E-Commerce Application Development - Assignment Example

Any business activity that takes place online (through the Internet) be it the buying and selling of goods and services, collaboration with business partners and other electronic transfers, can be referred to as e-commerce or e-business. There are various types of e-commerce classified according to the partners of the business process. When a transaction is happening between two businesses, it is termed as a Business to Business or B2B transaction. When a transaction happens between businesses and individual buyers, it is termed as Business to Consumer or B2C transaction. Similarly, when an individual sells services or products to a business, it is called a Consumer to Business or C2B transaction and a transaction between individual consumers is a Consumer to Consumer or C2C transaction. Give a brief overview of different contemporary e-commerce models with real world example applications. There are five types of e-business models that form the basic structure on which websites are based. These five models are vanity, billboard, advertising, subscription and storefront. Many sites also combine these basic models. All sites incur cost of development and maintenance, though they may not be deriving direct revenue from it. The five models of e-commerce have unique characteristics. The Vanity model, as the name suggests, cater typically to individuals who start it as an outlet for expression, to share a hobby, promote a cause such as an environmental or social agenda, etc. The site then acts like an online forum, to bring people together. A very good example for such a site is greenpeace.org. The site brings together people who are conscious about the degradation of the environment and helps raise a voice against issues such as climate change, endangered species, deforestation etc. The revenue models for such Vanity sites build up through advertisements of related organisations, services and products. In the case of Greenpeace, the site is maintained mainly through donations. The costs of vanity sites are either born by the individual or by philanthropic institutions such as associations, universities or may be businesses. This e-commerce model is designed to work like a billboard. Also called the brochure or information sites, Billboard models derive economic benefit indirectly through referred sales and reduced cost. The sites creates product awareness through the online medium, however, the actual buying and selling takes place off-line. Netizens surf and view the sites and the model functions in the same way as a billboard on a highway. The success of the site is measured according to the hits or viewership it gets. The site influences people to buy the product. The perfect real world example of this model is billboard.com. The site gives you music news, reviews, articles, information about live shows and more. You can listen to music, and download free music. The site also ranks music and ranks the best songs for any genre. The revenue model, what is apparent from the site, are advertisements related to the music world. For example you can buy Billboard magazine from the site. The Advertising model, in e-commerce, is similar to the model followed by radio, television and the print medium, among other things. The programme and the content are totally funded by the advertiser's money and the 'viewership' of the site decides the advertisement rate and volume. Surveys conducted by the websites can establish the 'viewership' of the sites and the advertising rates are decided likewise. The various forms of advertising for e-commerce are banners, sponsorships, ezine ads and other promotion methods. The Subscription model, though very well established in the 'real' world, has not become so prominent in the e-world. Consumers have not yet accepted the culture of subscriptions on the web. The subscription models, on the web, target particular niches of individuals with specific needs. These sites are often specialized with expert content and timely information. The subscriptions fund the development and maintenance of the site. The Storefront model, according to most netizens, is the true e-commerce site that offers products for sale, accompanied by a catalogue and a shopping cart. The sites not only showcase the product or service with descriptions and pictures but also complete the transaction by providing a shopping cart. Once the product is purchased, the online shop or the manufacturer arranges for shipping, handling and delivery. Majority of businesses have a storefront model. The Pharmaceutical Extranet Gateway (PEG) is an initiative led by the pharmaceutical industry, in Australia, to reduce the costs in managing pharmaceutical supplies. The Internet-based facility is a perfect B2B example that aims to lower transport cost and improve the efficiency of the supply chain. Provide an overview of different options for payment systems. Outline the main issues and justify which option(s) you would choose for your e-commerce application. Online transactions have revolutionised the world of business and have made business transactions much easy. However, a transaction is not a one-way thing and as such involves both the delivery of the good or service and the payment for the same. E-commerce payment facilities are also known as Electronic Data Interchange (EDI). The various methods used are increasingly proving to be popular, as more and more people are shopping and banking online. In the initial years of e-business, when B2C transactions were just gaining popularity, consumers were apprehensive about using their credit and debit cards over the Internet, as they felt that the information given online could be misused. Online payment can happen through different payment systems such as the traditional credit, debit and charge cards and also through new technologies such as digital-wallets, e-cash, mobile payment and e-checks. Besides this, another form of payment that is gaining popularity is a 3rd party transaction through companies which are called Payment Service Providers (PSPs). PayPal and WorldPay are some of the more frequently used PSPs. Credit cards are still the most preferred way of making online payments. In North America almost 90% of online B2C transactions are made with credit cards. [Turban, et al. (2008).] The use of credit and debit card is not open to security lapses and fraud, as most people might think. Security measures such as card verification number (CVN) can detect fraud by comparing the verification number printed on the signature strip on the back of the card with the information on file with the cardholder's issuing bank. [Turban, et al. (2008).] Also online merchants have to comply with stringent rules stipulated by the credit and debit card issuers such as Visa and Mastercard, as stipulated by these companies. A website owner also needs to have security protocol and procedures in place to ensure that the transactions on the site are more secure. Other than credit card, online transaction can be paid through a Smartcard. There is an embedded 8-bit microprocessor, on a Smartcard, which can transfer electronic cash from the consumers' card to the sellers' device. A Smartcard such as VISA Smartcard can be used to transfer electronic cash from the bank account to the card, which can then be used like a credit card. Sometimes consumers can transfer payment money (by establishing a cyber-mediary account) from a traditional bank account