E-COMMERCE

An Introduction

Fahad Farhan Ali Zubair Khokhar M.Saad

E-COMMERCE
An Introduction

A production of FASTian Students @ 2007

Fahad Farhan Ali Zubair Khokhar M.Saad

To our Marvelous Teacher Simon John Sir

Table of Contents
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5. 6. 7. 8. 9.

Concept of E-commerce Definition Explanation Characteristics History of E-commerce.. Concerning Technology Concerning Decisions/Foot Steps Concerning Transformation of IT A concise look at its Evaluation E-commerce Classification B2B B2C C2B B2E C2C E-commerce Players Internet Users Regulations Institutions Advantages/Disadvantages of E-commerce.. Success Factors in E-commerce.. Problems regarding E-commerce Product Suitability Future of E-commerce.. E-commerce Standards

Impact of Broadband Software as Services

Acknowledgments
One of the great pleasures of writing a report is acknowledging the efforts of people whose hard work, cooperation, friend-ship and understanding were crucial to the production of this report. We are fortunate to have been able to work on this report with talented and dedicated team members. This report happened because of the encouragement , enthusiasm and persistence of our parents. M.Saad Siddiqui has done a great work for presenting of our report, as he is responsible for the auditorium selection and booking. Farhan Ali helped us a lot on both review process and the book supplements. We owe special thanks to the creativity and ideas of Zubair Khokhar who suggested all the art work for our report title and cover. Fahad helped us to operate Adobe Photoshop CS and dedicated his time for finding quality information from internet. Tariq answered our various queries and he is responsible for smooth flow of our report. Under tight deadlines, our team members scrutinized every aspects of the text and made countless suggestions for improving the accuracy and completeness of the report. We will sincerely appreciate your comments, criticisms, correctness and suggestions for improving the report. Please address all correspondence to: virtualspidy@yahoo.com Well, that is it for now. Welcome to the exciting world of e-commerce and its impact on the growing population of world. We hope that you will enjoy this look at contemporary report of e-commerce. Group Members Fahad Farhan Ali Zubair Khokhar M.Saad Siddiqui Muhammad Tariq

Preface
E-commerce have been a topic of study since quite long ago. Our report E-commerce An Introduction provides a detailed view about E-commerce, its pillars, importance, problems and significance in future. This report presents from basic concepts of E-commerce to the impact and importance of dreams in our daily life. As a glance at Table of Contents will show, all important topics in the subject are covered, and there are many accompanying examples and illustrations to clarify the material. This report is suitable as a supplement to existing texts or as a guide to study. It can be used both as a reference and as a tool for learning about e-commerce or improving your knowledge of the subject. We hope that you will find this report quite helpful and interesting. Group Members Fahad Farhan Ali Zubair Khokhar M.Saad Siddiqui Muhammad Tariq

Introduction
E-commerce is actually short form of Electronic COMMERCE. It is one of the most important aspects of the internet to emerge. It allows people to exchange goods and services immediately and with no barriers of time or distance. Any time of the day or night, you can go online and buy almost anything you want. According to Person Halls book E-commerce started in 1994 with the first banner ad being placed on a website. The Internet continues to change every aspects of our life, and changes the way consumers make their purchase decisions. It is essential for organizations, large or small, to understand ecommerce from a broad perspective, to learn the basics of underlying technology, to assess the impact of the technology on business processes, to foresee how the Internet may shape the course of the future in our everyday life and business word, and to fully enjoy the benefits of electronic ecommerce in their business practices. To better understand what E-Commerce is all about, think about it! Want to buy a CD for your spouse? Send a greeting card and chocolates? Or a car perhaps? Buy a concert ticket or better yet, an airline ticket to London, reserve a hotel room, or do business with your suppliers? Then go online. Its that simple! Its all about doing business online the E-commerce way. E-Commerce is about setting your business on the Internet, allowing visitors to access your website, and go through a virtual catalog of your products/services online. When a visitor wants to buy something he/she likes, they merely, "add" it to their virtual shopping cart/basket. Items in the virtual shopping basket can be added or deleted, and when you're all set to checkout, you head to the virtual checkout counter, which has your complete total, and will ask you for your name, address etc. and method of payment e.g. via credit card etc. Once you have entered all this information which by the way is being transmitted securely, you can then just wait for delivery. Its that simple. According to a CNN Opinion Poll, 62% of respondents who were surveyed said they plan to shop online during the Christmas season. Newsweek devoted its front page story to "shopping.com" in its December 7, 1998 issue (Asian Edition). The title was "Why Online Stores are the Best Thing since Santa Claus".

