Online Bookstores as e-Business Applications - Essay Example

?B2C (Business to Consumer) Case Study Table of Contents Introduction 3 B2C E-business Application 3 Online Bookstore in E-business 6 Role of Online Bookstore Application in Book Industry 7 7 BOAT Perspective of Online Bookstore 8 Business Models of Online Bookstore 8 Organisation of Online Bookstore 10 Architecture of Online Bookstore 13 Technology of Online Bookstore 15 Recommendations for Improvement of Online Bookstore 16 Conclusion 18 References 19 Introduction In present days, e-business has become a key trend in commercial practices for several organisations. E-business is regarded as a new virtual marketplace which allows organisations of different sizes to compete through better internet representation of different products and services. Online customers usually enjoy extensive selection of products and services along with competitive prices and they are also able to purchase their favourite products from distant places. E-business provides communication between customers and organisations and they can exchange standard business transactions through online media (Yang & et. al., 2003). E-business in broad context can be stated as any business procedure that organisations carry out by computer networks, comprising internal and external communication flows. Through e-business, customers can make any transactions on the computer network, comprising transfer of proprietorship, or the right to use products and services. The transaction is performed within chosen e-business procedures and is considered to be completed upon agreement between purchasers and sellers regarding the use of products and services. Concerning the relationship between different participants, e-business can be classified into three categories namely B2C, B2B and C2C (Zakic & Mladenovic, 2011). Focusing on this aspect, the report describes a popular B2C application namely ‘Online Bookstore’ and its role in the respective industry. B2C E-business Application The access to business through internet is expected to grow in near future. According to online survey conducted in 1999, over 100 million people were found to shop online (Yang & et. al., 2003). This trend has grown significantly and it has been expected that in 2013, about one billion people will purchase through internet. E-business opens the door to the notion of commercial activities without any border. Globally, it has also been observed that most popular products for online shopping are books, apparel and accessories (yStats, 2013). According to the report of Pitney Bowes (2013), online shopping is continuing to grow with e-business and is predicted to reach US$963 billion by 2013 in an international extent. The quickly expanding international digital community signifies a massive potential marketplace for any retail business with internet presence. Besides, the report of Pitney Bowes states that most common products which are purchased through internet are books, clothes and magazines. Wherein the overall market of physical books has declined, e-books sales have increased considerably. Indeed, popular e-book retailer Amazon has reported double-digit growth in the year 2011. The following figure demonstrates products purchased through internet in 2012. Fig 1: Products Purchased Through Internet Source: (Pitney Bowes, 2013) From the above figure, it can be observed that online book shipping is regarded as the most popular item for a majority of online shoppers. According to the research of The Publishers Association, in the year 2012, the books sales in the United States were about ?3.3 billion, with 66% increase in online book sales. Online book sales represented about 12% of the total book sales in the United Kingdom (The Publishers Association, 2013). In the US, the revenue generated through book publishing had increased to about 3.1% in the year 2010 to a figure of US$27.9 billion. The percentage of sales of online book had increased to about 29.4 in 2009 and 38.9 in 2010 (German Book Office New York, 2010). According to the study of Nielsen (2010), books and clothing will continue to be the topmost purchasing items for online shopping amid a majority of customers. In accordance with the survey conducted by Nielson, it has been observed that about 46% of international customers purchase books frequently through internet. The following figure demonstrates the intention of online shoppers in 2010 according to Nielson. Fig 2: Purchase Intention of Online Shoppers Source: (The Nielsen Company, 2010) The above figure also signifies the importance of e-business for different industries, particularly book segment. The internet and e-business provide customers the prospect for simple online information gathering and convenient online shopping. Due to this reason, entrepreneurs and other organisations are using internet in order to enhance business operations and explore business opportunities. Several organisations are actually enjoying e-business by reaching potential customers at low expenses. E-business applications have attracted a great deal of attention in several industries, owing to the fact that information exchange and sharing is a vital part of business operations. E-business can fulfil consumers’ requirements in a much better manner than traditional business approaches as it provides low price, varied collection, better alternatives, superior services and conveyance (Berlecon Research GmbH, 2004). In B2C e-business, online bookstore has a bright prospect of success. Online bookstore mostly comprises customer operations in the front and management operations in the background. Customers’ operations comprehend registration and logon activities, book browsing activities, placing orders and reviewing users’ information among others. On the other hand, management’s operations mostly comprise the maintenance of books, management of user database along with dealing with users’ orders and reviewing users’ feedback (Li, 2010). Online Bookstore in E-business As stated above, there are about three basic types of e-business namely B2C, B2B and C2C. B2C model comprises transactions between organisations and customers. B2C model can be applied in any organisations which sells the products and services through internet. B2C websites display product related information through online record and electronic database. One prevalent example application of online bookstore in B2C e-business is Amazon.com. In Amazon.com, people