E-Commerce – Frameworks, Challenges and Solutions

Introduction:  E-Commerce (electronic commerce), derived from such terms as “e-mail” and “e-markets,” is often identified as the same as e-business, in many context, though the former theoretically is a subset of the latter. It is essentially the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners. Today, major corporations are rethinking their businesses in terms of the Internet and its new culture and capabilities. Companies are using the Web to buy parts and supplies from other companies, to collaborate on sales promotions, and to do joint research. Exploiting the convenience, availability, and world-wide reach of the Internet, many companies, such as Amazon.com, the book sellers, has already discovered how to use the Internet successfully.

Amazon.com is the world’s largest online retailer. Amazon.com, Inc. is an American international electronic commerce company with headquarters in Seattle, Washington, United States. It is the world’s largest online retailer.Amazon.com started as an online bookstore, but soon diversified, selling DVDs,VHSs, CDs, video and MP3 downloads/streaming, software, video games, electronics, apparel, furniture, food, toys, and jewellery. The company also produces consumer electronics—notably the Amazon Kindle e-book reader and the Kindle Fire tablet computer—and is a major provider of cloud computing services.”

E-commerce is more than just having a web presence to facilitate buying and selling. Frank Jones, VP of IBM Corporation, provides this definition: “E-business is exploiting the combined power of the internet and information technology to fundamentally transform key business strategies and processes”. The most common implementation of E-commerce is as an additional, or in some cases primary, storefront. By selling products and services online, an e-business is able to reach a much wider consumer base than any traditional brick-and-mortar store could ever hope for. This function of E-business is referred to as ecommerce, and the term are occasionally used interchangeably.

E commerce includes: Digitally enabled commercial transactions between organizations and individuals. Digitally enabled transactions include all transactions mediated by digital technology Commercial transactions involve the exchange of value across organizational or individual boundaries in return for products or services


Benefits of E Business:

The Internet has been a door to a myriad new business opportunity. Business owners of e-businesses and their customers find advantages in Internet transactions as opposed to brick-and-mortar operations.

Cost-Effective Marketing

With an e-business, all of your marketing efforts end with one goal to drive target traffic to your business website. E-business allows you to use many online marketing tactics including email marketing, article marketing, social media networking and e-newsletters. Most of these online marketing efforts are very low cost or free, so an e-business allows for highly cost-effective marketing strategies.

Flexible Business Hours

E-business breaks down the time barriers that location-based businesses encounter, according to E Commerce Education. Because the Internet is available 24 hours a day, seven days a week, your business never closes. An e-business can literally be making money while you are fast asleep.

Eliminates Geographic Boundaries

An e-business also allows you to broaden your reach. An online business can reach customers in the four corners of the Earth. As long as someone has an Internet connection, you may be able to reach and sell your product or service to these visitors to your business website.

Reduces Transaction Cost

Running an online business reduces the cost per transaction because it takes less manpower to complete an online transaction. Once you get your website up and running, the customer places the order online, which removes the need for a salesperson. The customer payment goes through your online payment processing software or eliminating the need for a store clerk.

Low Overhead Costs

Running an e-business cut back or out most of the costs involved in running a physical location. E-businesses have less expensive phone, rent and utility bills than businesses with physical locations. An e-business also reduces the cost of paying employees because you do not need someone for your website during business hours. Some e-businesses do not require any additional space and can be run out of your home, which you are already paying rent for or your mortgage payment.

How E Commerce helps consumers?

E business has affected the traditional marketing by different ways. An important characteristic is the non-existence of intermediaries in a supply chain. Internet allows full disintermediation because of the market’s transparency. According to their work, the new form of Disintermediation that was developed along with the Information Technology, “allows for the traditional richness/reach curve to be displaced, allowing new players to offer greater reach and greater richness simultaneously”. E-Businesses are created, which aim to play exactly the role of the intermediate between the manufacturers and the customers This is called reinter mediation.

