Information Technology Project Report

 

A  PROJECT REPORT ON

A COMPARATIVE ANALYSIS ON E – BUSINESS IN ONLINE SHOPPING WITH SPECIAL REFERENCE TO FLIPKART AND AMAZON Submitted in partial fulfillment of the requirement For the award of the degree of MASTERS OF BUSINESS ADMINISTRATION. ADMINISTRATION. DEPARTMENT OF BUSINESS ADMINISTRATION SESSION (2014-2016 (2014-2016))

Under the guidance of : SHRUSTHII BA!AI SHRUSTH &ASSISTA#T !R'F(SS'R)  

Submitted By: "HA#"HA$ SI#%H Roll #o*+,-,./--0/ Batch MBA !"#$%#&

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Ac'()*+,-,/,(t I would li8e to e9pre my incere gratitude and regard to my internal guide MS. SHRUS SH RUSHT HTII BA BAJP JPA AI for her cont contant ant inpi inpirati ration4 on4 uper uper;ii ;iion on and in;al in;aluabl uablee guidance for ma8ing the probuine?@ ';erall4 the anwer that firm ha;e faced mot of the challenge identified in the pat4 and that thi imply repreent the latet iteration of thee challenge* 'rganiation 'rganiat ion ha;e faced the challenge of integrating autonomou buinee* A "oniderable literature ha grown up around all of the problem in managing  probaed firm mut deal with de;eloping people 8ill among their Technical Te chnical manager4 be they engineer4 financial analyt4 or oftware de;eloper*

 3anaging acro generation i certainly not a new iue* And both the  buine today from managing in a bric8 bric8 and mortar buine*

 

Thee fi Th fir rtt fa fact ctor or di dit tin ingu gui ihi hing ng e> e>bu bui ine ne  fr from om tr trad adit itio iona nall bu bui ine ne  i th thee comple9ity of the problem*

 7hat eem different about managing e>buinee today tem from the Interaction of facing all of thee challenge imultaneouly* imultaneouly* 7hile organiation may ha;e faced each of thee challenge before4 they ha;e  probably ne;er faced o many challenge challenge at the ame time* time* Thi create a le;el of comple9ity eldom e9perienced before* A econd4 econd4 more important et of factor wa noted e9plicitly by the repondent* In fact4 when preed on thee iue4 repondent agreed a to the ditincti;ene of  two tw o of th thee ch chal alle leng nge e:: Un Unce cert rtai aint nty y an and d p pee eed* d* 6irt rtua uall lly y e; e;er ery y pe per ron on we inter;iewed firt noted that the bigget change in mo;ing to e>buine i the peed* Thing happen o much more quic8ly4 Requiring fater organiational repone than they had e;er faced before* Second4 while fewer noted it pecifically4 the uncertainty challenge wa at leat implicit if  not e9plicit*  They noted the concern with not 8nowing for ure how to manage in the preent en;ironment that wa accentuated by uncertainty regarding what might happen ne9t* It eem that the combination of uncertainty regarding the way in which certain factor will change change in the future with the !eople in the (>Buine 7! 7! --> ++ increai increaing ng pe peed ed at whi which ch the they y wil willl cha change nge pre preen ent t the mo mott for formi midab dable le management challenge unique to an e>buine* Thu4 managing an e>buine today require dealing with an unuual amount of  comple9ity4 uncertainty4 and dynamicity* Thi certainly require a new paradigm for organiing in term of how the tructure4 procee4 and people of the firm are

 

managed* Howe;er4 Howe;er4 before dicuing thi new paradigm4 we will firt e9amine the different differe nt e;olutionary path ta8en by different e>buine*

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INTRODUCTION Thi turn toward Internet baed technologie generated a new tatu quo in the  buine world* (>buine wa defined by IB3 bac8 in +/4 a =the transformation of key business processes through through the use of Internet technologies @*

Accord Acc ording ing to Chaffey (2002)4 e>buine i decribed a = all the electronically mediated information exchanges, both within an organization and with external   stakeholders, supporting supporting the range of business business processes*@

(>Buine enable an enterprie to pread it wing to the global cutomer* To e9te e9 tend nd th thee a ale le pl plat atfo form rm to a fu futu turi rit tic ic di dime men nio ion4 n4 bu bui ine ne  ho hou ue e ha ha;e ;e

 

incorporated oftware that can run on platform offered by the 7orld 7ide 7eb* (>buine ha now penetrated into conumer good and other production and er;ice baed indutrie* I!SR olutionJ 7eb Application 1i;iion ha pro;en e9pertie in creating cutomied olution that can manage web baed Buine $ogitic perfectly*

+ SHORT HISTORY OF E%BUSINESS 1epite the fact that e>buine i a relati;ely new trend in the buine ector4 it  brief hitory i filled with contro;erial e;ent* The rapid growth of the popularity of the 7eb from + wa accompanied by a highly profitable period for e>  buine companie* Setting Setting up a fully functional functional e>Buine webite webite wa ;ery eay and cot eff efficien icientt and at that time it wa thought to guar guarantee antee ucce and profit &!Connor and "al#in, $%%&' anenko, 200) * The number of e>buinee 8ept growing in an attempt for e;erybody to ha;e a hare from the profit pie* 'n the turn of the century4 their number reached it pea8 and their profit opportunitie and  potential financial growth wa capped* Thi led to the huge toc8 mar8et collape of many e>buine companie which i 8nown a dot*com but* After a fi;e year   period where companie had to re;aluated their trategic approach toward e> commerce4 growth of e>buinee tarted to increae again4 reaching double digit le;el through the current period.  

LIMITATIONS LIMITA TIONS OF E%BUSINESS E%BUSINES S SYSTEM% SYSTEM % The limitation of e>buine can be claified a two factor which area below> +) Te Techn chnolo ologic gical al

 

E) #on #on>te >techn chnolo ologic gical* al*

E

 

TECHNICAL LIMITATIONS LIMITATIONS OF ELECTRONIC OMMERCE •

$ac8 of u $ac8 ufffic icie ien nt y yttem communication protocol

i

tan t and dar ard d44

reli liaabi billit ity y4

ecu e currit ity y

and an d

•

•

 #ot enough telecommunication telecommunication bandwidth* bandwidth*  

•

•

•

KThe oftware de;elopment tool are till e;ol;ing and changing rapidlyK

Integrati Integr ating ng the In Inter ternet net and ele electr ctroni onicc com comme merce rce of oftwa tware re wit with h cur curren rentt databae and application difficultly

Additional cot to requet pecial 7eb er;er and other infratructure4 in addition to the networ8 er;er  

•

!oible problem of interoperability4 that mean ome e>buine oftware or application doe not fit with ome hardware4 or i incompatible with ome operating ytem or other component

NON%TECHNICAL LIMITA LIMITATIONS TIONS

 

•

$ac8 of feel and touch online

•

3any complicated legal iue

•

•

Rapidly changing and e;ol;ing e>buine

 

0 •

$ac8 of upport er;ice

•

Inufficiently Inufficie ntly large enough number of eller and buyer

•

Brea8down of human relationhip

 

 

  Incon;enient and e9peni;e acceibility to the Internet 

OBJECTIVE OF E%BUSINESS% • •

• • •

Impro;e er;ice* Sa;e time* >Time ta8en by cutomer* >(laped time for proce Reduce proce error* Reduce the cot of core er;ice pro;iion* Free taff to pro;ide ;alue added er;ice* er;ice*

 

•

Impro;e morale >gi;e people the tool and time they need

 

,

ADVANTAGES%

The benefit of implementing (>Buine tool i not o much in the ue of  technology4 a in the treamlining of buine procee and the eae in finding new mar8et* Some of the ad;antage include: •

quic8er and eaier communicatio communication* n*

•

trengthened mar8eting capabilitie and reach

•

increaed hour of operation &a webite pro;ide E, hour / day information to e9iting and potential cutomer)

•

acce to broader information through reearch

•

reduci red ucing ng the co cott of doi doing ng bu buine ine  by low loweri ering ng tra trana nacti ction on co cot t and increaing efficient efficient method for payment4 uch a uing online online ban8ing and reducing tationery and potage cot*

 

•

the opportunitie to adopt new buine model and de;elop  tailored cutomer  upport*

  SCOPE

AND FOCUS OF THE REPORT% REPORT%

The cope of (>Buine i a wide a an ocean  there by the implementation hurdle* 7hen one thin8 of the (lectronic Buine e;en through final goal remain the ame a that of the traditional buine4 but the way in which they function in order to impro;e the performance i differ different* ent*     A information haring i the maBuine* Thi change in ;iew>point ha opened door for new opportunitie*  #ationalied and !ri;ate ban8 agree that adopting e>buine a a trategy i one of the the im impo port rtan antt t tep ep th thee ba ban8 n8 ha ha ta ta8e 8en n in it it de de;e ;elo lopm pmen entt du duee to the the tremen tre mendou dou ben benefi efit t e>bui e>buine ne ado adopti ption on pro;id pro;ide* e* Ac Accor cordin ding g to them them their  their   percei;ed benefit include con;enience to cutomer4 peed and quality of er;ice4 reduction of queue in ban8ing hall and reduction in the total o;erhead cot uch a red reduct uction ion in emp emplo loyee yee rec recrui ruitme tment nt and reduc reductio tion n in pace pace for cli client ent and cutomer *Thee factor that puhed their dri;e to adopt e>buine* A) The reearch pro; pro;ide ide powerful4 powerful4 real time (>Bu (>Buine ine report reporting ing to help (>Buine manager impro;e merchandiing and increae ale* B) Th Thee re ree ear arch ch i ;e ;ery ry much much u uef eful ul to ge gett the the life lifeti tim me ;a ;alu luee of yo your  ur  cut cu tom omer er ba bae ed d upon upon th thei eirr ac acqu qui iit itio ion n o our urce ce44 an and d incr increa eae e yo your  ur  e9penditure on ource that generate the bet cutomer o;er lifetime*

 

") It tr trac ac8 8 th thee perf perfor orma manc ncee of al alll yo your ur on onli line ne ma mar8 r8et etin ing g init initia iati ti;e ;e4 4 including !ay > per> clic8 8eyword buy4 doing tranaction online4 paying  bill uing net ban8ing4 banner ad4 e>mail and affiliate program and alo how it i effecti;e to implement*

1) It help the (>Bu (>Buinee inee to con;ert ;iit ;iitor or into cutomer

D

() It help to determine wh whether ether online competitor can ignificantl ignificantly y Harm your buine by pro;iding ome of the ;alue you currently 'ffer cutomer in the traditional way* It help the manager to impro;e the buine by enhancing their functionalitie a compared with their competitor*

LITERATURE LITERATURE REVIEW

INFORMATION IS POWER   

Thi i one of the mot widely accepted tatement and applie for e;ery apect of  human acti;ity* Internet i an unlimited pool of information and benefit anyone who ue it properly*

 

According to *orter and +illar ($%&) information gi;e competiti;e ad;antage to a company in three diff different erent way: a) By changing indutry tructure and changing the rule of competition*  b) By pro;iding pro;iding companie with n new ew way to outpe outperform rform their com competitor* petitor* c) By creating new buinee4 e;en from within a company e9iting operation*

/ The autho author r cont continue inue by dicu dicuing ing the trat trategic egic ignifica ignificance nce that Informa Information tion Technology ha obtained for companie4 by affecting the ;alue chain4 thu the technological and economic acti;itie that a company perform to do buine* #ot only it tranform the ;alue chain4 but alo tranform the product or the er;ice that that the the co com mpa pany ny prod produc uce e** Add ddit itio iona nall lly y4 auth author or u ugg gge ett fi;e fi;e wa way y fo for  r  Information Technology to be uccefully implemented in buine procee* Thi can be done by:

a) Aeing the intenity of information* information*  b) 1etermining the role that Informatio Information n Technolog echnology y will ha;e in the indutry tructure* c) Und Under erta tandi nding ng the way way tha thatt it can cre create ate com compet petiti iti;e ;e ad;ant ad;antage age for the their  ir  companie* d) In;etigating the poibilitie of new buinee* e) 1e;eloping a trategic plan to ta8e ad;antage of Information Technology*

 

