E-Commerce and Business Process Term Paper

  • Length: 6 pages
  • Sources: 5
  • Subject: Business
  • Type: Term Paper
  • Paper: #84513313
  • Related Topics: Ecommerce, B2c, Zappos, B2b

Excerpt from Term Paper :

E-Commerce and Business Process

E-Commerce Defined

E- commerce as modern business methodology

Characteristics of internet and traditional markets

Benefits of E-commerce

Critical Success Factors of E-commerce

E-commerce applications

Types of E-commerce business models

Security and legal issues

Apple Company and E-commerce

Business and E-Commerce

Implementation of E-commerce

Conventional market approach vs. modern market approach

E-Commerce Applications

Types of E-Commerce models

E- commerce defined:

E-commerce is broadly described as "utilizing online sources as well as tools to perform business in a far better way - more effectively and proficiently (Montgomery, 2007)." As a result, e-commerce supports the promise as well as challenge of impacting every part of a business' operations from product design and style and manufacturing to distribution as well as delivery service. Organizations utilizing or thinking about e-commerce ought to check out the possible functions for e-commerce in every facet of the businesses' functions. The actual case studies offer types of e-commerce programs in product creation (Farmchem, MidWest e-Solutions); marketing and advertising (Nautical Antiques, Villages of Van Buren), stock and stockroom organization (Louis Williams & Sons, Mountain One), distribution as well as product sales (Sterling Biotech, Blue Smoke Salsa), along with services following the transaction (Vanns). Companies with e-commerce pursuits (B2B or B2C) may gain advantage using the data supplied through e-commerce (e.g. customer qualities, location, as well as order dimension and frequency) to improve productivity in other parts of operations. For instance, online product sales might produce the potential for immediate delivery to consumers and lower dependence on suppliers. Additionally, online marketing might draw in consumers from parts around the globe not formerly served from the company. Social variations among sellers and buyers may present unexpected issues, therefore knowing and preparing for doing business with international consumers will boost the advantages from these business opportunities (Barkley et al., 2008).

Figure: Business and E-Commerce

Literature Review

E- commerce as modern business methodology

Numerous non-urban organizations have adjusted towards the "possibilities" and "risks" developed by improvements in information and communications systems by establishing an e-commerce approach. E-commerce frequently is described directly to refer to using the web to promote and then sell products or services. E-commerce happens to be, nevertheless, much larger and consists of "the digital trade of data, products, solutions, and funds and & #8230; the formation and upkeep of internet-dependent relationships" (Fruhling and Digman, 2000, p. 13). E-commerce might engage in the style, financing, creation, marketing and advertising, supplies, distribution, as well as services elements of a business' pursuits (OECD, 2001). As a result, the usage of e-commerce from a company has got the possibility to both improve earnings from product sales as well as considerably reduce expenses via better productivity of operations.

Figure: Implementation of E-commerce

Characteristics of internet and traditional markets

The fast development of B2B as well as B2C e-commerce demonstrates their future advantages to organizations when it comes to elevated product sales, reduced expenses, along with improved durability. But many companies are unwilling to build e-commerce or perhaps they can be disappointed with e-commerce since their encounters did not meet their expectations.

Hence, the characteristics of the internet market vs. The traditional market is that the internet market is still a very novel and experimental idea and while it has work to increase sales and awareness for some products and companies, it has not yielded the same results everywhere. In internet markets, the two primary focal points are thus the price and product. On the other hand, the traditional market is ruled by four focal points: product, price, placement and promotion and hence traditional markets can find success with four different areas i.e. they have more room for trial and error. While the internet markets is determined primarily by product and price in a very competitive and cluttered promotion structure, there is thus very little room for trial and error and the returns can only be measure after a good amount of time has passed in order to clearly determine whether the internet market strategy is working or not. The figure below shows the difference between the two markets and the approach taken in each.

Figure: Conventional Market approach vs. The Modern Market approach

Benefits of E-commerce

The start of e-commerce may lead to a substantial rise in product sales, and also the company must be ready to fulfill this demand or perhaps the e-commerce opportunity might be suddenly lost. The standard Web client wants fast and precise replies for their online purchases. The well-timed delivery service of products and solutions in conjunction with the high quality ideas of consumers is crucial to creating repeat consumers, word-of-mouth promotion, as well as advantageous internet testimonials. The Manager of Multi-channel Marketing and advertising at Vann's, Inc. suggested that a business must prepare "a few steps in advance" when it comes to hiring individuals, available manufacturing capability, sufficient stockroom area, supplies administration abilities, and customer support delivery when it changes to e-commerce. Additionally, the company can relatively handle the speed of growing product revenue by restricting internet-centered campaigns to specific geographic locations or particular client user profiles (Barkley et al., 2008).

