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Unit 1 of 4 · MBA Sem 3

Unit 1: E-commerce fundamentals

E-Commerce and Digital Markets notes · PTU syllabus (MBA 942-18)

3 min read8 topics10 exam questions
On this page
  1. Unit summary
  2. Meaning, models and role of the internet
  3. Need and origin of e-commerce
  4. Business and technological dimensions
  5. E-commerce framework
  6. E-commerce value chains and business models
  7. Internet, e-business, intranet and extranet
  8. EDI and its components
  9. Creating web pages using HTML
  10. Key terms
  11. Quick revision
  12. Important questions

Unit summary

E-commerce has changed how firms buy, sell and collaborate. This unit covers the need for and origin of e-commerce, its business and technological dimensions, the e-commerce framework and models, value chains, the internet and e-business, intranets and extranets, the components of EDI, and creating web pages using HTML.

After this unit you can

  • Explain the need, origin and dimensions of e-commerce
  • Explain the e-commerce framework, models and value chains
  • Distinguish internet, intranet and extranet and explain EDI components
  • Create simple web pages using HTML

PTU syllabus topics

  • Need and origin of e-commerce
  • business and technological dimensions
  • e-commerce framework and models
  • value chains
  • internet and e-business
  • intranet/extranet
  • EDI components
  • creating web pages using HTML
ClassificationE-commerce models
E-commerce

  • B2B

    Business to business

  • B2C

    Business to consumer

  • C2C

    Consumer to consumer

  • C2B

    Consumer to business

  • G2C and B2G

    Government services and procurement

1

Topic 1

Meaning, models and role of the internet

E-commerce is buying and selling goods and services, and transmitting funds or data, over an electronic network, primarily the internet.

ComparisonTraditional commerce vs e-commerce
Traditional commerce
E-commerce

Place

Physical store or market

Website or app

Time

Limited business hours

24 × 7

Reach

Local

National and global

Customer interaction

Face to face

Digital — chat, email, reviews

Cost of set-up

High (rent, staff)

Lower

Payment

Cash, cheque, card at counter

UPI, cards, net banking, wallets, COD

Inspection of goods

Possible before purchase

Only after delivery

E-commerce models

ClassificationE-commerce models
E-commerce

  • B2B

    Business to business — IndiaMART, Udaan

  • B2C

    Business to consumer — Amazon, Flipkart, Nykaa

  • C2C

    Consumer to consumer — OLX, Quikr

  • C2B

    Consumer to business — freelancers on Upwork

  • B2G / G2C

    Government e-Marketplace (GeM), online tax filing

  • Others

    M-commerce (mobile), social commerce (Instagram, Meesho), ONDC network

  • Role of the internet: global, low-cost network (TCP/IP) enabling websites, email, cloud services and mobile apps — the infrastructure for e-commerce; the web made information and transactions universally accessible.
2

Topic 2

Need and origin of e-commerce

  • Need: global reach at low cost, 24×7 availability, lower transaction and inventory costs, personalisation, faster supply chains, data on customer behaviour, competitive pressure.
ProcessEvolution of e-commerce
  1. 11970s–80s

    Electronic funds transfer and EDI between large firms

  2. 21990s

    World Wide Web (1991), Amazon and eBay (1995), first Indian portals (Rediff, IndiaMART 1996)

  3. 32000s

    Online travel (MakeMyTrip, IRCTC), Flipkart (2007), payment gateways

  4. 42010s

    Smartphones, mobile commerce, cash on delivery, Paytm, UPI (2016)

  5. 52020s

    Quick commerce, social commerce, ONDC (2022), AI-driven personalisation

3

Topic 3

Business and technological dimensions

ComparisonDimensions of e-commerce
Business dimension
Technological dimension

Focus

Business models, strategy, marketing, customer relationships

Infrastructure, networks, software, security

Elements

Revenue models, pricing, logistics, partnerships, regulation

Internet, web servers, databases, payment systems, mobile apps, cloud

Decision makers

Managers and marketers

IT architects and developers

  • Choi, Stahl and Whinston's dimensions: the product (physical or digital), the process (physical or digital) and the delivery agent (physical or digital) — "pure" e-commerce is digital on all three (e-books, software downloads).
4

Topic 4

E-commerce framework

HierarchyE-commerce framework (Kalakota and Whinston)
  1. E-commerce applications

    Supply chain management, video on demand, remote banking, procurement, online marketing, home shopping

  2. Business services infrastructure

    Security, authentication, electronic payment, directories

  3. Message and information distribution

    EDI, email, HTTP

  4. Multimedia content and publishing

    HTML, Java, the web

  5. Network infrastructure

    Telecom, cable, wireless, internet

  • Supporting pillars: public policy (privacy, taxation, IT law) and technical standards (documents, security, network protocols).
5