E-Commerce is not about just online stores, its about anything and everything to do with money. If you are paying via cash, check, credit card, etc. E-Commerce is about to make an introduction into your life soon. Banks like, Bank of America and Wells Fargo are now giving their clients accessibility to their bank accounts via the web. Soon enough, banks in Pakistan would be following suit. Days are not far away when while living in Pakistan, you would be able to order and reserve your request for a movie at the local video store and be able to browse through various titles, etc. and if you are feeling hungry, access the local restaurant and order dinner right on internet.

Section # 01 Concept of E-commerce

Definition :
E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet/Phone/Electronic devices.

Explanation :
Electronic Commerce is exactly analogous to a marketplace on the Internet. E-commerce (also referred to as e-commerce, eCommerce, ecommerce, Electronic commerce or EC) consists primarily of the distributing, buying, selling, marketing and servicing of products or services over electronic systems such as the Internet and other computer networks. The information technology industry might see it as an electronic business application aimed at commercial transactions; in this context, it can involve electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange (EDI), automated inventory management systems, and automated data collection systems. Electronic commerce typically uses electronic communications technology of the World Wide Web, at some point in the transaction's lifecycle, although of course electronic commerce frequently depends on computer technologies other than the World Wide Web, such as databases, and e-mail, and on other non-computer technologies, such as transportation for physical goods sold via e-commerce. The concept has been broadened to include all business activities of a sales cycle. The distinction between Ecommerce and E-business has become blurred. Ecommerce and Electronic Commerce has been used interchangeably, Electronic Business, however, has not been a widely accepted terminology.

Characteristics :
Exchange and Share Data Across the World Text messages, documents, graphics, photographs, music, video, and much more, can be converted into data and sent as email attachments or presented on a web site. There are no postage, printing

and packaging costs with eCommerce communications. So, use this new communications method to work quicker, and in new ways, with customers and suppliers outside of your locality or country. Send Messages Faster and Cheaper When you send a message, you only pay for the Internet access. As soon as the message arrives at your ISP, it is sent for zero cost to all the people to whom it has been addressed. Moreover, the message is likely to arrive at its destination, in a matter of seconds or minutes, depending on the size of the email and its attachments. Think of the possibilities for saving time and money with email. Approve and Proof Work Quickly A quotation, purchase order, letter, design drawings, brochure, or advert colour proof, etc. can be emailed to you as an attachment for your approval. Using email in this way can dramatically speed-up the turn-around of work between you and your business contacts. Introduce Collaborative Working With fast, reliable and cheap eCommerce communications, it is possible for colleagues, customers, suppliers and partners, to use collaborative working practices to manage, share, and enhance the project work, regardless of location where they are at a particular instance. Update Employees Instantly With New Policies or Procedures Email and messengers etc. works well when communicating with colleagues/pals who are off-site, out of the country,or teleworking. Hold Web Meetings (Data Conferencing) A great way to have a virtual meeting is to upload a document (spreadsheets, project plans, etc) on to a web site and enable it to be viewed and edited in real-time through the Internet. Holding virtual meetings can save significantly on travel expenses and time. Take Advantage of Time Differences As eCommerce communications are so fast and low cost, new business relationship have been established where work is exchanged between time zones at the end of one day, which, on the other side of the world, is the beginning of either the same or next day. Send Out email Automatically

