Electronic Commerce Research Paper-BUSI 620
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Research Paper: E-Commerce
David Smith
Liberty University
BUSI 620 D01
E-Commerce
Definition
Salvatore (2013) defines electronic commerce or e-commerce as the production, advertising, sale, and distribution of goods and services from business-to-business and business-to-consumer via the internet. M-commerce (2007) defines e-commerce as electronic transfers of currency or services between buyers and sellers with devices like cell phones, tablets or personal computers. Electronic transactions can be executed anywhere across the global, any time of the day. This new phenomenon has changed the landscape of business from the customers’ perspective as well as the business.' E-commerce has also leveled the playing field for smaller businesses to compete with companies like Wal-Mart, Sears, and Target. Smaller companies can market with little to no cost and attract customers in the same fashion larger organizations does. Overnight success for a small company is attainable with the right product. Considering smaller company’s success, businesses selling product 24/7, and leveled competition amongst industries, where did the idea of e-commerce originate?
E-Commerce Origin
The origin of e-commerce dates back to the 1960s with the development of Electronic Data Interchange (EDI). The discovery allowed digital transfer between two computers to take place. This new technology replaced the faxing of documents. Michael Aldrich also contributed to the origin of e-commerce through his vision to create supermarket shopping from afar. These types of databases cost fortunes even-though they were limited. This allowed other generations to build on the research already conducted to provide better and more developed programs that would later become e-commerce. Also, the research that was shared over this network gave birth to a new method of conducting business and globalization. As time progressed, advances in communication technology and business transactions grew as e-commerce began to form. In the 1980s, the creation of communication networks for computers saw significant changes. Transmission Control Protocol and Internet Protocol (TCP/IP) was introduced and revolutionized the way information was shared and sourced in business (History of E-Commerce, n.d.). According to Fletcher (2002), TCP/IP was being used in Germany and France where phone lines and national broadcast mediums were also used. This Business-to-Business (B2B) concept was in its infancy stages, and the communication network was becoming popular among household telephone subscribers. Telephone companies sometimes included free service with a subscription. The American company, Bell System, which was a telephone company attempted to market the videotex technology, but was unsuccessful in their marketing process. Minitel, a France based company, became one of the most-prominent pre-internet interfaces for telephone users. Minitel was successful in their country, but the introduction of the internet dropped the value of their services.
In the 1990s, e-commerce gained attraction from businesses and customers. According to Demirdjian (2011), Sir Tim Berners-Lee was experimenting with computer codes and developed a system to share information across a network efficiently. Mr. Berners-Lee network proved to be the start to a more globalized approach to communication and business relations. Also, this was a time when computers became more abundant in business offices, schools, and homes around the world. Today, e-commerce is allowing businesses connect with other organizations and consumers via internet in an effort to impact their companies and nations on a global economic scale. E-commerce was a new easy to use tool and companies, governments, and households started to take advantage of the easy to use system.
Business to Business E-commerce
Businesses engaged in commercial transactions with one another as soon as e-commerce became a reliable option. Business-to-Business e-commerce is simply the exchange of funds or services over communications networks. This practice has restructured the basis of business and minimized or eliminated the geographical barriers. The advantage goes to start-up companies because they can reach out to customers without a large marketing budget and compete with larger companies that do. Inter-organizational systems and emerging electronic market will provide better insight of how e-commerce is being conducted on a day-to-day basis among businesses and customers.
Inter-organizational systems. There are two types of e-commerce, inter-organizational systems and emerging electronic market. Inter-organizational systems allow businesses to conduct frequent transactions without the need to negotiate. This is possible because all the information exchanged for using communications networks so there is no need for phone calls, paperwork exchange, face-to-face meetings. According to Senn (2000), the following are some examples of inter-organizational systems:
1. Electronic Data Interchange (EDI). Computer-to-computer or application-to-application formatted documents sent over computer networks where translation systems overcome differences in information technology used by trading partners.
2. Electronic Funds Transfer (EFT). This is an automated exchange that occurs when money is exchanged between banks acting on behave of a company or during commercial transactions.
3. Electronic Forms. Some companies have forms they need customers or potential customers to fill-out and send back. This allows the forms to sent to the appropriate department for handling.
4. Integrated Messaging. This is in reference to electronic mail, facsimiles, and scanned documents sent to anyone conducting business with the company.
5. Shared Databases. Many companies with different divisions often have shared files between them. This is done to keep continuity between all parts of the business. The database also reduces the time different divisions would spend communicating about the information found on the shared drive.