SUCCESS AND FAILURE FACTORS FACTORS OF E%BUSINESS E% BUSINESS

=(>buine and (>er;ice will mo;e to the forefront of technology prioritie* To ta8e full ad;antage of the (>er;ice4 you need to loo8 at your organiation from an alternati;e perpecti;e* The quetion i how to deal with thee change4 at what cot4 and at what peed* Thi i not the time to worry about KdiintermediationK* It i the time for cooperation4 integration4 and the conideration of cutomer loyalty4  profitability and competition ad;antage*@ . A we ha;e een4 e>Buine ha noticed remar8able growth and ucce o;er the lat year* 1epite the numerou e9ample of ucceful e>Buinee there are man any y e9 e9am ampl ple e wh wher eree e>Bu e>Bui ine ne  fa fail iled ed to u ucc ccee eed* d* By loo8 loo8in ing g at tho thoee characteritic e9ample4 thi report trie to undertand the factor that lead to a ucceful e>Buine but alo to figure out the danger that may lead to failure* Thee factor would form a helpful guideline4 which would help in ma8ing the IT employment webite a ucceful a poible*

HYPOTHESIS (>buine offer buyer and eller a new form of communication and pro;ide an opportunity to create new mar8etplace* Theoretical tudie ugget in general that the de;elopment of e>buine reult in higher firm performance a a reult of lower earch and head>to>head comparion cot*

 

 Howe;er4 there are a number of recent theoretical tudie4 which demontrate that the growth of e>commerce may lead to monopolitic pricing beha;iour o that firm engaging in e>commerce need not perform better compared to more Traditional enterprie* To da date te44 th ther eree e9 e9i it t li litt ttle le em empi piri rica call e; e;id iden ence ce on th thee im impa pact ct of in info form rmat atio ion n technology on economic performance* Thi paper i the firt that ue a large repreentati;e data et of Belgian firm to tudy empirically the impact of e>  buine on corporate corporate performance* performance*

 



COLLECTION OF DATA PRIMARY  SECONDARY DATA

Data 8)65c,

 

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E%BUSINESS – TRANSACTION MEDIUM 3ot e>commerce i done o;er the Internet* But (" can alo be conducted on  pri;ate networ84 networ84 uch a #alue-added networks &./s, networks that add communication ser#ices to existing common carriers )4 on local area networ8

&$A#) or wide area networ8 &7A &7A#)*

E%BUSINESS – TRANSACTION TYPES

 

&(>commerce tranaction tranaction can be done between ;ariou partie*)  B6 B687 87(, (,88 88%t %t)%3 )%368 687( 7(,8 ,888 B B!B !B  C)+ C)++a3 +a3)5a )5at7 t7,, c)// c)//,5 ,5c, c, c% c%c)/ c)//,5 /,5c, c,  B6 B687 87(, (,88 88%t %t)%c )%c)( )(86 86/, /,58 58 B B!C !C  C) C)(8 (86/ 6/,5 ,58% 8%t) t)%3 %368 687( 7(,8 ,88, 8,88 C!B C!B  C) C)(8 (86/ 6/,5 ,5%t %t)% )%c) c)(8 (86/ 6/,5 ,5 C C!C !C  I(t I(t5a% 5a%368 3687(, 7(,88 88 7(t5a%) 7(t5a%)5a 5a(79 (79at7 at7)(a )(a+ + c)//,5 c)//,5c, c,  G) G), ,5( 5(/, /,(t (t%t %t)%c )%c7t 7t79 79,( ,(88 G!C G!C  M) M)37 37+, +, c)/ c)//, /,5c 5c,, /%c /%c)/ )//, /,5c 5c, ,

  +E HOW IS E%BUSINESS DIFFERENT 

Reduction in phyical boundarie and ditance*



Ser;e larger cutomer bae more efficiently*



Target pecific cutomer group*



The Internet i an interacti;e mar8eting medium* medium*



3ore detailed information on cutomer tranaction*

 



Impro;ed tranaction efficiency*

 

13

CONSUMERS CONSU MERS TO CONSU CONSUMERS MERS C!C C!C

Abbre;iation for conumer>to>conumer commerceL that i4 commerce with no middle buine people The mot notable e9ample are 7eb>baed auction and claified a ite* 3ot large ;enue for uch model &for e9ample4 eBay and "laifiedE---) are quic8ly permeated by conumer who participate o acti;ely and regularly that they become mall buinee for them* "E" tand for conumer to conumer electronic commerce* The Internet ha facilitated new type of "E" although it i important to note that thi 8ind of  commerce >> in the form of barter4 yard ale4 flea mar8et4 wap meet4 and the

 

li8e >> ha e9ited ince time immemorial* #otably4 mot of the highly ucceful "E" e9ample uing the Internet actually ue ome type of corporate intermediary and are thu not trictly Kpure playK e9ample of "E"*

14

WHAT IS BUSINESS TO BUSINESS B!B

BEB tand for Kbuine>to>buine4K a in buinee doing buine with other   buinee* The term i mot commonly ued in connection with e>commerce and ad;ertiing4 when you are targeting buinee a oppoed to conumer* 'n the Internet4 BEB &buine>to>buine)4 i the e9change of product4 er;ice4 or information between buinee* BEB i e>commerce between buinee* BEB "ommunication uing M3$ o;er HTT! BEB > the baic Buine Bu ine> >to> to>bu buine ine  ele electr ctroni onicc com comme merce rce &BE &BEB) B) typ typica icall lly y ta8 ta8e e the for form m of  automated procee between trading partner and i performed in much higher  ;olume than buine>to>conum buine>to>conumer er &BE") application* +

WHAT IS BUSINESS BUSINE SS TO CONSU CONSUMERS MERS B!C B!C 

 

 

Refer to buinee elling product or er;ice to end>uer conumer* BEB tand for tranaction acti;itie in;ol;ing two buine entitie &buine>to>  buine tranaction)* BE" tand for tranaction acti;itie in;ol;ing a buine and a conumer &buine>to>conumer &buine>to>conumer tranaction)*

(lec (l ectr tron onic ic co comm mmer erce ce co comp mpri rie e

comm co mmer erci cial al tr tran ana act ctio ion n44

in;o in ;ol; l;in ing g

both bo th

organiation and indi;idual* From the technical point of ;iew e>commerce i the  proceing and tranmiion of digitied data* (>commerce decreae the ditance  between producer and conumer* "onumer can ma8e their purchae without entering a traditional hop*

E%BUS E% BUSINE INESS SS CATEGORY CATEGORY E%3a('8 E%t5a-, E%c)(86+t7( E%,(7(,,5 E%+,a5(7( E%/a7+

 

E%/a5',t7( E%t5a(8act7)(8

+/ HOW SAFE ARE E%BUSINESS FINANCIAL TRANSACTIONS  #ew ecurity technology li8e +E.>bit SS$ encryption enure the afety and  pri;acy of both you and your cutomer4 and i built into the latet e>Buine oftware tool* 2our ecurity and pri;acy i a top priority with all e>Buine  pro;ider*

 

 

+.

CAN MY BUSINESS BUSINE SS BENEFIT BE NEFIT FROM FRO M E%BUSINESS E%BU SINESS  •

•

Reduce Reduce adminitrati;e in;entory cot*and operating cot* Reduce the cot of procurement* Impro;e cutomer er;ice and atifaction* Streamline procurement procedure* Increae communication efficiency efficiency and interaction with employee4

•

;endor4 cutomer and trategic partner* Increae re;enue and profit margin*

• • • •

 

  + E%COMMERCE E%BUSINESS WHO E%CARE Some analyt and on>line buine people ha;e decided that e>buine iinfinitely uperior a a moni8er to e>commerce* That mileading and ditract u from the  buine goal at hand* The effort to eparate the (>commerce and (>buine concept appear to ha;e been dri;en by mar8eting moti;e and i dreadfully thin in ubtance*

AN E%DISTINCTION For the purpoe of clarity4 the ditinction between e>commerce and e>buine in thi boo8 i baed on the repecti;e term commerce and buine*

"ommerce i defined a embracing the concept of trade4 Ne9change of merchandie on a large cale between different countrie*++ By aociation4 e>commerce can be een to include the electronic medium for thi e9change* Thu electronic commerce can be broadl broadly y def define ined d a the e9c e9chan hange ge of merch merchand andie ie &wh &wheth ether er tan tangib gible le or 

 

intangible) on a large cale between different different countrie uing an electronic medium  G namely the Internet* Internet*

The implication of thi are that e>commerce incorporate a whole ocio>economic4 teleco tel ecomm mmuni unicat cation ion techno technolog logy y and comme commerci rcial al inf infra ratru tructu cture re at the ma macro cro>> en;ironmental le;el* All thee element interact together to pro;ide the fundamental of e>commerce*

 

E-

Buine4 on the other hand4 i defined a Na commercial enterprie a a going concern*+E (>buine can broadly be defined a the procee or area in;ol;ed in the running and operation of an organiation that are electronic or digital in nature* Thee The e inc includ ludee di direc rectt bu buine ine  act acti;i i;itie tie uc uch h a ma mar8e r8etin ting4 g4 al ale e and hum human an reour re ource ce man manage ageme ment nt but al alo o ind indire irect ct act acti;i i;itie tie uc uch h a bu buine ine  pr proce oce  re> engine eng ineeri ering ng and cha change nge man manage ageme ment4 nt4 whi which ch im impac pactt on the im impro pro;em ;ement ent in efficiency efficienc y and integration of buine procee and acti;itie *

 

 

E+

WHAT ARE THE KEY DRIVERS%

It i important to identify the 8ey dri;er of e>commerce to allow a comparion  between different countrie* It i often claimed that e>commerce i more ad;anced in the USA than in (urope* Thee 8ey dri;er can be meaured by a number of criteria that can highlight the tage of ad;ancement of e>commerce in each of the repecti;e countrie*

The criteria that can determine the le;el of ad;ancement of e>commerce *

 

# T("H#'$'%I"A$ FA FA"T'RS "T'RS   1 The de deg gree ree of ad ad;a ;an ncem cemen entt of the the

telecommunication telecommunica tion infratructure which pro;ide acce to the new technology for   buine and conumer* conumer* ! !'$ITI"A$ FA FA"T'RS "T'RS   1 in incl clud udin ing g th thee role role of go go;e ;ern rnm men entt in crea creati ting ng

go;ernment legilation4 initiati;e and funding to upport the ue and de;elopment of e>commerce and information technology* technology* < S'"IA$ FA"T'RS  G G incorporating the le;el and ad;ancement in IT education

and an d tr trai aini ning ng wh whic ich h will will enab enable le both both po pote tent ntia iall bu buye yer r and and the the wo wor8 r8fo forc rcee to undertand and ue the new technology technology** $ ("'#'3I" FA"T'RS  1 including the general wealth and commercial health

of the nation and the element that contribute to it* Since a ditinction ha been made in thi boo8 between e>commerce and e>buine for conitency4 the 8ey dri;er of e>buine are alo identified* Thee are mainly at the le;el of the firm and are influenced by the macro>en;ironment macro>en;ironment and e>commerce4 which include:  

KEY DRIVERS OF E%BUSINESS%

 

'R%A#ISATI'#A$ 'R%A#ISAT I'#A$ "U$T "U$TUR( UR(  G G attitude to reearch and de;elopment &R1)L it willingne to inno;ate and ue technology to achie;e obclic8

 

away*

Unli8e other 3ail 'rder or "atalog retail companie4 Amaon Amaon can ta8e ad;antage of the Internet and ue email a a form of communication4 both to confirm order and purchae a well a to contact cutomer with deli;ery information* Being an online retailer4 retailer4 Amaon Amaon ha ta8en ad;antage of the the eae of ue of the Internet Internet in it buine dealing* dealing* Intead of relying relying on the mail er;ice er;ice to end out catalog4 Amaon can let cutomer arri;e at it home through word of mouth and can alo contact former cutomer ;ia email to entice them bac8 to  purchaing* The Internet i i certainly the way way for catalog elling elling to mo;e4 becaue it ha many ad;antage and can till maintain it character of eae and con;enience* In creating a databae for Amaon Amaon44 we need to 8eep thi eae and con;enience in mind a we deign and create a fle9ible4 eay to ue4 adaptable databae* E