to the online account of the business. Online payment of bills can also be done through Electronic bill presentment and payment (EBPP). This is a recent technology by which regular bills such as phone, telephone, water, Internet, etc. can be paid online. E-wallets are also used for online payment, though the process is a little troublesome. For the mobile store online operation in question, the preferred method of payment would ideally be a credit card, a Smartcard, or an e-check. A PSP operator such as PayPal would also be a safe and secure method of payment, though the money transfer may take around five days, more than the turnaround time for credit card payments. Identify and evaluate options for promoting or marketing e-commerce applications and justify which method(s) you would use for your site. The benefits of e-commerce are diverse. The process of business is made cheaper as the costs of storage, middlemen and paper work are reduced. Since this is an emerging popular trend in conducting business, the need for marketing an e-commerce business is also important. The marketing of e-commerce business can take the tried and tested route of print advertisement. Manufacturers put advertisements in trade publications. The owner of e-commerce sites that sell the manufacturer's products can get into an understanding with the manufacturer and advertise the website in the print medium. Sometimes the manufacturer has a website where the websites of the online retailers are listed. This is free of cost but may involve certain conditions such as a certain amount of annual sales. Another way in which a website can be promoted is through advertisement, either in print publication or on a website, when the manufacturer is running some special offer. The customers can then be motivated to buy the good from the site and avail the promotional offer. There are various other ways in which an e-commerce site can be advertised for free. The visitors to the site can be asked to bookmark the site; a bookmarked site ensures frequent visits, as the consumer eliminates the process of searching a site. Forums and blogs, which cater to a group of people with particular interests, are viable places to advertise a product or service, in the form of posts. E-commerce ventures can also start blogs of their own, where the detailed information about the product can be posted. Websites of complementary products is another good place to advertise your product. For example the website in question here is that of a mobile store. You can exchange banners and links with a website of a service provider or some mobile accessory site. You can also get the visitors to subscribe to a mailing list, through which you can entice them to visit your sites. There can be numerous such 'free' ways (promotions, coupons, offers, word of mouth, online press releases, etc.) to advertise and promote your site. There are some other ways of promoting, which involve some minimal cost. One of the most effective ways is to place an advertisement with Google AdWords and Yahoo Search Marketing. These sites then give a link to the e-commerce website. You can also list your e-commerce site on a related industry website or directory. There are other methods of promotion such as buying a direct e-mail list, advertising on e-zine web sites, online shopping websites, online shopping malls, etc. Another simple, yet often missed out option is by adding the online address to the business card. Since the website is an online mobile store, some of the marketing strategies that can be applied are: 1. Offer the best products at competitive prices. 2. Try to get into official partnerships with companies such as BlackBerry and HTC. 3. Offer latest mobile accessories from top brands such as Otterbox and Case-mate and original accessories from Nokia, Samsung, Sony Ericsson and LG. 4. Sim free hand sets. 5. Provide links for authentic sites where consumers will get information about how to make cheap international calls and Internet phone calls. Assess the main security threats to your site and justify what precautions you would use or have used. The problems faced by an online business take a new dimension when compared with brick and mortar stores. It is obvious that some problems will be different between these types of business, as the mediums of operation are different. An e-commerce site is open to security threats and it is imperative that the design of the site should be made in such a way, so as to obviate the chances of such threat. Security threat to an online business mainly stems from the fact that the Internet or cyber space, like the real world, is also a competitive area. One of the main security threats is to the browser. So, it is important to remember that one should never run the system as 'admin,' unless some task is being performed that requires administrative privileges. It is particularly important not to browse the net, while logged in as an administrator. Update the system regularly, so that proper firewall, anti-virus and anti-spyware and other security systems that creates multiple layers of security is in place. The security setting for 'untrusted sites' should also be set high. Botnets are getting increasingly advanced; however, to get to the machine the botnet needs passage through an admin login. If, the admin login is not there, even a sophisticated botnet will in all probability not get installed. Another threat may come from organised crime against your e-commerce site with the intention of stealing highly valued company information. This is not like any other random security threat, as the organised group will not be deterred by any method and it is for the best interest of the e-commerce site that professional help is taken. Some steps such as limiting information that can be accessed by users and isolating servers will help. The website can also be under threat if the information on the site (emails etc.) can be accessed through a lost or stolen Wi-Fi enabled phone or if an iPhone silently directs all telephone calls to a back-end server that has evil intentions. Building secure web applications involves spending money, but in the long-run will be extremely useful. Social engineering is a threat to web security but since it is a people-related threat, there is no technical means to solve it. The best an online business can do is to warn employees against giving any personal information online, whatever the reason may be. Encouraging circulation of programme installs or any other executables through e-mails should be avoided under all circumstance and consumers should be warned not to open any such e-mail. However, it is only possible to limit the threat from social engineering but not to eliminate it. The site in question here is a online mobile store and a security precaution would involve the primary rule of refraining from any activity through an admin login, unless the work to be performed requires it. Also, it is important to put in firewalls and antivirus devices that comprise multiple layer of security. Reference List: Contemporary Developments in B2B E-Commerce [Internet] (Updated NA) Available at: http://www.archive.dcita.gov.au/2001/10/b2b_e-commerce/developments [Accessed 23 Dec 2009.] E-commerce And Its Business Model. [Internet] (Updated NA) Available at: http://www.scribd.com/doc/2527149/Ecommerce-And-Its-Business-Model [Accessed 23 Dec 2009.] Five Business Models of eCommerce. 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