The need for inter-organizational systems stemmed from businesses and the advances in technology-assisted with the process. Businesses also desired a system that would interconnect them with partners to streamline the process in an effort to reduce the costs of routine business transactions, reduce cycle time to fulfill business transactions, eliminate paper usage, and create computer-to-computer or application between sellers and buyers. The communications portion of an inter-organizational system is decided before any transactions conducted. The entities already know the links the transactions will be transmitted. Every detail is discussed before business deals are discussed, all the way down to how the receiving organization will receive their product. Public or private networks are used in a variety of ways and could vary from situation to situation.
Electronic markets. Electronic markets are emerging similar to inter-organizational systems as an option for business-to-business e-commerce. The market is a system of interactions where payments are exchanged based on information, products, and services. The marketplace is an electronic location for business and not a physical location. In electronic markets, buyers, sellers, and other participants are usually at different locations and do not know each other. The relationships in electronic markets are often predetermined by agreements. Interconnections between parties vary and may be different even if the businesses are the same. The interactions between the organizations are managed by many different IT applications. The companies taking advantage of electronic marketing use the internet as a medium, leverage business, and create clear and concise objectives for the internet.
Business-to-Consumer E-commerce
Business-to-consumer e-commerce offers virtual shopping, selling, and trading of goods or services to consumers. This type of e-commerce benefits consumers and businesses because the products or services being offered are cheaper for the customer, and it saves money for the company by cutting back on in-store inventory. In addition, this method also saves money for businesses by cutting down on advertisements and printing catalogs to get them to the customers. The money involved may not seem significant initially, but over time it can get pricey. The consumers have the most benefits in the virtual shopping arena. As
Tangpong, Islam, and Lertpittayapoom (2009) pointed out, the competition among businesses is sharpened due to the consumers’ increase in bargaining power. Bargaining power allows customers to compare prices, products, and availability with a click of a button. Businesses compete for the business even more because they understand the options customers possess, but they want the sell. Small start-up companies thrive in this environment because they need the sell more than the larger companies. Today, many entrepreneurial companies are become overnight multi-million dollar operations with the help of the internet. The capability to contact any customer world, 24 hours a day, and seven days a week allows smaller companies to engage in global operations without investing the money it took 20 years ago to create such a global reach. Technology is the reason for such lucrative opportunities for both businesses and consumers. Conversely, face-to-face transactions are becoming minimal as technology improves over time. Customer service must be as important as attracting new consumers. The retention of customers is important for businesses because loyal consumers are who keep the organization profiting during hard economic times. A great example of loyal customer base is Coca-Cola soda customers. During the recession from 2007-2009, Coca-Cola still made profits. This could be attributed to their loyal customer base. Virtual companies must retain customers by providing excellent customer services and shipping the right products, to the correct address, and on-time. That type of service builds a trusting relationship between business and customers that are usually hard to break. The utilization of self-service technology should not change the dynamics of the relationship with things like kiosks and automatic teller machines (ATMs) as they should aid in the delivery of business. (Johnson, 2001). Time is always an important factor in business, and time should never be exchanged for delivering exceptional customer service.
Ratnasingam (2008) makes an excellent point in that customer relations can only be maximized when the technology and customer services are productive and positive.
Legal Environment of E-commerce
The internet changed lives across the world when it was introduced and became part of almost everyone’s household or introduced to everyone. The new technology has affected everyone around the world in one way, or another. Copyrights and trademarks are two the issues that have been at the forefront of e-commerce legal issues. Mykytyn (2004) defines copyrights as a body of work in which the owner has the individual rights to reproduce, distribute, perform, and display the material and to prepare similar material based on them. Music has been a huge problem for e-commerce. Consumers buy music from many websites, but since they are not the copyright owners of the material; they can not redistribute it. Music companies lose billions of dollars yearly at the expense of individuals downloading, repackaging, and distributing music illegally. There are laws in place such as the Digital Millennium Copyright Act (DMCA) to protect the work of companies and individuals. Laws similar to DMCA were built with protection for the inventors in mind, but the Internet and e-commerce have no boundaries. However, the litigation involved with such lawsuits is not worth the money the company will retrieve if rewarded. Trademarks are also a major issue in e-commerce legal environment. Trademark laws in America are known as Lanham Act. The Lanham Act protects individuals or companies’ patents for ten years and then it must be renewed. If the patent is not used for ten years, it is no longer protected by the law. The most-important trademark legal issue with e-commerce is mislabeling of products sold to customers. Products sold in stores, or other physical locations law enforcement agencies to protect citizens. Products sold on-line could be shipped from anywhere in the world, and laws could be different or the company could intentionally send customers the wrong products. The American government and agencies can only control what products are sold within the borders, but not what is coming to customers from around the world. This issue cannot be controlled by one government. Several countries have been cooperative to build common e-commerce laws. Control measures must be implemented to counter criminal e-commerce activity such as copyright infringement and embezzlement while also protecting honest e-commerce transactions.
