Thursday, February 14, 2008

Ch. 7 Key Concept-The Legal Environment of Electronic Commerce

Businesses operating on the web face additional factors: (1) the web extends a company’s reach beyond traditional boundaries; (2) the web increases the speed and efficiency of business communications.

Borders and Jurisdiction
The relationship between geographic boundaries and legal boundaries in based on: power, effects, legitimacy, and notice.
Power: control over physical space and the people and objects that reside in that space. For laws to be effective a government must be able to enforce them. The ability of a government to exert control-jurisdiction.
Effects: relationship between physical proximity and the effects or impact of a person’s behaviour.
Legitimacy: the legitimate right to create and enforce laws derives from the mandate of those who are subject to those laws. Legitimacy is the idea that those subject to laws should have some role in formulating them.
Notice: People receive constructive notice that they have become subject to new laws and cultural norms when they cross an international border.
Jurisdiction on the internet
Defining, establishing, and asserting jurisdiction is more difficult on the internet-because geographic boundaries do not exist.
Subject-matter jurisdiction: a court’s authority to decide a particular type of dispute.
Personal jurisdiction: determined by the residence of the parties. A court has personal jurisdiction over a case if the defendant is a resident of the state in which the court is located. An out of state person or corporation can also voluntarily submit to the jurisdiction of a particular state court by agreeing to do so in writing or by taking certain actions in the state. Forum selection clause- contract will be enforced according to the laws of a particular state. Long arm statutes create personal jurisdiction over nonresidents who transact business or commit tortuous acts in the state.
Jurisdiction in international commerce: jurisdiction across international borders is governed by treaties between the countries. Non-US corporations and individuals can be sued in US courts if they conduct business or commit tortuous acts in the US. Foreign courts can enforce decisions against US corporations or individuals through the US court system if those courts can establish jurisdiction over the matter. Courts asked to enforce the laws of other nations sometimes follow a principle called judicial comity.
Contracting and Contract Enforcement in e-commerce
Any contract includes three essential elements: an offer, an acceptance, and consideration. On the internet – offers and acceptances can occur when parties exchange e-mail messages, engage in electronic data interchange (EDI), or fill out forms on web pages. When a seller advertises goods for sale on a web site, that seller is not marking an offer, but is inviting offers from potential buyers. When a buyer submits an order, which is an offer, the seller can accept that offer and create a contract. Written contracts on the web: certain categories of contracts aren’t enforceable unless the terms are put into writing and signed by both parties. Contracts for the sale of goods worth more than $500 and contracts that require actions that cannot be completed within one year must be created by a signed writing. A writing exists when the terms of a contract have been reduced to some tangible form.
Warranties on the web: any contract for the sale of goods includes implied warranties. A seller implicitly warrants that the goods it offers for sale are fit for the purposes for which they are normally used. Sellers can avoid some implied warranty liability by making a warranty disclaimer. A warranty disclaimer is a statement declaring that the seller will not honor some or all implied warranties.
Authority to Form Contracts: In general, courts will not hold a person or corporation whose identity has been forged to the terms of the contract; however, if negligence on the part of the person or corporation contributed to the forgery, a court may hold the negligent party to the terms of the contract.
Terms of service agreements: a site visitor is held to the terms of service even if that visitor has not read the text or clicked a button to indicate agreement with the terms.

Use and protection of intellectual property in lone business
Intellectual property –all products of the human mind.
Copyright infringement: a copyright is a right granted by a government to the author or creator of a literary or artistic work. Gives the author or creator the sole and exclusive right to print, publish, or sell the work-include virtually all forms of artistic or intellectual expression. In the US, works created after 1977 are protected for the life of the author plus 70 years. Many countries required the creator of a work to register that work to obtain copyright protection. US law still allows registration, but registration is no longer required. Most US web pages are protected by the automatic copyright provision of the law because they arrange the elements of words, graphics, and HTML tags in a way that creates an original work. The fair use of a copyrighted work includes copying it for use in criticism, comment, news reporting, teaching, scholarship, or research-provide a citation to the original work. An entity becomes liable for vicarious copyright infringement if it is capable of supervising the infringing activity and obtains a financial benefit from the infringing activity.
Patent Infringement: a patent is an exclusive right granted by the government to an individual to make, use, and sell an invention. In the US, patents on inventions protect the inventor’s rights for 20 years. A patent on the design for an invention provides protection for 14 years. To be patentable, an invention must be genuine, novel, useful, and not obvious given the current state of technology.
Trademark Infringement: a trademark is a distinctive mark, device, motto, or implement that a company affixes to the goods it produces for identification purposes. A service mark is similar to a trademark, but it is used to identify services provided.