> C)/=,t7t7, F)5c,8 M)-,+ I(-68t5? A(a+?878 A(a+?878 'ne of the maeller

collaboration are are relati;ely wea8* wea8* 7hile in many many cae upplier can create create a challenge for a company by forcing them to accept higher cot for material4 Amaon began mall and built up it upply chain to wor8 with multiple upplier*

 

7ith 7i th multiple upplier4 each upplier trength wea8en againt that of Amaon* Amaon * For e9ample4 if one boo8 boo8 upplier want to get a >cent charge charge on each  boo8 ordered but but Amaon Amaon can get mot mot of the ame boo8 boo8 from upplier E for only 0 cent per boo84 upplier + wont wont get a contract with Amaon Amaon** Amaon ha ha created a broad upply chain to 8eep it upplier from acquiring too much trength and forcing price too high* high* Therefore4 Amaon ha been able able to pa thoe a;ing on to the cutomer cutomer44 creating a bargaining chip againt indutry ri;al and creating a hedge againt upplier dependency* B6?,58. Buyer power i relati;ely relati;ely trong within thi indutry* indutry* %i;en that

witching cot between competing brand or ubtitute i generally low4 conumer may4 without incurring any lo4 chooe one er;ice o;er another if deired* Addition Additionally4 ally4 buyer may potpone purchae from online eller uch a Amaon if they do not agree with the price a;ailable at the preent time* time* Such  preure require Amao Amaon n to dico;er new way way of paing on a;ing a;ing to their cutomer without decreaing the profit neceary to maintaining their current economic tanding and mar8et mar8et poition* Therefore4 while while the power of buyer in thi indutry i trong Amaon Amaon ha found effecti;e method to retain attracti;e  price for conumer* conumer*

 

N

  E n

i

i B v & 3" ( er r s3

r n

 

S & # s   &  e s

i

A ;iual model of !orter  Force 3odel

(>commerce offer offer product and er;ice through webite4 a cutomer imply ha to ;iit an e>commerce webite and browe ;ariou offering through brower catalog4 a cutomer can elect multiple offering offering and can add them to the hopping cart4 once the hopping i done the cutomer can chec8out and proceed to payment ection where ;ariou online payment option are a;ailable li8e internet ban8ing4 credit card4 debit card etc* 'nce the payment i done the cutomer i notified about the order and order i hipped on the potal addre pro;ided by the cutomer* 00  REVIEW OF LITERATURE  The firt approach on how to upport query operation on encrypted data with  buc8etiation4 after after the data i encrypted4 encrypted4 the cipherte9t cipherte9t i concatenated to a buc8et number4 which which i aigned to a pecific range that include the data* 7hen a uer requet a query operation4 the er;er ue the buc8et number to e9ecute the query operation* For e9ample4 if a client program want to  Abhi "ommerce in India>A Re;iew@4 International ournal of 3ar8eting4 Financial Ser;ice  3anagement Reearch* "oncluded that The (>"ommerce ha bro8en the geographical limitation and it i a re;olution>commerce re;olution>commerce will impro;e

 

tremendouly in ne9t fi;e year in India*  1*5*%angehwar* &E-+0)4@ (> "ommerce or Internet 3ar8eting: A Buine Re;iew from Indian "onte9t@4 International ournal of u> and e> Ser;ice4 Science and Technology* "oncluded that the (>commerce ha a ;ery bright future in India although ecurity4 pri;acy pri;acy and dependency on technology are ome of the drawbac8 of (>commerce but till there i a bright future to (>commerce*  3artin 1odge* &+)4@Finding the ource of Amaon*com: e9amining the hype of the earth bigget boo8 tore@4 "enter for Ad;anced Spatial Analyi* "oncluded that Amaon*com ha been one of the mot promiing (>commerce companie and ha grown rapidly by pro;iding quality er;ice* E%COMMERCE IN INDIA  The e>commerce introduced to India in mid>+-4 many of them were either matrimonial or commerce progreed ;ery lowly in Indian mar8et* In mid>E--- the e>commerce indutry in India grown rapidly offering online er;ice li8e tra;elling4 many airline companie tarted pro;iding the tra;el er;ice online to cutomer4 e;en today online tra;el boo8ing hold a maemployee of Amaon*com* Amaon*com* Flip8art i an e>commerce company  baed in Singapore4 Singapore4 it operate in India* India* According According to ale9ia ale9ia internet4 Flip8art Flip8art i one of the mot popular webite ;iited in India* Flip8art ell good in India through a company called 7S retail* The other third>party trader or companie

 

can alo ell good through the platform of Flip8art* Initially in E--. Flip8art old  boo8 but oon it etablihed etablihed itelf wide wide and tarted elling product li8e conumer conumer electronic4 clothing4 home decoration product4 appliance4 beauty and fahion  product etc* 1ue to the powerful networ8 all o;er India and effecti;e effecti;e cutomer relationhip management4 management4 Flip8art ha earned a topmot poition in India* Flip8art allow payment method uch a cah on deli;ery4 net ban8ing4 debit or credit card tranaction4 e>gift ;oucher and card wipe on deli;ery The founder of Flip8art Sachin and Binny Banal4 now ha ta8en the combined net worth in e9ce of +  billion4 reaching reaching cloer to that of #arayana 3urthy and #andan #ile8ani #ile8ani of Infoy* The ;alue of Banal combined combined ta8e ha croed o;er R* D--- due to the freh + billion fund raie* The 3urthy family ha a net worth of near R* .4/-- crore  being India India econd larget larget it er;ice er;ice company4 company4 while the the #ile8ani familyJ familyJ net worth hold at R D4-- crore* Infoy too8 about four decade to reach mar8et cap of about 0- billion while Flip8art raied the ;aluation of / in billion e>commerce "ompany*  

0

BUSINESS STRUCTURE

In a report dated #o;ember E4 E-+,4 a leading media outlet reported that Flip8art were operating through a comple9 buine tructure which included nine firm4 ome regitered in Singapore and ome in India* In E-+E Flip8art co>founder old 7S Retail to a conortium of in;etor *

ACUISITIONS •

E-+-: 7eRead 7eRead44 a ocial boo8 dico;ery tool*

•

E-++: 3ime0D-4 a digital content platform company*

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E-++: "ha E-++: "ha8pa 8pa8*c 8*com4 om4 a Bol Bollyw lywood ood new new it itee tha thatt of offe fer r upd update ate4 4 new new4 4  photo and ;ideo* Flip8art acquired the right to "ha8pa8J digital catalogue which whi ch inc includ lude e ,-4 ,-4----- fil filmo mogra graphi phie4 e4 +-4 +-4----- mo; mo;ie ie and clo cloe e to -4 -4----rating* Flip8art hanot categorically aid that it will not be in;ol;ed with the original ite and will ue the brand name*

 

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E-+E: $etbuy*com4 an Indian e>retailer in electronic* Flip8art ha bought the company for an etimated USE million*$etbuy*com wa cloed down and all traffic to $etbuy ha been di;erted to Flip8art* E-+,: E-+ ,: Ac Acqui quired red 3yntra*com 3yntra*com  in an e eti tim mat ated ed ₹ E- bi bill llio ion n &E &E44---- crore crore44 about US0+ million) deal*

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E-+:: Fl E-+ Flip ip8a 8art rt ac acqu quir ired ed a mo mobi bile le ma mar8 r8et etin ing g t tar art> t>up up App ppit iter erat atee a to trengthen it mobile platform*

INVESTMENTS •

In EE-+ +44 Flip Flip8a 8art rt boug bought ht a mi mino nori rity ty t ta8 a8ee in a #a #a;i ;iga gati tion on an and d rout routee opti op tim mi iat atio ion n t tar artu tup p 3a 3apm pmyI yInd ndia ia to he help lp im impr pro; o;ee it it de deli li;e ;ery ry u uin ing g 3apmyIndia aet*

 

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FINANCE

Ini Initia tiall lly4 y4 the they y had pe pent nt ₹ ,,--4 -4---- on only ly fo forr ma ma8i 8ing ng we web bit itee to e ett up th thee  buine*Flip8art ha later raied funding from ;enture capital fund Accel India &US+ India  &US+ million in E--)and Tiger %lobal &US+%lobal &US+- million in E-+- and USEmillion in une E-++)* 'n E, Augut E-+E4 Flip8art announced the completion of  it ,th round of +- million funding from 3IH &part of #aper of  #aper %roup %roup)) and I"'#IO "apital* The company announced4 on +- uly E-+04 that it ha raied an addi ad diti tion onal al E E--- mi mill llio ion n fr from om e9 e9i iti ting ng in in;e ;et tor or in incl clud udin ing g Tige gerr %l %lob obal al44  #aper4 Accel !artner and !artner and Iconiq "apital* Fli lip p8a 8art rtJJ rep epor ortted a alle wer eree ,- mil illi lion on in F2 F2  E-E--.GE .GE-- --44 E-- mi milli llion on in F2 F2 E--GE  E--GE-+-+- and /- million million for for F2 F2 E-+-GE-++  E-+-GE-++ In F2 E-++GE-+E4 Flip8art i et to cro the  billion &US+-- million) mar8 a Internet uage in the country increae and people get accutomed to ma8ing purchae online* Flip8art pro+0* E-+E>+0* In uly E-+04 Flip8art raied US1 +D- million from pri;ate equity in;etor* In 'ctober E-+04 it wa reported that Flip8art had raied an additional +D- million from fr om ne new w in in;e ;et tor or 1r 1rag agon onee eerr In In;e ;et tme ment nt %r %rou oup4 p4 3or 3orga gan n St Stanl anley ey 7ealt alth h 3anagement44Sofina 3anagement Sofina SA  SA and 6ulcan Inc* with Inc* with participation from e9iting in;etor  Tiger %lobal* 'n ED  E-+,4 Flip8art that it ha raied E+-#aper millionand from 2uri 3ilner  3ay  1ST %lobal and itannounced e9iting in;etor Tiger %lobal4 Iconiq "apital* In early uly E-+,4 it wa alo highly peculated that Flip8art wa in negotiation to raie at leat -- million4 for a li8ely liting in the US for E-+D*

 

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'n E uly E-+,4 announced it raied + billion from 3anagement Tiger %lobal 3anagement $$"4Flip8art Accel !artner4 andthat 3organ Stanley In;etment and a new in;etor Singapore o;ereign>wealth o;ereign>wealth fund %I"* 'n D 'ctober E-+,4 Flip8art old product worth I#R  D-"rore  D-"rore in  in +- hour in a pecial one>day e;ent > KThe Big Billion 1ayK4 claiming they had created e> comme com merce rce hi hitor tory4 y4 but the their ir har hard>w d>won on re reput putati ation on for goo good d cu cutom tomer er er er;ic ;icee uffered becaue of technical problem4 and angry reaction on ocial media from  buyer diappointed with the pricing and a;ailability of product* It claimed to ell a who whoppi pping ng  la8 la8h h mo mobil bilee han hande det4 t4 fi; fi;e>l e>la8h a8h clo clothe the and ho hoe e and E4 E4----tele;iion tele; iion et withi within n hour hour of opening it dico dicounted unted ale at . A3* In 1ecem 1ecember  ber  E-+,4 After it recei;ed /-- million from another funding4 Flip8art had a mar8et cap of ++ billion or R*DD--- crore* In 3ay E-+ Flip8art ha raied - million

 

from ome of it e9iting in;etor4 in a deal that raie the ;aluation of the  pri;ately held Indian Indian tartup to about about + billion or R* -4--- crore crore 'n E- 1ecember E-+,4 Flip8art announced filing application with Singapore>baed companieJ regulator A"RA to become a public company after raiing US1 /-million fore9ceeded long term-* trategic in;etment in India itadded number of  in;etor The US1 /-- million fund following raied by which Flip8art new in;etor > Baillie %ifford4 %reenoa8 "apital4 Stead;iew "apital4 T* Rowe !rice Aoci A ociate ate and Oat Oatar ar In; In;et etmen mentt Au Autho thorit rity y > on com compan panyJ yJ boa board* rd*It It e9i e9iti ting ng in;etor 1ST %lobal4 %I"4 I"'#IO "apital and Tiger %lobal alo participated in thi latet financing round* By Augut E-+4 after raiing /-- million4 Flip8art had already raied a total of  0 billion4 o;er +E round and +D in;etor*

