1.

Business-to-Consumer (B2C)

The B2C ecommerce business model involves a business selling products directly to consumers.

B2C businesses can sell their own products—a practice known as direct-to-consumer (D2C)—or
they can sell products from other brands

It’s typical for B2C ecommerce companies to have:

Short sales cycles (the time it takes to attract a prospect and have them complete a purchase)

High transaction volume

Low average transaction value

The B2C category makes use of a variety of revenue models, such as:
Dropshipping: Sellers showcase other brands’ products in their online stores. When someone
buys, the seller purchases the item at a lower cost from a third-party supplier that ships it straight
to the customer. The process is often automated.

Subscription services: Customers pay recurring fees to access an ongoing service or regular
product delivery. Spotify and pet product supplier BarkBox are popular B2C subscription
services.

Pre-owned/refurbished products: Sellers source used stock from consumers and other
companies. For example: BackMarket sells refurbished cell phones in various conditions.

Low startup costs (compared with opening a physical store) give entrepreneurs easy access to the
B2C ecommerce sector. That’s why competition here can be tough.

Business-to-Business (B2B)

B2B businesses sell products or services to other businesses.

B2B companies can sell directly to end users. Or they can sell to businesses that then resell the
products to other companies or consumers.

For example: Project collaboration tool Trello is a B2B ecommerce company that sells to end-
user businesses.

Compared with B2C purchases, B2B transactions typically involve:

 Longer sales cycles

 Higher transaction values

 More recurring purchases

Subscription models are popular among B2B ecommerce companies, especially software
vendors. Sellers get regular, predictable income, and buyers can spread purchase costs to manage
cash flow better.

B2B ecommerce companies often use a white labeling business model. That means the online
business sells an unbranded product to a reseller. The reseller then brands and markets it to
consumers or other businesses as their own.

Business-to-Government (B2G)
In a B2G ecommerce model, businesses market and sell products to government organizations or
public administrations. These include federal, state, county, and local organizations.
Many B2G transactions start with a request for proposal (RFP). This is where a government
agency invites businesses to pitch their product or service to them in order to bid for a contract.

Most B2G companies experience:

 Long sales cycles

 High transaction values

 Strict compliance requirements

B2G ecommerce models can be good for companies with niche offerings and effective
marketing. Plus, longer government contracts typically mean more financial predictability and
security.

Consumer-to-Consumer (C2C)
C2C describes business transactions involving two or more consumers. The term can also refer
to any provider that manages this type of online transaction.
For example: When a person sells their car to another person, that’s a C2C transaction.
Consumer-to-Business (C2B)
C2B ecommerce involves consumers selling goods and services to companies.
Sometimes the company will be the end-user. For example: An individual selling an image to a
newspaper is conducting a C2B transaction. Because the newspaper publishes the image, they
are also the product’s end user.
Influencer networks also promote C2B transactions. They connect businesses with consumers
who are popular on social media. Those consumers then sell the brands access to their followers.
They promote the brand’s products for a fee.
Consumer-to-Government (C2G)
C2G describes transactions between consumers and government agencies. A C2G ecommerce
business is any company that facilitates these transactions.
For example, utility companies give home and business owners direct access to government-
sponsored energy services.
Marketing Strategies for Ecommerce Models
Search Engine Optimization (SEO)
SEO aids in ecommerce efforts by improving your website and online store’s visibility on search
engine results pages (SERPs). It helps attract potential buyers.
The goal is to rank at the top of search results for keywords your ideal customers are using.
For example: the direct-to-consumer B2C brand Trek ranks highest for “hybrid bikes.
Many factors contribute to your ecommerce site’s search performance. We can break
down the optimization process into four tasks:
 Keyword research: Identify the product-related keywords your ideal customers use in
search queries. Online searches, keyword research tools, and website analytics will help.
 Site architecture: A well-organized site structure helps Google crawl your product pages
more effectively. It also helps visitors to your site more easily find the products they
seek.
 On-page SEO: Optimize your site’s title tags, meta descriptions, images, internal linking,
and markup to help search engines and users better understand your content.
 Technical SEO: Help Google index your content (so it can rank in the SERPs) by fixing
duplicate content, slow load speeds, broken links, and more. Semrush’s Site Audit tool
uncovers technical issues that could prevent your site from ranking.
Above all, remember: Google prioritizes relevant, high-quality content that fulfills users’ search
needs. Algorithms matter, but always put human experience first when planning and creating
product content.
Pay-Per-Click (PPC) Advertising
A pay-per-click (PPC) online advertising model uses ads to drive traffic to your site from search
and social media.
It involves running an ad through a platform such as Google Ads or Facebook Ads and paying a
fee every time someone clicks on it. The more competitive the search term (keyword), the higher
the fee.
PPC suits ecommerce marketing because:
 Ads often show above organic content in SERPs, so users see them first
 You pay based on results (i.e., the clicks and traffic you generate), which allows more
control of your spending
 It produces measurable results much faster than SEO, which makes it ideal for product
launches, promotions, and startup brand awareness
 You can use data to target customers precisely for a higher chance of converting