Topic 5

E-commerce value chains and business models

  • Goal congruence: e-commerce initiatives must align with the firm's strategy — online channels should complement (not cannibalise) offline channels; performance measures and incentives must support digital goals.
  • Value chain impact (Porter): e-procurement in inbound logistics, digital operations and automation, online order tracking in outbound logistics, digital marketing and sales, online customer service; support activities — ERP, online HR, digital R&D collaboration. E-commerce lowers transaction costs and enables disintermediation (and new reintermediation by platforms).
FrameworkICDT model (Angehrn) — virtual spaces

  • Information space

    Websites and content to inform customers

  • Communication space

    Email, chat, social media, forums for dialogue

  • Distribution space

    Delivery of digital products and services online

  • Transaction space

    Ordering, payment and contracting online

  • New business models: marketplace (Amazon), subscription (Netflix), freemium, D2C, aggregator (Zomato, Ola), advertising-based (Google), platform ecosystems.
6

Topic 6

Internet, e-business, intranet and extranet

  • E-business is broader than e-commerce: it uses internet technologies for all business processes — procurement, production, HR, collaboration and customer service — not just buying and selling.
ComparisonInternet vs intranet vs extranet
Users
Purpose and example

Internet

Public — anyone

Global network for websites, email, e-commerce

Intranet

Employees only

Private network for HR policies, internal portals, collaboration

Extranet

Selected outsiders — suppliers, dealers, partners

Secure partner access to orders, inventory, specifications

7

Topic 7

EDI and its components

Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents (purchase orders, invoices, shipping notices) in a standard format between trading partners.

ProcessEDI process
  1. 1

    Buyer's application creates a purchase order

  2. 2

    EDI translator converts it to a standard format

    ANSI X12, UN/EDIFACT

  3. 3

    Transmission through a VAN or direct link

  4. 4

    Supplier's translator converts it to its format

  5. 5

    Supplier's application processes the order

  6. 6

    Functional acknowledgement sent back

  • Benefits: speed, fewer errors (no re-keying), lower paper and processing costs, better inventory management (JIT), stronger partner relationships.
  • Limitations: high set-up costs, standards complexity, need for trading-partner agreements.
ClassificationComponents of EDI
EDI system

  • Standards

    ANSI X12, UN/EDIFACT, XML-based

  • Translation software

    Converts internal formats to standard and back

  • Communication network

    Value-added network (VAN), direct connection or internet (AS2)

  • Trading-partner agreement

    Legal terms of exchange

  • Application interface

    Links EDI to ERP and accounting

8

Topic 8

Creating web pages using HTML

HTML (HyperText Markup Language) describes the structure of web pages using tags.

TagPurpose
html, head, bodyBasic structure of the document
titleText shown in the browser tab
h1 to h6Headings of decreasing importance
pParagraph
a href="url"Hyperlink
img src="file" alt="text"Image with alternative text
ul, ol, liUnordered and ordered lists
table, tr, th, tdTables
form, input, buttonForms for user input
  • A minimal page: an html element containing a head (with a title) and a body (with a heading, paragraph, image and link).
  • CSS controls presentation (colours, fonts, layout); JavaScript adds interactivity.
  • Good practice: responsive (mobile-friendly) design, alt text for accessibility, meaningful headings for SEO, fast-loading images.

Key terms

E-business
Use of internet technologies across all business processes
Extranet
Private network extended to selected business partners
EDI
Computer-to-computer exchange of business documents in standard format
VAN
Value-added network for EDI transmission
HTML
Markup language for structuring web pages

Quick revision

  • Need and evolution of e-commerce; Indian milestones.
  • Business vs technological dimensions; pure vs partial e-commerce.
  • Kalakota–Whinston framework; models B2B, B2C, C2C, D2C; value chain impact.
  • Internet, intranet, extranet; e-business.
  • EDI components; HTML tags and page structure.

Important exam questions

Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).

Short-answer questions

  1. Q1.Distinguish e-commerce and e-business.
  2. Q2.Name four e-commerce models with examples.
  3. Q3.Distinguish intranet and extranet.
  4. Q4.What is a value-added network?
  5. Q5.Name the components of EDI.
  6. Q6.What does the a tag do in HTML?

Long-answer questions

  1. Q1.Explain the need, origin and dimensions of e-commerce.
  2. Q2.Explain the e-commerce framework and its business models.
  3. Q3.Distinguish internet, intranet and extranet and explain their business uses.
  4. Q4.Explain EDI and its components.

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