Major Project

On

E-Commerce and Business SocietySubmitted in partial fulfillment of requirement of

Bachelor of Business

Administration (B.B.A) General

BBA VI Semester (Morning)

Batch 2011-2014

Submitted to: Submitted by:

Dr. Ruchi Singhal Shrishti Raxwal

Associate Professor 02914101711

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL KALKAJI, NEW DELHI

ContentsS.No. Title Page

NO.1 Declaration Of Student 32 Certificate of Internal Mentor 43 Acknowledgement 54 Objectives 65 Chapter – I Ecommerce 76 Chapter – II Business Society 227 Chapter- III Amazon:

Company profile and study32

8 Research Methodology 389 Chapter – IV Ecommerce and

business society40

10 Chapter-V Conclusion 4311 Bibliography 51

2

Declaration of Student

This research work is my original work and it has not been

submitted elsewhere.

All care has been taken to keep this project error free and

sincerely regret for any unintended discrepancies that might have

crept into this report.

Shrishti Raxwal

02914101711

3

Certificate of Internal Mentor

Date: …………..

TO WHOMSOEVER IT MAY CONCERN

This is to certify that student Shrishti Raxwal of BBA (2011-14)

batch has completed her Major Project on “E-commerce and Business Society” under my guidance.

Her work is up to my satisfaction and worth appreciation.

I wish her all the best for future endeavors.

Name: Shrishti RaxwalProject Guide: Dr. Ruchi Singhal

4

AcknowledgementI take this opportunity to express my deep sense of gratitude to all

those who have contributed significantly by sharing their

knowledge and experience in the completion of this project work.

I would like to thanks Dr. Ruchi Singhal (Associate Professor), my

mentor under whose able guidance this project was carried out. I

thank her for her continuous support and mentoring.

Shrishti Raxwal

5

Objectives

To find the emergence of e commerce

To find out how e commerce affects various business society

To find the advantages and disadvantages of e commerce

To analyse the business market with the emergence of e

commerce

To find the growth and scope in the e commerce industry

To see how e commerce affects the various business

models

To find out the impact on business

To find out the various benefits that e commerce industry

offers

To analyse the initiation and growth of a e commerce firm.

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Chapter 1E-commerce

Electronic commerce, commonly known as e-commerce or

ecommerce, is a type of industry where the buying and selling of

products or services is conducted over electronic systems such

as the Internet and other computer networks. Electronic

commerce draws on technologies such as mobile commerce,

electronic funds transfer, supply chain management, Internet

marketing online transaction processing, electronic data

interchange (EDI), inventory management systems and

automated data collection systems. Modern electronic commerce

typically uses the World Wide Web at least at one point in the

transaction's life-cycle, although it may encompass a wider range

of technologies such as e-mail, mobile devices social media, and

telephones as well.

Electronic commerce is generally considered to be the sales

aspect of e-business. It also consists of the exchange of data to

facilitate the financing and payment aspects of business

transactions.

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This is an effective and efficient way of communicating within an

organization and one of the most effective and useful ways of

conducting business.

E-commerce can be divided into:

E-tailing or "virtual storefronts" on websites with online

catalogs, sometimes gathered into a "virtual mall"

Buying or Selling on various websites and/or online

marketplaces

The gathering and use of demographic data through Web

contacts and social media

Electronic Data Interchange (EDI), the business-to-business

exchange of data

E-mail and fax and their use as media for reaching

prospective and established customers (for example, with

newsletters)

Business to business buying and selling

The security of business transactions

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Global trends

In 2010, the United Kingdom had the biggest e-commerce

market in the world when measured by the amount spent per

capita. The Czech Republic is the European country where

ecommerce delivers the biggest contribution to the enterprises´

total revenue. Almost a quarter (24%) of the country’s total

turnover is generated via the online channel

Among emerging economies, China's e-commerce presence

continues to expand. With 384 million internet users, China's

online shopping sales rose to $36.6 billion in 2009 and one of

the reasons behind the huge growth has been the improved

trust level for shoppers. The Chinese retailers have been able

to help consumers feel more comfortable shopping online.

China's cross-border e-commerce is also growing rapidly. E-

commerce transactions between China and other countries

increased 32% to 2.3 trillion yuan ($375.8 billion) in 2012 and

accounted for 9.6% of China's total international trade.

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Other BRIC countries are witnessing the accelerated growth of

ecommerce as well. In Russia, the total ecommerce market is

projected to total somewhere between 690 billion rubles ($23

billion) and 900 billion rubles ($30 billion) in 2015, at 2010

values. This will equal 5% of total retail volume in Russia.

