FREE ESSAY ON ANALYSIS OF TWO MARKET MODELS

ANALYSIS OF TWO MARKET MODELS

As the Internet grows in popularity every day, so too does electronic commerce. Electronic
commerce, simply put, is the exchange of money for goods and services via electronic
means. In other words, electronic commerce is when you purchase something off of the
Internet. Electronic commerce is often referred to as e-commerce, or e-business. In this
paper I will be discussing the technical side of e-commerce, security, different points
of view regarding e-business, and of course my personal opinion and experiences.
First I would like to discuss the types of e-business. E-business can be anything from
purchasing a toaster from a department store online to checking your bank statement
online. All are examples of the many aspects of e-business. There are several aspects of
e-business unique to it.
When comparing traditional business to e-business, one can see several differences
between the two. The most obvious difference when buying standard goods (such as a
toaster, a book, or a new computer) is the store. When dealing with e-business there is
no real store or merchandise to look at. It is all presented through the merchant's
webpage, or by other electronic means. You will not be able to touch, or inspect
potential purchases. All you will have to go on is perhaps a picture and a brief
description of the item in question. This is obviously a big change from traditional
store-based business practices. Why would any self-respecting consumer buy something via
e-business if they were unable to touch, or inspect a potential purchase, and there is a
real store just down the street? There are several reasons why e-business is appealing to
a growing amount of people. For example, e-business is based on the Internet. If you are
using the Internet, you are not bound by geography. You can access any site, anywhere in
the world from the comfort of your computer chair. What does this mean to the consumer?
Now the consumer has access to several things they didn't before. The consumer now has
diversity. With the entire Internet at your fingers, in a matter of minutes you can
browse several stores in several parts of the world without even leaving your home. This
allows you to compare prices and products. With e-business you are not restricted to the
prices and products of you local stores. You can easily choose the best price on the best
product.
Purchasing goods electronically is becoming easier by the day. The majority of
e-businesses have software set up on their webpage to take and record your order as well
as your credit card and personal information. The software is set up such that you can
order anything you want without having to interact with anyone what so ever. You just
have to enter your credit card number, address, and other personal information. Some
people are not comfortable with the concept of sending their credit card number or other
personal information to a potential merchant over the Internet, but are more comfortable
using the telephone. Most businesses know this and have set up a special number or other
means to talk to a representative from the company to settle any questions, and to accept
credit card numbers or other means of payment. There are of course several security
issues involved in both forms of commerce. I will discuss security in greater detail
later in the paper.
The popularity of e-business is growing almost as fast as the technology itself. More and
more people are using their computers to buy what ever they want, whenever they want.
Every day there is an increasing number of companies that join the electronic world of
business. Companies spend millions of dollars a year to setup and maintain a website
designed for e-business. Why are they willing to spend so much? Most business people have
a good knowledge of how and why business works. It is not hard to see that there is a
huge market in e-business. With the price of computers going down each day, more and more
people have the opportunity to get in on their piece of cyberspace.
A Typical E-business Transaction & Security Information
A few methods in which e-business is conducted are shopping, and online banking. Let's
examine the shopping aspect of e-business first. When you go to a site to buy something,
a site such as www.amazon.com, there are a few things you should notice. They have
something called a shopping cart. When you finally decide that you want to buy something,
you enter the quantity you wish to purchase, and then add to shopping cart. The shopping
cart is a CGI script used to keep track of the things you want, and how many. This is a
way to keep track of everything while you can continue shopping. When you are finished
adding everything to the shopping cart, then you choose the option to check out. This
starts another CGI script that takes all of your personal data such as your name,
address, and phone number, as well as your credit card number.
When you examine the online banking portion of e-business, you have a few more things to
consider. In order to use online banking, you will have to have an account with the bank
in question. Once you have your account, you can go to the bank's webpage and set it up
by giving them account and personal information. Then you will be able to use their
software to access your account. There is definitely an issue with privacy in both cases.
It is obvious that customers do not what their personal information released. A more
important issue, perhaps more important than your personal information is your credit
card number. This can be used by anyone who has it. There is no real way to stop someone
from using your number at another site to buy things with out your permission. This is a
major concern of the e-business industry. Should the consumer be concerned? Well, yes and
no. The first thing you should be concerned with is the validity of the e-business
itself. Unless the company can offer you some kind of assurance that you can agree with,
you should stick to the companies you know and trust. Many businesses you have been using
for years are now making the push to provide an electronic method to shop. Once you have
established that you are in fact dealing with a respectable firm, you in most cases have
nothing more to worry about. Most respectable companies use data encryption to secure
online transfers. These sites use your browser to encrypt data so that no one without the
decryption key can gain access to your information. Microsoft Internet Explorer and
Netscape come standard with 40-bit encryption. With your data encrypted, even with a
40-bit encryption, it is safer to transmit that data around the world than to call in
your number over the telephone. When you are talking about online banking, you most
likely will have to upgrade your browser to support 128-bit encryption. The majority of
online banking companies will not let you use the basic 40-bit encryption because it is
not quite as safe as the 128-bit version. It is assumed that you need more protection for
your bank accounts than you do for a basic online purchase. In all cases you should be
using some form of encryption to transfer data. Some companies will give you a security
guarantee.
