Discuss about the E-Business and Communication Technology.
Revolution in e-commerce, enabled by Information and communication technology (ICT) has led to huge change in marketing and operations method of business organisations. By definition e-commerce is the conduct of business transactions electronically through internet platform (Lee, 2014). E-commerce has today become a business reality enabling purchase convenience to the customer from the comfort of their home.
E-commerce revolution has also impacted banking business and transactions. In-fact e-commerce has enabled customers to make various banking transactions from the convenience their home. Through the years Commonwealth Bank has set up a user friendly interactive website through which customers can view their banking details and make payments after logging in through a secure password (Commonwealth Bank, 2017). Therefore, e-commerce has empowered Commonwealth Bank in delivering its services in a better way.
E-commerce is a term used for online commercial transactions between any two transacting parties (Alghamdi, 2011). For example, if a person transfers funds from his account in Commonwealth Bank to another person’s account in another or same bank then it will be known as an E-commerce transaction.
E-commerce transactions can be categorized into six categories.
Business to business- This involves all electronic transactions pertaining to products and services which take place between one business and another (Ciaramitaro, 2010). For example, if Commonwealth Bank has corporate or current accounts of other business firms and it allow these firms to transact using online platforms then it will be termed as B2B transaction.
Business to customer- Business to customer transactions under e-commerce involves the transactions which happen between the firm and its first customers through electronic mode (Cruz-Cunha, 2010). For example, any account holder operating his bank account details through electronic mode on the Commonwealth bank would come under business to customer e-commerce.
Customer to customer- these electronic transactions occur between customers of a firm involving sales and purchase of any products and services (Khosrow-Pour, 2015). Such transactions are enabled by third party electronic commerce platforms where customers can interact and indulge in sale and purchase transactions (Alghamdi, 2011). For example, at Amazon.com people can sell their old books through electronic interactions and can also purchase books from other customers (Basu, 2013). Therefore, this will be termed as customer to customer ecommerce.
Customer to business- This type of ecommerce involves an electronic interaction through which customers of a firm make their products or services available to companies for purchase (Shaw, 2015). The example of such interaction is NGOs where customers sell their used goods to NGOs or give them away for free as charity. Crowd sourcing for elections or any other cause such as flood relief through electronic mode is also an example of customer to business interaction.
Business to administration- Public sector and company transactions via electronic commerce comes under this category (Qin, 2010). For example, if any public sector department like the police department has its salary account with Commonwealth bank, and they transact via electronic mode, then it will be termed as business to administration e-commerce transaction.
Customers to Government: this category involves electronic transactions between customer and the Government (Lee, 2014). For example, if people pay their taxes online it will come under customer to Government transactions.
Another concept relevant to e-commerce is big data and the internet of things (IOT) (Bessis, 2014). Big data is a term used for any large data which can be used for extraction of information through electronic medium (Bessis, 2014). For example, Commonwealth Bank keeps data of its various customers’ accounts and the firm can extract information pertaining to deposits and transactions from this large amount of data. Big data is characterized by volume of data, variety in data and the velocity at which data processing is done (Bessis, 2014). For data to be classified as big, it should have large volume, good variety and high velocity.
IOT allows monitoring and controlling of physical devices like vehicles, airplanes and buildings through electronic medium (Bessis, 2014). IOT helps in sensing and controlling physical objects. It is very effective for controlling the movement of airplanes and military operations like sensing submarines etc.
As Commonwealth Bank holds consumer deposits and is a retail banking sector Bank, it extensively uses B2C transaction model of e-commerce through which it enables its customers to electronically make banking transactions (Commonwealth Bank, 2017).
Under B2C e-commerce model the website is the most important platform from where the firm distributes goods and services to the customer (Juon, 2011). Through internet platform the website facilitates direct contact between the customer and the company. To place an order for a good or a service the customer goes to a company’s website and selects the product or the service from a catalog and places the order. The firm receives the order and processes and delivers it as per product criteria.
This process has also been implemented by Commonwealth Bank (Commonwealth Bank, 2017). As this firm is a bank and deals with people’s money, it has given unique log in ID and passwords to its customers through which they can log into the company website and browse through their account (Commonwealth Bank, 2017). They can check balance and transactions, make transactions such as transfer of funds etc. and also make products requests like credit card. Firms processes these orders as per service required and facilities the delivery electronically or through physical mailing system as the case may be (Ciaramitaro, 2010) . This banking facility enabled for the customer through electronic channel is known as net banking.
Following are the steps used in the b2C e-commerce interaction between the firm and the customer-
Other important aspects of e-commerce b2C model for a firm like Commonwealth Bank is the need of heavy investment in hardware and software so that orders can be placed without delay and in a smooth manner (Khosrow-Pour, 2015). Moreover, investment is needed in processing software so that the orders can be processed faster. Manpower needs to be adequately trained to manage the website and keep it updated (Alghamdi, 2011). Commonwealth Bank also needs additional security measures on its website because it deals with people’s money. Therefore, IT and manpower support is a major requirement of B2C e-commerce model.
