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    Electronic Commerce for the

    Competence Examination

    Dr. Basil Dudin

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    Definitions and Concepts

    Electronic Commerce: The process of buying, selling,or exchanging products, services, or information viacomputer netor!s.

    Electronic Business: " broader definition of EC thatincludes not #ust the buying and selling of goods andservices, but also servicing customers, collaboratingith business partners, and conducting electronic

    transactions ithin an organi$ation. Defined through the perspectives of communications,

    business process, services, learning and collaboration.

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    Dimensions of Electronic Commerce

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    %rganisations in E&Commerce

    EC organizations

    Brick-and-mortar organizations

    %ld&economy organi$ations 'corporations( that perform

    most of their business off&line, selling physical products bymeans of physical agents

    Virtual (pure-play) organizations

    %rgani$ations that conduct their business activities solelyonline

    Click-and-mortar (click-and-brick) organizations

    %rgani$ations that conduct some e&commerce activities, butdo their primary business in the physical orld

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    )rameor! for Electronic Commerce

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    *a#or Business +ressures and oles of

    Electronic Commerce

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    Business Environment Drivers for E&

    Commerce

    %rgani$ational response strategies

    -trategic systems

    -"gile systems

    -Continuous improvement efforts and business

    process restructuring

    -Customer relationship management

    -Business alliances

    -Electronic mar!ets

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    Business Environment Drivers for E&

    Commerce eductions in Cycle Time and Time&to&*ar!et

    cycle time reduction

    hortening the time it ta!es for a business to complete aproductive activity from its beginning to end

    Empoerment of Employees

    EC allos the decentrali$ation of decision ma!ing andauthority via empoerment and distributed systems, butsimultaneously supports a centrali$ed control

    upply Chain /mprovementsEC can help reduce supply chain delays, reduce inventories,and eliminate other inefficiencies

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    Business Environment Drivers for E&

    Commerce

    -*ass Customi$ation: *a!e&to&%rder in 0arge1uantities

    mass customization

    +roduction of large 2uantities of customi$ed items-/ntrabusiness: )rom ales )orce "utomation to

    /nventory Control

    knowledge anagement (!)

    The process of creating or capturing !noledge,storing and protecting it, updating and maintainingit, and using it

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    E&Commerce Business *odels

    Typical EC Business *odels

    -%nline direct mar!eting

    -Electronic tendering systems:

    tendering 'reverse auction(

    *odel in hich a buyer re2uests ould&be sellers to submit

    bids3 the loest bidder ins

    &4ame&your&on&price model:

    *odel in hich a buyer sets the price he or she is illing to

    pay and invites sellers to supply the good or service at that

    price

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    E&Commerce Business *odels

    Typical EC Business *odels

    - )ind the best price

    affiliate marketing

    "n arrangement hereby a mar!eting partner 'a business,an organi$ation, or even an individual( refers consumers to

    the selling company5s 6eb site

    "iral marketing

    6ord&of&mouth mar!eting in hich customers promote aproduct or service to friends or other people

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    E&Commerce Business *odels

    Typical EC Business *odels

    group purchasing

    1uantity purchasing that enables groups of

    purchasers to obtain a discount price on theproducts purchased

    #Es

    mall&to&medium enterprises

    e-co-ops

    "nother name for online group purchasingorgani$ations

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    E&Commerce Business *odels

    Typical EC Business *odels

    -%nline auctions

    -+roduct and service customi$ation

    customization

    Creation of a product or service according to the

    buyer5s specifications

    -Electronic mar!etplaces and exchanges

    -/nformation bro!ers

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    E&Commerce Business *odels

    Typical EC Business *odels

    -Bartering

    -Deep discounting

    -7alue&chain integrators

    -7alue&chain service providers

    -upply chain improvers

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    %rganisational Benefits

    8lobal each

    Cost eduction

    upply Chain

    /mprovements Extended 9ours

    Customi$ation

    4e Business *odels

    7endors5 peciali$ation

    apid Time&to&*ar!et

    0oer CommunicationCosts

    Efficient +rocurement

    /mproved Customerelations

    p&to&Date Company*aterial

    4o City Business+ermits and )ees

    %ther Benefits

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    Consumer Benefits

    bi2uity

    *ore +roducts and

    ervices

    Customi$ed +roducts

    and ervices

    Cheaper +roducts and

    ervices

    /nstant Delivery

    /nformation "vailability

    +articipation in

    "uctions

    Electronic Communities

    4o ales Tax

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    ocietal Benefits

    -Telecommuting

    -9igher tandard of 0iving

    -9omeland ecurity

    -9ope for the +oor

    -"vailability of +ublic ervices

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    Electronic *ar!etplaces

    *ar!et space components

    -Customers

    -ellers

    -+roducts and services

    digital products

    8oods that can be transformed into digital format

    and delivered over the /nternet

    -/nfrastructure

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    Electronic *ar!etplaces

    *ar!et space components

    front end

    The portion of an e&seller5s business processes through hich

    customers interact, including the seller5s portal, electroniccatalogs, a shopping cart, a search engine, and a payment

    gateay

    back end

    The activities that support online order&ta!ing. /t includes

    fulfillment, inventory management, purchasing from

    suppliers, payment processing, pac!aging, and delivery

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    Electronic *ar!etplaces

    *ar!et space components

    intermediary

    " third party that operates beteen sellers and

    buyers.