REGULATORY ACTION ACTION AND L AW AWSUITS SUITS

The %o;ernment 'f India informed the parliament in E-+E4 that it had a8ed the (nforcement 1irectorate to in;etigate Flip8art 'nline Ser;ice* In Augut E-+,4 the (nforcement 1irectorate claimed that it had found Flip8art to be in ;iolation of  the Foreign (9change 3anagement Act* Act*

 

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'n #o #o;e ;emb mber er 00-44 EE-+E +E44 Fl Flip ip8a 8art rt of offi fice ce we were re ra raid ided ed by the the (n (nfo forc rcem emen entt 1irectorate* 1ocument and computer hard dri;e were eied by the regulatory agency* 1elhi Hig 1elhi High h "ou "ourt rt ob ober; er;ed ed ;io ;iolat lation ion of for foreig eign n in; in;et etme ment nt reg regula ulatio tion n by (> "ommerce firm including Flip8art* In anuary E-+D4 a public interet litigation came up for hearing which allege Flip8art of contra;ention of foreign in;etment norm* The court a8ed the Reer;e Ban8 of India to pro;ide the latet circular on foreign in;etment policy*

 

In an anuar uary4 y4 E-+D4 the 1ep 1epart artmen mentt of Ind Indut utria riall !ol !olicy icy and !r !rom omoti otion on &1 &1I!! I!!)) clarified that it doe not recognie the mar8etplace model of online retail* In February E-+D4 Health 3initer4  ! #adda4 informed that the 3aharahtra F1A had ta8en action againt Flip8art4 among other4 for elling drug without ;alid licene*

FLYTE FLY TE DI GITAL MUSIC STORE

In 'ctober and #o;ember E-++4 Flip8art acquired the webite 3ime0D-*com and "ha8pa8*com* $ater4 $ater4 in February E-+E4 the company re;ealed it new Flyte 1igital 3uic Store*Flyte4 a legal mu uiic dow ownl nloa oad d er;ice in the ;ein of iTune iTune and  and Amaon*com Amaon*com44 offered 1R3 1R3>free >free 3!0 download* But it wa hut down on +/ une E-+0 a paid ong download did not get popular in India due to the ad;ent of free muic treaming ite*

E2CLUSIVE PRODUCT LAUNCHES

3obility4 pre;iouly owned by %oogle 3otorola 3obility4 %oogle but  but then old to $eno;o $eno;o44 in an e9clui;e tie up with Flip8art launched it budget martphone 3oto % in % in India on  Februa Feb ruary ry E-+ E-+,L ,L mo more re tha than n E-4 E-4----- un unit it wer weree ol old d wit within hin hou hour r of lau launch nch on Flip8art* After thi Flip8art wa loo8ing for a long term tie up with 3otorola 3obility4They 3obility 4They alo launched their Android Android  martphone martphone44 the 3oto M4 M4 on + 3arch E-+,* Flip8art later old the 3oto (4 cheaper than 3oto %4 from +0 3ay E-+,* The ale of high>end high>end martphone  martphone Mi Miao aomi mi 3i 3i0 0 pro produc duced ed by Mia Miaom omii Tech ch wa  wa launched in India on an e9clui;e tie>up with Flip8art* The firt batch wa old out within 0 minute  on EE uly E-+,4 the econd in  econd on E uly E-+,* The ale wa proceeded on pre>regitration mode where more than +-4--- buyer  boo8ed for the  Augut E-+, ale* Thi got old off in le than E econd*Following thi Miaomi Tech old E-4--- unit in the ne9t ale on +E Augut E-+,* 'n E September Flip8art held a flah ale in of uly the Miaomi Redmi +S budget +S  budget Android martphoneE-+, which wa launched in India E-+,* ,-4 ---

 

unit priced at R  each were old within econd*A further ,-4--- unit were old within ,* econd on Sept 4 E-+,*The third Redmi +S ale on Sept +D4 E-+, old ,-4--- unit in 0*, econdL In the ,th round of ale of Redmi +S4 D-4--- unit old in *E econd on Sept E04 E-+,*'n 0- September E-+, D-4--- unit old in +0* econd* Redmi #ote in #ote in India e9clui;ely through Flip8artL -4--- unit old in D econd on E 1ecember E-+,*

IN%HOUSE PRODUCTS

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In u uly ly EE-+, +, Fl Flip ip8a 8art rt la laun unch ched ed it it ow own n e ett of ta tabl blet et44 mo mobi bile le phon phone e  !hablet !hablet** The firt among thee erie of tablet phone wa 1igiflip !ro MT /+E Tablet* In uly E-+, Flip8art launched it firt networ8ing router4 under it own  brand name named named 1igiFlip 7R--+ 7R--+ 0-- 3bit 7irele 7irele # Router* Router* In Sep Septem tember ber E-+ E-+, , Fli Flip8a p8art rt lau launch nched ed it in in>ho >houe ue hom homee app applia liance nce and  peronal healthcare brand "itron* The label include a wide range of coo8ing utilitie and grooming product*

CRITICISM

+0 bad*Th Sept Se ptem embe r e E-+, E+,4 4 adJFl Flip ip8a 8art rt er deli de li;e ;ery rybee boy bo mole mo let ted edaga aint hou ho eip8art maid ma id for  in 'n Hydera Hyd erabad *The e ber houe hou maidJ mai employ emp loyer ha been ny fig fighti hting ng again t ue Flip8 Fl art  E-+, E+>'ct>E-+, to +.>#o;> E-+,* a) Stoc8 5eeping Unit: 7hen the Stoc8 5eeping Unit &S5U) of both Flip8art and Amaon compared for four popular electronic product mobile4 laptop4 tablet4 camera* Following reult were obtained from the data* Flip8art hold total +/-D S5U under the abo;e four category while Amaon hold only +0 S5U for the ame product* E* Flip8art ha ,+/E offer for the +/-D S5U while Amaon ha EE,, offer for the +0 S5U b) 'nline !roduct "ategorie and Sub>"ategorie: !reently Amaon*com offer +D main categorie of product online while thee +D main categorie can be further di;ided in to +.D ub>categorie* 'n the other hand flip8art*com offer .D main categorie of offering offeri ng which are e9panded into a huge ,EE ubcategorie much more than amaon*com pro;iding a wide range of product which are quite eay to acce through webite* c) "omparion of 3anpower 3anagement and 7or8

 

Satifaction : "onidering the gender wie ditribution of employee in both Amaon*in and Flip8art*com4 following information i obtained "ompanie  Se9 Ratio 3ale Female Flip8art*com .-Q E-Q Amaon Amaon India ./Q +0Q Sr* #o* 1ecription Flip8art*com Amaon India + ob 7or8$ife Balance 0* 0* E Salary Benefit 0 , 0 ob Security 0* 0 , 3anagement 0* 0  ob "ulture , , Total +/* +/* W 1ata Showing 7or8 atifaction*

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THE E%BUSINESS MODEL

43

 

Thee e> Th e>Bu Bui ine ne  mo mode del4 l4 li li8e 8e an any y bu bui ine ne  mo mode del4 l4 de dec cri ribe be ho how w a co comp mpan any y functionL how it pro;ide a product or er;ice4 how it generate re;enue4 and how it will create and adapt to new mar8et and technologie* It ha four traditional component a hown in the figure4 The e>Buine 3odel* Thee are the e>  buine concept4 ;alue propoition4 propoition4 ource of re;enue4 re;enue4 and the required acti;itie4 acti;itie4 reource4 and capabilitie* In a ucceful buine4 all of it buine model component wor8 together in a cooperati;e and upporti;e fahion*

 

44

(>BUSI#(SS "'#"(!T:

 

 -345I 45I55 55 CC CC*6  *6  decribe The -3  decribe the rationale of the buine4 it goal and

;iion4 and product or offering from which it will earn re;enue* A ucceful concept i baed on a mar8et analyi that identifie cutomer li8ely to purchae the product and how much they are willing to pay for it

%'A$S A#1 'B("TI6(S:

The e>Buin e>Buine e concept concept ho hould uld be ba baed4 ed4 in par part4 t4 on )a+8 uch a Kbecome a ma8no nown wn fi firm rm in ea each ch of th the eee in indu dut tri rie e*K *K 'bBUSI#(SS "'#"(!T

 

  !RI"( !ricing i an important part of the e>buine concept and hould be etablihed on the bai of mar8et reearch* !rice i often et with an eye on the competition and can ha;e a direct effect on mar8et hare* In traditional commerce in the U*S*4 the eller et the price* 'nline pricing4 on the other hand4 may include negotiation or  auction pricing4 where the interaction of eller and buyer can affect the price* 5nowledge of competing price i alo readily a;ailable online4 and will 8eep downward preure on price*  

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7hen i it '5 to increae price? It depend on the buine* If a company ha high fi9ed to ;ariable cot4 price hould be changed cautiouly* If cutomer are Kloc8ed>inK4 and the product or er;ice i le eniti;e to price4 then price may be

 

changed4 to a degree4 with le ri8* But all change hould be chec8ed beforehand with mar8et reearch and financial analyi* A potential problem for ome product i that the mar8et may change fater than thee e th ell ller er ca can n ch chan ange ge th thee pr prod oduc uctt or e er; r;ic ice* e* 'n 'nee wa way y to u ur; r;i; i;ee in th thi i en;ironment i to ell at the minimum price that allow a profit4 a;oid price change and continuouly upgrade the product* Thi approach i often ued in computer hardware and oftware ale* At the ame time the eller hould in;et in finding how to horten the de;elopment cycle4 and put in place a mar8et reearch  program that will will quic8ly identify identify trend and change* change* Thee t Th tea eady dy de de;e ;elo lopm pmen entt of a pr prod oduc uctt ha ha ot othe herr ad ad;a ;ant ntag age e** It e; e;en en ou outt th thee re;enue tream rather than ha;ing the Kboom or butK cycle of a ingle product* It alo how that the company i teadily de;eloping and upgrading product for the cutomer who hould begin to buy into the companyJ ;iion* And cutomer4 analyt4 and in;etor will de;elop confidence that the company i going to be around for the long>term* The price mut alo pro;ide real ;alue to the cutomer cutomer44 that i the cutomer mut be  pleaed with the purchae of the product or er;ice* In addition to price4 the buyer  may alo be intereted in how the product can be of aitance to hi company* In thi cae4 comparion of price and R'I may be ued to how that the offering add more ;alue than a competitorJ* The price can alo be a bai for building long>term cutomer relation4 which can lead to multiple ale* For e9ample4 a retail cutomer become more comfortable hopping on a ite4 it hould be eaier to get them to migrate to higher margin product*

6A$U( !R'!'SITI'#

 

The ./84 *7*5I6I  decribe  decribe the ;alue that the company will pro;ide to it cutomer and4 ometime4 to other a well* 7ith a ;alue propoition the company attempt to offer better ;alue than competitor o that the buyer will  benefit mot with with thi product*

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 Reduced price

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Impro;ed er;ice or con;enience uch a the K+ clic8K chec8out

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Speed of deli;ery and aitance

•

!roduct that lead to increaed efficien e fficiency cy and producti;ity

•

Acce to a large and a;ailable in;entory that preent option for the buyer

!ro;iding ;alue in an e>buine ue the ame approach a pro;iding ;alue in any  buine4 although it may require different different capabilitie* capabilitie* But common common to both are the cutomer who ee8 out ;alue in a buine tranaction* The ;alue propoition help focu the buine on the well>being of the cutomer4 where it remain in ucceful companie*  

VALUE

,

DELIVERY

ACTIVITIES

THROUGH

INTEGRATION

OF

 