can search their preferred books on the website and accordingly can place an order. In the online bookstore of Amazon.com, publishers as well as consumers can transact with the organisation. Role of Online Bookstore Application in Book Industry Online bookstore helps customers to derive a better understanding about their desired products. In the year 1995, Amazon had first applied online bookstore application in its B2C e-business model. The basic premise of online bookstore is based on the fact that it renders customers infinite diversity of books without keeping those books in the inventory. Hence, this application helps to save money on inventory expenses and maintenance expenses. Furthermore, by this application, consumers can also find and order a book in a short period of time without requiring travelling to a physical bookstore. However, one key drawback of online bookstore is that consumers must wait for some time in order to receive the ordered products. Besides, online bookstore cannot match the environment of traditional brick-and-mortar bookstore. In the meantime, as physical bookstores possess limited space, they require concentrating on reputation (Chu & et. al., 2012). Online bookstore can deliver any book to the customers through virtual inventory at almost zero expenses. Hence, it provides extensively wide diversity of books in comparison with physical bookstore. For example, Amazon.com provides about 23 times more books than a typical book superstore (Chu & et. al., 2012). Online bookstore allows users to navigate rapidly among millions of products. Online bookstore application uses database in the main server and permits customers as a client to find products. The database of online bookstore includes product description, product availability, delivery information, inventory level, order statistics and other vital information about business. Online bookstore database also stores information regarding book titles, authors’ name, product costs, sales history, publishers, product review and other descriptions regarding products. This extensive database allows users to cross-reference different products. Online bookstore personalises the website to service returning customers. It entails information regarding previous transactions and credit/debit card information (Software Engineering Department, 2013). BOAT Perspective of Online Bookstore BOAT framework is regarded as a technique to evaluate e-business application. BOAT comprises four aspects of e-business application namely, business, organisation, architecture and technology which are described below (Luftenegger, 2010). Business Models of Online Bookstore From the perspective of business, there are two models of online bookstore that can be used by organisations namely virtual business model and click and mortar model. Virtual Business Model: In virtual business model, organisations operate the business through internet without having a physical outlet. In this model, an organisation provides a website with product and service information and online ordering system. Users can choose the products they wish to purchase and place order according to their adoptions. The popular e-business organisation i.e. Amazon follows the virtual business model in order to earn profit (Rojas & et. al., 2012). Click and Mortar Business Model: In click and mortar business model, organisations operate their business through physical outlet and internet. This type of business model provides customers the advantages of quick online shopping along with traditional face-to-face shopping. Click and mortar business model combines both physical and virtual network and delivers customers a new form of transaction experience i.e. transactions can be done according to the convenience of the customers. An example of click and mortar business model is Barnes and Noble (Lu, 2004). From the perspective of business process, there are three models of online bookstore namely storefront model, auction model and portal model. Storefront Model: The storefront model combines transaction handling, online safety, online payment and data storage in order to allow organisations to sell products on the website. Storefront model is a simple form of e-business where customers and sellers interact in an indirect manner. In order to use this model, organisations require arranging online directory of products, along with taking orders from websites, receiving payments through secure environment and managing users’ information. Two most common technologies used in storefront model are shopping cart and e-mall. One prevalent example of the use of storefront model can be found in Amazon. It uses shopping cart technology in order to conduct business activities (Software Engineering Department, 2013). Auction Model: Auction model acts as a medium by which users can undertake the role of either purchaser or seller. As a seller, users can be capable of posting products they desire to sell along with the price and deadline. Users can also implement features such as picture or description of products they desire to sell. As customers, users can search e-business website for the availability of specific products, observe bidding activity and place a bid. Some auction models also permit users to submit maximum cost. E-business website eBay uses auction model in its operational procedure (Software Engineering Department, 2013). Portal Model: Portal model provides visitors the possibility to find the preferred products they search for in one place. This model provides users a shopping page which associates them with multiple websites carrying a range of products. Portal can link customers with online merchants and aid users to gather information on specific products. Portal model also permits users to search individually owned storefronts. Every portal arranges its online shopping experience in a different manner. Yahoo uses this portal model in its business by providing various links and product categories (Software Engineering Department, 2013). Organisation of Online Bookstore The organisational system of online bookstore arrives from different business activities. There are several online bookstore systems which are modular in nature, i.e. organisations can select which functionality they require and which are unnecessary. Most of the online bookstore systems are organised into three types namely ordering system, inventory management system and Electronic Point of Sales (EPOS). The