Critical Success Factors of E-commerce

These 6 "Cs" have been metrics that offer an unequalled window inside the health of your internet or e-retail-store company (Beesmer, 2010).

• Company Web Marketer Rating, or WMR, happens to be a consumer loyalty metric put together by Satmetrix, Bain And Company, along with Fred Reichheld. This rating is based on asking a straightforward question to customers; it's a question made to filter buyer loyalty (Beesmer, 2010).

• Consumer life-time participation (CLTP). As mentioned in Rule #2, CLTP stands out as the net existing worth (WMR) involving the profit made from a customer's acquisitions. A lucrative client may have a CLTP greater than its CAC (view subsequent metric). It's additionally useful to monitor the Average Purchase Value (APV) from month to month as being a leading signal of CLTP (Beesmer, 2010).

• Consumer purchase price (CPP). This really is basically a company's fully-packed standard price to get a new consumer. Companies need to monitor this with time. Nevertheless, averages could be deceptive; and one should never assume that all clients are the same (Beesmer, 2010).

• Conversion level. For the majority of e-tailers, the appropriate transformation rates are the proportion of brand new site visitors that become purchasers. Right here, conventional obstructing-and-dealing with ideas such as streamlined landing WebPages as well as fast web page-load situations happen to be king (Beesmer, 2010).

• Churn. Indeed, e-commerce companies have churn as well! This is actually the number of your site's clients that never ever return to purchase anything. You must also, needless to say, monitor the volume of month-to-month site visitors who happen to be returning clients. (Beesmer, 2010)

• Cash conversion pattern as well as Return-on-investment. It is safe to say that only those with simple minds emphasize upon the P&L assertion only. Online clients care less about what a company's profits are if they do not produce any kind of cash flow. Online retail is generally challenging simply because there are numerous methods to burn money regardless of whether you are producing earnings-statements (Beesmer, 2010).

E-commerce applications

Businesses like Zappos, Bessemer collection business Quidsi (owner of Baby diapers.com as well as Soap.com), Vente Privee, Netflix as well as others are coming up with brand new online-retail groups and drawing offline money into the Net. However quite a bit has changed ever since the eToys and Pets.com phenomenon. Today's productive e-commerce websites do not simply toss products on a Web site and then invest hundreds and thousands of dollars on conventional brand marketing to showcase them. The strategy nowadays happen to be much more complicated and, in lots of ways, scientific: They require smart use of focused, direct-response marketing as well as careful measurements concerning the life time value of every client. All those pioneering the e-commerce group nowadays additionally show a laser-like emphasis on customer support, such as providing quick and/or free of charge product shipping. (Take into consideration Zappos, which delivers clients their footwear instantaneously.) Some other E-commerce applications are exhibited in the figure below:

Figure: Other E-commerce Applications

Analysis and Discussion

Types of E-commerce business models

The kinds of E-commerce enterprise models consist of:

Significant B2C (Business-to-Customer) Business Designs are focused on the trade of goods, knowledge or services between companies and end users in a retailing setup

Significant B2B (Business-to-Business) Business Designs are focused on the trade of goods, knowledge or services between different companies.

Business-to-Government (B-to-G) business designs are focused on the trade of goods, knowledge or services between companies, corporate entities and government owned companies in an online setup.

Business-to-Peer Networks (B-to-P) business designs are focused on the supply of technical support or hardware, software or other services to different peer networks.

Consumer-to-Business (C-to-B) business designs are focused on the trade of goods, knowledge or services from singular individuals to companies.

Consumer-to-Consumer (C-to-C) business designs are focused the personalized and customized interactions between customers.

Consumer-to-Government (C-to-G) business designs are focused on the exchange…

Sources Used in Document:


Barkley, D.L., R.D. Lamie, and D.M. Markley. (2008). E-Commerce As A Business Strategy: Lessons Learned From Case Studies Of Rural And Small Town Businesses. These materials were developed as part of the Southern Rural Development Center's National Rural e-Commerce Extension Initiative. They are based upon work supported by the Cooperative State Research, Education, and Extension Service, U.S. Department of Agriculture, under Award No. 2005-45064-03212.

Beesmer. (2010). Bessemer's Top 10 Laws of E-Commerce. Beesmer Venture Partners.

Fruhling, A.L. And L.A. Digman. 2000. "The Impact of Electronic Commerce on Business Level Strategies." Journal of Electronic Commerce Research, 1(1): 13-22.

Laudon, K.C. And Traver, C.G. (2009). E-Commerce: Business, Technology, and Society, Fifth Edition. Prentice Hall, Pearson Education, Inc.

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