I#T(%RATI'# 'F 'R%A#IVAT I#T(%RATI'# 'R%A#IVATI'# I'# 'R (#T(R!RIS( '!(RAT '!(RATI'#S I'#S

The integration of ytem inide and outide the organiation can pro;ide ;alue for both cutomer and the organiation* 'ne of the requirement for e>buine i to lin8 front>end with bac8>end ytem in order automate the online operation of  the organiat organiation* ion* Front> Fro nt>end end act acti;i i;itie tie dea deall dir direct ectly ly wit with h the cu cutom tomer er whi while le bac bac8>e 8>end nd y ytem tem include all of the internal upport acti;itie that do not deal directly with the cutomer** Some enterprie ha;e differen cutomer differentt geographic location for 45)(t%,(- a(3ac'%,(- office acti;itie and rely on the integration of the aociated computer 

and networ8 ytem for ucceful corporate operation* FRONT-END > BA?=-END OPERATIONS@

 

50

(9ample of acti;itie that require integrated ytem are: •

'rder placement through point>of>a point>of>ale le ytem

•

"utomiation of product baed on uer requirement

 

•

!roduction trac8ing

•

"utomer order fulfillment

(MT(R#A$ I#T(% RAT RATI'#: I'#: TH( SU!!$2 "HAI#

'peration on the 7eb can alo e9tend to cooperating firm uch a partner in a 86==+? cha7( cha7(  4 alo 8nown a a K6alue K 6alue 7ebK* 7ebK* The 6alue 7eb may include a wide ,@cha(,  to procure range of participant a well a the poible ue of a -77ta+ ,@cha(, 

or ell product* 3any firm ha;e participated in a upply chain for year uing E+,ct5)(7c Data I(t,5cha(, EDI  EDI   technology to buy and ell component and

 product* Succ Su cce ef ful ul u upp pply ly ch chai ain n ar aree ;i ;ita tall fo forr ma manu nufa fact ctur urin ing g op oper erat atio ion n i inc ncee th thee timeline4 cot and ucce of the final product may depend on a component part made by a ingle upplier* The competence of upplier may now be demontrated through the IS' --- qualification proce4 which i critical when uing upplier from foreign countrie or when the final product are e9ported*

 

51

SU!!$2 "HAI# I#T(%RATI'#

 

 

7hen 7h en th thee u upp pply ly ch chai ain n tr tran ana act ctio ion n of th thee pa part rtne ner r ca can n be au auto toma mate ted d an and d integrated o;er the 7eb 7eb into the bac8>end ytem of each other4 then the reource of all the chain partner can be planned and managed for an efficient operation* An An emerg eme rging ing app approa roach ch to aut automa omate te tr tran anact action ion wit with h par partne tner r i to lin lin8 8 y ytem tem =)5ta+  4 which greatly reduce the integration requirement* through thro ugh the corp corporat oratee =)5ta+

!ortal oftware now ha potential connection4 or hoo84 where the ytem of  different differe nt enterprie can be lin8ed to ecurely tranfer data*

In addition to good technology4 it ta8e a trategy4 time4 reource and4 mot importantly4 trut between partner4 for the upply chain to function uccefully*

52

STRUCTURAL CONCEPTS TO DELIVER VALUE The effecti;e deli;ery of ;alue to a cutomer4 require that a company organie it tructure and function according to the type of product or offering deli;ered* The

 

./84 C9/I 4 a popularied by 3ichael !orter #4 decribe a linear et of tep4

which could be acti;itie or buine procee uch a deign4 production and ale4 whereby a manufacturing company deli;er ;alue* Thi ;alue chain deli;ery model tri;e for o;erall efficiency and cot reduction by increaing the efficiency and reducing the cot of each buine proce* (ach tep i independent and eparable4 and can be 46547C:4 or contracted out to another company* The ;alue chain become a upply chain when a company ue the input and acti;itie of other companie in it manufacturi manufacturing ng proce* Howe;er4 the ;alue chain doenJt appear to decribe how many er;ice>oriented  buinee operate* Stabell and Fbuine et up a a ;alue hop wor8 directly with the cutomer to pro;ide a neceary4 often unique4 olution*

 

The ;alue hop i geared to ol;e pecific client problem rather than to ma8e a commo com mon n ol oluti ution on mo more re ef effi ficie cient* nt* Som Somee ;al ;alue ue ho hop4 p4 uc uch h a lar large ge con conul ultin ting g companie4 will attempt to duplicate olution among client by introducing buine* 3any online buinee will ha;e a three or four of thee ource* A re#enue #enue mode model  l   but may be mi9 of re re;e ;enu nuee o our urce ce i of ofte ten n re refe ferr rred ed to a a re

mita8enly called a buine model* Some of thee ource of re;enue are:  

, •

Ad;ertiing

 

•

Affiliation

•

Agent commiion

•

$icening

•

Sale commiion

•

Sale profit

•

Sponorhip

•

Subcription

•

Syndication

•

Ue Fee

For lar large ge pub public lic>p >pri; ri;ate ate or go; go;ern ernme ment nt pro proBuine tartup4 in;etor often trac8 e9pected re;enue and re;enue growth and may ma8e change to increae re;enue* Howe;er4 after the D)t%C)/ boom ended4 more traditional meaure uch a cah flow and earning ha;e came bac8 into fa;or a mean of e;aluation*

 



 

A"TI6ITI(S4 R(S'UR" R(S'UR"(S (S A#1 "A!A "A!ABI$ITI(S BI$ITI(S

The acti;itie4 reource and capabilitie of a buine are ometime 8nown a it /7887)(   of  requirement* In order to perform the acti;itie required to carry out the /7887)(

the buine4 certain reource are neededL for e9ample4 employee with certain 8ill4 or capabilitie4 are needed to perform acti;itie correctly and efficiently* 7(t,++,ct6a+ t6a+ =5)=, =5)=,5t? 5t?   may add to the Alo44 in Alo in;e ;ent ntio ion n44 pr proc oce ee e an and d ot othe herr 7(t,++,c indi;idual 8nowledge of an employee to de;elop a competence in the performance

of the required acti;itie*

A"TI6ITI(S Acti;itie are pecific buine procee or group of procee uch a deign4  production and ale ale that implement the buine concept* The operational operational buine model identifie the cot and output of each acti;ity* Acti;i Act i;itie tie dri dri;e ;e the nee need d for re reour ource ce** (9i (9iti ting ng act acti;i i;iti tie e ho hould uld be car caref efull ully y crutinied in order to coner;e reource and reduce cot* Acti;itie left o;er  from pre;iou initiati;e4 but not currently neceary hould be curtailed* Thi may ound elementary but buinee tart many acti;itie o;er time4 epecially if it  buine concept change* But one doenJt often hear of a large buine curtailing it acti;itie in order to focu on it current miion*

 

D (>BUSI#(SS !R'"(SS(S: Some So me fu fund ndam amen enta tall e> e>bu bui ine ne  ac acti ti;i ;iti tie e ma may y in infr frin inge ge on pa pate tent nt* * Bu Bui ine ne   procee4 or the Kmethod of doing buineK may be patented4 o that a buine model may unwittingly include the de;elopment or ue of intellectual property owned by another party* !atent ha;e been freely awarded for e;en the mot traight forward buine procee* •

Amaon*com ha a patent for Kone clic8K purchaing technology and it KAffiliateK program*

•

"yber%old ha a patent for pay>per>;iew ad where the cutomer enclic8 hopping allow the propecti;e buyer to bypa the ue of a Khopping cartK4 which i cumberome for many uer*

•

Amaon*com alo ha a patent for it KAffiliateK program4 which allow the comp co mpan any y to mar ar8e 8ett th thee pr prod oduc uct t of ot othe herr co comp mpan anie ie in re retu turn rn fo forr a commi com miio ion* n* Th Thi i bu buine ine  pr proce oce  ha bee been n ue ued d fr freel eely y by tr tradi aditio tional nal  buinee ince the beginning of recorded hitory and the fact that thi  proce ha been patented i ;ery contro;erial contro;erial** Alo contro;erial i !riceline*comJ patent for a re;ere auction method4 which it ue to ell airline tic8et*

•

In effect4 a few companie ha;e patented Internet buine model4 which are being ued by many other companie* If thee patent can be eaily licened at reaonable rate then there wonJt be a problem in the future

 

de;elopment of e>buine* But if not4 the reulting chao will inhibit the growth of the online buine world* .

(>BUSI#(SS (#6IR'#3(#T A#1 STRAT(%I(S STRAT(%I(S The rate of change in e>buine preent an enormou challenge to manager* Buine on the Internet i buine* The en;ironment of any organiation conit of all of the factor that are beyond it control4 but influence it in one way or another* (9ample of thee factor are hown in the fi hown figur gure4 e4 (>B (>Bui uine ne (n; (n;iro ironme nment nt and Str Strate ategie gie* * To cou counte nterr the  potential ad;ere affect of thee factor4 the e>buine can repond with trategie* An e9ternal trategy i an approach to deal with factor in the e9ternal buine en;ironment uch a competitor4 mar8et4 and technological de;elopment4 that are beyond the companyJ direct control* Thi i different from a corporate trategy4 which addree factor under the companyJ control uch a the approach to mar8eting4 ale4 and pricing* 'ther component of the buine model uch a the ;alue propoition and ource of re;enue may alo include trategie* Thee t Th tea eady dy de de;e ;elo lopm pmen entt of a pr prod oduc uctt ha ha ot othe herr ad ad;a ;ant ntag age e** It e; e;en en ou outt th thee re;enue tream rather than ha;ing the Kboom or butK cycle of a ingle product* It alo how that the company i teadily de;eloping and upgrading product for the cutomer who hould begin to buy into the companyJ ;iion* And cutomer4 analyt4 and in;etor will de;elop confidence that the company i going to be around for the long>term*

 

 



The price mut alo pro;ide real ;alue to the cutomer cutomer44 that i the cutomer mut be  pleaed with the purchae of the product or er;ice* In addition to price4 the buyer  may alo be intereted in how the product can be of aitance to hi company* In thi cae4 comparion of price and R'I may be ued to how that the offering add more ;alue than a competitorJ* The price can alo be a bai for building long>term cut cu tom omer er re rela lati tion on4 4 wh whic ich h ca can n le lead ad to mu mult ltip iple le a ale le* * Fo Forr e9 e9am ampl ple4 e4 a re reta tail il cutomer become more comfortable hopping on a ite4 it hould be eaier to get them to migrate to higher margin product*

TH( (>BUSI#(SS (#6IR'#3(#T A#1 STRAT(%I(S

 

60

 

(9ternal trategie may be dri;en by component of the buine model4 uch a finding wor8er with certain capabilitie to taff acti;itie* If the required wor8  force fo rce i not a;ailabl a;ailablee loc locall ally4 y4 the bu buine ine  con concep ceptt may ha; ha;ee to cha change nge44 and wor8er wor 8er br broug ought ht in4 or the wo wor8 r8 out outou ource rced* d* (;e (;en n tho though ugh trategi trategie e may be implicit in the buine model4 uch a hire wor8er at the indutry wage4 it i important to recognie them e9plicitly becaue they may ha;e to change a the  buine en;ironment en;ironment change* 

TH( "'3!(TITI6( "'3! (TITI6( (#6IR'#3(#T (#6IR'# 3(#T A#1 STRAT(%I(S STRAT(%I(S

The com competit petiti;e i;e en;ir en;ironme onment4 nt4 ome ometime time 8now 8nown n a the indu indutry try en;i en;ironm ronment4 ent4 reult from relationhip with other firm* Thee relationhip are with upplier4 cutomer4 producer of ubtitute product4 potential new entrant4 competitor4 KcomplementaryK4 and trategic partner4 which are decribed by !orter* 7hen upplier are limited4 they may 8eep price high and reduce the profit of a firm that buy from them* A trategy for the buyer i to find new upplier4 or   producer of ubtitute product* 'n the other hand4 if there are only a few buyer4 they can 8eep price low4 but a trategy for the eller i to find more cutomer to compete for product in order to raie price4 or to find a more profitable of their  indutrial capacity*  

D+

 