    -%ther business partners

    -upport services

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    Types of Electronic *ar!etplaces

    Electronic torefronts

    storefront

    " single company5s 6eb site here products or

    services are sold *ost common mechanisms are a'n(:

    - electronic catalog

    - search engine

    - electronic cart

    - e&auction facilities

    -payment gateay

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    Types of Electronic *ar!etplaces

    e-mall (online mall)

    "n online shopping center here many onlinestores are located

    Types of tores and *alls-8eneral stores;malls

    -peciali$ed stores;malls

    -egional versus global stores-+ure online organi$ations versus clic!&and&mortar

    stores

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    Types of Electronic *ar!etplaces

    e-mall (online mall)

    "n online shopping center here many onlinestores are located

    Types of tores and *alls-8eneral stores;malls

    -peciali$ed stores;malls

    -egional versus global stores-+ure online organi$ations versus clic!&and&mortar

    stores

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    Types of Electronic *ar!etplaces

    Types of E&*ar!etplaces

    e-marketplace

    "n online mar!et, usually B

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    Types of Electronic *ar!etplaces

    Types of E&*ar!etplaces

    sell-side e-marketplace

    " private e&mar!etplace in hich a company sells

    either standard or customi$ed products to 2ualified

    companies

    buy-side e-marketplace

    " private e&mar!etplace in hich a company

    ma!es purchases from invited suppliers

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    Types of Electronic *ar!etplaces

    public e-marketplaces

    B

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    Types of Electronic *ar!etplaces

    ix ma#or types of portals

    -Commercial 'public( portals

    -Corporate portals

    -+ublishing portals

    -+ersonal portals

    -*obile portals

    -7oice portals

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    Types of Electronic *ar!etplaces

    mobile portal

    " portal accessible via a mobile device

    "oice portal

    " portal accessed by telephone or cell phone

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    /ntermediation in Electronic

    Commerce

    infomediaries

    Electronic intermediaries that control information flo in cyberspace, oftenaggregating information and selling it to others

    )ive limitations of direct interaction

    - earch costs- 0ac! of privacy

    - /ncomplete information

    - Contract ris!

    - +ricing inefficiencies

    e-distributor"n e&commerce intermediary that connects manufacturers 'suppliers(ith business buyers by aggregating the catalogs of many suppliers inone place=the intermediary5s 6eb site

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    /ntermediation in Electronic

    Commerce

    disintermediationElimination of intermediaries beteen sellers and

    buyers

    reintermediation

    Establishment of ne intermediary roles for

    traditional intermediaries that have beendisintermediated

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    Electronic etailing

    %vervie of Electronic etailing

    electronic retailing (e-tailing)

    etailing conducted online, over the /nternet

    e-tailers

    etailers ho sell over the /nternet

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    Electronic etailing

    Characteristics of uccessful E&Tailing- 9igh brand recognition

    - " guarantee provided by highly reliable or ell&!non

    vendors- Digiti$ed format

    - elatively inexpensive items

    - )re2uently purchased items

    - Commodities ith standard specifications

    - 6ell&!non pac!aged items that cannot be opened even in

    a traditional store

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    Electronic etailing Business *odels

    Classification by Distribution Channel

    >. *ail&order retailers that go online

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    Electronic etailing Business *odels

    direct marketing

    Broadly, mar!eting that ta!es place ithout

    intermediaries beteen manufacturers andbuyers3 in the context of this boo!, mar!eting

    done online beteen any seller and buyer

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    Electronic etailing Business *odels

    "irtual (pure-play) e-tailers

    )irms that sell directly to consumers over the

    /nternet ithout maintaining a physical sales

    channel

    click-and-mortar retailers

    Bric!&and&mortar retailers that offer a transactional

    6eb site from hich to conduct business

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    Electronic etailing Business *odels

    brick-and-mortar retailers

    etailers ho do business in the non&

    /nternet, physical orld in traditional bric!&and&mortar stores

    multichannel business model

    " business model here a company sells inmultiple mar!eting channels simultaneously

    'e.g., both physical and online stores(

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    Electronic etailing Business *odels

    etailing in %nline *alls

    - eferring Directories

    - *alls ith hared ervices

    epresentative B