Cybersquatting is the practice of registering a domain name that is the trademark of another person or company in the hopes that the owner will pay huge amounts of money to acquire the URL. A related problem, called name changing, occurs when someone registers purposely misspelled variations of well known domain names. Name stealing occurs when someone posing as a site’s administrator changes the ownership of the site’s assigned domain name to another site and owner. Disputes that arise when one person has registered a domain name that is an existing trademark or company name are settled by the World Intellectual Property Association. A domain name ownership change occurs when owner info maintained by a public domain registrar is changed in the registrar’s database to reflect a new owner’s name and business address.
Protecting Intellectual Property Online
Several industry trade groups have proposed solutions to the current problems in digital copyright protection, including host name blocking, packet filtering, and proxy servers. One promising technique employs steganography to create a digital watermark. The watermark is a digital code or stream embedded undetectably in a digital image or audio file. It can be encrypted to protect its contents, or simply hidden among the bits-digital info-comprising the image or recording. Copy control is an electronic mechanism for limiting the number of copies that one can make of a digital work.
Defamation
A defamatory statement is a statement that is false and that injures the reputation of another person or company. If the statement injures the reputation of a product or service instead of a person, it is called product disparagement. A person must establish that the defamatory statement caused injury. Per se defamation-a court deems some types of statements to be so negative that injury is assumed. An important exception in US law exists for statements that are defamatory-but that are about a public figure. Statements of personal opinion are true statements and thus neither defamatory nor disparaging.
Deceptive trade practices
If the objects being manipulated are trademarked, however, these manipulations can violate the trademark holder’s rights. Web sites that include links to other sites must be careful not to imply a relationship with the companies sponsoring the other sites unless a relationship exists. Trademark dilution is the reduction of the distinctive quality of a trademark by alternative uses.
Advertising Regulation
Advertising is regulated primarily by the federal trade commission – publishes regulations and investigates claims of false advertising. Bait advertising, consumer lending and leasing, endorsement and testimonials, energy consumption statements for home appliances, guarantees and warranties, prices
Online crimes
-includes online versions of crimes that have been undertaken for years in the physical world, including theft, stalking, distribution of porn, and gambling. Other crimes, such as commandeering one computer to launch attacks on other computers, are new. Law enforcement agencies - obstacle they face is the issue of jurisdiction. Another problem facing law enforcement officers is the difficulty of applying law that were written before the internet.

Ethical Issues
The Electronic Communications Privacy Act of 1986 is the main law governing privacy on the Internet today. This law was enacted before the general public began its wide use of the internet. The law was written to update existing law that prevented interception of audio signal transmissions so that any type of electronic transmissions would be given the same protections. One of the major privacy controversies in the US today is the opt in versus opt out issue. The most common policy used in US companies today is an opt out approach. In an opt out approach, the company collecting the info assumes that the customer doesn’t object to the company’s use of the info unless the customer specifically chooses to deny permission. In the less common opt in approach the company collecting the info doesn’t use the info for any other purpose unless the customer specifically chooses to allow that use.

