Page 31 - Electronic Commerce

Chapter 1

businesses and internal processes that companies use to support their buying, selling,
6
hiring, planning, and other activities. Some people use the term electronic business (or
e-business) when they are talking about electronic commerce in this broader sense. For
example, IBM defines electronic business as “the transformation of key business processes
through the use of Internet technologies.” Most people use the terms “electronic
commerce” and “electronic business” interchangeably. In this book, the term electronic
commerce (or e-commerce) is used in its broadest sense and includes all business
activities that use Internet technologies. Internet technologies include the Internet, the
World Wide Web, and other technologies such as wireless transmissions on mobile
telephone networks. Companies that operate only online are sometimes called dot-com or
pure dot-com businesses to distinguish them from companies that operate in physical
locations (solely or together with online operations); however, online business activity has
become so integrated with everyday life in much of the world that few people worry about
these distinctions any longer.

Categories of Electronic Commerce
Categorizing electronic commerce by the types of entities participating in the transactions or
business processes is a useful and commonly accepted way to define online business. The
five general electronic commerce categories are business-to-consumer, business-to-business,
transactions and business processes, consumer-to-consumer, and business-to-government.
The three categories that are most commonly used are:
• Consumer shopping on the Web, often called business-to-consumer (or B2C)
• Transactions conducted between businesses on the Web, often called
business-to-business (or B2B)
• Business processes in which companies, governments, and other
organizations use Internet technologies to support selling and purchasing
activities
A single company might participate in activities that fall under multiple e-commerce
categories. Consider a company that manufactures stereo speakers. The company
might sell its finished product to consumers on the Web, which would be B2C electronic
commerce. It might also purchase the materials it uses to make the speakers from
other companies on the Web, which would be B2B electronic commerce. Businesses
often have entire departments devoted to negotiating purchase transactions with their
suppliers. These departments are usually named supply management or procurement.
Thus, B2B electronic commerce is sometimes called e-procurement.
In addition to buying materials and selling speakers, the company must also
undertake many other activities to convert the purchased materials into speakers. These
activities might include hiring and managing the people who make the speakers, renting
or buying the facilities in which the speakers are made and stored, shipping the speakers,
maintaining accounting records, obtaining customer feedback, purchasing insurance,
developing advertising campaigns, and designing new versions of the speakers. An
increasing number of these transactions and business processes can be done on the Web.
Manufacturing processes (such as the fabrication of the speakers) can be controlled using

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