Content Marketing
Ecommerce content marketing is the creation and distribution of helpful, relevant content. Think
things like blogs, videos, and infographics. The content helps online brands grow and maintain
audience interest.
Done well, content marketing increases website traffic, drives qualified leads, and improves
brand image. All of which are crucial to thriving in the ecommerce industry.
Other content marketing formats include:
 Emails
 Newsletters
 Ebooks
 Podcasts
 Social media posts
 Frequently asked questions (FAQs) pages

Influencer Marketing
Influencer marketing is when businesses collaborate with high-profile social media personalities
to promote their brands or products.
Brands typically compensate influencers with free products, set payments, or fees
Social Media Marketing
Social media marketing is using social media to grow your brand’s audience, improve its
reputation, and increase revenue.
It’s especially useful for B2C and B2B businesses. Platforms such as Facebook, TikTok,
LinkedIn, and Instagram let brands connect directly with customers.
You can use that connection to:
 Share relevant, helpful content
 Answer customers’ questions
 Show your brand’s relatable side
These actions all contribute to trust, which encourages people to follow, buy from, and stay loyal
to your business
Email Marketing
Email marketing involves sending marketing content, such as guides, newsletters, catalogs, and
coupons, to subscribers electronically.
What is ecommerce website development?
E-commerce website development is the process of creating and building online platforms that
enable businesses to sell products or services. It involves designing and developing user-friendly
interfaces, integrating secure payment gateways, managing product catalogs, and implementing
features to enhance the overall shopping experience for customers.
It includes:

 Website design
 Product catalog
 Shopping cart
 Payment gateway integration
 Security
 Search engine optimization (SEO)
 Mobile responsiveness
 Customer service
How to develop an ecommerce website
A successful ecommerce website development process involves a number of steps varying in
scope, from articulating your company’s identity in a digital context to building the site itself.

Establish your brand

Brand establishment in an ecommerce context involves making a number of determinations.
First, is your online business a business-to-business (B2B) or business-to-consumer (B2C)
operation?
You’ll want to determine your target audience and tailor your ecommerce project to meet their
needs and tastes, from the style of photography to the level of detail in product descriptions.
Finally, you’ll want to come up with a snappy business name something memorable and unique
that effectively translates your brand’s objectives.
Buy a domain name
You may also want to consider domain name availability when choosing your ecommerce
business’s name. Buying a domain is an easy process with Shopify, but in-demand domains can
sometimes go fast—if the domain you want is available, try to get it while you can (you can opt
for a short-term contract of a year or two, in case you’re not fully committed). An easy-to-
remember and eye-catching URL can drive traffic to your ecommerce site, and increase brand
awareness, so you may want to check to see what URLs are available before settling on a
company name.
Choose a hosting platform
Once you purchase your domain, you can get your website up and running by choosing a website
host (preferably one with an ecommerce platform) to host your site as well.
Some hosting services are barebones—you have to design and build the website yourself—and
others offer pre-built website designs optimized for both desktop and mobile viewing.
Design your site
Beyond a memorable logo and eye-catching color palette, your website design should effectively
communicate your business’s goals.

