary services over the internet.
• An online shop, e-shop, e-store, internet shop web shop, web store, online store, or
virtual shop evokes the physical analogy of buying products or services in a shopping
center.
• In order to shop online, one must be able to have access to a computer, a bank
account and debit card.
• Online shoppers commonly use credit card to make payments , however some
systems enable users to create accounts and pay by alternative means ,such as
a. Cheque.
b. Debit cards.
c. Gift cards
• Online stores are usually available 24 hours a day

• Entertainment:-

• The conventional media that have been used for entertainment are
a) Books/magazines.
b) Radio.
c) Television/films.
d) Video games.

Online books /newspapers, online radio, online television, online firms, and online games
are common place in internet where we can entertain.

• Online social networking websites are one of the biggest sources of E-entertainment
for today’s tech-savvy generation.
 E-Commerce Trade Cycle

E-Commerce can be applied to all, or different phases of the trade cycle.

• The trade cycle varies depending on:-

a) The nature of the organization (or individuals) involved.

b) The nature and type of goods or services being exchanged.
c) The frequency of trade between the partners to the exchange process.

• The trade cycle has to support:-

✓ Finding goods or services appropriate to the requirement and agreeing the terms of
trade often referred to as search and negotiation.
✓ Placing the order, taking delivery and making payment i.e., execution & settlement of
transaction.
✓ After sales activity such as warrantee, service etc.

There are numerous categories of trade cycles depending on the factors outlined above and,
for many transactions, further complicated by the complexities of international trade.

Three generic trade cycles can be identified:-

1. Regular, repeat transactions between commercial trading partners (Repeat Trade Cycle).

2. Irregular Transactions between commercial trading partners where execution and

settlement are separated (Credit Transactions)

3. Irregular transactions in once-off trading relationships where execution and settlement

are typically combined (Cash Transactions)
• Electronic Markets:-

a) It increases the efficiency of the market.

b) It reduces the search cost for the buyer and makes it more likely that buyer will
continue the search until the best buy is found.
c) It exists in financial markets & they are also used in airline booking system.
d) It is irregular transaction trade.

• Electronic Data Interchange:-

a) It is used for regular repeat transactions.

b) It takes quite a lot of work to set up systems.
c) Mature use of EDI allows for a change in the nature of the product or service.

e.g. Applications are sending test results from the pathology laboratory to the hospital or
dispatching exam results from exam boards to school.
• Internet Commerce:-

a) The first stage

• Advertising appropriate goods and services.

• Internet sites offer only information & any further steps down the trade cycle are
conducted on the telephone.

b) The Second stage

• An increasing no. of sites offer facilities to execute & settle the transaction.

• Delivery may be electronic or by home delivery depending on the goods and services.

c) The final stage

• After-sales service.

• On-line support & On-Line services.

Tools & Technologies for E-Commerce

• Electronic data interchange (EDI)

• Bar codes

• Electronic mail

• Internet

• World Wide Web

• Product data exchange

• Electronic forms
Electronic Data Interchange (EDI)

EDI is the computer-to-computer exchange of structured business information in a standard

electronic format. Information stored on one computer is translated by software programs
into standard EDI format for transmission to one or more trading partners. The trading
partners’ computers, in turn, translate the information using software programs into a form
they can understand.

Bar Codes

a) Bar codes are used for automatic product identification by a computer. They are a
rectangular pattern of lines of varying widths and spaces. Specific characters (e.g.
numbers 0-9) are assigned unique patterns, thus creating a "font" which computers
can recognize based on light reflected from a laser.
b) The most obvious example of bar codes is on consumer products such as packaged
foods. These codes allow the products to be scanned at the checkout counter. As the
product is identified the price is entered in the cash register, while internal systems
such as inventory and accounting are automatically updated.

Electronic Mail

Messages composed by an individual and sent in digital form to other recipients via the
Internet.

Internet

The Internet is a global network of millions of diverse computers and computer networks.
These networks can all "talk" to each other because they have agreed to use a common
communications protocol called TCP/IP. The Internet is a tool for communications between
people and businesses. The network is growing very, very fast and as more and more people
are gaining access to the Internet, it is becoming more and more useful.

