INTRODUCTION TO E-COMMERCE

Rizal Hari MagnadiManagement Department

Economics and Business FacultyDiponegoro University

Business Pressure : Market and Economic

Strong competition Global economy Regional trade agreement Low labor cost in some countries Frequent and significant changes in markets Increased power of consumers

Business Pressure : Societal

Changing nature of workforce Government deregulation – more competition Shrinking government subsidies Increased importance of ethical and legal

issues Increased social responsibility of organizations Rapid political changes

Business Pressures : Technological

Increasing innovations and new technologies Rapid technological obsolence Increases in information overload

Digital economy an economy that is based on digital technologies, including digital communication networks, computers, software, and other related information technologies (Turban, 2002)

With digital networking and communications infrastructures provide a global platform over which people and organizations interact, communicate, collaborate, and search information

E-Commerce

The process of buying, selling, transferring, or exchanging products, services, and/or information via computer networks, including the internet

Common E-Commerce’s Business Models

Business-to-Business (B2B) Business-to-Consumer (B2C) Consumer-to-Consumer (C2C) Peer-of-peer aplications Mobile commerce

EC’s Benefits to Organizations

Global reach Cost reduction Extended hours: 24/7/365 Customization New business models Lower communication costs

EC’s Benefits to Consumers

Ubiquity More products and services Cheaper products and services Instant delivery Information availibility Electronic communities

MANAGERIAL ISSUES OF e-COMMERCE

Budgets Project deadlines Keeping up with technology Privacy issues High cost of capital expenditure Unrealistic management expectations Training Reaching new customers Improving customer ordering services Employee hiring revision