Longer-term, the market size of Russian e-commerce could

reach $50 billion by 2020. Ecommerce players need to

understand unique insights about trust factor, online payments

and language peculiarities to penetrate the Russian market.

Brazil's ecommerce is growing quickly with retail ecommerce

sales expected to grow at a healthy double-digit pace through

2014. By 2016, eMarketer expects retail ecommerce sales in

Brazil to reach $17.3 billion. India's ecommerce growth, on the

other hand, has been slower although the country's potential

remains solid considering its surging economy, the rapid

growth of internet penetration, English language proficiency

and a vast market of 1.2 billion consumers (although perhaps

only 50 million access the internet through PCs and some

estimate the most active group of e-commerce customers

numbers only 2-3 million).

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E-commerce traffic grew about 50% from 2011 to 2012, from

26.1 million to 37.5 million, according to a report released by

Com Score. Still much of the estimated 14 billion dollars in

2012 ecommerce was generated from travel sites.

Ecommerce is also expanding across the Middle East. Having

recorded the world's fastest growth in internet usage between

2000 and 2009, the region is now home to more than 60 million

internet users. Retail, travel and gaming are the region's top

ecommerce segments, in spite of difficulties such as the lack of

region-wide legal frameworks and logistical problems in cross-

border transportation E-Commerce has become an important

tool for small and large businesses worldwide, not only to sell

to customers, but also to engage them.

In 2012, ecommerce sales topped $1 trillion for the first time in

history.

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Ecommerce Timeline

1960-1982

Paving the way for electric commerce was the development of the

Electronic data Interchange (EDI). EDI replaced traditional mailing

and faxing of documents with a digital transfer of data from one

computer to another.

Trading partners could transfer orders, invoices and other

business transactions using a data format that met the ANSI ASC

X12, the predominant set of standards in North America.

Once an order is sent, it is then examined by a VAN (Value-

Added Network) and finally directed to the recipient’s order

processing system. EDI allowed the transfer of data seamlessly

without any human intervention.

Michael Aldrich an English inventor, innovator and entrepreneur is

credited with developing the predecessor to online shopping. The

idea came about during a stroll with his wife and Labrador when

Aldrich lamented about their weekly supermarket shopping

expedition. This conversation sparked an idea to hook a television

to their supermarket to deliver the groceries. Immediately after the

discussion Aldrich quickly planned and implemented his idea.

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In 1979 Aldrich connected a television set to a transaction

processing computer with a telephone line and created what he

coined, “teleshopping,” meaning shopping at a distance.

1982-1990

It was apparent from the beginning that B2B online shopping

would be commercially lucrative but B2C would not be successful

until the later widespread use of PC’s and the World Wide Web,

also known as, the Internet. In 1982, France launched the

precursor to the Internet called, Minitel

The online service used a Videotex terminal machine that was

accessed through telephone lines. The Minitel was free to

telephone subscribers and connected millions of users to a

computing network.

By 1999, over 9 million Minitel terminals had been distributed and

were connecting approximately 25 million users in this

interconnected network of machines. The Minitel system peaked

in 1991 and slowly met its demise after the success of the Internet

3 years later. Eventually, in 2011, France Telecom announced its

shutdown of its Minitel service system. Sadly, it had not become

what it had hoped to be, the Internet.

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90’s To Present

In 1990 Tim Berners Lee, along with his friend Robert Cailliau,

published a proposal to build a “Hypertext project” called,

“Worldwide Web.” The inspiration for this project was modeled

after the Dynatex SGML reader licensed by CERN.

That same year, Lee, using a NeXT computer created the first

web server and wrote the first web browser. Shortly thereafter, he

went on to debut the web on Aug. 6, 1991 as a publicly available

service on the Internet. When Berner’s Lee decided he would take

on the task of marrying hypertext to the Internet, in doing that, the

process led to him developing URL, HTML and HTTP. 

When the National Science Foundation lifted its restrictions on

commercial use of the NET in 1991, the Internet and online

shopping saw remarkable growth. In September 1995, the NSF

began charging a fee for registering domain names.  120,000

registered domain names were present at that time and within 3

years that number grew to beyond 2 million.  By this time, NSF’s

role in the Internet came to an end and a lot of the oversight

shifted to the commercial sector. 

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For hundreds of years the marketplace has been growing more

complex and more confusing for consumers to navigate.

Published in 1992, long before the Internet became a household

word. Future Shop argued that new information technologies,

combined with innovative public policies, could help consumers

overcome that confusion. A prescient manifesto of the coming

revolution in e-commerce, Future Shop’s vision of consumer

empowerment still resonates today.