World Wide Web

✓ The World Wide Web is a collection of documents written and encoded with the
Hypertext Markup Language (HTML). With the aid of a relatively small piece of
software (called a "browser"), a user can ask for these documents and display them on
the user’s local computer, although the document can be on a computer on a totally
different network elsewhere in the world.
✓ HTML documents can contain many different kinds of information such as text,
pictures, video, sound, and pointers, which take users immediately to other web
pages.
✓ It is this ability to jump from site to site that gave rise to the term "World Wide Web."
Browsing the Web (or "surfing the Net") can be a fascinating activity, especially to
people new to the Internet. The World Wide Web is by far the most heavily used
application on the Internet.
Product Data Exchange

✓ Product data refers to any data that is needed to describe a product. Sometimes that
data is in graphical form, as in the case of pictures, drawings and CAD files. In other
cases the data may be character based (numbers and letters), as in the case of
specifications, bills of material, manufacturing instructions, engineering change
notices and test results.
✓ Product data exchange differs from other types of business communications in two
important ways.
✓ First, because graphics are involved users must contend with large computer files and
with problems of compatibility between software applications. (The difficulty of
exchanging CAD files from one system to another is legendary).
✓ Second, version control very quickly gets very complicated. Product designs, even
late in the development cycle, are subject to a great deal of change, and because
manufacturing processes are involved, even small product changes can have major
consequences for getting a product into production.

Electronic Forms

✓ Electronic form is a technology that combines the familiarity of paper forms with the
power of storing information in digital form. Imagine an ordinary paper form, a piece
of paper with lines, boxes, check-off lists, and places for signatures. To the user an
electronic form is simply a digital analogue of such a paper form, an image, which
looks like a form but which appears on a computer screen and is filled out via mouse,
and keyboard.
✓ Behind the screen, however, lie numerous functions that paper and pencil cannot
provide. Those extra functions come about because the data from electronic forms are
captured in digital form, thus allowing storage in data bases, automatic information
routing, and integration into other applications.

E-commerce in perspective

E-commerce can be defined from five perspectives.

▪ First, business process. E-commerce is doing business electronically by completing

business process over electronic network, thereby substituting information for
physical business process.
▪ Second, services. It is a tool that addresses the desire of governments, firms,
consumers, and management to cut service costs while improving the quality of
customer service and increasing the speed of service delivery.
▪ Third, learning. It enables online training and education schools to the customers.
▪ Fourth is collaborative which is framework for inter- and intra organizational
collaboration.
▪ Final is community, which provides a gathering place for community members to
learn, transact, and collaborate.
 There are few reason that the companies use E-commerce to support their business.

• First, it enables the company’s business to reach the global market. It can cater
demand for both the national and international market. By using E-commerce, it can
allow the company business operate their business 24 hours a day even at holiday or
weekends. So, it can significantly increase the sales and profit.

• Besides that, companies also can reduce some costs by using E-commerce. It is
because companies can run with less employees such as sales staff .Other than that,
companies also can reduce the cost of phone bills, utility costs and others.
• Furthermore, it can let the company gain the loyalty of the customers. Through the
E-commerce, companies can always make it to customer’s wish and fulfill the
customers’ requirement with fast and reasonable cost. Customers will feel satisfy with
the service of the company, so it will gain the loyalty from the customers that will
increase the sales and profit.

Obstacles in Adopting e Commerce Applications

1. Lack of awareness

2. Trust and Confidence

3. The difficulty in re-engineering the business process

4. Huge investment required

5. Poor customers, Suppliers, and Business Partners’ Base

6. Lack of trust and confidence

7. Lack of legal and Regulatory Framework

8. Lack of Knowledge of E-commerce

9. Weak Payment and delivery system

10. Taxation

1. Lack of awareness:-

The primary obstacle to the adoption of e-commerce is the lack of awareness of e-commerce
and the unavailability of access to telecom infrastructure at a reasonable cost. The
organizations are unaware of the current developments or the role they could play in this new
marketplace. The lack of awareness is closely related to the fact that the organizations in
India are usually slower in adopting new technologies give the high investments necessary.
Many of the business organizations are less risk-taking and are not ready to experiment.

