E-market and trade cycle

 

E-Market and Trade cycle:
 
The Electronic market is primarily search phase of trade cycle. Typically an inter-organisational credit trade cycle. Normally includes facilities for Execution and Settlement  
 
 Usage of electronic markets

1.      Application has been limited to specific sectors:

2.      Airline Booking Systems

3.      Financial and Commodity Markets

4.      Use is typically via an intermediary (i.e. only for dealers)

5.      Study of Share and stock market

 

Advantages :

1.      Customer Advantage: Easy access to comparative price/service information. These markets give the customer (or the customer's intermediary) easy access to comparative data on price, and other attributes, of the goods or services on offer.

2.      Supplier: For supplier it facilitates easy access to market.

3.      Search cost lowered: An effective E-Market increases the efficiency of market; it reduces the search cost for buyers.

4.      Assistance to buyers: E-Market is most effective in assisting the buyer.

5.      Awareness of market: The use of information and communication technologies to provide geographically dispersed traders with the information necessary for the fair operation of the market.

1.      Best negotiations: Easy access to information on a range of competing product offerings reduces the search cost of finding the supplier that best meets the purchase requirement.

 

Disadvantage:

            It becomes difficult for sellers to maintain high price levels, because due to the introduction          of an electronic market search cost is reduced for the buyer.

            And also second disadvantage for seller is buyer can make easy price comparison

 

 


 

Electronic Data Interchange (EDI) :

Definition:

 

It provides a standardized system for coding trade transactions so that they can be            communicated from one computer to another without the need for printed orders and invoices & delays & errors in paper handling.

 

It is used by organizations that make a large no. of regular transactions. e.g. EDI is used in the large supermarket chains for transactions with their suppliers.

 

EDI is transfer of structured data, by agreed message standards, from one computer system to another, by electronics means.


This definition has four elements, each of them essential to form EDI system


1. Structured Data: EDI transactions are composed of code, values and short pieces of text; each   element with strictly defined purpose.


2.Agreed message standards: The EDI transactions has to have a standards format .The standard is not just agreed between the trading partners but is a general standard agreed at national or international level.


3. From one computer system to another: The EDI message sent is between two computer applications There s no requirement for people to read the message or re-key it into computer system.

  4.By electronics means: Usually this is by data communication but the physical transfer of   magnetic tape or floppy disc would be within the definition of EDI
 
Thus there are two important things in EDI. First, EDI replaces paper-based documents with electronic ones. And, second, the data in a document is transmitted in a standardised format so that both the sender and the receiver can accurately read the document.

 

Benefits of EDI:

1. Shortened ordering time: EDI orders are sent straight into the network. Orders can be in suppliers system within a day.

2. Reduction in cost: The use of EDI can cut cost. These include the costs of stationary and postage. EDI is the potential to save staff costs.

3. Elimination of errors: EDI eliminates the source of errors i.e. data entry errors.

4. Fast response: With EDI, customer can be informed directly for any inconvenience, so that the customer can take fast decision.
 
EDI security: When an organization adopts EDI, security controls becomes important factor.
Because when transaction takes place between two trading partners, confidentiality is necessary 

and important.
A full EDI security system should include three levels of security:

(1) Network level security: This level of security ensures that users not registered in the EDI network are not able to gain access to its facilities.
(2) Application level security: In any given EDI application or software, there might be some data you are not allowed to see, some you can see but not alter.
(3) Message level security: Here the data should be secured against non-bonafide messages, duplication, loss or replay of messages, deletion of messages.

 

Internet Commerce: 

 

Information and communications technologies can be used to advertise & make sales of wide range of goods & services. This application is both for business to business & business to consumer transactions. e.g. The purchase of goods that are then delivered by post or the booking of tickets that can be picked up by the clients.

 

 Internet commerce is the use of the Internet for all phases of creating and completing business transactions. In broad sense Internet Commerce includes:

·         Full sales and marketing cycle- for example, by analyzing online feedback to ascertain customer's needs.

·         Identifying new markets- through exposure to a global audience through the World Wide Web.

·         Developing ongoing customer relationships -achieving loyalty through ongoing email interaction.

·         Assisting potential customers with their purchasing decision- for example by guiding them through product choices in an intelligent way.

·         Providing round-the-clock points of sale- making it easy for buyers to order online, irrespective of location.

·         Supply Chain Management- supporting those in the supply chain, such as dealers and distributors, through online interaction.

·         Ongoing Customer Support- providing extensive after-sales support to customers by online methods; thus increasing satisfaction, deepening the customer relationship and closing the selling loop through repeat and ongoing purchases.

 

Internet commerce and Trade cycle: Consumer transactions tend to be once-off (or at least vary each time) and payment is made at the time of the order. Internet e-Commerce is the technology for these exchanges. 

The third  generic trade cycle is the non-repeating commercial trade cycle and Internet e-Commerce or an electronic market is the appropriate e-technology
 
Advantages of Internet Commerce 
1.Home Shopping: Quick and convenient
2.World Wide and 24 hours: Anywhere -any time
3.Home Delivery of the product.


 Disadvantages of internet commerce:
1. Privacy and security: Privacy of personal details and security of transactions.
2. Delivery of product: Delay in delivery can be inconvenient and can add other costs.
3. Inspecting goods: You cannot actually see, feel or try goods.
4. Social interaction: Shopping with family and friends will stop.

 

 

 

 

 

 

 

 

 

 

 

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