From the beginning, there were many hesitations and concerns

with online shopping but the development of a security protocol –

the secure socket layers (SSL) - encryption certificate by

Netscape in 1994 provided a safe means to transmit data over the

Internet. Web browsers were able to check and identify whether a

site had an authenticated SSL certificate and based on that, could

determine whether or not a site could be trusted.

Now, SSL encryption protocol is a vital part of web security and

version 3.0 has become the standard for most web servers today.

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Online Ecommerce Megastores

The mid-nineties to 2000’s saw major advancements in the

commercial use of the Internet. The largest online retailer in the

world Amazon, launched in 1995 as an online bookstore. Brick-

and-mortar bookstores were limited to about 200,000 titles and

Amazon, being an online only store, without physical limitations

was able to offer exponentially more products to the shopper.

Currently, Amazon offers not only books but DVDs, CDs, MP3

downloads, computer software, video games, electronics,

apparel, furniture, food, and toys. A unique characteristic of

Amazon’s website is the user review feature that includes a rating

scale to rate a product. Customer reviews are now considered the

most effective social media tactic for driving sales.  The company

attracts approximately 65 million customers to its U.S. website per

month and earned revenue of 34.204 billion in 2010. In 2001,

Amazon.com launched its first mobile commerce site.

Another major success story of the dot com bubble was EBay, an

online auction site that debuted in 1995.  Other retailers like

Zappos and Victoria Secret followed suit with online shopping

sites; Zappos being a web only operation.

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Also in 1995, was the inception of Yahoo followed by Google in

1998, two leading search engines in the US. These successful

web directories began their own ecommerce subsidiaries with

Google Shopping and Yahoo! Auction, in following years.

Global ecommerce company, PayPal, began its services in 1998

and currently operates in 190 markets. The company is an

acquired bank that performs payment processing for online

vendors, auction sites, and other commercial users. They allow

their customers to send, receive and hold funds in 24 currencies

worldwide. Currently, PayPal manages more than 232 million

accounts, more than 100 million of them active.

As more and more people began doing business online, a need

for secure communication and transactions became apparent. In

2004, the Payment card Industry security standard council (PCI)

was formed to ensure businesses were meeting compliance with

various security requirements.

The organization was created for the development, enhancement,

storage, dissemination and implementation of security standards

for account data protection.

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The growing use of the Internet, tablet devices, and smart phones

coupled with larger consumer confidence will see that ecommerce

will continue to evolve and expand.

With social media growing exponentially in recent years, the

conversation between businesses and consumers has become

more engaging, making it easier for transactional exchanges to

happen online. Internet retailers continue to strive to create better

content and a realistic shopping experience with technologies like

augmented reality.

With mobile commerce gaining speed, more users are purchasing

from the palm of their hand. The market for mobile payments is

expected to quadruple by 2014, reaching $630 billion in value.

Total sales in ecommerce have grown from $27.6 billion in 2000

to $143.4 billion in 2009 and are expected to continue its growth

for the foreseeable future. 

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Benefits of E-Commerce

Hopefully by now you're aware of the main benefits of E-

Commerce, which are:

immediacy –

No going to the shops or waiting in queues

price –

Goods bought online tend to be cheaper

choice –

The range of goods available is vast and with sites like

www.kelkoo.com that let you compare goods from many

retailers it is easy to find what you want

24-hour availability –

The shop never closes

speed –

You’ll locate what you want much quicker

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global markets –

Neither you nor the vendor is restricted to your/their

locality

interactivity –

Get immediate feedback on prices, features etc

Less paperwork –

Always a good thing!

Drawbacks of E-Commerce

Some of the drawbacks to putting your business online are:

high investment needed

more in-house responsibility for order fulfillment and

technology

It is necessary to frequently update your product

catalogue. You need the technical skills to do this

reduced flexibility - it is often difficult to achieve your own

house style

20

transaction fees and/or commission have to be paid to the

service provider

complete reorganization of your business model

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Chapter- IIBusiness Society

Business refers to that economic activity which is conducted on

regular basis to earn profits through production and sale of goods

and services.

Ecommerce is an electronic system of dealing in all the

commercial activities which can be done through the medium of

internet. These commercial activities include receiving information

about the goods, placing an order, receiving delivery, making

payment, etc. Under this system the sale and purchase of every

type of thing, information and services – all are possible. Buying

and selling through internet is called ecommerce.

The scope of ebusiness can be understood by the view point of

the parties involved and making electronic transactions. The

following parties are included in the scope of e-business.