2. Trust and Confidence:-

Another main obstacle in the growth of the e-commerce market is the lack of trust and
confidence in various aspects of electronic marketplace. Organizations fear doing businesses
with international marketplaces, due to culture backgrounds and the fear of being deceived,
due to lack of knowledge of new technologies.

3. The difficulty in re-engineering the business process:-

It takes much longer than expected to position an entire organization to benefit from e-
commerce. Reengineering paper-driven processes and convincing people to use the new
system regularly are slowing the pace of implementation.

4. Huge investment required:-

The investment required for converting information into useful electronic format and to
develop new methods to conduct paper-based processes electronically acts as a major barrier
for small organizations. In addition to the cost concerns, organizations also face the resistance
to change within their organizations and among the customers and suppliers.

5. Poor customers, Suppliers, and Business Partners’ Base:-

Another obstacle is the lack of a critical mass among customers, suppliers, and business
partners. Until sufficient numbers of their main local customers or suppliers participate in
online commerce activities, there is little incentive for organizations to become engaged in e-
commerce themselves.

6. Lack of trust and confidence:-

Lack of trust and confidence in various aspects of the electronic marketplace is another main
obstacle to the e-commerce. Small organizations fear doing business with international
marketplaces due to cultural backgrounds, fear of being deceived and due to lack of
knowledge new technologies.

7. Lack of Legal and Regulatory Framework:-

Conducting business through electronic networks raises numerous legal questions that
include: the legal status and jurisdiction of international e-commerce transactions; intellectual
property rights and copyright protection for digital content; the privacy of personal data; and
the validity of electronic evidence in legal disputes.

8. Lack of Knowledge of E-commerce:-

E-commerce can demand fundamental shifts in business strategies, operations, and

technologies. Due to a lack of knowledge of e-commerce technologies, there is an internal
resistance to change, and skepticism of the benefits of e-commerce among the business
organizations.
 9. Weak payment and delivery systems:-

The majority of customers and suppliers do not use credit cards for their payments. E-
commerce is associated with insufficient security safeguards and authentication processes.
Customers are worried about giving their credit card details to vendors because of the
security issues prevalent in the e-commerce.

10. Taxation:-

Business organizations are more concerned about taxation because may to like to avoid taxes.
Also, the taxation process is not transparent and often subjects to the discretion of evaluators.
Malpractice is common practice to avoid taxes. The application of existing taxation on
commerce conducted over the internet requires that tax principles be consistent with the
established principles of international taxation, neutral with respect to other forms of
commerce.

Impact of E-commerce
On Economy:
The buying and selling of goods is the most basic economic transaction, any altering in this
reflects in the supply chain management. The number of consumers purchasing online has
increased gradually with the increased use of the internet. The buyers and sellers are no longer
restricted to a retail store. Within a few clicks, a list of hundreds of products can be accessed.
The growth in e-commerce has reduced consumer’s search to different retail stores which has
resulted in decrease of small retail stores or businesses which are not involved in e-commerce.
The larger businesses such as furniture stores, book outlets, automobile dealers are able to
compete in this environment. b2b ecommerce has also emerged in the online market with
increase in online users.
The growth in e-commerce sales has provided an exponential growth in the branch of logistics
as the ecommerce platform integrates third party logistics vendors such as Fedex, UPS,
BlueDart etc.
E-commerce controls demand patterns. E-commerce, technology are influencing the speed of
sales transactions. The economy is globally affected through e-commerce. In ancient days, it
took a while to affect the economy of the two dependent countries, but due to extreme changes
in sales pattern and due to e-commerce this impact is almost immediate.