Event-triggered emails can be used to acknowledge orders made on web sites, and to update customers on order progress. Alertemails or SMS messages can also be used to notify technical support of critical issues or maintenance problems. There, and many other similar applications, are effortless, cheap, and efficient ways of enhancing customer service and the brand experience. Use the Internet to Improve Business Administration With a mobile phone connected to a portable computer, employees working off-site can access and update internal information, such as customer records, price lists, time sheets, schedules, and job reports. Providing remote Internet access for staff makes it possible for the latest information to be at hand, for administrative tasks such as invoicing, employee whereabouts, and expense claims etc. Train on the Web The multi-media capabilities of web sites make them ideal for creating a virtual learning environment for employees and customers. When training material is updated, the latest version is immediately available. On-line learning facilities enable trainees living all over the world to access courseware when it is convenient to them, and without having to travel to a training centre, which in turn, saves time and expenses. Replace the Fax Machine and Save Money If a multi-page document has to be faxed to many people, it can work out expensive on telephone bills, especially if a national or international call has to be made. The cost savings can be huge if email is used instead, and the message can also be sent to multiple people for no extra cost.

Section # 02 History of E-commerce

Concerning Technology E-commerce began before personal computers were prevalent and has grown into a multi-billion dollar industry. The meaning of the term "electronic commerce" has changed over the last 30 years. Originally, "electronic commerce" meant the facilitation of commercial transactions electronically, usually using technology like Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT), where both were introduced in the late 1970s, for example, to send commercial documents like purchase orders or invoices electronically. The 'electronic' or 'e' in e-commerce refers to the technology/systems; the 'commerce' refers to be traditional business models. E-commerce is the complete set of processes that support commercial business activities on a network. In the 1970s and 1980s, this would also have involved information analysis. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of e-commerce. However, from the 1990s onwards, this would include enterprise resource planning systems (ERP), data mining and data warehousing. In the dot com era, it came to include activities more precisely termed "Web commerce" - the purchase of goods and services over the World Wide Web, usually with secure connections (HTTPS, a special server protocol that encrypts confidential ordering data for customer protection) with e-shopping carts and with electronic payment services, like credit card payment authorizations. Today, it encompasses a very wide range of business activities and processes, from e-banking to offshore manufacturing to e-logistics. The ever growing dependence of modern industries on electronically enabled business processes gave impetus to the growth and development of supporting systems, including backend systems, applications and middleware. Examples are broadband and fibre-optic networks, supply-chain management software, customer relationship management software, inventory control systems and financial accounting software.

Concerning Decisions/Foot steps When the Web first became well-known among the general public in 1994, many journalists and pundits forecast that e-commerce would soon become a major economic sector. However, it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary web sites. Although a large number of "pure e-commerce" companies disappeared during the dot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilities to their Web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers could order groceries online. The emergence of e-commerce also significantly lowered barriers to entry in the selling of many types of goods; accordingly many small home-based proprietors are able to use the internet to sell goods. Often, small sellers use online auction sites such as EBay, or sell via large corporate websites like Amazon.com, in order to take advantage of the exposure and setup convenience of such sites. Concerning Transformation of IT EDI Some authors will track back the history of ecommerce to the invention of the telephone at the end of last century. EDI (Electronic Data Interchange) is widely viewed as the beginning of ecommerce if we consider ecommerce as the networking of business communities and digitalization of business information. Large organizations have been investing in development of EDI since sixties. It has not gained reasonable acceptance until eighties. EDI has never reached the level of popularity of the web-based ecommerce for several reasons: 1. High cost of EDI prohibited small businesses and medium-sized companies from participating in the electronic commerce. 2. Slow development of standards hindered the growth of EDI.

3. The complexity of developing EDI adaptation to a narrow user base.

applications

limited

its

The Internet and the Web The Internet was conceived in 1969, when the Advanced Research Projects Agency (a Department of Defense organization) funded research of computer networking. The Internet could end up like EDI without the emergence of the World Wide Web in 1990s. The Web became a popular mainstream medium (perceived as the fourth mainstream medium in addition to print, radio and TV) in a speed which had never been seen before. The Web users and content were almost doubled every a couple of months in 1995 and 1996. The web and telecommunication technology had fueled the stock bubble in the roaring 90s and eventually pushed NASDAQ over 5,000 in 2000 before it crashed down to 1,200 in 2002. XML and Web Services Besides the availability of technical infrastructures, the popularity of the Web is largely attributed to the low cost of access and simplicity of HTML authoring, which are the obstacles of EDI development. The Internet and the Web have overcome the technical difficulty of EDI, but it has not solved the problem of slow development of ecommerce standards. XML, as a meta markup language, provides a development tool for defining format of data interchange in a wide variety of business communities. Web Services offers a flexible and effective architecture for the implementation. There is no doubt that XML and the Web Services will shape the course of ecommerce in years to come. A concise look at its Evaluation Year Event