Pay special attention to designing a navigable online store, with easy search and filtering options,
as this is your ecommerce site’s core functionality. A disorganized website design or a
frustrating checkout experience can result in lost sales and a decline in brand reputation.
Determine how orders will be fulfilled
Which ecommerce fulfillment strategy will you opt for? In-house fulfillment, dropshipping
(ordering items direct from suppliers on customers’ behalf), or third-party logistics (fully
outsourced fulfillment processing)?
These will inform your capacity for orders, and consequently, how you design your site. If
you’re relying on a third-party logistics service, for example, and they have a standard delivery
time window, you’ll want to be sure your ad copy adequately informs customers of when they
can expect to receive their shipment
Build and launch your website
You may wish to save on web development costs and use an ecommerce website builder like
Shopify to create your own website in a prefab method—dropping pre-coded content blocks and
image placeholders into a site-building interface.
If you have a little more cash to spare, you can still utilize a hosting platform like Shopify, build
your website with a developer separately, and then migrate the site over.
Once you’ve built your website, it’s time to launch it. But before you do, you’ll want to
thoroughly test it to ensure everything works correctly. Test all of your site’s features, loading
speed, mobile responsiveness, and the checkout process before launch.
Set up tracking with Google Analytics or a similar platform. That way, you can monitor your
website’s performance and make data-driven decisions to improve it over time.
Qualities of successful ecommerce sites
Good UI/UX
A successful ecommerce website will have an excellent user interface (UI) and user experience
(UX) design. Basic requirements of good UI/UX in an ecommerce context include filters that
allow customers to identify their desired product or range of products efficiently, a search bar,
clean design, and legible copy.
The website is fully responsive, meaning it adjusts well to various screen sizes, including mobile
devices. Given the increasing trend of online shopping, this is a crucial aspect of user experience.
Good online security
The security of your ecommerce store and any data it processes and/or stores is paramount. You
are handling customers’ sensitive financial information, including credit card numbers and
mailing addresses.
Best practices for ecommerce customer security include adequately password protecting your
site and all other sensitive accounts (don’t use easy-to-guess passwords), and employing
“transport layer security” (TLS), “secure sockets layers” (SSL), and HTTPS authentication—
programs that authenticate and encrypt links between customer computers and your site. You can
also ensure all company devices are outfitted with antivirus and anti-malware software.

What is ecommerce fulfillment?

