Page 18 - DCAP306_DCAP511_E-COMMERCE_AND_E-BUSINESS

Unit 1: Introduction to E-Commerce and E-Business

carriers, platforms, and networks. Many firms are considering both internal and external factors of
an organization when shaping their business strategies. The main focus of an organization is to set
up private electronic connections with consumer, suppliers, competitors, distributors, and
industry groups. This in turn helps to increase the efficiency of business communications, to
expand market share, and to maintain long-term position in today's business environment.
2. Marketing and E-Commerce: Electronic commerce is forcing companies to rethink their existing
ways of doing target marketing (isolating and focusing on a segment of the population),
relationship marketing (building and sustaining a long-term relationship with existing and
potential customers), and even event marketing (setting up a virtual booth where interested
people come and visit).
Interactive marketing is accomplished in electronic markets via interactive multimedia catalogs.
Users find moving images more appealing than still images and listening more appealing than,
reading text on a screen.

3. Inventory Management and Organizational Applications: Inventory management solutions are
referred in the manufacturing industry as Just-In-Time (JIT) inventory systems. In the retail
industry, they are referred as quick response programs.
(a) JIT Manufacturing: JIT purchasing, which is considered as an integral part of JIT, has
received considerable attention in electronic commerce. It allows a manufacturer to
incorporate its suppliers' efforts towards eliminating waste in the upstream portion of the
manufacturing cycle. JIT purchasing focuses on the reduction of inventories throughout the
systems of the manufacturing firms and provides a careful audit of the production process.
Basically, it optimizes supplier and customer relations.

(b) Quick Response (QR) Retailing: The process is quite complex, given that a single retailer
may purchase merchandise from thousands of vendors in a global market. The failure to stock
merchandise that matches customer demand can be extremely costly. To reduce the risk of
being out of stock, retailers are implementing QR systems. QR provides for a flexible response
to product ordering and lowers costly inventory levels. QR retailing focuses on market
responsiveness while maintaining low levels of stocks. It creates a closed loop encompassing
the retailer, vendor, and consumer. As consumers make purchases, the vendor automatically
orders new deliveries from the retailer through its computer network.

4. Supply Chain Management (SCM): The SCM process increasingly depends on electronic markets
because of global sourcing of products and services. The process helps to reduce costs and product
manufacturing life cycles, and provides flexible manufacturing systems resulting in a variety of
customizable products.

Discuss the importance of supply chain management in electronic markets.

5. Work Group Collaboration Applications: Work group applications of e-commerce enable easy
and inexpensive connection of various organizational segments to improve communication and
information sharing among employees and to gather and analyze competitive data in real-time. E-
Commerce also facilitates sales force automation by enabling salespeople to carry product and
reference information in one portable device. Other applications such as, video conferencing,
document sharing, and multimedia e-mail, are expected to reduce travel and encourage
telecommuting.

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