EDI, or electronic data interchange, was standardized 1984 through ASC X12. This guaranteed that companies would be able to complete transactions with one another reliably. Compuserve offers online retail products to its customers. 1992 This gives people the first chance to buy things off their computer. Netscape arrived. Providing users a simple 1994 browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer. 1995 Two of the biggest names in e-commerce are launched:

Amazon.com and eBay.com. DSL, or Digital Subscriber Line, provides fast, always-on Internet service to subscribers 1998 across California. This prompts people to spend more time, and money, online. Retail spending over the Internet reaches $20 billion, 1999 according to Business.com. The U.S government extended the moratorium on Internet 2000 taxes until at least 2005.

Section # 03 E-commerce Classification

There are a number of different types of E-Commerce: B2B - Business to Business Business to Business e-commerce has been in use for quite a few years and is more commonly known as EDI (electronic data interchange). In the past EDI was conducted on a direct link of some form between the two businesses where as today the most popular connection is the internet. The two businesses pass information electronically to each other. B2B e-commerce currently makes up about 94% of all e-commerce transactions. B2C - Business to Consumer Business to Consumer e-commerce is relatively new to Australia. This is where the consumer accesses the system of the supplier. It is still a two way function but is usually done solely through the Internet. Example: A home user wishes to purchase some good quality wine. The user accesses the Internet site http://www.craigs.com.au and follows the links to read a report on the recommended wines. After reading the tasting notes the user follows the links to place an order along with delivery and payment details directly into the merchants inventory system. The wine is then dispatched from the suppliers warehouse and in theory is delivered to the consumer without delay. C2B - Consumer to Business Consumer to Business is a growing arena where the consumer requests a specific service from the business. Example: Harry is planning a holiday in Darwin. He requires a flight in the first week of December and is only willing to pay $250. Harry places a submission with in a web based C2B facility. Dodgy Brothers Airways accesses the facility and sees Harry's submission.

Due to it being a slow period, the airline offers Harry a return fare for $250. B2E - Business to Employee Business to Employee e-commerce is growing in use. This form of e-commerce is more commonly known as an 'Intranet'. An intranet is a web site developed to provide employees of an organisation with information. The intranet is usually accessed through the organisation's network, though it can and is often extended to an entrant who uses the Internet but restricts uses by signon and password. C2C - Consumer to Consumer These sites are usually some form of an auction site. The consumer lists items for sale with a commercial auction site. Other consumers access the site and place bids on the items. The site then provides a connection between the seller and buyer to complete the transaction. The site provider usually charges a transaction cost. In reality this site should be call C2B2C.

Section # 04 E-commerce Players

Basically, there are three players of E-commerce which are mentioned as follows: 1. Internet Users 2. Regulations 3. Institutions Internet Users: Size of the Internet users, usage patterns and user behaviors is worth observing during E-commerce. Global Internet Usage According to Nielsen/NetRatings, the size of the Internet universe is estimated about 416 million users for August, 2003, and the active user base is 253 millions world wide. Users spent 12 hours and viewed 900 pages a month on average. United States Internet Usage According to Nielsen/NetRatings, 182 millions of US Internet users (127 million users are considered active users) spent 26 hours to access 53 sites from home for August, 2003, while 51 millions of US Internet users (47 million users are considered active users) spent 26 hours to access 96 sites from work. Internet User Behaviors Internet users flock to the Web for many reasons, the following are the top three things they do on the Internet. a) accessing content on familiar sites. b) using search engines to search new information, and c) online shopping and auction. Regulations: Government agencies and law enforcement etc. also play an important role in E-commerce. While success of every new technology has made our life easier, it has drastically increased the complexity of related law practice. The Web has no exception. Ecommerce, like other business activities, are governed by international and country-specific laws. Within US, ecommerce are governed by federal and state laws. Institutions:

Institutions like World Wide Web Consortium, commerceNet and IETF etc. play a vital role in communication and other respects. Several organizations have been instrumental in shaping the course of the development of the Internet/Web and electronic commerce. CommerceNet CommerceNet is a neutral, non-profit consortium dedicated to advancing the growth of global electronic trade through business process interoperability and the creation of open Business Service Networks. Founded in 1994, CommerceNet has been a trusted intermediary conducting industry-wide research and programs that have advanced the commercial use of the Internet. CommerceNet has had a direct role in pioneering some of the industries first milestones including secure transactions, XML messaging and defining the next generation of the Internet. The World Wide Web Consortium The World Wide Web Consortium was created in October 1994 to lead the World Wide Web to its full potential by developing common protocols that promote its evolution and ensure its interoperability. W3C has around 400 Member organizations from all over the world and has earned international recognition for its contributions to the growth of the Web. The Internet Engineering Task Force The Internet Engineering Task Force (IETF) is a large open international community of network designers, operators, vendors, and researchers concerned with the evolution of the Internet architecture and the smooth operation of the Internet. It is open to any interested individual. IEEE 802 LAN/MAN Standards Committee The IEEE 802 LAN/MAN Standards Committee develops Local Area Network standards and Metropolitan Area Network standards. The most widely used standards are for the Ethernet family, Token Ring, Wireless LAN, Bridging and Virtual Bridged LANs. An individual Working Group provides the focus for each area.

Section # 05 Advantages/Disadvantages of E-commerce

Advantages:
The advantages of E-commerce are basically increased sales and decreased costs through the use of electronical media, especially the Web. The advantages of E-commerce will be divided into the benefits it provides to organizations, consumers, and society. Advantages to Organizations Due to the global reach of the Internet, businesses organizations are able to send messages worldwide, exploring new markets and opportunities. This breaks down geographic limitations, and reaches narrow markets that traditional businesses have difficulties accessing. Through the Internet, business now offer a wide range of choices and higher levels of customer information and details for individuals to search and compare. Some build-to-order companies such as Dell Computer Corp can even provide a competitive advantage by inexpensive customization of products and services. In terms of cost reduction, E-commerce helps organizations decrease costs in creating, processing, distributing, storing and retrieving information. For example the communication and advertising costs could be lower by sending e-mails and using online advertising channels, than by using television commercials or the print media. In terms of online ordering and online auction organizations, the costs could be lower than running an actual shop with the associated manpower. Extended trading hours is another benefit, the 24 hours a day. 7 days a week in 365 days allows business always free to open on the Internet without overtime and extra cost. Other advantages includes the up-to-date company material, current inventories, improved customers service, better customers communication, increased operating and trading flexibility. Advantages to Consumers For customers, the advantages occur in the buying process, product research, evaluation and execution. E-commerce provides customers with a platform to search product information through global markets with a wider range of choices, which makes comparison and

evaluation easier and more efficient. With the ubiquity in accessing the Internet, consumers are able to search for shops or perform other transactions anytime in almost location. Cheaper goods and services is one of the benefits for consumers who purchase online. Furthermore, delivery time and costs can be saved by buyers when they purchase digital goods and services. Examples are e-books, music and audio clips, software, games, and distance education delivered via the Internet. Advantages to Society By telecommuting, individuals can nowadays work and do their purchasing at home rather than by traveling around. This will result in less traffic and air pollution. For people in Third World countries, many service and products are now available which were unavailable in the past; opportunities and higher education services are more achievable for students. Non-profit organizations, including government services, also benefit from E-commerce by the online payment system which supports the payment of tax refunds and pensions quickly and securely. Public services such as health care, education, and public social service also benefit from E-commerce. For example, rural doctors and nurses can access professional information and the latest health care technologies. Overall, e-commerce makes products and services more easily available without geographic limitations.