ordering system allows users to place orders on certain products from the suppliers. Inventory management system records information about inventory and lets organisations know which books they have in the stock. EPOS helps to connect the ordering information to stock management and is able to print book title and ISBN number of a purchased book (Caron, 1999). Ordering System: In online bookstore, the ordering activities go through ten common steps for any new user. The following figure demonstrates ordering system of online bookstore application. Fig 3: Administration of Order in Online Bookstore From the above figure, it can be stated that in online bookstore application, at first users will require to open the website and create new account. While making an account, Internet Information Server (IIS) receives and processes the users’ request and displays the requested pages. On the basis of information provided by the users, IIS generates HTML page to users’ web browser. After the creation of account, users’ information is displayed with a confirmation message. Users are required to return to the main webpage of online bookstore in order to make an order. The default website of online bookstore contains HTML frameset which is established by two components namely menu, which delivers functionalities accessible throughout the entire website and the webpage, along with delivering unique online shopping experience. The business layer of online bookstore processes different requests of users regarding featured books, new books or bestselling books among others (Caron, 1999). In the online bookstore application, whenever users choose preferred books, a webpage with detailed information regarding the books are shown. Through the utilisation of Active Data Objects (ADO) technique, online bookstore application requests the preferred books from current inventory with the aid of the database. As a result, customers can review the information regarding requested products. After customers’ decide to purchase the requested products, IIS receives the information and processes the request by adding the items in the shopping cart. The shipping information of customers is obtained from users’ database. During the checkout process, customers are provided the options of delivery methods. After selecting the preferred delivery methods, customers are able to complete the order by calculating total expenses and are requested to provide information regarding credit card. When customers are satisfied with the orders, a confirmation is delivered with order number and other associated information. Customers can also check the status of their orders in the online bookstore application (Caron, 1999). Inventory Management System: Online bookstore application provides end-to-end order fulfilment for customers. The order management function performs in synchronisation with supply chain and decision support system for better management of inventory. The inventory management system helps to ensure that optimum inventory is maintained. The inventory management system of online bookstore application commences several key activities. For instance, the information regarding products is gathered from database and is interrogated to yield inventory turnover. The inventory turnover information is used to stratify stocks on sales basis such as best-selling products or medium selling products among others. The inventory information is also used in order to seduce customers and provide expressive selling recommendations. Inventory management system also utilises the turnover information and customers’ purchasing information in order to make an accurate prediction about customers’ requirements. Inventory management system facilitates to reconcile order and inventory information, enabling organisations to commit lead times of sales (Digital 4Sight Corp, 2000). EPOS: A typical EPOS provides several features to customers such as check-in and check-out, stock control, label deign, calculation of tax, along with observation of business activities and invoicing activities among others (The Small Business Depot, 2005). Architecture of Online Bookstore Architecture is regarded as the infrastructure of hardware, software and data used in order to provide services to the employees, customers and other business associates. A typical online bookstore consists of five layers namely service application layer, system software layer, network layer, storage layer and data layer. The service application layer consists of different services. For instance, in online bookstore, there are typical services such as search engines, electronic money and information system security. The system software layer includes different applications which support the functioning of online bookstore such as web browser, networking software and database management system. The network layer comprises different physical network such as LAN and WAN and transport standards including TCP/IP protocols (Dave, 2008). The physical layer of online bookstore comprises storage components which can be classified into permanent storage and temporary storage. Permanent storage of online bookstore comprises cloud server and disk based storage such as hard drive or removable drive. On the other hand, temporary storage comprises external or internal memory including RAM. Finally, data layer includes website components which are used for internet, intranet and extranet based website, customers’ data, transaction history and data regarding the number of visits among others (Dave, 2008). The following figure demonstrates the architectural layer of Online Bookstore. Fig 4: Architecture of Online Bookstore Source: (Dave, 2008) Online bookstore also uses XML architecture. XML combines a tradition of mark-up languages for different e-business applications. The online bookstore application has a typical website architecture comprising high availability sets for database, java oriented application servers and website servers. The most vital application deliverable of online bookstore is logical database model, physical system planning and object plan for application services. In online bookstore, the extranet is extended with supplier integration. Through this application, users can place orders and consequently perform online status enquiries. Online bookstore application has typical internet architecture, comprising high accessibility clusters for database, java oriented application servers and web servers. The