B2B Commerce (business-to-business)

B2C Commerce (business-to-consumer)

Intra-B Commerce (within business)

C2C Commerce (customer-to-customer)

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A.B2B Commerce B2B commerce is that business activity in which two firms

of two business units make electronic transactions. For

example, one can be a producer firma and other a raw

material supplier firm. Activities like enquiry about goods,

placing an order and making payments are undertaken on the

internet.

B.B2C commerceIn B2C commerce one party is a firm and the other party is a

customer. On one hand customer can through internet seek

informations about his favorite products, can place orders,

can get some items on internet, and can also make payments.

He can avail such facilities round the clock. On the other

hand, the firm with the help of internet can make a survey any

time to know who is buying what and can also know the

satisfaction level of customers.

C. Intra-B CommerceUnder it, the parties involved in the electronic transactions are

the two persons or two departments of the same business

units. For example, through internet it is possible for the

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Marketing department to interact constantly with the

production department and get the customized goods made

as per the requirement of individual customer. In similar way

one can very quickly get the inventory informations of various

branches. The personnel department can very efficiently

perform the job recruitment, selection, training, etc., through

internet.

D.C2C CommerceUnder it both the parties involved in the transaction are the

customers. As both the parties are the customer, that is why,

it is known customer-to-customer commerce. It is required for

the buying and selling of those goods for which there is no

established markets are available. For example, selling old

books and clothes either on cash and barter basis. Through

internet the customers have a world wide reach. In this

system, one can take the help of PayPal for payment. Instead

of purchasing goods directly from an unknown seller, the

buyer can send the money to PayPal. PayPal informs the

seller that they will hold the money for them until the goods

have been reached to the buyer. In this way the risk of buyer

not getting the goods is eliminated.

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E-Commerce as a Business Tool

Used appropriately, E-Commerce can be a powerful business

tool. According to James Devlin of the Belfast Times:

It can facilitate access to new markets, cost savings on marketing

and promotion, help improve customer service and even assist in

ensuring longer lasting, more profitable customer and supplier

relationships.

E-Commerce is now beginning to move ahead strongly.

Companies making the smartest use of the Internet are amongst

those operating more nimbly, efficiently and profitably than those

trying to ignore the technology. The government is solidly behind

the promotion of E-Commerce in the UK by assisting companies

to embrace E-Commerce, broadband, and other knowledge-led

techniques.

It can help them move up the value chain in terms of what they

offer their customers; to increase profitable business, and develop

the capability and confidence to innovate. It could transform their

business with a new product or service, enabling them to capture

brand-new customers and thus producing much higher growth.

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At its most potent, the technology and innovation behind e-

business could even enable them to catalyze their market and

gain a competitive edge. Take broadband, for example, and the

further potential benefits it is bringing to businesses. Broadband is

giving SMEs (small to medium sized enterprises) more than just

improved efficiency through time saving.

Outwardly facing, it has also enabled them to provide new and

enhanced customer services and even operate in completely new

ways. And for internal processes, it's impacting in other ways that

were not envisaged - such as improved staff satisfaction and

retention.

Technology and Business

Technology has the power to not only help companies improve

their business but also to move much closer to their customers.

Companies that succeed are more likely to be those harnessing

technology that allows them to listen to their customers and

develop a sophisticated understanding of their needs.

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The next step is to seek out information on how best E-

Commerce could aid your business.

There are a plethora of companies in the market offering free and

independent advice on how E-Commerce could transform your

business.

Support is available for start-up companies, established

businesses, traditional manufacturing, and information technology

companies.

Business Models

How does a business physically implement an E-Commerce

system? Some business models are:

online catalogue

e-shop

e-procurement

e-mall

E-auction.

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Let's have a look at each one in turn.

Online Catalogue

An online catalogue is the web-based equivalent of the paper-

based catalogue you could pick up in the shop.

For example, Argos, a large retailer in the UK, issues members of

the public with a free catalogue which lists all items sold in Argos

stores in the UK. There's an index in the catalogue to help locate

specific items. You can use the catalogue at home to select an

item and then order and pay for it over the phone.

The web-based equivalent can be found at www.argos.co.uk. In

addition to the usual search facilities, this site also lets you search

by catalogue number. All items in the paper-based catalogue

have a unique number. Once located, any items you want to

purchase can be added to your 'shopping trolley' and you can pay

online.

Alternatively, you can reserve the item online and pay for it at

your local shop when you collect it.

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E-Shops

What's the difference between an online catalogue and an e-

shop? Sometimes there's little or no difference.

For example, IKEA the home furnishing shop, has a website at

www.ikea.co.uk which is listed (with Internet search engines) as

an e-shop.

It looks very similar to the Argos site though there isn't any

reference to catalogue numbers. You have to search for items

using their names.