Conclusion
E-commerce is a technology many people cannot fathom see how businesses have survived without it. Businesses and consumers have accepted and adapted to this type of retail where globalization is achievable. The opportunities to collaborate and network with others are two of the largest advantages due to the endless possibilities. E-commerce possesses the capability to create and control efficient economies on a global scale. The success of e-commerce for companies depends on the quality of their customer relations for goods or services through business-to-business, business to consumer, and how well they protect their product and customers with legal awareness. E-commerce has been a major success for many companies that have taken part in it and will continue to grow businesses around the world for many years to come.
References
Demirdjian, Z. S. (2011). The world wide web: The stepchild of the internet. The Business Review, Cambridge, 17(1), 2-I,II. Retrieve from http://search.proquest.com/docview/871194214?accountid=12085
Fletcher, A. (2002). France enters the information age: A political history of minitel. History and Technology, 18(2), 103-119. Retrieved on August 1, 2014 from http://search.ebscohost.com.ezproxy.apollolibrary.com/login.aspx?direct=true&db=iih&AN=7097715&site=ehost-live
History of E-Commerce. (n.d.). Retrieved on July 28, 2014 from http://www.ecommerce-web-hosting-guide.com/history-of-ecommerce.html
Johnson, D. T. (2001). Is this a real person?: Communication and customer service in e-commerce. Management Communication Quarterly, 14(4), 659-665. Retrieved on July 25, 2014 from http://mcq.sagepub.com.ezproxy.apollolibrary.com/content/14/4/659
m-commerce. (2007). Bloomsbury Business Library - Business & Management Dictionary, 4720.
Retrieved on August 1, 2014 from http://search.ebscohost.com.ezproxy.liberty.edu:2048/login.aspx?direct=true&db=bth&A N=26742563&site=ehost-live&scope=site
Mykytyn, P. (2004). E-Commerce Legal Perspectives: A Continuing Saga for Organizations and End Users. Journal of Organizational and End User Computing, 16(4). Retrieved on August1, 2014 from http://search.proquest.com.ezproxy.apollolibrary.com/docview/199927135?pq- origsite=summon
Ratnasingam, P. (2008). The impact of e-commerce customer relationship management in business-to-consumer e-commerce. Journal of Electronic Commerce in Organizations, 6(4), 30. Retrieved on August 4, 2014 from http://search.proquest.com.ezproxy.apollolibrary.com/docview/236430192?pq-origsite=summon
Salvatore, D. (2012). Managerial Economics in a Global Economy. Oxford, NY, USA: Oxford University Press.
Senn, J. A. (2000). Business-to-Business E-Commerce. Information Systems Management, 17(2), 23. Retrieved on July 28, 2014 from http://search.ebscohost.com.ezproxy.apollolibrary.com/login.aspx?direct=true&db=iih& AN=2865204&site=ehost-live
Tangpong, C., Islam, M., and Lertpittayapoom, N. (2009). Journal of Leadership & Organizational Studies,16,131. Retrieved on August 1, 2014 from http://jlo.sagepub.com.ezproxy.apollolibrary.com/content/16/2/131.full.pdf+html
RESEARCH OR INTERVIEW PAPER INSTRUCTIONS
You can choose 1 of the following two options for your Research or Interview Paper. Your paper will be 7 double-spaced pages for the main content (not including the cover page and reference page). Your choices include:
1. A research paper
Steps for writing the research paper:
a) Choose a topic in Managerial Economics.
b) Submit the topic and the outline of the paper to the instructor anytime for approval.
c) A minimum of 3 references besides the textbook are required. Liberty University library has excellent resources for your search for journals. http://www.liberty.edu/index.cfm?PID=178
OR
2. An interview paper
Steps for writing the interview paper:
a) Choose a topic in Managerial Economics.
b) Design at least 5 questions according to the topic.
c) Submit your questions to the instructor for approval.
d) Contact a local or non-local company for an interview.
e) Conduct the interview for answers to your questions.
f) The paper must have 3 parts:
• The description of the company;
• Interview questions and answers; and
• Your comments.
*The research paper is to be done individually, not as a group.
**Do not wait until the last module/week to work on the paper. Do it as early as possible.
Use the SafeAssign Link in the Assignments folder in Module/Week 8 to verify that your paper consists of original material.
This assignment is due by 11:59 p.m. (ET) on Friday of Module/Week 8.