On Customers:
The number of consumers purchasing online has increased gradually with the increased use of
the internet. People are too busy nowadays to go to banks or purchase goods by going to the
market. So e-commerce has made their life more convenient.
Customers today search on google about the products they wish to purchase. Google being a
powerful search engine shows hundreds of products matching the consumer needs.
Customers can checkout the prices of the items they want to purchase, on different websites
and make a decision to purchase. It is a lot easier instead of going to 5 different retailers to
know the price. It saves a lot of time! Also, the availability of e-store is 24*7.
Due to a wide range of products, users spend more time on the websites. Also, digital payment
methods allow the consumers to pay online or pay on delivery.
The functionality of easy returns helps the consumers to return back the goods they have
purchased by sitting at home. E-commerce has made the shopping experience very smooth and
enriching.

On Traditional Business and on online business

E-commerce is eternal. The threat of e-commerce is to all, from small startups to huge
corporations. The ultimatum from e-commerce is extreme for all the traditional old school
businesses who are not willing to accept the changing business landscape.
Business organizations must try sticking to their core practices and for other technical
functions, outsource the tasks to skilled enterprises.

• Elimination of middlemen: Businesses can sell directly to the customers now,

without the involvement of any middlemen. E-commerce has eliminated the use of
middlemen due to which costs are reduced. So, business owners are able to earn higher
profits.
• Marketing: As e-commerce has changed the purchasing methods of people, it is
expected that the marketing methods must also change. People search on google first,
even if they want to make a purchase on physical shops. So, with the rise in e-
commerce, digital marketing has replaced traditional marketing methods.
• Higher Profits: Due to increase in sales in e-commerce, the traditional commerce
sales have been downgraded. 24*7 availability and convenience has resulted in huge
profits.
• Global marketplace: All the customers from overall the world can access your
products by simply sitting at home. It is due to the huge impact of e-commerce. It is
very easier to differentiate the prices online.

Positive Impacts of E-commerce to the society

1. Use of the internet

The internet is very popular among youth and students. The increased use of internet users has
led to the notable growth in e-commerce, digital advertisements, mobile e-commerce etc.
The Indian education system has implemented various educational models through various
computer tools and technical aspects, which are suitable for all levels, from primary to higher
secondary level students.
The students from urban and rural areas were provided laptops and tablets at a very low cost
with the access to internet, e-books which helps to improve their lifestyle and studies. As the
educational standards have been kept on rising, it has increased the use of the internet among
the students.
With the high speed internet connectivity, Users can now start an Online business, sell & buy
stocks in any trade market and finscreener is considered as good resource to monitor different
stocks If you really want to explore more in stock market.
2. Technological Awareness
People today are becoming more tech-savvy. On account of using the latest applications,
gadgets, tools, people are more technically aware. E-commerce plays a vital role to create this
awareness.
Digital advertisements, latest tools available online, enables users to know about the
advancement. High tech smartphones are trending these days, few of which are only available
online.

3. Marketing Patterns
Marketing methods have been digitized. It is easier to track the effectiveness of promotions.
Email marketing, on click marketing, etc have changed the way marketing used to be. You can
easily drive a lot of traffic on websites using digital marketing.
This huge advancement in marketing methods is an impact of e-commerce.

4. Need of Highly skilled IT executives

E-commerce has deeply impacted the Human Resource branch. In order to run the e-store,
highly skilled IT executives are required. Workforce planning to manage the demand. The
increased use of automation alters the needs of the workforce.
So, a huge number of job opportunities have been created in the IT sector, and firms are willing
to pay huge amounts to the people with advanced skills.

Negative Impacts of E-commerce to the society

Every coin has two sides. In the similar manner, e-commerce too has few disadvantages which
are mentioned below:
1. Customers are unable to examine the products.
2. Security is the biggest concern. Online payment transactions can result in fraud sometimes.
3. Due to some reasons, there might be a delay in the products to reach out to the customer.
4. Website maintenance is the biggest concern for business owners. It needs to be taken care
24*7 for technical glitches.
5. The updates part in both the hardware and software consistent is a must.
6. As middlemen are eliminated, to reduce costs, most of the companies try to eliminate these
positions, their jobs are in danger these days.
 UNIT- II

Value Chain model

A value chain for a product is the chain of actions that are performed by the business to add
value in creating and delivering the product. For example, when you buy a product in a store
or from the web, the value chain includes the business selecting products to be sold,
purchasing the components or tools necessary to build them from a wholesaler or
manufacturer, arranging the display, marketing and advertising the product, and delivering
the product to the client.