On the other hand, both Argos and IKEA have physical shops and

their web-based facilities are an additional service to customers.

However not all goods in the catalogue can be bought online, a

scenario also present in Marks and Spencer, John Lewis and

other major retailers.

These companies only sell a limited number of goods online

compared to the goods they have in store and they all charge for

delivery.

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Companies such as ebuyer whose site can be found at

www.ebuyer.com have no physical shops and only sell online. To

my mind this is a 'real' e-shop, not a service extension to an

existing 'physical' business.

E-Malls

In the 'real world' a shopping mall is a collection of shops on a

single physical site. Similarly, an e-mall is a collection of e-shops

available from a single website.

One such site can be found at www.e-mall.uk.net.

The beauty of an e-mall from the customer's point of view is that

you can purchase multiple items from different e-shops but pay

using a single payment.

E-Auctions

As the name suggests, this is an online auction where individuals

or companies can offer items for sale and have people bid to

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purchase the item. The best known of them all is probably eBay,

which can be found at www.ebay.co.uk.

E-Procurement

Businesses require stock to sell. Whether they have the stock in advance of the sale, or whether they order as required will be dictated by their business rules.

Ordering as required is better for cash flow but what if they lose customers because they can't supply the goods quick enough?

Also, in addition to the products they sell, businesses need to buy products and services for themselves such as stationary, temporary staff etc.

E-procurement is the term used to describe the use of electronic methods at every stage of the purchasing process from identification of requirement through to payment, and potentially to contract management.

A number of companies produce e-procurement software. One such company is Wax Digital and you can find information on their implementation of e-procurement at www.wax-digital.com/eprocurement.asp.

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Amazon: Company ProfileAmazon.com, Inc is an American international electronic

commerce company with headquarters in Seattle, Washington,

United States. It is world’s largest online retailer. It was started as

online book store, but soon diversified, selling DVDs, VHSs, CDs,

Video and MP3 downloads/ streaming, software, video games,

electronics, apparel, furniture, food, toys and jewelry. The

company also produces consumer electronics- notably the

Amazon Kindle e-book reader and the Kindle Fire tablet

computer- and is a major provider of cloud computing services.

Jeff Bezos incorporated the company (as cadabra) in July 1994

and the site went online as amazon.com in 1995. Amazon has

separate retail websites for United States, United Kingdom,

France, Canada, Germany, Italy, Spain, Australia, Brazil, Japan,

China, India and Mexico with international shipping to certain

other countries for its products.

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Products and Services

Retail goods like books, DVDs, music CDs, software , videotapes,

apparel, baby products, consumer electronics, beauty products,

gourmet food, groceries, health and personal care items, sporting

goods, tools, toys and games.

Consumer electronics In November 2007, Amazon launched

Amazon Kindle, an e-book reader which downloads content over

"Whispernet", via Sprint's EV-DO wireless network. The screen

uses E Ink technology to reduce battery consumption and to

provide a more legible display. As of March 2011, the stated

library numbers over 850,000 titles.

In September 2011, Amazon announced its entry into the tablet

computer market by introducing the Kindle Fire, which runs a

customized version of the operating system Android. The

exceedingly low pricing of Fire ($199 USD) was widely perceived

as a strategy backed by Amazon's revenue from its content sales,

to be stimulated by sales of the Fire.

In September 2012, Amazon unveiled the second generation

tablet, called the Kindle Fire HD. On September 25, 2013,

Amazon.com unveiled its third generation tablet, called Kindle

Fire HDX.[109] In October 2013, the sixth generation Kindle was

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released. Amazon Art In August 2013 Amazon launched Amazon

Art as an online marketplace selling original and limited edition

fine art from selected galleries.[127] The initial 40000 items listed for

sale included Norman Rockwell’s painting “ William Gillis:

Package from home” priced at $4.85 million, "L’enfant a la tasse

by Claude Monetfor $1.45 million and Andy warhols “ Sachikos”

for $45 000.

Private labels and exclusive marketing arrangements

AmazonBasics is a private-label consumer electronics product

line. It sells AV cables, blank DVD media and other electronics

products under the AmazonBasics product label.[134] The line was

launched in 2009.Computing services and Content production.

Amazon technology

Customer Relationship Management (CRM) and Information

Management (IM) support Amazon’s business strategy. The core

technology that keeps Amazon running is Linux-based. As of

2005, Amazon had the world’s three largest Linux databases, with

capacities of 7.8 TB, 18.5 TB, and 24.7 TB. The central data

warehouse of Amazon is made of 28 Hewlett Packard servers

with four CPUs per node running Oracle database software.