Ecommerce fulfillment refers to the process of picking, packing, and delivering products to
customers. It includes maintaining accurate inventory, tracking down products where they’re
stored (either in a warehouse or a brick-and-mortar shop), packaging products, and managing the
logistics of timely delivery.
How does ecommerce fulfillment work?
Ecommerce fulfillment is one of the more logistically complex parts of running an online store,
and big corporations pour millions into making their fulfillment process more efficient. There are
multiple moving parts involved in fulfilling orders, but the six main procedures are:
1. Inventory management. This is the process by which an ecommerce business orders and
stores raw materials, components of a product, or finished products themselves. Most
ecommerce outfits don’t manufacture their own products, so inventory management is a
critical part of the fulfillment process. You have to know what products you have on hand
before you can fill a customer’s order.
2. Warehouse storage. This is the process by which products ready for sale are stored for
later shipment. You may store products yourself, if you have the capacity, or outsource
this to a third-party warehousing service.
3. Receiving orders. At this stage, your company receives orders from customers.
4. Packaging. This is the process of preparing products for shipping. This may involve
wrapping products in branded packaging, as well as packing products in protective
material to ensure they do not get damaged in transit to the customer.
 5. Shipping. Shipping entails selecting and paying for the appropriate postage or private
shipping service to transport products from the warehouse to the end customer.
Customers expect to get an estimate of shipping times before they purchase, and for those
time frames to be met. One of the biggest upsets to the customer experience is unforeseen
delays in shipments. If you can offer two-day shipping, great! But if you can’t, be sure to
communicate a realistic time frame to your buyers at the outset.
6. Returns. Returns is the process by which unsatisfactory items are shipped from the
customer back to the warehouse for processing, cataloging, and possibly resale and
reshipment.
Three strategies for ecommerce fulfillment
Ecommerce retailers have several options for fulfillment: You can do it yourself, forward orders
to others for fulfillment, or completely outsource to a third party. Each path can be customized
depending on the particularities of your own ecommerce business’s needs.
In-house fulfillment
In-house fulfillment involves a business fulfilling orders within its own facilities, using its own
labor, technology, and other assets, without help from a third-party fulfillment company. For
example, say you own a brick-and-mortar clothing store with a corresponding ecommerce store
and you rent a large storefront with a spacious spare room in the back. You might use that spare
room to store additional inventory (beyond what’s on the floor) and to pack your online orders
prior to shipment. Since the USPS visits your shop every day to drop off mail, you also hand
over outgoing items to mail carriers.
The appropriateness of in-house ecommerce fulfillment for your business will depend largely on
your inventory volume. If your operation is lean, fielding less than 100 orders a month, in-house
order fulfillment may be an efficient option for you.
Advantages of in-house ecommerce fulfillment include ease of implementation, low startup
costs, control over packaging style and branding, and control over fulfillment processes and
customer support. You may also qualify for lower shipping costs by signing up for bulk postage
services like [Link]. Downsides include difficulty scaling, diverted labor and time
consumption, limitations on storage space and labor, and reliance on full-price shipping.
Dropshipping
Dropshipping involves forwarding orders from your online store directly to a product supplier or
manufacturer who picks, packs, and ships orders to customers on your behalf. The retailer (you)
comes into no actual contact with the merchandise—no one involved with your company will
need to store, pick, pack, or ship inventory. The supplier manages the entire process after point-
of-sale. Your profits are generated by paying lower, discounted, or wholesale costs to the
supplier, and charging the customer a premium for your own branding.
Many ecommerce businesses that sell imported cosmetics or clothing in the US rely on the
dropshipping model. Korean products are especially popular, and by ordering makeup directly
from a dealer in Seoul, for example, and forwarding those shipments directly to the client,
retailers cut out the time-consuming process of importing, storing, and merchandising these
orders themselves.
The advantages of dropshipping are its low startup cost. Overall costs of order fulfillment are
also lower, as the process is streamlined by leaving everything to the supplier. You also accept
lower risk of loss by only paying the supplier for what customers have already ordered.
The downside of dropshipping is that you relinquish control over the shipping and handling
process to the supplier—their process might be efficient, or it might be disastrous. If the
customer receives a broken item, or the shipment is excessively delayed, poor customer
experience can result in complaints and bad reviews that ultimately impact your sales.
Third-party logistics
Third-party logistics (3PL) is a fulfillment service model where a provider hired by your
company manages the entire fulfillment and shipping process and manages your supply chain.
Elements of the supply chain managed by a 3PL service include sourcing, inventory storage,
inventory and order management, freight forwarding, shipping the order, receiving, distribution,
customs, cross-docking, picking, and packing.
3PLs are popular with fast-growing startups with small product ranges that sell direct-to-
consumer. Companies at this stage might have a huge amount of orders, but haven’t yet built the
physical capacity to handle fulfillment in-house.
The benefits of outsourcing to a 3PL service exist where your ecommerce company lacks the
resources to efficiently store, pack, and ship inventory. Perhaps your orders are outpacing your
capacity to fulfill them. If so, you can outsource the process, which frees up your team’s time
and resources to focus on other essential aspects of the business.
Other benefits of utilizing a 3PL service include the opportunity to leverage the third-party
company’s supply chain management expertise, reduced operating costs due to not having to
warehouse or coordinate shipment for orders yourself, and optimized shipping and return
processes. This option is also the easiest to scale.
The disadvantages of working with a 3PL service is that you relinquish some control over
shipping processes and returns. You will be at the mercy of the pace and deadlining dictated by
the service.
Catalogs
A catalog is a set of products that's published and priced for certain customers based on specified
conditions. For example, you can make a catalog of products for customers who are browsing the
online store from Canada and the United States.
An eCommerce product catalog includes all the products you sell. It includes the information
you want to give to buyers about a specific product, including technical details as well as the
accompanying marketing copy. Each item’s page can also include schema to help search engines
find it.
What is an ecommerce shopping cart?
An ecommerce shopping cart is a software that lets customers select, store, and manage items
before buying them. It reflects the concept of shopping in a store. You can add items to the cart
that you want to buy, change the quantity, and get a total cost before finishing the transaction.
There are two main types of ecommerce shopping carts:

 Hosted/self-hosted shopping cart. This type of ecommerce shopping cart is provided by a

third party. Typically, it’s easy to set up and integrate with other business tools and
platforms. Hosted shopping carts are great options for new businesses and businesses
with limited technical resources.
 Licensed shopping cart. A licensed ecommerce shopping cart is completely custom.
While you have more control over the functionality and design, it requires more technical
resources for implementation and maintenance. Typically, licensed shopping carts are
good for enterprise businesses or merchants with complex tech stacks.
How to choose the right ecommerce shopping cart
Consider the following factors when researching options for your online store’s shopping
cart:
Pricing
All merchants need to consider budget when selecting an online shopping cart. And this goes
beyond simply looking for the best price. Sometimes, the cheapest option isn’t the best option.
Typically, self-hosted ecommerce shopping carts are more affordable, but they’re not always the
best. They have more limited functionality when compared to a full-featured option like Shopify,
and you also need to invest in technical resources to build and maintain it.
When looking at pricing as a retailer, consider the following:

 Monthly fees
 Payment processing fees
 Minimum transaction volume requirements
 Transfer fees
 Cancellation or early termination fees
 Integrations
You’ll want to look for an online shopping cart that offers not only integrations with your
existing ecommerce platform and tech stack but additional options as well. Chances are, your
online business will grow over time—and you need business tools and ecommerce solutions that
can adapt and grow with you.

Accepted payment types

It’s important to select an online shopping cart that works with a variety of payment methods,
including debit and credit card, mobile wallets, PayPal, and buy now, pay later services, among
others.
Additional payment options can boost not only conversions but also average order value (AOV).
One in four merchants using Shop Pay Installments double AOV when allowing customers to
spread the cost over monthly payments, for example. Flexible payment options increase
consumer spending power.
E-Payment System:
Electronic payment systems are central to on-line business process as companies look for ways
to serve customers faster and at lower cost. Emerging innovations in the payment for goods and
services in electronic commerce promise to offer a wide range of new business opportunities.
Electronic payment systems and e-commerce are highly linked given that on-line consumers
must pay for products and services. Clearly, payment is an integral part of the mercantile process
and prompt payment is crucial. If the claims and debits of the various participants (consumers,
companies and banks) are not balanced because of payment delay, then the entire business chain
is disrupted. Hence an important aspect of e-commerce is prompt and secure payment, clearing,
and settlement of credit or debit claims.
Electronic payment systems are becoming central to on-line business transactions nowadays as
companies look for various methods to serve customers faster and more cost effectively.
Electronic commerce brings a wide range of new worldwide business opportunities. There is no
doubt that electronic payment systems are becoming more and more common and will play an
important role in the business world. Electronic payment always involves a payer and a payee
who exchange money for goods or services. At least one financial institution like a bank will act
as the issuer (used by the payer) and the acquirer (used by the payee).
Types of Electronic Payment Systems:
Electronic payment systems are proliferating in banking, retail, health care, on-line markets, and
even government—in fact, anywhere money needs to change hands.
Organizations are motivated by the need to deliver products and services more cost
effectively and to provide a higher quality of service to customers.
The emerging electronic payment technology labeled electronic funds transfer (EFT).
EFT is defined as ―any transfer of funds initiated through an electronic terminal
telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize
a financial institution.
EFT can be segmented into three broad categories:
 Banking and financial payments
Large-scale or wholesale payments (e.g., bank-to-bank transfer)
Small-scale or retail payments (e.g., automated teller machines
Home banking (e.g., bill payment)
 Retailing payments
Credit Cards (e.g., VISA or MasterCard)
Private label credit/debit cards (e.g., J.C. Penney Card)
Charge Cards (e.g., American Express)
 On-line electronic commerce payments
 Token-based payment systems
Electronic cash (e.g., DigiCash)
Electronic checks (e.g., NetCheque)
Smart cards or debit cards (e.g., Mondex Electronic Currency Card)
 Credit card-based payments systems
Encrypted Credit Cards (e.g., World Wide Web form-based encryption)
Third-party authorization numbers (e.g., First Virtual)
E-Cash:
There are many ways that exist for implementing an e-cash system, all must incorporate a few
common features.
Electronic Cash is based on cryptographic systems called ―digital signatures‖.
This method involves a pair of numeric keys: one for locking (encoding) and the other for
unlocking (decoding).
E-cash must have the following four properties.
 Monetary value
 Interoperability
 Retrievability
 Security

