Buss 208 lesson 5 Forms of E-commerce Lecture Notes.pdf

E-commerce can be classified by the relationship among the participants or depending on the
type of parties involved in the transaction. The different forms of E-commerce include:-
(1) Business –to- Business (B2B):-. E-commerce between any two companies i.e. all the
participants are businesses or other organizations. Business-to-Business (B2B) Ecommerce deals with relationships among businesses that have two primary components,
E-infrastructure and E-market.

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Sub-topics: Forms / Types of E-Commerce
E-commerce can be classified by the relationship among the participants or depending on the
type of parties involved in the transaction. The different forms of E-commerce include:-
(1) Business –to- Business (B2B):-. E-commerce between any two companies i.e. all the
participants are businesses or other organizations. Business-to-Business (B2B) E-
commerce deals with relationships among businesses that have two primary components,
E-infrastructure and E-market.
An illustration of B2B form of e-commerce
Sells a product or service
To a business entity

E-infrastructure is the architecture of B2B, and E-market refers to a Website where buyers and
sellers interact with each other and conduct transactions. Some of the application areas of B2B
are supplier management, inventory management, distribution management, channel
management and payment management.
An example of a B2B model is https://www.amazon.com website (online bookstore) that sells
books from various publishers.
Advantages of B2B model
(i) It can efficiently maintain the movement of the supply chain and the manufacturing and
procurement processes
(ii) It helps in the delivery of the right products and services quickly and in a cost effective
manner

Business entity A
(Seller)
Business entity B
(Buyer)

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(2)Business to Consumer (B2C): a form of E-commerce where a business entity transacts
electronically with a consuming entity for example E-commerce transactions between companies
and consumers. Business-to-Customer (B2C) involves selling and buying of goods and services
over the Internet from Web retailers to Web customers. With B2C E-commerce, the retailer sells
the products and the services to unknown and un trusted strangers. Therefore, extra effort must
be made to capture customer and payment information. The most common application areas of
this type of E-commerce are purchasing product and information and personal finance
management.
(3) Business –to- Government (B2G): a form of e-commerce where a business entity transacts
electronically with the government entity for instance E-commerce between companies and the
public sector .Business-to-Government (B2G) E-commerce refers to the use of the Internet for
public procurement, licensing procedures and the other government-related operations. Internet-
based purchasing policies increase the transparency of the procurement process and reduce the
risk of irregularities.
(4) Government-to-Consumer (G2C) also known as Government-to-citizen:- in this model, the
government entity transacts with an individual consumer for example the Kenyan government
can enforce laws pertaining to tax payments on individual citizens over the Internet by using
G2C model.
(5)Government –to- Business (G2B: a form of ecommerce where the government entity
transacts electronically with a business entity for example, a business house landlord paying
government taxes via Internet.
(6) Government-to-Government (G2G): -Government to government (G2G) is the electronic
sharing of data and/or information between government agencies, departments or organizations.
The goal of G2G is to support e-government initiatives by improving communication, data
access and data sharing.
What is E-government (Electronic Government)? E-government is the use of technological
communications devices, such as computers and the Internet to provide public services to

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citizens and other persons in a country or region. E-government offers new opportunities for
more direct and convenient citizen access to government and for government provision of
services directly to citizens.
(7) Consumer-To-Consumer (C2C) also known as Customer-to-Customer (C2C): A form of E-
commerce where a consumer entity sells products or services to another consuming entity.
Customer-to-Customer (C2C) E-commerce is characterized by the growth of the E-marketplace
and on-line auctions, particularly in industries where business firms can bid for what they want
from multiple suppliers.
An example of this form of E-commerce is an individual selling cars, property online or online
auction websites such as , OLX.com, Bay WWW.bazee.com that provide a consumer to sell
their products online to other consumers. The online website brings the buyer and the seller
together to conduct business deals.
Generally consumer-to-consumer transactions are provided by online platforms (such as PayPal),
but often are conducted through the use of social media networks e.g. Facebook marketplace and
websites.
(8) Consumer-to-Business (C2B): C2B e-commerce is when a consumer makes their services
or products available for companies to purchase. An example of this would be a graphic designer
customizing a company logo or a photographer taking photos for an e-commerce website.
(9)Intra-business E-commerce:-a form of E-commerce that includes all internal organizational
activities that involve the exchange of goods, services or information among various units and
individuals in an organization. This form of E-commerce requires supporting organizational
networks such as Intranets.
(10) Business-to-Employees (B2E):- E-commerce model in which an organization delivers
services, information or products to its individual employees. Business-to-employee (B2E)
electronic commerce uses an intra-business network which allows companies to provide products
and/or services to their employees. A B2E strategy covers everything a business can do to attract,
recruit, onboard, train, empower and retain employees.