most vital design deliverable of online bookstore is logical database model, physical system and different services (Bodkin, 2000). In online bookstore, XML provides a standardised set of messages and leverages consistent development tools. Online bookstore system passes XML messages through HTTPS protocol and provides a reliable solution concerning e-business facilities. This permits the application to exploit existing architecture and brings about limited requirements for new abilities (Qayyum, 2003). Technology of Online Bookstore The key technological feature of online bookstore is the application of multi-level e-business strategies. Online bookstore can allow every person to sell products by using the platform. Users can find sales of merchandise directly by online bookstore. The technology core of online bookstore can be based on any operating system such as Windows or Linux. Online bookstore requires databases also known as data warehouses where vital information regarding products, customers and suppliers are stored. Organisations can develop a number of database servers according to information requirements (Layton, 2006). The technology architecture of online bookstore manages millions of back-end operations in a regular manner along with queries of different parties. The number of operations depends on the level of delivery and inventory updates. In online bookstore, people perform sales through credit or debit card, hence security is considered as a vital concern for this application. In order to ensure security of payments, this application uses encryption technology during the checkout process. Encryption technology allows online bookstore application to encode every piece of data that users enter such as name, address and phone number among others. For instance, popular e-business organisation Amazon uses ‘Secure Socket Layer’, an encryption technology which stores every sorts of credit card information in a separate database that is not accessible through internet. Thus, it minimises the possible threat of hacking (Caron, 1999). The technological layout of online bookstore comprises three layers namely data layer, business layer and presentation layer. Data Layer: The data layer of online bookstore signifies myriad data sources distributed across organisations’ computer system. The data sources help to access data for the application and provide connectivity of users to the inventory management system (Caron, 1999). Business Layer: The business layer uses technologies in order to access the mainframe computer. Business layer of online bookstore comprises data and business components which provide bulk functionalities related with online shopping activities (Caron, 1999). Presentation Layer: The presentation layer of online bookstore comprises website hosting components and web browser which serve the users by providing an active interface to the customers (Caron, 1999). Recommendations for Improvement of Online Bookstore Irrespective of several advantages of online bookstore for organisations, this application faces considerable issues with respect to reliability and security. One of the most important aspects of online bookstore is trust of users. In order to exploit the advantages of online shopping trends, it is vital for any organisation to gain the trust of users. This trust can be gained through the following ways: Increased Security: There are multiple security threats which are related with electronic transactions such as privacy of personal information, confidentiality of financial data and fraudulent activities among others. Thus, in order to gain the trust of users, there is a need to enhance the security of online bookstore application. Multiple solutions such as fair business transactions, increased authenticity and implementation of better encryption technology can help to reduce the security threats of online transactions and can support in gaining the trust of users. Process Improvement: E-business often faces the issue of reliability due to the process delay or inconsistency in delivery time among others. In order to mitigate this issue, there is a need to enhance the process. Better process can only be accomplished by having a better understanding on how different activities are related and actually function. Usable and logical process descriptions can assist organisations to exploit the advantages of good process design and to make the different operational functions effective (National Office for the Information Economy, 2002). Development of Services: Online businesses often face issues with respect to reliability of services. Thus, it is recommended that organisations can use process mapping in order to enhance the reliability of services. Process mapping can ensure that every business activities and organisational systems are related with service delivery and the operations are optimised for providing proper performance. Conclusion E-business is an important trend for the new era of commerce. From the study, it can be observed that online bookstore as e-business applications can enhance the ability of an organisation by providing innovative services and by reaching to a vast customer segment. Online bookstore provides new opportunities for organisations to attract the customers and to make them purchase. This application is constantly affecting the old trends and generating prospects for business over the internet. The application of online bookstore has not only shifted the way of business transactions but also provided several alternatives to conduct business activities. However, the key challenges faced by this application come into forefront in terms of fulfilling the expectations of customers with respect to security, consistency and reliability. Organisations prefer to use an online bookstore that must have optimum architecture and technology to support the business objectives. Besides, it is also vital for e-business organisations to develop the application through establishing a well-structured administration. Online bookstore is highly important not only to increase the profit, rather to encourage technological and procedural development of business. References Bodkin, R., 2000. Using XML Effectively in eBusiness Architectures. C-bridge Internet Solutions, pp. 1-16. Berlecon Research GmbH, 2004. Case Study: B2b E-Marketplaces in the Business Services Sector. The European E-business Market Watch. 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