Therefore the Internet er;e to increae the 8nowledge of price4 find producer of  ubtitute input4 and ubequently caue downward preure on price* !otential new entrant to a mar8et may alo dirupt price* (ither they enter the mar8et with low price to gain mar8et hare4 or they caue the e9iting firm to lower it price in order to create a entry barrier to the new firm* "ompetitor may alo caue price to drop through price war4 but can alo contribute to tability in the mar8etplace* Finally4 complementary4 firm that ma8e product that need the firmJ product to add ;alue &e*g* oftware de;eloper for particular !" operating ytem)4 a well a trategic partner can create demand for the firmJ product* In each cae the Internet may be ued to the ad;antage or diad;antage of the e>  buine* The point i that an e>buine mut ha;e an Internet trategy to be ucceful*

3AI#TAI# A#1 I3!R'6( "'3!(T(#"I(S

'ne ob;iou trategy i to de;elop the capabilitie4 and to build and maintain competencie in order to 8eep an ad;antage o;er other firm* To do thi4 one mut undertand mar8et condition and the firmJ trength and wea8nee* 'ther trategie to maintain competencie include: •

 3lock : The Kbloc8K trategy ma8e it difficult for other companie to copy

 buine procee and intellectual property property** Bloc8 can be achie;ed by limi li miti ting ng 8n 8now owle ledg dgee tr tran anf fer er ab abou outt cr crit itic ical al fe feat atur ure e or by re redu duci cing ng or  indicating a reduction in price* DE

 

•

 7un: The KrunK trategy mean the buine inno;ate fater than potential

competitor* To To pull it off the company need competencie in critical area* •

•

5trategic 5trat egic /lli /lliance ance: Th Thee e> e>bu bui ine ne  wo wor8 r8 wi with th ot othe herr fi firm rm th that at ar aree no nott

uually direct competitor* For mall e>buinee4 alliance may be eential ince e;ery facet of growth can be facilitated through aociation with a well>8nown and capable partner* Strategic alliance can ol;e immediate  problem of de;eloping capabilitie in ditribution4 hipping4 and billing4 and will allow the company to be Kup and runningK ;ery quic8ly* Howe;er4 the mall company hould be concerned about loing it autonomy and intellectual property to it larger partner* •

TH( T("H#'$'%2 (#6IR'#3(#T A#1 STRAT STRAT(%I(S (%I(S  Tec!n$$+  T ec!n$$+ ,"s "n i*,$r"n r$e in e-#&siness "n% *&s #e r"c7e% c$se I c"n s!i. ver 8&ic7 "n% +re" %isr&, "n &n,re,"re% c$*,"n c$*,"n

1ISRU!TI6( T("H#'$'%I(S 7hen a new technology create a different approach to performing a ta8 that i le cotl cotly4 y4 more eff efficien icient4 t4 or othe otherwi rwiee rela relati;el ti;ely y ad;a ad;antage ntageou ou and dip diplace lace  :I574*6I 4*6I. . 6C9 6C98 8"=  "= * Th e9i e9 iti ting ng te tech chno nolo logy gy44 it i 8n 8now own n a a  :I57 Thee ee

 

tech te chni nica call di dir rup upti tion on ca can n ca cau uee bu bui ine ne e e to fai ail4 l4 pa part rtic icul ular arly ly in th tho oee organiation organiati on unprepared to change their buine model*   &< E@a/=+,8 )4 -7856=t7, t,ch()+)7,8 a5, a 5, •

Alternati;e (nergy %eneration at low cot*

•

Artificial Intelligence including Autonom Autonomou ou Sytem*

•

(mergent "omputing: Biocomputing4 1#A "omputing4 'ptical "omputing4 3olecular or "hemical "omputing4 and Ouantum "omputing*

•

%lobal e>"ommerce with the (lectronic !roduct "ode &(!") and RFI1*

•

%rid %r id

"om ompu puti ting ng44

inc nclu lud din ing g

Bio Bi oin inffor orm mat atic ic

%rid %r id

and

(co (c ono nom mic

1e;elopment %rid* •

Human>3achine Interaction: Intelligent "ollaboration4 Intelligent 1eign4 and Intelligent Training Sytem*

•

 #anotechnology**  #anotechnology

•

'pen "oureware*

•

'pen 1eign  !roblem Sol;ing*

•

!arallel "omputing*

•

5nowledge Repreentation and the Semantic 7eb*

•

Superconducti;ity*

 

•

6oice4 Sight and Haptic &i*e* touch) Repone Sytem*

•

7irele Internet*

D,

T("H#'$'%2 T("H#'$'% 2 STRAT(%I(S STRAT(%I(S (;ery e>buine concept baed on a technology brea8>through run the ri8 of   being replaced by a company with a newer technology technology** Therefore4 a trategy to mainta mai ntain in tec techno hnolog logica icall lea leader derhi hip4 p4 or to ha; ha;ee acc acce e to the lea leadin ding g app applic licabl ablee techno tec hnolog logie ie44 i e eent ential ial for the lon long>t g>term erm ur ur;i; ;i;al al of a tec techno hnolog logy>b y>bae aed d e>  buine*

A technical inno;ation trategy can be a imple a outourcing the technical ide of an e>buine rather than trying to maintain the competency in>houe* If it i large enough4 a firm can de;elop new technologie* But for mot firm4 an R1  program i too e9peni;e* 'ne option i to partner with an organiatio organiation n 8nown for  de;eloping new technologie4 o that they become a;ailable a they are de;eloped* "o>de;eloping and licening technologie are alo option* The ue of a trategic alliance can er;e a a technology trategy4 a well a a competiti;e trategy*

 

To a;oid falling ;ictim to a new technology4 a firm mut try to 8eep abreat of  techno tec hnolog logica icall de; de;elo elopm pment ent tha thatt ma may y af affe fect ct it ind indut utry ry** Any com compan pany y tha thatt i technology>dependent mut ha;e omeone in>houe who i 8nowledgeable about the latet technical de;elopment* But more importantly4 the company mut be willing to ta8e action when it appear that a mabuine4 e>buine4 epecially in the area of pri;acy4 patent and other intellectual property* (>Buine leader hould undertand regulation and the rational for local ta9e4 including how ta9 re;enue are pent* Unfair ta9 brea8 hould not be e9pected by an e>buineL neither hould buinee e9pect to compete unfairly with other buinee*

("'#'3I" "$I3AT "$I3AT( ( Sound financial trategie will help maintain cah flow and ol;ency during an econom eco nomic ic dow downtu nturn* rn* 3an 3any y ma mall ll bu buine inee e im imply ply run ou outt of mon money ey bef before ore  product begin to generate re;enue* (>buine hould ue the coner;ati;e accounting practice preferred by mot in;etor*

7'R5(R 7'R 5(R A6AI$AB I$ABI$IT I$IT2 2

 

The a;ailability of qualified employee i one of the bigget problem for an e>  buine attempting to grow from a tartup tartup into a mall or medium medium ied enterprie* enterprie* Although technical wor8er became a;ailable in the economic downturn after the 1ot>"om crah4 the a;ailability of foreign wor8er decreaed ignificantly after the terro ter rori ritt att attac8 ac8 of Sep Septem tember ber ++ ++44 E-E--+* +* $ar $arge gerr tec techni hnical cal com compan panie ie44 who had augmented their wor8 force through hire of foreign wor8er prior to K++K now feel that mut outource large number of bu bui ine ne  i a fo forg rgin ing g of a ne new w ec econ onom omy y of in> n>ti time me bu bui ine ne  mo mode del l44 (> whereby phyical procee are being upplanted by ;irtual operating dynamic* 2e4 e>buine i all thi*

THE E%BUSINESS SUPPLY CHAIN

Typically4 e>buine i decribed and dicued with more emotion than other   buine area4 and rightfully o* After all4 we are witnee to an e9citing re;olution*

To gain true inight and a conceptual undertanding of e>buine4 it need to be defined from both the BE" and the BEB perpecti;e*

Thi ection alo introduce Internet4 or digital4 upply chain and re;eal their  underlying ignificance to both the BE" and BEB e>buine channel*  

/E

THE B!C SUPPLY CHAIN STREAMLINES PROCESSES OF THE PHYSICAL WORLD

 

THE BUSINESS%TO%CONSUMER PHENOMENON 7hen conumer purchae good and certain clae of er;ice directly from the Internet4 online retailer are er;icing them* In other word4 online retailer4 or e> tailer4 ha;e initiated a conumer>oriented upply4 or ;alue4 chain for the benefit of  Internet conumer* Thi form of Internet>baed acti;ity i 8nown a buine>to> conumer &BE")*  

/0

Supply chain i ued interchangeably with ;alue chain* Howe;er4 upply chain4 in the traditional ene4 refer to the upply and ditribution of raw material4 capital  purchased ased  by a gi;en enterprie to ue in manufacturi good4 and o on4 that are  purch manufacturing ng

or de; de;elo elopin ping g the pro produc duct t and er er;ic ;ice e for cu cutom tomer er or in reg regula ularr bu buine ine  operation*  

 

  In BE" di ditri tribu butio tion n mod mode4 e4 up upply ply44 or ;al ;alue4 ue4 cha chain in ref refer er to the ytem4 ytem4 or  infra inf ratru tructu cture4 re4 tha thatt del deli;e i;er r goo good d or er er;ic ;ice e dir direct ectly ly to con conum umer er thr throug ough h Internet>baed channel* BE" e>buine i a rich4 comple9 upply chain that bear no direct analogy to the  phyical world* In fact4 no supply supply chain chain in the phyical world compare to BE" ;alue chain uch that an apple>to>apple comparion can be made* Thu4 BE" e> channel are unique becaue they are pro;iding upply chain that  streamli  streamline ne and  enhance processes of the phyical world*

Internet>dri;en upply chain depend hea;ily on the coordination of information flow4 automated financial flow4 and integrated information procee rather than on the phyical procee that traditionally mo;e good and er;ice from producer  to conumer*

 

/,

THREE THRE E CLA CLASSES SSES OF B!C VALUE CHAI CHAINS NS MAKE POSSI POSSIBLE BLE THE FOLLOWING E%BUSINESS REALITIES +)

uni# i#er erse se,, or an un 1eli;ery of th the un unlim limite ited d num number berXpo Xpoten tentia tially lly

mill mi llio ion nXo Xoff go good od an and d e er; r;ic ice e wi with thin in e eta tabl bli ihe hed d ma mar8 r8et et4 4 by oper op erat atin ing g un unde derr a i ing ngle le br bran and d id iden enti tity ty or a a intermediary*

upe u pere reff ffic icie ient nt

 

 

E)* "reation of new market channels by le;eraging the the Internet*

 

0)* (limination of middlemen while treamlining traditional buine

 

procee

E%BU E% BUSI SINE NESS SS TH THE E SH SHAP APIN ING G AND DY DYNA NAMI MICS CS OF A NE NEW W ECONOMY

Amaon*com and "1 #ow are e9cellent e9ample of the BE" cla indicated in cla cla  +* Am Amao aon n ha uc uccee ceeded ded by pro produc ducing ing an ef effi ficie cient nt con conum umer er pro produc ductt deli;ery ytem* The ;alue in thi e>buine channel i the uniting of many bac8treet dealer under  the banner of one popular brand name* "1 #ow i alo attempting to implement a imilar trategy* Furthermore4 no one boo8tore or muic tore in the phyical world offer +- million title li8e Amaon*com doe or 0E4--- "1 li8e "1 #ow doe* / Traditional boo8 or "1 retailer in etablihed mar8et could ne;er offer thi ;at array arr ay of me merch rchand andie ie44 bec becau auee of he helf lf pa pace ce and in; in;ent entor ory y con contr train aint* t* For  e9ample4 the typical uper boo8tore or muic "1 tore toc8 only +-4--- or D-4--- title4 repecti;ely*

An e9ampl e9amplee of BE" cl cla a E i eB eBay ay44 which which create created d a new mar8et channel in etablihing an online auction facility facility** Through thi e>buine channel4 buyer and

 

ellerXe;eryday conumerXcan interact to ell peronal item in a ;enue that did not e9it pre;iouly pre;iouly**

1ell*com 1ell *com i an e9am e9ample ple of the third BE" e>buine e>buine cla cla** 1ell* 1ell*com com i ucc uccefu efull  becaue it incorporate the principle of dis disint interm ermedi ediati ation, on, or th thee ab abil ilit ity y to eliminate intermediarie from the ;alue chain* In other word4 diintermediation in;ol; in; ol;e e di dieng engagi aging ng mid middle dleme men4 n4 who uu uuall ally y com comma mand nd a ha hare re of the ;al ;alue ue chain* Reearch ha hown that intermediarie add a large percentage to the final  price of product* product*