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Examples of B2E applications include:
(i) Employee benefits reporting
(ii) Online insurance policy management
(iii) Corporate announcement dissemination
(iv) Online supply requests
(v) Special employee offers

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Sub-topics: Benefits and Limitations of E-Commerce
Benefits of E-Commerce
E-commerce benefits can be classified under:-
(1) Organization benefits
(2) Society benefits
(3) Consumer benefits
E-Commerce Benefits to the society
1) Enables telecommuting (working from a remote location):- with E-commerce,
Customers need not travel to buy a product thus reducing traffic congestion and air
pollution.
2) Provision of government services:-E-commerce helps government to deliver public
services such as health care, education, social services etc. at reduced cost and in
improved ways. In addition, E-commerce has enabled access to services and products in
the rural areas which were otherwise not available.
3) Availability of cheaper products and services:-E-Commerce helps reduce cost of
products and services therefore less affluent people can also afford the products and
services.
4) Improved standard of living due to availability of quality and cheaper products and
services.
5) Close of digital divide: - people from developed countries and rural areas can access
services and products and purchase what they want.

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E-Commerce Benefits to organizations
1) Cost reduction: E-commerce helps organization reduce the cost to create, process,
distribute, retrieve and manage the paper passed information by digitizing the
information.in addition, with E-commerce, there are fewer permit and less taxes
2) Expansion of market segment: - Using E-Commerce, organizations can expand their
markets to national and international markets with minimum capital investment. In
addition; organizations can easily locate more customers, best suppliers and sustainable
business partners across the globe.
3) Increased organization productivity:- E-Commerce increases the organization
productivity this is because it supports the ‘Pull’ type supply chain management.in “pull”
type supply management, a business process starts when a request comes from a
customer and it uses Just-Time (JIT) manufacturing.
4) Increased sales of products and services: - with E-commerce the business is open 24/7
and as a result there is an increase in sales of products and services.
5) Improved business processes efficiency & accuracy: - E-Commerce helps in
automating business processes thus simplifying the business processes and making them
faster and efficient and as result, offering improved customer services and relationship.
6) Sustainability of competitive advantages: the use of ecommerce in a business sector
leads to improved customer services and relationship, product customization, cost
reduction, market expansion etc. therefore making the business achieves and sustains
competitive advantages.
E-Commerce Benefits to Consumers
(1) Convenience: E-Commerce technology provides consumers with a convenient way of
buying and selling products, services or information.
(2) Access to cheaper products and services: E-commerce application provides user with
more options to compare and select the cheaper and better option. This is because E-
commerce increases competition among the organizations and as a result organization’s
provides substantial discounts to customers.

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(3) Information availability: - consumers gain access to products / service related
information thus facilitating their product or services buying decisions. In addition, an E-
commerce customer can put review comments about a product and can see what others
are buying or see the review comments of other customers before making the final buying
decisions.
(4) Access to quality and cheaper products and services:-consumers have access to
vendors’ websites thus they are able to compare the prices of different vendors before
making a buying decision.
(5) Access to round-the-clock support services: - customers can transact or enquire about a
product/ services provided by a company anytime, anywhere from any location.
Limitations of Electronic Commerce
The major limitations of E-commerce can be classified under two major categories namely:
Technological and non-technological limitations. These limitations include:-
(a) Non-technological limitations
(1) Lack of trust between the parties involved (un-known sellers and buyers) in the electronic
transactions, lack of trust in paperless and faceless transactions thus creating fear
especially to the targeted consumers.
(2) The non-quantifiable (difficult to measure) E-commerce benefits such as online
advertising
(3) End- user resistance to change due to the lack of feel and touch of E-commerce products.
(4) The lack of governmental rules and regulations governing taxation, copyright, privacy,
trade mark etc. has not been resolved or are not clearly outlined.
(b)Technological Limitations
(1) Special servers are needed while setting-up the ecommerce platform thus increasing the
implementation and maintenance expenses in addition, Internet accessibility is still
expensive.

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(2) The lack of E-commerce systems security, reliability or standards owing to poor
implementation of e-commerce platforms.
(3) The telecommunication's bandwidth is insufficient though some ISPs have managed to
deal with this limitation through the implementation of fiber optic cables
(4) Compatibility issues: Sometimes, it becomes difficult to integrate an e-commerce
software or website with existing applications or databases i.e. there could be
software/hardware compatibility issues, as some e-commerce software may be
incompatible with some operating system or any other components.
(5) Software development tools that support Electronic commerce platforms are still under
development thus making the stabilization of E-commerce technology impossible. This is
a challenge because software development industry is still evolving and keeps changing
rapidly.
Summary:-
Categories of products and services that sell well on the Internet
Product category Description
1) Travel services On-line travel offer a range of services such as travel
booking, hotel reservation, car rentals and vacation
2) Computer hardware and
software
Dell is the major on-line vendor for computer hardware
and software.
3) Consumer electronics Consumer electronics include digital cameras, microwaves,
fridges, cookers, printers, scanners, wireless devices such
as mobile phones etc.
4) Clothing On-line shoppers are buying customized and
personalized shirts, shoes, dresses etc.
5) Cars The sale of cars over the Internet may become one of the top
sellers on the Internet in the near future.

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6) Office supplies B2B and B2C sales of office stationary via the Internet is
rapidly increasing
7) Books and digital music Amazon.com is the major seller of books online
8) Services On-line services such as E-banking, stock trading ,
auction and insurance services
9) Foods and drugs Online Ordering for food or drugs prescription may save
time and money