• Electronic cash is a general term that describes the attempts of several companies to
create value storage and exchange system that operates online in much the same way that
government-issued currency operates in the physical world.
• Concerns about electronic payment methods include:
– Privacy
– Security
– Independence
– Portability
Electronic Cash Storage:
• Two methods
– On-line
• Individual does not have possession personally of electronic cash
• Trusted third party, e.g. e-banking, bank holds customers‘ cash accounts
– Off-line
• Customer holds cash on smart card or electronic wallet
• Fraud and double spending require tamper-proof encryption
The purchase of e-cash from an on-line currency server (or bank) involves two steps:
 Establishment of an account
 Maintaining enough money in the account to bank the purchase.
Once the tokens are purchased, the e-cash software on the customer‘s PC stores digital money
undersigned by a bank.
The users can spend the digital money at any shop accepting e-cash, without having to open an
account there or having to transmit credit card numbers.
As soon as the customer wants to make a payment, the software collects the necessary amount
from the stored tokens.
Types of Smart Cards:
Relationship-Based Smart Credit Cards
Electronic Purses also known as debit cards
 Relationship-Based Smart Credit Cards:
It is an enhancement of existing cards services &/ or the addition of new services that a financial
institution delivers to its customers via a chip-based card or other device.
These services include access to multiple financial accounts, value-added marketing programs,
or other information card holders may want to store on their card.
It includes access to multiple accounts, such as debit, credit, cash access, bill payment
& multiple access options at multiple locations.
 Electronic Purses:
To replace cash and place a financial instrument are racing to introduce electronic purses, wallet-
sized smart cards embedded with programmable microchips that store sums of money for people
to use instead of cash for everything.

The electronic purse works in the following manner:

After purse is loaded with money at an ATM, it can be used to pay for candy in a vending
machine with a card reader.
It verifies card is authentic & it has enough money, the value is deducted from balance on the
card & added to an e-cash & remaining balance is displayed by the vending machine.
Credit Card-Based Electronic Payment Systems:
Payment cards are all types of plastic cards that consumers use to make purchases:
– Credit cards
• Such as a Visa or a MasterCard, has a preset spending limit based on the
user‘s credit limit.
– Debit cards
• Removes the amount of the charge from the cardholder‘s account and
transfers it to the seller‘s bank.
– Charge cards
• Such as one from American Express, carries no preset spending limit.
Advantages:
– Payment cards provide fraud protection.
– They have worldwide acceptance.
– They are good for online transactions.
Disadvantages:
Payment card service companies charge merchants per-transaction fees and monthly processing
fees.
Risks in Electronic Payment systems:
 Customer's risks
– Stolen credentials or password
– Dishonest merchant
– Disputes over transaction
– Inappropriate use of transaction details
 Merchant‘s risk
– Forged or copied instruments
– Disputed charges
– Insufficient funds in customer‘s account
– Unauthorized redistribution of purchased items

Electronic Data Interchange(EDI):

Electronic Data Interchange (EDI) - interposes communication of business information in
standardized electronic form.
Prior to EDI, business depended on postal and phone systems that restricted communication to
those few hours of the workday that overlap between time zones.

