Electronic Commerce Decisions Essay

2601 words - 11 pages

Electronic Commerce Decisions
The decision to take up electronic commerce should be a strategic one, which is informed by the broad objectives of the firm. Whether or not electronic commerce will build value, reduce costs, or simply result in an extra layer of IT infrastructure that requires on-going support, are still issues for debate. Haag, S., & Cummings, M. (2008, pg. 227), in their case study of America Online (AOL) imply that AOL is "inching" toward becoming an Internet bank. In this posting, I discuss the recommendations I would make to AOL management, and the advice I would make to them, on the processes and outcomes they should expect from implementing the ...view middle of the document...

’’(Duffy, G., & Dale, B. G. (2002, pg. 432). In Duffy, G., & Dale, B. G.’s opinion, e-commerce refers to trade that occurs over the internet, usually through a buyer making a transaction via the seller’s website. While it may seem easy to create an e-commerce Website, there is still need to follow sound business fundamentals and principles to be successful.
E-Commerce Business Model
According to Duffy, G., & Dale, B. G. (2002), within the e-commerce environment there are a number of sub-environments, ranging from business to business (B2B) via the Internet through modems and personal computers; business to consumer (B2C) via the internet; electronic data interchange (EDI) through formal information systems (IS) and local and wide area networks (LANS and WANS. The Economist (2000) notes an additional two sub environment consumer to business (C2B) and consumer to consumer (C2C). However, Haag, S., & Cummings, M. (2008), state that there are nine major e-commerce business models, with the other four models involving e-commerce with government.
Business to Business (B2B) and Business to Consumer (B2C) e-commerce
Business to business e-commerce occurs when a business sells products and services to customers who are primarily other businesses. First Data for the store, which is one of America’s top 250 largest corporations, is cited by Haag, S., & Cummings, M. (2008), as one of the most successful B2B e-commerce. When customers pay by credit card, credit card authorization and verification is handled by First Data for the store.
Business to consumer (B2C) e-commerce occurs when a business sells products and services to customers who are primarily individuals. According to Haag, S., & Cummings, M. (2008), it is B2C e-commerce that fueled the early growth of e-commerce in the 1990s. Unlike the long term partnership with other businesses in B2B e-commerce, in B2C model, consumers are indecisive and purchase the same types of products and services from many different sites.
Consumer to Business (C2B), Consumer to Consumer (C2C) e-commerce
Consumer to business (C2B) e-commerce occurs when an individual sells products or services to a business. According to Haag, S., & Cummings, M. (2008), the C2B e-commerce model is a true inversion of the B2C e-commerce business model, where rather than the demand being driven by consumers and supply driven by the business, the reverse occurs. In C2B, the consumer drives the supply, and the business drives demand. Consumer to Consumer (C2C) e-commerce occurs when an individual sells products and services to another individual. Such transactions take place through an intermediary such as e-Bay which is considered a hybrid of both B2C e-commerce site and C2C e-commerce site. The remaining five models deal with business to government (B2G), Consumer to Government (C2G), Government to Business (G2B), Government to Consumer (G2C), and Government to Government (G2G) e-commerce....

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