Amazon’s technology architecture handles millions of back-end

operations every day, as well as queries from more than half a

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million third-party sellers. With hundreds of thousands of people

sending their credit card numbers to Amazon’s servers everyday,

security becomes a major concern. Amazon employs Netscape

Secure Commerce Server using the Secure Socket Layer

protocol which stores all credit card details in a separate

database. The company also records data on customer buyer

behavior which enables them to offer or recommend to an

individual specific item, or bundles of items based upon

preferences demonstrated through purchases or items visited.

On January 31, 2013 Amazon experienced an outage that lasted

approximately 49 minutes, leaving its site inaccessible to some

customers.

Multi-level sales strategy

Amazon employs a multi-level e-commerce strategy. Amazon

started off by focusing on Business-to-Consumer relationships

between itself and its customers, and Business-to-Business

relationships between itself and its suppliers but it then moved to

incorporate Customer-to-Business transactions as it realized the

value of customer reviews as part of the product descriptions. It

now also facilitates customer to customer with the provision of the

Amazon marketplace which act as an intermediary to facilitate

consumer to consumer transactions. The company lets almost

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anyone sell almost anything using its platform. In addition to

affiliate program that lets anybody post Amazon links and earn a

commission on click through sales, there is now a program which

let those affiliates build entire websites based on Amazon’s

platform.

Some other large e-commerce sellers use Amazon to sell their

products in addition to selling them through their own websites.

The sales are processed through Amazon.com and end up at

individual sellers for processing and order fulfillment and Amazon

leases space for these retailers. Small sellers of used and new

goods go to Amazon Marketplace to offer goods at a fixed price.

Amazon also employs the use of drop shippers or meta sellers.

These are members or entities that advertise goods on Amazon

who order these goods direct from other competing websites but

usually from other Amazon members. These meta sellers may

have millions of products listed, have large transaction numbers

and are grouped alongside other less prolific members giving

them credibility as just someone who has been in business for a

long time. Markup is anywhere from 50% to 100% and sometimes

more, these sellers maintain that items are in stock when the

opposite is true. As Amazon increases their dominance in the

marketplace these drop shippers have become more and more

commonplace in recent years. The resulting damage to a supply

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and demand marketplace remains to be seen but advertising

contracts with large search engines eliminating smaller websites

from overall exposure these practices should have a negative

effect on the industry on the whole.

37

Research MethodologyResearch and experimental development is creative work

undertaken systematically to increase the stock of knowledge,

including knowledge of humanity, culture and society, and the use

of this stock of knowledge to devise new applications (OECD

(2002) Frascati Manual: proposed standard practice for surveys

on research and experimental development. It is used to

establish or confirm facts, reaffirm the results of previous work,

solve new or existing problems, support theorems, or develop

new theories.

A research project may also be an expansion on past work in the

field. To test the validity of instruments, procedures, or

experiments, research may replicate elements of prior projects, or

the project as a whole. The primary purposes of basic research

(as opposed to applied research) are documentation, discovery,

interpretation, or the research and development of methods and

systems for the advancement of human knowledge. Approaches

to research depend on epistemologies, which vary considerably

both within and between humanities and sciences.

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There are several forms of research: scientific, humanities,

artistic, economic, social, business, etc.

The goal of the research process is to produce new knowledge or

deepen understanding of a topic or issue. This process takes

three main forms :

Exploratory research, which helps to identify and define a problem

or question

Constructive research, which tests theories and proposes

solutions to a problem or question.

Empirical research, which tests the feasibility of a solution using

empirical evidence.

There are two ways to conduct research:

Primary researchUsing primary sources i.e., original documents and data.

Secondary researchUsing secondary sources i.e., a synthesis of, interpretation of, or

discussions about primary sources or internet

There are two major research designs: qualitative research and

quantitative research

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Chapter- IVEcommerce and Business

SocietyE Commerce affects society in that it makes products accessible to people nearly everywhere in the world within just a few days. This causes trends to spread much faster than they once did. It also provides an easily implemented platform for small businesses to sell their goods.

Ecommerce affects business

The Internet and the growth of e-commerce has had a revolutionary effect upon business whether it is dealing with other business: so called "business to business e-commerce" or whether it is business selling to consumers: "business to consumer" e-commerce. Here are some of those effects:

1. On-line selling allows products to be sold directly to consumers, bypassing traditional retailers. Web sites that sell computers directly from the manufacturer, such as Dell.com and automobile manufacturers like Honda of America are examples of business to consumer e-commerce that allow the customer to specify exactly the product they desire from the convenience of their own home.