Why EDI?
• Reduction in transaction costs
• Foster closer relationships between trading partners
EDI & Electronic Commerce
• Electronic commerce includes EDI & much more
• EDI forges boundary less relationships by improving interchange of information between
trading partners, suppliers, & customers.
EDI layered architecture:
• Semantic (or application) layer
• Standards translation layer
• Packing (or transport) layer
• Physical network infrastructure layer
Security Requirements For E-Commerce:
Authentication:
This is the ability to say that an electronic communication (whether via email or web) does
genuinely come from who it purports [Link] face-to-face contact, passing oneself off as
someone else is not difficult on the internet.
In online commerce the best defence against being misled by an imposter is provided by
unforgeable digital certificates from a trusted authority (such as VeriSign). Although anyone can
generate digital certificates for themselves, a trusted authority demands real-world proof of
identity and checks its validity before issuing a digital certificate. Only certificates from trusted
authorities will be automatically recognized and trusted by the major web browser and email
client software.
Authentication can be provided in some situations by physical tokens (such as a drivers license),
by a piece of information known only to the person involved (eg. a PIN), or by a physical
property of a person (fingerprints or retina scans). Strong authentication requires at least two or
more of these. A digital certificate provides strong authentication as it is a unique token and
requires a password for its usage.
Privacy:
In online commerce, privacy is the ability to ensure that information is accessed and changed
only by authorized parties. Typically this is achieved via encryption. Sensitive data (such as
credit card details, health records, sales figures etc.) are encrypted before being transmitted
across the open internet – via email or the web. Data which has been protected with strong 128-
bit encryption may be intercepted by hackers, but cannot be decrypted by them within a short
time. Again, digital certificates are used here to encrypt email or establish a secure HTTPS
connection with a web-server. For extra security, data can also be stored long-term in an
encrypted format.
Authorization:
Authorization allows a person or computer system to determine if someone has the authority to
request or approve an action or information. In the physical world, authentication is usually
achieved by forms requiring signatures, or locks where only authorized individuals hold the
keys.
Authorization is tied with authentication. If a system can securely verify that a request for
information (such as a web page) or a service (such as a purchase requisition) has come from a
known individual, the system can then check against its internal rules to see if that person has
sufficient authority for the request to proceed. In the online world, authorization can be achieved
by a manager sending a digitally signed email.
Such an email, once checked and verified by the recipient, is a legally binding request for a
service. Similarly, if a web-server has a restricted access area, the server can request a digital
certificate from the user‘s browser to identify the user and then determine if they should be given
access to the information according to the server‘s permission rules.
Integrity:
Integrity of information means ensuring that a communication received has not been altered or
tampered with. Traditionally, this problem has been dealt with by having tight control over
access to paper documents and requiring authorized officers to initial all changes made – a
system with obvious drawbacks and limitations. If someone is receiving sensitive information
online, he not only wants to ensure that it is coming from who he expects it to (authentication),
but also that it hasn‘t been intercepted by a hacker while in transit and its contents altered. The
speed and distances involved in online communications requires a very different approach to this
problem from traditional methods. One solution is afforded by using digital certificates to
digitally ―sign‖ messages. A travelling employee can send production orders with integrity to
the central office by using their digital certificate to sign their email. The signature includes a
hash of the original message – a brief numerical representation of the message content. When the
recipient opens the message, his email software will automatically create a new hash of the
message and compare it against the one included in the digital signature. If even a single
character has been altered in the message, the two hashes will differ and the software will alert
the recipient that the email has been tampered with during transit.
Non-repudiation:
Non-repudiation is the ability to guarantee that once someone has requested a service or
approved an action. Non-repudiation allows one to legally prove that a person has sent a specific
email or made a purchase approval from a website. Traditionally non-repudiation has been
achieved by having parties sign contracts and then have the contracts notarized by trusted third
parties. Sending documents involved the use of registered mail, and postmarks and signatures to
date-stamp and record the process of transmission and acceptance. In the realm of e-commerce,
non-repudiation is achieved by using digital signatures. Digital signatures which have been
issued by a trusted authority (such as VeriSign) cannot be forged and their validity can be
checked with any major email or web browser software. A digital signature is only installed in
the personal computer of its owner, who is usually required to provide a password to make use of
the digital signature to encrypt or digitally sign their communications. If a company receives a
purchase order via email which has been digitally signed, it has the same legal assurances as on
receipt of a physical signed contract
What Is a Value Chain?
A value chain is a series of consecutive steps that go into the creation of a finished product, from
its initial design to its arrival at a customer's door. The chain identifies each step in the process at
which value is added, including the sourcing, manufacturing, and marketing stages of its
production.
A company conducts a value-chain analysis by evaluating the detailed procedures involved in
each step of its business. The purpose of a value-chain analysis is to increase production
efficiency so that a company can deliver maximum value for the least possible cost.
Understanding Value Chains
Because of ever-increasing competition for unbeatable prices, exceptional products, and
customer loyalty, companies must continually examine the value they create in order to retain
their competitive advantage. A value chain can help a company to discern areas of its business
that are inefficient, then implement strategies that will optimize its procedures for maximum
efficiency and profitability.
Components of a Value Chain
In his concept of a value chain, Porter splits a business's activities into two categories, "primary"
and "support," whose sample activities we list below.1 Specific activities in each category will
vary according to the industry.