!ercentage range from . percent for tra;el agent to more than /- percent for a typical apparel retailer* 1ell i a buine cae e9ample of effecti;e deployment of  dii di int nter erm med edia iati tion on be beca cau uee it it di dire rect ct co con num umer er mo mode dell de deli li;e ;er r custom-built  computer ytem at reaonable price by le;eraging Internet channel*

In the future4 other online upply chain will uccefully remo;e middlemen4 reulting in e;en lower price for other clae of good and er;ice*  

/D

In u umm mmar ary y4 th thee In Inte tern rnet et upp upply ly ch chai ain n cr crea eate ted d to u upp ppor ortt BE BE" " e>bu e>bui ine ne  init in itia iati ti;e ;e ha ha;e ;e no di dire rect ct an anal alog ogy y in th thee tr trad adit itio iona nal4 l4 or ph phy yic ical al44 wo worl rld d of  commerce*

True4 Tr ue4 the two cha channe nnel l ha; ha;ee im imila ilarit ritie ie** Th Thee goo good d and er er;ic ;ice e of offe fered red in  phyical bric8>and>m bric8>and>mortar ortar retailer become e9y multimedia preentation and transa tra nsacti ction on data> (>t (>tail ailer er and con conum umer er con connec nectt ;ia 7eb por portal tal in intea tead d of 

dri;in dri ;ing g to ma mall ll or to ;ar ;ariou iou bu buine ine  con concer cern* n* In In;en ;entor tory y bec become ome onl online ine

 

tranaction data that flow from the conumer shopping cart of the online toreX  7eb 7e b iteXto fulfillment houe or directly to the producer themel;e*

B!C Va+6, Cha7(8 C5,at, Th, F)++)*7( Th5,, T?=,8 O4 E%B687(,88 R,a+7t7,8

digi gita tall su supp pply ly ch chai ains ns that eliminate +* In e eta tabl bli ihe hed d mar ar8e 8et t44 cr crea eati tion on of di middlemen and enable

the a;ailability

of a unique er;ice4 uch a 1ell direct deli;ery of cutom>built !"*

market cha channe nnell that did not not exist exist in the phyical uni;ere4 E* "reation of a new market uch uc h a eBa eBay y cre creati ation on of the onl online ine auc auctio tion n fac facili ility ty for th thee con con;en ;enien ience ce of 

e;eryday conumer*

0* 4niting of bac8>end4 ued or rare>product dealer under the banner of a popular  namee bra nam brand* nd* In eff effect ect44 thi thi cre create ate a con conor ortiu tium m of bu buine inee e und under er a  single branded identity, or under a new4 uperefficient intermediary4 that did not exist in

the phyical world*

//

THE BUSINESS%TO BUSINESS%TO%BUSINESS %BUSINESS PHENOMENON

 

BEB commerce growing from +- billion in + to /*, trillion by E--,Y !reently44 the median tranaction for BEB ite i three to four time the ie of the !reently median tranaction for BE" ite4 or .-- ;eru E,,*

Impo Im port rtan antt dr dri; i;er er of th thi i pr pro< o

 buine function

BEB channel can eliminate e9traneou or redundant

and related infratructur infratructure4 e4 reulting in the reduction of 

o;erhead cot* P INCREASE PRODUCTIVITY>

By eli elimi minat nating ing ope operat ration ional al wa wate te and the

automation of inefficien inefficientt buine practice4 organiation organiation can realie producti;ity producti;ity gain* P ENHANCE PRODUCT AND SERV SERVICE ICE OFFERINGS .  7ith economie of 

cale4 reduction of o;erhead4 operating efficiencie4 and lower operating cot4 uch gain may be paed on to the cutomer through through lower lower price or a enhanced enhanced or additional feature of product or er;ice*   P

/

CUSTOMER CUSTOME R SA SATISF TISFACTION ACTION..  A t tra ratteg egiic be ben nef efit it of the u ucc ccee fu full

impl im plem emen enta tati tion on of dy dyna nami micc BE BEB B

bui bu ine ne  mod odel el i im impr pro; o;ed ed cu cut tom omer  er 

 perception of the the tranaction*

Thi metamorphoi will not occur unle companie undergo radical change* (nterprie will begin with critical elf>e9amination and compreheni;e proce

 

analyi to determine what internal operating function4 underlying infratructure4 and critical practice are neceary to tranform into a BEB channel that i capable of le;eraging the Internet*

 Thi in turn will lead to the reengineering of procee4 elimination of operational inefficiencie4 and4 ultimately4 increaed producti;ity* If companie are ucceful4 they will rein;igorate their ;alue chain4 incorporate technology>dri;en procee that become the foundation for BEB4 and increae tranaction with cutomer*  

END%TO%END SOLUTION inco corp rpor orat atee e>b compan comp any y ca cann nnot ot me mere rely ly in e>bui uine ne tec techno hnolog logie ie int into o an e9i e9iti ting ng ytem &that &that i4 write omething omething in a;a) a;a)** Rather4 it mut bec become ome an e>buine

through>and>through*

 To reap full ;alue4 e>buine methodologie hould be uni;eral throughout the organiation4 organiati on4 from interaction with upplier to tranaction with cutomer*

.3ore importantly4 an e>buine focued organiation integrate thee e>function with core buine application to ma9imie efficiencie at all operational le;el* Buine intelligence i alo 8ey to the e>buine model ince4 without the benefit of buying pattern analye4 companie tend to imply open a 7eb catalog and compete on price X often with diatrou reult* 7ithout a ;alue add4 an e>  buine i dead on arri;al* arri;al*

 

7ith thi undertanding4 iSerie pro;ide an ideal end>to>end olution platform* From cutomer relationhip relationhip mana manageme gement nt &"R3 &"R3)) to upp upply ly chain management management &S"3)4 &S" 3)4 it app applie lie ana analyt lytica icall bu buine ine  int intell ellige igence nce to bet better ter tar targe gett e>b e>bui uine ne efficiencie* (mphaiing both BE" and BEB practice X e>buine on iSerie i o much more than imply an electronic hopping cart application*

 

1

E%BUSINESS FRAMEWORK 

 

By anyone meaure4 embar8ing on a miion to etablih a cohei;e e>buine  procritica miion>criticall application area* ., E+,ct5)(7c Data I(t,5cha( I(t,5cha(,,2t,(873+, ,,2t,(873+, Ma5'6= La(6a, &(1IM3$)

refer to tool that allow for the mo;ement4 ;ia the Internet4 of data between  

;endor and ytem with the upply chain*

Pa?/,(t Pa?/ ,(t S,5 S,5,58 ,58 are tool that ;alidate charge card purchae by contacting the

holding card company to confirm the a;ailability of credit for the purchaer* Thee tool alo pro; tool pro;ide ide truted truted ecurity and confidenti confidentialit ality y routi routine4 ne4 a i dema demanded nded more and more by conumer when pro;iding peronal and pri;ate information*

P)5ta+8  P,58)(a+79at7)( tool allow the creation of web portal and creation of 

 peronalied uer interface* Uer are gi;en the capability to a;e their  configuration for future web ite ;iit*

 

W,3 Acc cc,8 ,888 t) DB DB! ! UD UDB B 4) 4)55 AS S$" $"" " i deli;ered ;ia tool and utilitie that

 pro;ide acce from the brower to 1BE U1B for AS,-- table* Thee tool may imply pro;ide databae connection dri;er ;ia 1B"4 or they may be higher le;el tool with their own %UI for building querie againt 1BE U1B for AS,--* W,3 R,=)5t V7,*,58 are tool that allow the end uer to ;iew iSerie or AS,--

 print pool file ;ia a brower brower** Thee tool hold promie for wor8er whoe mail tool*  

.

W75,+,8 W75 ,+,888 Ac Acc,88 c,88 S)+6 S)+6t7)( t7)(88 can be achie;ed by uing tool for writinge9tending

appl ap plic icat atio ion n to ha hand ndhe held ld de de;i ;ice ce* * A an in inte tere ret tin ing g i ide de po poin int4 t4 th thee pe per ron onal al information management &!I3) indutry &which include !alm !ilot and Hand Spring Spr ing 6i ior or tha thatt lin lin8 8 to e>m e>mail ail ;ia wir wirele ele  mo modem dem) ) i e9p e9pect ecting ing rec record ord>>  brea8ing ale in the the lat quarter of E---* 7irele acce i becoming a maintream a the cellular phone4 both of which will wi ll ac acce cele lera rate te de dema mand nd fo forr wi wire rele le  ac acce ce  o olu luti tion on* * Th The eee to tool ol al allo low w th thee  programmer to deploy a E- application to a tier- de;ice with no change to the underlying R!% application in mot cae*  

BUSINESS MODELS

 

  A method method of doing buine by which a company can generate re;enue to utain

itelf 

P Spell out where the company i poitioned in the ;alue chain

P Buine model are a component of a buine plan or a buine cae

  .D THE CONTENT CONTE NT OF A BUSINESS PLAN 3iion tatement and company decription*

P The management team*

P The mar8et and the cutomer*

P The indutry and competition*

P The pecific of the product andor er;ice

P 3ar8eting and ale plan*

 

P 'peration plan*

P Financial procommerce allow companie to conduct buine 24-by-7 4 all day e;ery day , worldwide*

P An e>commerce torefront hould include:

P 'nline catalog of product

P 'rder proceing

 

P Secure payment

P Timely order fulfillment

SHOPPING CART TECHNOLOGY SHOPPING CART

P An order>proceing technology allowing cutomer to accumulate lit of item they wih to buy a they continue to hop*

P !roduct catalog

 

..

P 3erchant er;er  P 1atabae technology

P "ombine a number of purchaing method to gi;e cutomer a wide array of  option  

ONLINE SHOPPING MALLS P 7ide election of product and er;ice*

P 'ffer greater con;enience than hopping at multiple online hop*

P "onumer can ma8e multiple purchae in one Tranaction*

 

AUCTION MODEL P ONLINE AUCTION SITES P Act a forum through which Internet uer can log>on and aume the role of

either bidder or eller*  P "ollect a commiion on e;ery ucceful auction* P Seller pot item they wih to ell and wait for buyer to bid* RESERVE PRICE P The minimum price a eller will accept in a gi;en Auction* Auction*

  REVERSE AUCTIONS

.