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2.      Comparison-shopping, through e-commerce, has created price and product competition between businesses that benefits the consumer. It is very easy to make price and product comparisons online. Sites such as Compare.com will look up the best price and advertised for any product you choose.

 

3.      Because consumers and business can deal directly with suppliers, intermediaries and brokers are potentially affected. This is the so-called "disintermediation" that many Internet commentators talk about. If you can book your airline tickets directly through expedia.com, what do you need a travel agent for? One way those intermediaries may rise to this challenge by providing a more personalized service to a smaller, higher value customer base.

 

4.      Business to business trade is transformed, not only because many intermediaries are removed, but also because it is so much cheaper to issue invoices and purchase orders electronically than it is to do so by traditional paper means. In addition it becomes possible to manufacture "On demand", rather ahead of that demand. Traditional supply chains, which fulfill predicted demand for goods, become demand chains, where goods are manufactured to order as and when that order is received. This allows both manufacturers and suppliers to reduce their supply chains.

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5.      The costs associated with entry into global markets are very low in an e-commerce environment. Traditionally for somebody to set up an overseas operation often involves significant costs in setting up. Now with the Internet a website can be read anywhere in the world and anyone can be a global trader.

 

There are other challenges facing a company that wants to do business online. Marketing and logistics, along with security are the biggest challenges. In order to get your product out, E-businesses must market their product and web site.

Many E-businesses have failed because of lack of knowledge about their site. Logistics encompasses many aspects of the E-commerce arena. Not only does a web site have to be easily navigatable, the customer must be assured that the product they are ordering will arrive on time and in the condition in which it is expected to be in. If the E-business fails to do so, the customer will not be back and they will tell their friends about their bad experience. This negative response from customers is the kiss of death to any E-business.

The last issue is security, 2/3 of internet users are concerned about Cybercrime and worry about giving personal information, like credit card information, online to a company they may not know a lot about. In order to succeed, E-businesses must use the latest in encryption technology and develop good will with their customers in the area of personal information.

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Chapter-VConclusion

Concludingly, Following are the impact of ecommerce on business society.

The impact of e-commerce on business activity

Selling through websites is the fastest growing method of trading worldwide. There are two main forms of e-commerce:

Business to business (B2B) trading where companies trade and exchange information using the World Wide Web.

Business to consumer (B2C) trading where companies deal directly with customers through web pages, and ordering is carried out online.

There are many different types of products and services that are traded on line including books, CDs, cars, holidays, and insurance.In response to e-tailing and e-trading, most businesses have now set up their own websites.

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Trading online

Trading online enables businesses to reach much wider audiences while cutting the costs of traditional retailing methods. For example, an e-tailor does not have to spend so much on an expensive High Street presence.

Although the outlay on developing a good website is substantial the potential benefits can be enormous. One group of businesses that have been particularly successful as a result of the development of the web are specialist suppliers of items such as paintings, photographs, confectionery, and other items. An individual working from home can now advertise and sell their produce worldwide.

E-commerce has made a profound impact on society. People can now shop online in the privacy of their own homes without ever having to leave. This can force larger brick and mortar retailers to open an online division. In some cases, it can also force smaller businesses to shut their doors, or change to being completely online. It also changes the way people look at making purchases and spending money. E-commerce has changed the face of retail, services, and other things that make our economy work. Undoubtedly, it will continue to influence how companies sell and market their products, as well as how people choose to make purchases for many years to come. The following are the impact of e-commerce on the global economy.

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Impacts on Direct Marketing

Product promotion E-commerce enhances promotion of products and services through direct, information-rich, and interactive contact with customers.

New sales channel E-commerce creates a new distribution channel for existing products. It facilitates direct reach of customers and the bi-directional nature of communication.

Direct savings The cost of delivering information to customers over the Internet results in substantial savings to senders when compared with non electronic delivery. Major savings are also realized in delivering digitized products versus physical delivery.

Reduced cycle time The delivery of digitized products and services can be reduced to seconds. Also, the administrative work related to physical delivery, especially across international borders, can be reduced significantly, cutting the cycle time by more than 90 percent.

Customer service Customer service can be greatly enhanced by enabling customers to find detailed information online. Also, intelligent agents can answer standard e-mail questions in

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Seconds and human experts' services can be expedited using help-desk software.

Corporate image On the Web, newcomers can establish corporate images very quickly. Corporate image means trust, which is necessary for direct sales. Traditional companies such as Intel, Disney, Dell, and Cisco use their Web activities to affirm their corporate identity and brand image.