Disadvantages:
There are also many disadvantages of e-commerce, one of the main ones is fraud. This is where your details (name, bank card number, age, national insurance number) are entered into what look to be a safe site but really it is not. These details can then be used to steal money from you and can be used to buy things on line that you are completely unaware of until it is too late. If this information is leaked into the wrong hands. People are able to steal your identity, and commit more fraud crimes under your name. Finally there are many problems with e commerce some of which are: Failure to understand customers, why they buy and how they buy. Even a product with a sound value proposition can fail if producers and retailers do not understand customer habits, expectations, and motivations. E-commerce could potentially mitigate this potential problem with proactive and focused marketing research, just as traditional retailers may do. Failure to consider the competitive situation. One may have the will to construct a viable book e-tailing business model, but lack the capability to compete with Amazon. Inability to predict environmental reaction. What will competitors do? Will they introduce competitive brands or competitive web sites? Will

they supplement their service offerings? Will they try to sabotage a competitor's site? Will price wars break out? What will the government do? Research into competitors, industries and markets may mitigate some consequences here, just as in non-electronic commerce. Overestimation of resource competence. Can staff, hardware, software, and processes handle the proposed strategy? Have e-tailer's failed to develop employee and management skills? These issues may call for thorough resource planning and employee training. Products less suitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings most notably clothing and products where colour integrity appears important. Nonetheless, Tesco.com has had success delivering groceries in the UK, albeit that many of its goods are of a generic quality, and clothing sold through the internet is big business in the U.S. Also, the recycling program Cheapcycle sells goods over the internet, but avoids the low value-to-weight ratio problem by creating different groups for various regions, so that shipping costs remain low.

Section # 06

Success Factors in E-commerce

Several factors have a role in the success of any e-commerce venture. They may include: 1. Providing value to customers. Vendors can achieve this by offering a product or product-line that attracts potential customers at a competitive price, as in non-electronic commerce. 2. Providing service and performance. Offering a responsive, userfriendly purchasing experience, just like a flesh-and-blood retailer, may go some way to achieving these goals. 3. Providing an attractive website. The tasteful use of colour, graphics, animation, photographs, fonts, and white-space percentage may aid success in this respect. 4. Providing an incentive for customers to buy and to return. Sales promotions to this end can involve coupons, special offers, and discounts. Cross-linked websites and advertising affiliate programs can also help. 5. Providing personal attention. Personalized web sites, purchase suggestions, and personalized special offers may go some of the way to substituting for the face-to-face human interaction found at a traditional point of sale. 6. Providing a sense of community. Chat rooms, discussion boards, soliciting customer input, loyalty schemes and affinity programs can help in this respect. 7. Providing reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption, and firewalls can enhance this requirement. 8. Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers may not appreciate the big brother experience. 9. Owning the customer's total experience. E-tailers foster this by treating any contacts with a customer as part of a total experience, an experience that becomes synonymous with the brand. 10. Streamlining business processes, possibly through re-engineering and information technologies. 11. Letting customers help themselves. Provision of a self-serve site, easy to use without assistance, can help in this respect. 12. Helping customers do their job of consuming. E-tailers can provide such help through ample comparative information and good search

13. 14.

15. 16.

facilities. Provision of component information and safety-and-health comments may assist e-tailers to define the customers' job. Constructing a commercially sound business model. If this key success factor had appeared in textbooks in 2000, many of the dot.coms might not have gone bust. Engineering an electronic value chain in which one focuses on a "limited" number of core competencies -- the opposite of a onestop shop. (Electronic stores can appear either specialist or generalist if properly programmed.) Operating on or near the cutting edge of technology and staying there as technology changes (but remembering that the fundamentals of commerce remain indifferent to technology). Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.