Issues Regarding E-business
There are two points of view to consider. There is the consumer and the business person.
Within these two groups, there are those in favor of e-business and those who are not.
First I would like to talk about the consumer and there points of view. There are many
reasons why a potential customer will either like e-business or will not. I believe the
main reason most people like e-business is the ease in which they can get what ever they
want, when ever they want it. Anyone with a valid credit card can go to a site such as
www.amazone.com, and order anything they want at any time of the day. Within a few days
(depending on the method of shipping chosen) their order will arrive at their front door.
The problem with shopping online is, because you are not bound by geography, the company
you bought from could be on the other side of the world. They have to send you the
product. This obviously creates delays in receiving your merchandise and you will also
have to pay a modest shipping charge in addition to any other charges. If you are buying
something heavy like a computer monitor, you may not wish to spend the extra fifty or so
dollars to have it shipped. In this case going to your local Circuit City may be a more
effective way of shopping. Basically, when shopping online you have the power to get
anything any time, but you may have to pay for your convenience. From the perspective of
the e-business itself, there are other things to consider. Mostly you need to consider
the cost versus the sales. Is it worth the cost to setup and maintain a website? What
exactly is involved in setting up an e-business? In order to setup an e-business you will
need a domain name, webspace to put pictures, and bandwidth. In addition to this, you
might need to hire technical support, and purchase software needed to run your business.
Compared to the cost of traditional commerce, I believe e-business is much cheaper to run
and maintain. When running an e-business you wont have as high of an overhead to pay. A
domain name, webspace, and bandwidth are all fairly cheap. A growing number of businesses
think e-commerce is a good investment, and a legitimate way to expand their company.
Large companies such as K-Mart are leaning towards the e-business market.
Personal Experience
In my quest for the best product at the best price, I too have turned to e-commerce from
time to time to get what I needed. My first experience comes from purchasing a telephone
online. I started by visiting several sites and inspecting what they had to offer. I
began to notice right away that some stores are more expensive than others, even for the
exact product. I proceeded to find the best deal on the phone I wanted and, as I
described before I added it to my shopping cart at www.amazon.com. Next I went to check
out. The scrip loaded and I entered all of my personal data and my credit card number.
After I did all of that, I was taken to a billing screen where I could choose my form of
shipping based on cost and time. At the bottom of the billing section it added the price
of the phone and all of the additional charges (such as shipping), and produced an actual
total. Before proceeding to confirm my order I considered my position. Was it worth the
price after shipping to buy here instead of at a local shop? Do I need the phone right
away? It turned out that even after shipping and all additional costs, I got the phone
for less than my local stores could offer. Because I did not need the phone right away, I
decided to purchase it. Within three or four days I received my phone and was satisfied
with my first online purchase. It is also worth noting that I bought my phone at about
2am.
Another personal experience of mine regards online banking. I have a checking and a
savings account with Citibank. I noticed that they offered online banking free of charge,
so I figured I would try it out. I went to their website and began to setup my online
account. I was asked for my basic personal and my account information. I gave them all of
that and proceeded to try to log into my account. I was surprised to find that I could
not. I was using Internet Explorer with only 40-bit encryption. Citibank requires that
you use a browser with at least 128-bit encryption. After I downloaded the addon for
Internet Explorer, I successfully logged in. I was meet with a number of options. I could
check my checking account balance, my savings account balance, and I could transfer money
between the two. This made me very pleased. I have trouble keeping my checking account up
to date, but with this I could see exactly what I had with only a day's delay. I am
overly pleased with all of my e-business encounters. Also I enjoy buying things from my
home at any hour. It is also very convenient to see my account status in almost real
time.
To summarize this paper, e-business is basically online transactions for goods and
services. There are many things to consider when buying something online. Firstly you
should be dealing with a company that you are totally comfortable with. After you have
that established, online shopping is safer than any other form of commerce because of the
use of encrypted data transfer. Online banking is another aspect that is worth looking
into. You can get information about your accounts anytime for little or no charge. Online
banking, of course requires a stronger method of encryption, so you may need to download
the newest security plug in for your browser. Finally, e-business is the new business of
the future. You can buy anything, any time, and get information from your home. Which
makes being antisocial just that much easier.