Module_5_with_narration_text - Module 5 e-Commerce and...

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Module 5: e-Commerce and supply chain systems 1. Introduction In this lecture, we discuss two related topics: e-commerce and supply chain management. 2. e-Commerce models e-Commerce is the buying and selling of goods and services over public and private computer networks. In e-commerce, order placement is executed over a computer network. Also, marketing, and, for digital products, even delivery, often make use of computer networks such as the Internet. The business to consumer (B2C) e-commerce model involves end consumers making purchases over the Internet (e.g., reserving a hotel room in Wellington on-line via NeedItNow, Consumer to consumer (C2C) is an e- commerce model in which consumers purchase goods from other consumers. In New Zealand, TradeMe ( is the most significant e-marketplace primarily relying on the C2C e-commerce model. Business to business (B2B) e-commerce is not as visible as B2C or C2C. However, in terms of the volume of transactions, B2B is bigger than either B2C or C2C. 3. Distinguishing features of e- commerce e-Commerce offers buyers a number of unique features, which were not available in traditional commerce, such as product delivery over digital networks, mass customization and reputation services. 4. Digital products via digital network The cost of delivering digital products and services purchased via e-commerce is very low if such products and services are
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Module 5: e-Commerce and supply chain systems 2 delivered over a computer network there are no handling costs. In addition, digital products can be delivered almost immediately. Immediate delivery encourages consumers to buy impulsively a desirable behaviour from the point of view of the sellers. In the diagram, you can see a mock-up of a page from an e-commerce site operated by Australian software manufacturer Acronis offering a link to download the Acronis True Image software product. The option to get a CD posted is also available - at a higher price. 5. Mass customization creates competitive advantage e-Commerce web sites may offer sophisticated interfaces allowing customers to customize products they are buying (or are considering to buy). As an example of customization, the slide shows the steps involved in building an order of a personal computer at Advantage Computers e-business web site. By selecting various options, a customer can create a configuration that meets his or her unique needs. Customization in traditional commerce tended to be limited to very expensive products (such as houses), because costs associated with customization were rather high. In the case of e-commerce, orders for customized products collected on-line can be automatically forwarded to computer-aided manufacturing systems, so that customized products can be manufactured at a cost similar to mass-produced products. 6. Reputation services ensure
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Module_5_with_narration_text - Module 5 e-Commerce and...

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