The impact of e-commerce on Commonwealth Bank is that it reduces footfalls into the bank branch and banking is enabled through company website. This reduces paperwork and operational cost for the firm and increases customer convenience. This results in value generation.
E-commerce is impacted by various domestic and international factors which have strategic consequences for firms (Basu, 2013). Both domestically and international demographic structure affects e-commerce business interactions. In the domestic market, younger generation likes to interact more through e-commerce medium while, the older generation prefers the transitional channels (Cruz-Cunha, 2010). Similarly, the people with middle to higher income tend to purchase devices conducive to electronic transactions like laptop, tablets and smartphones. On the other hand, people with lower incomes may prefer traditional channels (Basu, 2013). For Commonwealth bank also the younger generations seems to be more enthusiastic in using e-commerce (Commonwealth Bank, 2017). Therefore, firms including Commonwealth Bank come out with mobile Apps to suit younger generation and as a strategy use many types of lucrative offers like discount in shopping using Commonwealth Bank net-backing, to increase e-commerce transactions.
Internationally also it is seen that e-commerce is more popular in developed countries or in the more developed cities of developing countries (Basu, 2013). Additionally, the younger generation and higher income groups are more interested in electronic commerce (Basu, 2013). To increase the usage of e-commerce internationally, firms use strategies like giving international discounts on shopping and educating customers for using the digital medium in the developing countries.
Another major factor which affects e-commerce is the development of needed infrastructure that is software, hardware and cyber security systems (Basu, 2013). In developed countries this infrastructure is more readily available and can be developed in-house (Bailey, 2011). However, in international arena especially in developing countries there is a problem of cyber security and software and hardware development which hampers e-commerce interaction (Basu, 2013). For this purpose firms need to tie up with local partners in order to have proper infrastructure (Basu, 2013). For example, if Commonwealth Bank wants to move into Asia it would need a local telecommunication partner for internet enabling.
Another major factor is the regulations pertaining to internet and e-commerce which may be different in domestic and international market (Alghamdi, 2011). Strategically a firm needs to understand laws and regulations of both the domestic market and the international market in order to have a working e-commerce platform which generates value for the customer.
Therefore, the firm needs to make its strategy pertaining to e-commerce after understanding the international and domestic factors.
Conclusion
Internet has emerged as a very important medium on which people spend a lot of time hence; it hosts a huge opportunity for business organisations to sell and promote products. ICT has enabled firms to use e-commerce model to sell products online. This cuts costs for the company and gives convenience of shopping to the customers. Therefore, e-commerce is good for both company and customer.
Retail industry including the banking industry has embraced e-commerce model in a big way throughout the world. Commonwealth bank being a retail banking firm is also using e-commerce model. This helps in generating customer convenience and cutting costs for the firm
References
Alghamdi, D. A. (2011). The Law of E-Commerce: E-Contracts, E-Business. Bloomington: AuthorHouse.
Bailey, M. (2011). Internet Marketing: An Hour a Day. Melbourne: John Wiley & Sons.
Basu, D. S. (2013). Global Perspectives on E-Commerce Taxation Law. Farnham: Ashgate Publishing.
Bessis, N. (2014). Big Data and Internet of Things: A Roadmap for Smart Environments. Humburg: Springer.
Ciaramitaro, B. (2010). Virtual Worlds and E-Commerce: Technologies and Applications for Building Customer Relationships: Technologies and Applications for Building Customer Relationships. Hershey: IGI Global.
Commonwealth Bank. (2017, March 25). About Us. Retrieved Jan 17, 2017, from https://www.commbank.com.au
Cruz-Cunha. (2010). E-Business Issues, Challenges and Opportunities for SMEs: Driving Competitiveness: Driving Competitiveness. Hetshey: IGI Global .
Juon, C. (2011). Internet Marketing Start to Finish: Drive Measurable, Repeatable Online Sales with Search Marketing, Usability, CRM, and Analytics. Essex: Que Publishing.
Khosrow-Pour. (2015). Strategic E-Commerce Systems and Tools for Competing in the Digital Marketplace. hershey: IGI Global.
Lee, G. (2014). E-Commerce, E-Business and E-Service. Boca Raton: CRC Press.
Qin, Z. (2010). Introduction to E-commerce Zheng Qin. New York: Springer Science & Business Media.
Shaw, M. J. (2015). E-Commerce and the Digital Economy. New York: Routledge.
VanHoose, D. (2011). ECommerce Economics (2nd ed.). New Jersey: Taylor & Francis.
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