Other marketing Impacts

Customization E-commerce provides for customization of products and services, in contrast to buying in a store or ordering from a television, which is usually limited to standard products. Dell Computers Inc. is a success story of customization. Today, we can configure not only computers but also cars, jewelry, gifts, and hundreds of other products and services. If properly done, one can achieve mass customization. It provides a competitive advantage as well as increases the overall demand for certain products and services.

Advertisement With direct marketing and customization comes as one-to-one or direct advertisement, which is much more effective than mass advertisement. This creates a fundamental change in the manner in which advertisement is conducted not only for online trades but also for products and services that are ordered in traditional ways.

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Ordering System Taking orders from customers can drastically be improved if it is done online. When taken electronically, orders can be quickly routed to the appropriate order-processing site. This saves time and reduces expenses. So sales -people have more time to sell. Also, customers can compute the cost of their orders, saving time for all parties involved.

Markets The physical market disappears as does the need to deliver the goods to the marketplace. In a market space, which is an electronic market, goods are delivered directly to buyers when purchasing is completed making markets much more efficient. For those products that are digitally based-software, music and information-the changes will be dramatic. Already, small but powerful software packages are delivered over the Internet. This fundamentally affects packaging and greatly reduces the need for historical distribution.

New selling models such as shareware, freeware are emerging to maximize the potential of the Internet. New forms of marketing will also emerge, such as Web-based advertising, linked advertising, direct e-mail, and an increased emphasis on relationship marketing. Customer’s convenience is greatly enhanced, availability of products and services is much greater, and cheaper products are offered. All these provide EC with a competitive advantage over the traditional direct sales methods. Some people predict the "fall of the shopping malls," and many retail stores and brokers of services are labeled by some as "soon to be endangered species."

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Impacts on organizations

Technology and Organizational Learning Rapid progress in E-Commerce will force companies to adapt quickly to the new technology and offer them an opportunity to experiment with new products, services, and processes. New technologies require new organizational approaches. For instance, the structure of the organizational unit dealing with E-Commerce might have to be different from the conventional sales and marketing departments. To be more flexible and responsive to the market, new processes must be put in place. This type of corporate change must be planned and managed.

Changing Nature of Work The nature of work and employment will be transformed in the Digital Age; it is already happening before our eyes. Driven by increased competition in the global marketplace, firms are reducing the number of employees down to a core of essential staff and outsourcing whatever work they can to countries where wages are significantly less expensive. The upheaval brought on by these changes is creating new opportunities and new risks and forcing us into new ways of thinking about jobs, careers, and salaries.

The Digital Age workers will have to become very flexible. Few of them will have truly secure jobs in the traditional sense, and all of them will have to be willing and able to constantly learn, adapt, make decisions, and stand by them.

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New product capabilities E-commerce allows for new products to be created and existing products to be customized in innovative ways. Such changes may redefine organizations' missions and the manner in which they operate. E-Commerce also allows suppliers to gather personalized data on customers. Building customer profiles as well as collecting data on certain groups of customers, can be used as a source of information for improving products or designing new ones.

Mass customization, as described earlier, enables manufacturers to create specific products for each customer, based on his or her exact needs. For example, Motorola gathers customer needs for a pager or a cellular phone, transmits them electronically to the manufacturing plant where they are manufactured, along with the customer's specifications and then sends the product to the customer within a day.

Impacts on Manufacturing

E-Commerce is changing manufacturing systems from mass production to demand-driven and possibly customized, just-in-time manufacturing. Furthermore, the production systems are integrated with finance, marketing, and other functional systems, as well as with business partners and customers. Using Web-based ERP systems, orders that are taken from customers can be directed to designers and to the production floor, within seconds. Production cycle time is cut by 50 percent or more in many cases, especially when production is done in a different country from where the designers and engineers are located.

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Companies like IBM, General Motors, are assembling products for which the components are manufactured in many locations. Sub-assemblers gather materials and parts from their vendors, and they may use one or more tiers of manufacturers. Communication, collaboration, and coordination become critical in such multitier systems. Using electronic bidding, assemblers get sub-assemblies 15 percent to 20 percent cheaper than before and 80 percent faster.

Impacts on Finance

E-commerce requires special finance and accounting systems. Traditional payment systems are ineffective or inefficient for electronic trade. The use of the new payment systems such as electronic cash is complicated because it involves legal issues and agreements on international standards. Nevertheless, electronic cash is certain to come soon and it will change the manner in which payments are being made. In many ways, electronic cash, which can be backed by currency or other assets, represents the biggest revolution in currency since gold replaced cowry shells. Its diversity and pluralism is perfectly suited to the Internet. It could change consumers' financial lives and shake the foundations of financial systems and even governments.

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