Value Chain and E-Value Chain

Michael Porter’s value chain is a tool used by companies to evaluate their operations in order to identify the value adding activities. In this study, Porter’s value chain is modified to incorporate the use of IT. Due to the increasing use of technology in today’s global market, it is important to recognize that companies can increase their value generating activities by implementing IT. Additional value is created because operations can become more effective and efficient


Another definition of value chain is as “a series of activities a company performs to achieve its goals. And IT value chain refers to the “subset of enterprise activities that pertain to IT operations, both to add value and by providing service to customers and to add indirect value by supporting other enterprise operations. In the current study, an e-value chain incorporates the use of internet technologies and supply chain management software to increase the value adding process of a product’s life cycle. The significant difference between Michael Porter’s value chain and the IT adopted value chain is the incorporation of an extranet and intranet to increase speed and communication throughout the supply chain. The use of IT helps businesses to add value to each stage of production because data can be communicated quicker and more accurately. Value is created when a supplier meets or exceeds a customer’s expectations and non-value adding activities are removed from the supply chain.


Examples of E Commerce initiatives:

There are many innovative e-commerce business models which have developed over the ages: A pictorial representation of some of the major and niche business models in the domain is represented in the infographic below.



We can thank Dell Inc. for being the catalyst in selling computers directly to users from the Internet, generating millions of dollars as it took its sales process directly to its customers. Its strategy of no retail outlets and no middlemen has been replicated by e-commerce businesses worldwide. E-tailing possibilities are endless and can be adapted to suit your knowledge, experience and passion. You can buy and trade collectible coins and stamps, sell custom-ordered jeans and other fashions or offer your secretarial skills to online clients. Much like retail businesses, you can start your own e-business operation or operate a franchise so that the groundwork is done for you.

Business to Business (B2B)

Commercial real estate, institutional furniture and accounting and advertising services are commonly associated with Business-to-Business transactions. In the B2B arena, businesses engage in commerce with other businesses rather than retail customers. It involves interactions at the buying and selling levels of companies and may include educational sessions and marketing presentations. It is relationship driven and often involves a great deal of effort by participants to keep the business relationship strong and profitable.

Business to Consumer (B2C)

Amazon. com and eBay are examples of businesses focused on consumers. An e-business with a B2C model takes time to understand the behavioral patterns of consumers online using software to track decisions and buying preferences and patterns. The goal for B2C interactions is to establish a long-term relationship with the consumer by making sure each customer is satisfied with the company’s product or service.

Consumer to Consumer (C2C)

Think of a yard sale and you will understand the e-business term Consumer to Consumer, or C2C. In this type of business, an individual trades with another individual, only this time, on the Internet. Auction sites such as eBay are known for this type of business interaction, although eBay conducts other forms of e-business as well. Napster Inc., an on-line music service, became famous when it allowed individuals to sell, swap or give music files to other individuals. When you want to sell your own goods as you would at a yard sale — and with the online community so easy to access — you have immediate access to an international yard the size of the world.
Challenges faced by E Business Today:

  1. Gaining and Maintaining Commitment from Management
  2. Maintaining IT Resources
  3. Determining E-Business Applications
  4. Integrating Internet Technologies and Existing Business Processes
  5. Security of information assets
  6. Legal Considerations
  7. Rollout of plans and fulfillment of transactions


  1. One strategy for obtaining upper-management commitment to an e-business venture is to present case studies of companies that have successfully implemented EDI, a procurement card, an intranet, or Domino applications. Such examples can be compelling – especially when they involve your competitors.
  2. Competitive salaries and deferred benefits are also important long-term considerations that play a major role in retaining IT expert employees.
  3. A detail analysis of the requirement of IT services will help to choose the right e business applications.
  4. Identifying the possible opportunities in using IT services will make it easy to integrate the Internet technologies along with the existing business processes.
  5. To address security concerns, many businesses install firewall technologies, define use policies, and tighten employee access to outside lines and networks.
  6. Make the e business comply with all legal requirements to avoid any unnecessary pitfalls.


E business includes not only buying and selling via internet rather all the commercial activities taking place with the help of World Wide Web. There are many advantages of e business like it is cost effective, no transaction or warehouse costs involved, less dependent on manpower so no issues about employee turnover and the most important factor is that it removes geographic boundaries and helps to communicate and trade from one corner of the world to another.

It helps the customers by reducing the intermediaries between the manufacturers and consumers. E business helps in the supply chain management of any product. Due to the increasing use of technology in today’s global market, it is important to recognize that companies can increase their value generating activities by implementing IT. Additional value is created because operations can become more effective and efficient.

There are many examples of e business like business amazon.com where business to customers dealing are done, barterstreets.com which is a C2C business etc. There is nothing which is so useful and easily available. The various challenges faced by e business are lack of IT knowledge and resources, legal considerations, adopting new technologies etc. This report deals with certain recommendations to overcome such challenges.