Primary Activities
Primary activities consist of five components, and all are essential for adding value and creating
competitive advantage:
 Inbound logistics include functions like receiving, warehousing, and managing inventory.
 Operations include procedures for converting raw materials into a finished product.
 Outbound logistics include activities to distribute a final product to a consumer.
 Marketing and sales include strategies to enhance visibility and target appropriate
customers—such as advertising, promotion, and pricing.
 Service includes programs to maintain products and enhance the consumer experience—
like customer service, maintenance, repair, refund, and exchange.
Support Activities
The role of support activities is to help make the primary activities more efficient. When you
increase the efficiency of any of the four support activities, it benefits at least one of the five
primary activities. These support activities are generally denoted as overhead costs on a
company's income statement:
Procurement concerns how a company obtains raw materials.
Technological development is used at a firm's research and development (R&D) stage—like
designing and developing manufacturing techniques and automating processes.
Human resources (HR) management involves hiring and retaining employees who will fulfill the
firm's business strategy and help design, market, and sell the product.
Infrastructure includes company systems and the composition of its management team—such as
planning, accounting, finance, and quality control.
Supply chain
A supply chain is a network of individuals and companies who are involved in creating a product
and delivering it to the consumer. Links on the chain begin with the producers of the raw
materials and end when the van delivers the finished product to the end user.
Supply chain management is a crucial process because an optimized supply chain results in
lower costs and a more efficient production cycle. Companies seek to improve their supply
chains so they can reduce their costs and remain competitive.
Understanding a Supply Chain
A supply chain includes every step that is involved in getting a finished product or service to the
customer. The steps may include sourcing raw materials, moving them to production, then
transporting the finished products to a distribution center or retail store where they may be
delivered to the consumer.
The entities involved in the supply chain include producers, vendors, warehouses, transportation
companies, distribution centers, and retailers.
The supply chain begins operating when a business receives an order from a customer. Thus, its
essential functions include product development, marketing, operations, distribution networks,
finance, and customer service.
When supply chain management is effective, it can lower a company's overall costs and boost its
profitability. If one link breaks, it can affect the rest of the chain and can be costly.
What Are the Main Supply Chain Models?
Many types of supply chain models are available. The model a company selects will depend on
how the company is structured and what its specific needs are. Here are a few examples:

Continuous Flow Model: This traditional supply chain model works well for companies that
produce the same products with little variation. The products should be in high demand and
require little to no redesign. This lack of fluctuation means managers can streamline production
times and keep tight control over inventory. In a continuous flow model, managers will need to
regularly replenish raw materials in order to prevent production bottlenecks.
Fast Chain Model: This model works best for companies that sell products based on the latest
trends. Businesses that use this model need to get their products to market quickly to take
advantage of the prevailing trend. They need to rapidly move from idea to prototype to
production to consumer. Fast fashion is an example of an industry that uses this supply chain
model.
Flexible Model: Companies that manufacture seasonal or holiday merchandise often use the
flexible model. These companies experience surges in demand for their products followed by
long periods of little to no demand. The flexible model ensures they are able to gear up quickly
to begin production and shut down efficiently as soon as demand tapers off. In order to be
profitable, they must be accurate in forecasting their need for raw materials, inventory, and labor.