Taxation and Electronic Commerce
Firms that engage in e-commerce must comply with these multiple tax laws from their first day of existence. Income taxes are levied by national, state, and local governments on the net income generated by business activities. Transaction taxes which include sales taxes, use taxes, excise taxes, and customer duties, are levied on the products or services that the company sells or uses. Property taxes are levied by states and local governments on the personal property and real estates used in the business. Web businesses are income taxes and sales taxes.
Nexus
A government acquires the power to tax a business when that business establishes a connection with the area controlled by the government.
US Income Taxes
A basic principle of the US tax system is that any verifiable increase in a company’s wealth is subject to federal taxation. Any company whose US based web site generates income is subject to US federal income tax. A web site maintained by a company in the US must pay federal income tax on income generated by a company in the US must pay federal income tax on income generated outside of the US.
US State Sales Taxes
Businesses that establish nexus with a state must file sales tax returns and remit the sales tax they collect from their customers. If a business ships goods to customers in other states, it is not required to collect sales tax from those customers unless the business has established nexus with the customer’s state. A use tax is a tax levied by a state on property used in that state that was not purchased in that state. Larger businesses use complex software to manage their sales tax obligation. Some purchasers are exempt from sales tax, such as certain charitable organizations and businesses buying items for resale.
EU Value Added Taxes
The Value Added Tax is assessed on the amount of value added at each stage of production-is collected by the seller at each stage of the transaction. Companies based in EU countries must collect VAT on digital goods no matter where in the EU the products are sold. Non EU companies that sell into the EU must now register with EU tax authorities and levy, collect, and remit VAT if their sales include digital goods delivered into the EU.

Thursday, February 7, 2008

ch.6 Key Concept

Key Concept
This chapter discusses a new options brought on by the internet for supply chain management and procurement. It discusses a variety approaches that companies have taken with regards to obtaining materials and selling products online.

Origins of auctions
-earliest records of auctions-Babylon (500 BC)-men bid against each other for the women they wished to marry.
-Auctions became common activities in 17th century England (taverns held regular auctions of art and furniture)
-bids -price willing to pay for an item.
-private valuations- amounts bidders are willing to pay for the item
-Shill bidders-People employed by the seller or the auctioneer can make bids on behalf of the seller
-English auctions: bidders publicly announce their successive higher bids until no higher bid is forthcoming-item sold to the highest bidder. (aka ascending price auction, open auction). Minimum bid is the price at which an auction begins. If no bidders are willing to pay that price, the item is removed from the auction. A minimum acceptable price-reserve price.
-Yankee auctions: English auctions that offer multiple units of an item for sale and allow bidders to specify the quantity they want to buy. The highest bidder is allotted the quantity bid. If items remain after satisfying the highest bidder, remaining items are allocated to successive lower bidders. Successful bidders only pay the price bid by the lowest successful bidder.
-Dutch auctions: open auction in which bidding starts at a high price and drops until a bidder accepts the price – descending price auctions.
-First price sealed bid auctions: bidders submit bids independently and are prohibited from sharing info with each other and the highest bidder wins. Successive lower bidders are awarded the remaining items at the prices they bid.
-Second price sealed bid auctions: the highest bidder is awarded the item at the price bid by the second highest bidder. Encourages all bidders to bid the amount of their private valuations-vickrey auctions.
-Open outcry double auctions: buy and sell offers are shouted by traders standing in an area on the exchange floor called a trading pit.
-Sealed bid double auctions: buyers and sellers each submit combined price quantity bids to an auctioneer. The auctioneer matches the sellers’ offers to the buyers’ offers until all the quantities offered for sale are sold to buyers.
-Reverse (seller bid) auction: multiple sellers submit bids to a single buyer. The prices go down as the bidding continues until no seller is willing to bid lower.