Supply Chain

· A supply chain is a system of organizations, people, technology, activities, information

and resources involved in moving a product or service from supplier to customer.

· Supply chain activities transform natural resources, raw materials and components into
a finished product that is delivered to the end customer.

· In sophisticated supply chain systems, used products may re-enter the supply chain at
any point where residual value is recyclable.

Porter’s Value Chain Model

The idea of the value chain is based on the process of organization, the idea of seeing a
manufacturing (or service) organization as a system, made up of subsystems each with inputs,
transformation processes and outputs. Inputs, transformation processes, and outputs involve
the acquisition & consumption of resources- money, labour, materials, equipment, buildings,
land, administration and management. How value chain activities are carried out determines
costs and affects profits.

Most organizations engage in hundreds, even thousands of activities in the process of

converting inputs to outputs. These activities can be classified generally as either primary or
support activities that all businesses must undertake in some form.

According to Porter (1985), the primary activities are:-

 • Inbound Logistics: involve relationships with suppliers and include all the activities
required to receive, store & disseminate inputs.
• Operations: are all the activities required to transform inputs into outputs (products &
services).
• Outbound Logistics: include all activities required to collect, store & distribute the
output.
• Marketing & Sales: activities inform buyers about products & services, induce buyer
to purchase them and facilitate their purchase.
• Service: includes all the activities required to keep the product or service working
effectively for the buyer after it is sold and delivered.

Support Activities are:-

• Procurement: is the acquisition of inputs, or resources, for the firm.

• Human Resource Management: consists of all activities involved in recruiting,
hiring, training, developing, compensating and dismissing or laying off personnel.
• Technological Development: pertains to the equipment, hardware, software,
procedures and technical knowledge brought to bear in the firm’s transformation of
inputs into outputs.
• Infrastructure: Serves the company’s needs & ties its various parts together, it
consists of functions or departments such as accounting, legal, finance, planning,
public affairs, government relations, quality assurance & general management.

Value chain activities are not isolated from one another. Rather, one value chain activity
often affects the cost or performance of other ones. Linkages may exist between primary &
support activities. Interrelationships among business units form the basis for a horizontal
strategy. Such business unit interrelationships can be identified by a value chain analysis.

Inbound Logistic- From Suppliers

Outbound Logistic- From Customers

Inter organisational value-chain:
Strategic Business unit chains

A strategic business unit, popularly known as SBU, is a fully-functional unit of a business

that has its own vision and direction. Typically, a strategic business unit operates as a
separate unit, but it is also an important part of the company. It reports to the headquarters
about its operational status.

Four Stages of Strategy Formulation:

• Consideration of environmental changes that bring about new opportunities and pose
new threats.
• Assessment of the internal strengths and weaknesses of the institution and in
particular its ability to respond to those opportunities and threats.
• A decision-making process influenced by the values, preferences and power of
interested parties.
• A strategy generating process concerned with generating options and evaluating them

Strategic implications of IT

o IT – initially used for administrative automation.

o ICT (information and communications technology)used for:
 a) Intra-organisational systems
b) Inter-organisational systems
c) Public access networks (Internet)
d) Mobile data communications

o The use of ICTs can have strategic implications for small and large organisations.

e-Commerce technologies:

EDI:

✓ Streamline supply logistics.

✓ Facilitate decreases in trade cycle times.

Electronic Markets:

✓ Redefine the operation of a market sector.

Internet e-Commerce:

✓ New direct sales opportunities

✓ Novel business to business and business to consumer applications

e-Commerce evaluation

Evaluate:

✓ Feedback from Users

✓ Feedback from those who gave up?!

Loopback:

✓ Improve it
✓ Revise it
✓ Update it

Industry value-chain

An industry value-chain is a physical representation of the various processes involved in

producing goods (and services), starting with raw materials and ending with the delivered
product (also known as the supply chain).