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Electronic Commerce, Third Edition Chapter 1 Introduction to Electronic Commerce Learning Objectives In this chapter, you will learn about: The basic elements of electronic commerce Differences between electronic commerce and traditional commerce Economic forces that have created a business environment that fosters electronic commerce The ways in which businesses use value chains to identify electronic commerce opportunities The ways in which businesses use SWOT analysis and evaluate business opportunities Traditional Commerce and Electronic Commerce To many people, the term electronic commerce means shopping on the part of the Internet called the World Wide Web. Although consumer shopping on the Web was running about $130 billion per year in 2002 and is expected to exceed $500 billion by 2004, electronic commerce is much broader and encompasses many more business activities than just Web shopping. Traditional Commerce and Electronic Commerce Electronic commerce refers to business activities conducted using electronic data transmission via the Internet and the World Wide Web. The three main elements of e-commerce are: Business-to-consumer Business-to-business The transactions and business processes that support selling and purchasing activities on the Web Other categories include: consumer-to-consumer and consumer-to-government. Electronic Commerce Electronic Commerce Electronic Funds Transfers (EFTs) have been used by banks for many years. Electronic Data Interchange (EDI) occurs when one business transmits computer-readable data in a standard format to another business. Electronic Commerce Businesses who engage in EDI with each other are called trading partners. The standard formats used in EDI contain the same information that businesses have always included in their standard paper invoices, purchase orders, and shipping documents. Firms, such as General Electric and Wal-Mart, have been pioneers in using EDI to improve their purchasing process. Value Add
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