Section # 07

Problems regarding E-commerce

Even if a provider of E-commerce goods and services rigorously follows these sixteen "key factors" to devise an exemplary e-commerce strategy, problems can still arise. Sources of such problems include: 1. Failure to understand customers, why they buy and how they buy. Even a product with a sound value proposition can fail if producers and retailers do not understand customer habits, expectations, and motivations. E-commerce could potentially mitigate this potential problem with proactive and focused marketing research, just as traditional retailers may do. 2. Failure to consider the competitive situation. One may have the capability to construct a viable book e-tailing business model, but lack the will to compete with Amazon.com. 3. Inability to predict environmental reaction. What will competitors do? Will they introduce competitive brands or competitive web sites. Will they supplement their service offerings? Will they try to sabotage a competitor's site? Will price wars break out? What will the government do? Research into competitors, industries and markets may mitigate some consequences here, just as in nonelectronic commerce. 4. Over-estimation of resource competence. Can staff, hardware, software, and processes handle the proposed strategy? Have etailers failed to develop employee and management skills? These issues may call for thorough resource planning and employee training. 5. Failure to coordinate. If existing reporting and control relationships do not suffice, one can move towards a flat, accountable, and flexible organizational structure, which may or may not aid coordination. 6. Failure to obtain senior management commitment. This often results in a failure to gain sufficient corporate resources to accomplish a task. It may help to get top management involved right from the start. 7. Failure to obtain employee commitment. If planners do not explain their strategy well to employees, or fail to give employees the whole picture, then training and setting up incentives for workers to embrace the strategy may assist. 8. Under-estimation of time requirements. Setting up an ecommerce venture can take considerable time and money, and failure to understand the timing and sequencing of tasks can lead

to significant cost overruns. Basic project planning, critical path, critical chain, or PERT analysis may mitigate such failings. Profitability may have to wait for the achievement of market share. 9. Failure to follow a plan. Poor follow-through after the initial planning, and insufficient tracking of progress against a plan can result in problems. One may mitigate such problems with standard tools: benchmarking, milestones, variance tracking, penalties for negative variances, rewards for positive variances, and remedial realignments.

Section # 08

Product Suitability
Certain products/services appear more suitable for online sales; others remain more suitable for offline sales. Many successful purely virtual companies deal with digital products, including information storage, retrieval, and modification, music, movies, education, communication, software, photography, and financial transactions. Examples of this type of company include: Schwab, Google, eBay, Paypal, Egghead, and Morpheus. Virtual marketers can sell some non-digital products/services successfully. Such products generally have a high value-to-weight ratio, and/or involve embarrassing purchases, and/or typically go to people in remote locations, and/or have shut-ins as their typical purchasers. Products such as spare parts, both for consumer items like washing machines and for industrial equipment like centrifugal pumps, also seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at consumer outlets -- in such cases, e-commerce solutions in in spares do not compete with retail stores, only with other ordering systems. A factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular version of a product needs, for example by providing parts lists keyed by serial number. Purchases of pornography and of other sex-related products and services fulfill the requirements of both virtuality or if non-virtual, generally high-value and potential embarrassment; unsurprisingly, provision of such services has become the most profitable segment of ecommerce. Products unsuitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings, and products where colour integrity appears important.

Section # 09

Future of E-commerce
The attempt to paint a clear picture of the future is always fertile. The predictable part of the future, however, will be the efforts of solving the major problems we face today and the possibility of that some of technical and business initiatives at the infant stage today will become main-stream tomorrow. E-commerce Standards The Internet and the Web have overcome the technical difficulty of EDI, but it has not solved the problem of slow development of ecommerce standards. The development and acceptance of standards will significantly impact the future success of the electronic commerce. XML will play a pivotal role in that process. Impact of Broadband The continuing acceptance of broadband technology and maturity of technology for delivering broadband applications (video on demand, online gaming and etc.) to the end users will drastically impact the consumer market in near future. The ability to present multimedia applications to consumers will transform the Internet from an information tool to an entertainment tool. The Web, as the fourth medium, has the potential to integrate other three types of media (print, radio and video) in one way or another. Software as Services The Internet has changed the way how software is distributed. It may change the way how software is developed. Distribution of some software may not be necessary. The functionality of some software may be presented as online services that users can subscribe.

Conclusion
In short, by implementing E-Commerce, you save money, are online 24 hours-a-day, 7 days-a-week, no traffic jams, shopping crowds, carrying overloaded heavy shopping bags etc. Just more business, the easy way.

Bibliography
References
Chan, H., Lee, R. Dillon, T., and Chang, E. (2001) E-Commerce: Fundamentals and Applications, England: John Wiley & Sons, LTD. Turban, E., King, D., Lee, J., and Viehland, D. (2004) Electronic Commerce: A Managerial Perspective, New Jersey: Pearson Prentice Hall.

Sites
www.forrester.com www.4th-media.net www.netxs.com www.wikipedia.com www.google.com