Allow the buyer to et a price a eller  eller compete to match or e;en beat it*

PORTAL MODEL

 

PORTAL SITES

P %i;e ;iitor the chance to find almot e;erything they are loo8ing for in one  place

 HORIZONTAL PORTALS P !ortal that aggregate information on a broad range of topic* P 2ahooY4 2ahooY4 Alta6ita4 %oogle* % oogle*

VERTICAL PORTALS

P !ortal that offer more pecific information within a ingle area of interet* P 7eb31*  

-

  HORI HORIZONTAL ZONTAL PORTALS PORTALS

DYNAMIC PRICING MODELS

 

P The 7eb ha changed the way product are priced and purchaed*

 COMPARISON PRICING MODEL

P 7eb 7eb ite uing hopping hopping both technology to find the lowet price for a gi;en gi;en Item*

DEMAND%SENSITIVE SITIVE PRICING MODEL  DEMAND%SEN

P %roup buying reduce price a ;olume of ale increae*

 

+

NAME%YOUR%PRICE MODEL

P #ame>your>price for product and er;ice*

 BARTERING MODEL P Indi;idual and buine trade unneeded item for item they deire*

 REBATE MODEL

P Site offer rebate on product at leading online retailer in return for commiion or ad;ertiing re;enue*

 FREE OFFERING MODEL

P Free product and er;ice  er;ice generate high traffic*

 

E%BUSINESS ADVERTISING P Traditional P Tele;iion4 Tele;iion4 mo;ie4 newpaper and magaine P (tablih and continually trengthen 35a(-7(

B5a( a(- i a ymbol or name that ditinguihe a company and it product or  P B5

er;ice from it competitor and hould be unique4 recogniable and eay to remember*

  E P !ublicie UR$ on direct mailing and buine card P 'nline ad;ertiing

P !lace lin8 on other ite4 regiter with earch engine

BANNER ADVERTISING P BANNER ADS P $ocated on 7eb 7eb page4 act li8e mall billboard4 uually contain graphic and an ad;ertiing meage*

P Increaed brand recognition4 e9poure and poible re;enue*

SIDE PANEL ADS OR SKYSCRAPER BANNERS

 

P Ad;ertiement that lie ;ertically on 7eb ite

P !lace logo on banner4 enhancing brand Recognition

 

0

BANNER ADVERTISING

P In;enti;e color cheme and mo;ement*

 

P Flahing4 crolling te9t4 =)=%6= 3)@,8 and color change*

P P)=%6= 3)@ i a window containing an ad;ertiement that appear eparate from   the creen the uer i ;iewing4 pop up randomly or a a reult of uer action   &can ha;e a negati;e negati;e effect due to their intrui;e intrui;e nature) nature)

P 1etermine the bet poition on ite for a banner 

 

,

P 7eb ite cluttered with ad annoy ;iitor P Space can be more e9peni;e during high traffic P (9changing banner with another ite

BUYING AND SELLING BANNER ADVERTISING P Buy ad;ertiing pace on ite that recei;e a large number of hit and target a

imilar mar8et* P Selling ad pace pro;ide additional income* P 3onthly charge for online ad;ertiing rarely ued*

 CPM COST PER THOUSAND P A deignated fee for e;ery one thouand people who ;iew the ite on which your ad;ertiement i located*  ADVERTISING PA PAYMENT YMENT OPTIONS

P Pa?%=,5%c+7c' you pay the hot according to the number of clic8>through to your 

 

  ite P Pa?%=,5%+,a- you pay the hot for e;ery lead generated from the ad;ertiement* P Pa?%=,5%8a+, you pay the hot for e;ery ale reulting from a clic8>through* P Selling ad;ertiing pace* P !ro;ide appropriate contact information on your 7eb ite* P Regiter with organiation that will ell your pace for you* P Thee companie typically charge a percentage of the re;enue you recei;e from   the Ad;ert Ad;ertiement iement placed on your ite*  

5

ORGANIZATIONAL STRAT STRATEGIES EGIES FOR F OR E%BUSINESS E% BUSINESS

To be ucceful in e>buine4 an organiation mut mater the art of electronic relati rel ation onhip hip*T *Tra radit dition ional al mea mean n of cu cutom tomer er acq acqui uiiti ition on uc uch h a ad; ad;er erti tiing ing44  promotion4 and public relation are buine e>buine include:

P 3AR5(TI#% SA SA$(S P FI# I#A# A#"I "IA$ A$ S( S(R R6I" I"(S (S P !R'"UR(3(#T P "U "UST ST' '3(R S(R (R6 6I" I"( ( P I#T(R3(1IARI(S

MARKETINGSALES

 

1ire rect ct e ell llin ing g wa wa th thee ea earl rlie iet t ty type pe of e> e>bu bui ine ne  an and d ha ha pr pro; o;en en to be a 1i teppingtone to more comple9 commerce operation* Succee uch a eBay4 Barne and #oble4 1ell Inc*4 and Tra;elocity ha;e par8ed the growth of thi egment4 pro;ing cutomer acceptance of e>buine direct elling* 3ar8eting and ale department are initiating ome of the mot e9citing e>buine inno;ation* "incinnati 7"!'>T6 wa a rating blip in E--E and i now the number three AB" af affi filia liate te in the nat nation ion** 7" 7"!'> !'>T6 T6 cre credit dit it uc ucce ce lar large gely ly to dig digita itall  billboard that promote different programming depending on the time of day* The  billboard are updated updated directly from from a 7e 7eb b ite*  ite*  

D

 The tation quic8ly noticed that when current e;ent for the early>e;ening new were plugged during the afternoon4 rating pi8ed*The digital billboard let e;eral companie hare one pace and can change meage directly from the company computer* In the morning4 a department tore can ad;ertie a ale4 and in the afternoon4 a retaurant can ad;ertie it pecial*

(;entually cutomer will be able to buy billboard ign time in hour or minute incr in crem emen ent t*" *"ur urre rent nt co cot t to h har aree a di digi gita tall bi bill llbo boar ard d ar aree , ,-4 -4---- a mo mont nth4 h4 compared with +-4--- for one tandard billboard*

FINANCIAL SERVICES

Financial er;ice 7eb ite are enprocurement application i to lin8 organiation directly to preappro;ed upplier catalog catalog and to proce the entire purchaing tranaction online* $in8ing to electronic catalog ignificantly reduce the need to chec8 the timeline and accuracy of upplier information*

An electronic catalog preent cutomer with with information information about good and er;ice offered for ale4 bid4 or auction on the Internet* Some electronic catalog manage large number of indi;idual item4 and earch capabilitie help buyer na;igate quic8ly to the item they want to purchae* 'ther electronic catalog emphaie merchandie preentation and pecial offer4 much a a retail tore i laid out to encourage impule or add>on buying* A with other apect of e>  buine4 it i important important to match electronic electronic catalog deign deign and functionality functionality to a company buine goal*

CUSTOMER SERVICE

 

(>buine e

enable

cutom omeer

to

help

themel;e

by

combining

the

communication capability of a traditional cutomer repone ytem with the content richne only the 7eb 7eb can pro;ideXall a;ailable and operating E,9/* A a reult4 conducting buine ;ia the 7eb offer cutomer the con;enience they want while freeing 8ey upport taff to tac8le more comple9 problem* The 7eb alo allow an organiation to pro;ide better cutomer er;ice through e>mail4 pecia pe ciall me mea age ge44 and pri pri;at ;atee pa pawo word> rd>7 7eb acc acce e to pe pecia ciall are area a fo forr to top p cutomer* "utomer er;ice i the buine proce where the mot human contact occur  between a buyer and a eller* #ot urpriingly urpriingly44 e>buine trategit are finding that cutomer er;ice ;ia the 7eb i one of the mot challenging and potentially lucrati;e area of e>buine*  



Thee pr Th prim imar ary y i iu uee fa faci cing ng cu cut tom omer er e er; r;ic icee de depa part rtm men ent t u uin ing g e> e>bu bui ine ne  i conumer protection*

CONSUMER PROTECTION

An organiation that want to dominate by uing uperior cutomer er;ice a a competiti;e ad;antage mut not only conider how to er;ice it cutomer4 but alo al o ho how w to pr prot otec ectt it it cu cut tom omer er* * 'r 'rga gani nia ati tion on mu mut t re reco cogn gni iee th that at ma many ny conumer are unfamiliar with their digital choice4 and ome e>buinee are well aware of thee ;ulnerabiliti ;ulnerabilitie* e* For e9ample4 +/>year>old 3iami high chool enior Franci "ornworth offered hi =2oung 3an 6irginity@ for ale on eBay* The offer attracted a +- million phony  bid* 1iana 1uyer of Hollywood4 Florida4 old half of a grilled cheee andwich

 

that reemble the 6irgin 3ary to the owner of an online caino for E.4--- on eBay* eBa y*Hig Highli hlight ght the dif diffe feren rentt pro protec tectio tion n ar area ea fo forr con conum umer er** Reg Regard ardle le of  whether the cutomer are other buinee or end conumer4 one of their greatet concern i the ecurity le;el of their financial tranaction* Thi include all apect of electronic information4 but focue mainly on the info in form rmat atio ion n a ao oci ciat ated ed wi with th pa paym ymen ent t &e &e*g *g*4 *4 a cr cred edit it ca card rd nu numb mber er)) an and d th thee  payment themel;e4that i4 the =electronic money* money*@@ An organiatio organiation n mut con co nid ider er u uch ch i iue ue a en encr cryp ypti tion on44 e ecu cure re o oc8 c8et et la laye yer r &S &SS$ S$)4 )4 an and d e ecu cure re electronic tranaction &S(T)

 

+--

NEW TRENDS IN E%BUSINESS E%GOVERNMENT AND M%COMMERCE

Recent buine model that ha;e arien to enable organiation to ta8e ad;antage of the Inte Internet rnet and crea create te ;alu ;aluee are within e>go;ernme e>go;ernment* nt*  E-government in;ol;e the ue of trategie and technologie to tranform go;ernment&) by impro;ing the deli;ery of er;ice and enhancing the quality of interaction between the citien conumer within all branche of go;ernment* cutomer> cutomer>focued focued lin8 connect uer to mi mill llio ion n of 7eb pa page ge4 4 fr from om th thee fe fede dera rall go go;e ;ern rnme ment nt44 to lo loca call an and d tr trib ibal al go;ernment4 to foreign nation around the world*

M%COMMERCE

 

In a few year4 year4 Int Intern ernet> et>ena enable bled d mo mobil bilee de; de;ice ice wil willl out outnum number ber !"*  Mobile commerce 4 or m-commerce 4 i the ability to purchae good and er;ice through

a wirele Internet>enabled de;ice* The emerging technology behind m>commerce i a mobile de;ice equipped with a 7eb>ready micro>brower* To ta8e ad;antage of  the m> m>com comme merce rce ma mar8e r8ett pot potent ential ial44 han hande dett man manuf ufact acture urer r #o8 #o8ia4 ia4 (ri (ric con4 on4 3otorola4 and Oualcomm are wor8ing with telecommunication carrier ATT 7irele and Sprint to de;elop martphone* Uing new form of technology4 mart  phone offer fa94 e>mail4 and phone capabilitie all in one4 pa;ing the way for m> commerce to be accepted by an increaingly mobile wor8force* Figure 0*00 gi;e a ;iual o;er;iew of m>commerce*

 

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Amaon*com ha collaborated with #o8ia to pioneer a new territory* 7ith the launch of it Amaon*com Anywhere er;ice4 it ha become one of the firt ma m>co comm mmer erce ce wi will ll u urp rpa a la land ndli line ne e> e>bu bui ine ne  &traditional telephony) telephony) a the method of choice for digital commerce tranaction*

According to the reearch firm Strategy Analytic4 the global m>commerce mar8et wa e9pected to be worth more than E-- billion by E--4 with ome 0- million cutomer generating almot +, billion tranaction annually*

  Ad Addit dition ionall ally4 y4 inf inform ormati ation on act acti;i i;itie tie li8 li8ee e>m e>mail ail44 new new4 4 and to toc8 c8 quo quote te wil willl  progre to peronalied tranaction4 =one>clic8@ tra;el reer;ation4 online auction4 and ;ideoconferencin ;ideoconferencing* g*

 

M%COMMERCE TECHNOLOGY OVERVIEW

 

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+--* Technology i a primary force dri;ing thee change* 'rganiation that wantt to ur wan ur;i; ;i;ee mu mut t rec recogn ognie ie the imm immen enee pow power er of tec techno hnolog logy4 y4 carry carry out required organiational change in the face of it4 and learn to operate in an entirely different way*

OFFICIAL SITES OF E%BUSINESS #.  F+7='a5t W,387t, ***.4+7='a5t.c)/ ***.4+7='a5t.c)/

 

Flip8art i an Indian e>commerce company headquartered in Bangalore4 5arnata8a* It wa founded by Sachin Banal and Binny Banal in E--/* In it initial year4 Flip Fl ip8a 8art rt co conc ncen entr trat ated ed on on onli line ne a ale le of bo boo8 o84 4 bu butt it la late terr on e9 e9pa pand nded ed to electronic good and a di;erity of other product* Flip8art offer multiple multiple payment method li8e credit card4 debit card4 net ban8ing4 e>gift ;oucher4 and the maE-++* mid>E-++* 'n ulyJ +-th E-+E4 Big Shoe Baaar India !;t $td* owner of Brand 2ebhi*com 2e bhi*com announced that it ha raied +-- "r in Serie " round of funding led  by Fidelity %rowth %rowth !artner India India and Oualcomm* Oualcomm*

 

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 Ca5at+a(, W,387t, ***.ca5at+a(,.c)/

"aratlane i IndiaJ firt online uer*

ucceful implementation among early adopter which then reult in a fater and broader adoption proce*

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greater fle9ibility for inno;ation and increaed re;enue*

   

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