Online Auctions and related Businesses
-General consumer auctions: most successful consumer auction today – eBay. Third party assurance provider- provide assurance that the privacy policies of the websites meet certain standards (ex: eTRUST). Sellers and buyers must register – sellers pay eBay a listing fee and a sliding percentage of the final selling price and buyers pay none to eBay. eBay is a computerized version of the English auction-allows the seller to set a reserve price. The main difference between eBay and a live English auction is that bidders don’t know who placed which bid until the auction is over. It has a minimum bid increment, amount by which one bid must exceed the previous bid. eBay offers a platform called eBay Stores within its auction site-sellers can establish eBay stores that show items for sale. Yahoo! success early in attracting large numbers of auction participants because it offered its auction service to sellers at no charge – less successful in attracting buyers, resulting in less bidding action. Amazon also added auctions to its list of products and services. Marketing tactics: Auctions Guarantee – addressed concerns raised in the media by eBay customers about being cheated by sellers.
Buyers of more expensive items can protect themselves by using a third party escrow service which holds the buyer’s payment until he or she receives and is satisfied with the purchased item.
-Specialty consumer auctions: identify special interest market targets and create specialized web auction sites.
-Consumer reverse auctions and group purchasing sites: visitor fills out a form that describes the item or service in which he or she is interested. The site then routes the visitor’s request to a group of participating merchants who reply to the visitor by email with offers to supply the item at a particular price.
-Group purchasing site – the seller posts an item with a price – as individual buyers enter bids on an item the site can negotiate a better price with the item’s provider. The posted price ultimately decreases as the number of bids increase.
-Business to business auctions: Large companies sometimes have liquidation specialists who find buyers for these unusable inventory items. Smaller businesses often sell their unusable and excess inventory to liquidation brokers, firms that find buyers for these items.
-Auction related services: growth of eBay auction sites has encouraged to create businesses that provide auction-related services of various kinds – these include escrow services, auction software and auction consignment services.
-Auction Escrow services: when purchasing high value items, buyers can use an escrow service to protect their interests. An independent party that holds a buyer’s payment until the buyer receives the purchased item and is satisfied that the item is what the seller represented it to be.
-Auction directory and info services: guidance for new auction participants and helpful hints and tips for more experienced buyers and sellers along with directories of online auction sites.
-Auction software: companies sell auction management software and services for both buyers and sellers. For sellers, these companies offer software and services that can help with or automate tasks such as image hosting, advertising, page design, bulk repeatable listings, feedback tracking and management, report tracking, and email management. For buyers, a number of companies sell auction sniping software. Sniping software observes auction progress until the last second and as the auction is about to expire, the sniping software places a bid high enough to win the auction. Auction consignment services take an item and create an online auction for that item, handle the transaction, and remit the balance of the proceeds after deducting a fee.

Wireless application protocol allows web pages formatted in HTML to be displayed on devices with small screens, such as PDAs and mobile phones.
Mobile Business-Revenue models for mobile business can be developed once mobile phones, notebook computers with wireless internet connections, and online marketplaces are interconnected in ways that let people switch among modes of access seamlessly. Intelligent Software Agents–programs that search the web and find items for sale that meet a buyer’s specifications. Simon is one of the best shopping agents currently available.
Virtual Communities-gathering place for people and businesses that doesn’t have a physical existence. Various forms, including Usenet newsgroups, chat rooms, and websites – offer people a way to connect with each other and discuss common issues and interests. Virtual learning community (ex: WebCT).
Early web communities-one of the first web communities was the WELL-whole earth electronic links – series of dialogs– members pay a monthly fee to participate in its forums and conferences.
Web Community Consolidation-virtual communities for consumers can succeed as money making propositions if they offer something sufficiently valuable to justify a charge for membership.
-Web log: websites that contain commentary on current events or specific issues written by individuals. Most of the early blogs were focused on technology topics or on topics about which people have strong beliefs (political or religious issues).
-Social networking websites: sole purpose of community-useful tools for persons who want to make new local friends, established acquaintances before moving to a new location, obtain advice of various kinds, or who are looking for a job.
-Idea Based Virtual Communities: Other web sites create communities based on the connections between ideas.
- Revenue Models for Web Portals and Virtual Communities-by the late 1990s, virtual communities were selling advertising to generate revenue. Beginning in 1998, a wave of purchases and mergers occurred among these sites- emerged still used an advertising only revenue generation model and included all the features offered by virtual community sites, search engine sites, web directories, and other info providing and entertainment sites.
-Advertising supported web portals and virtual communities: because web portals ask their members to provide demographic info about themselves, the potential for targeted marketing is very high. Second wave portal strategies are based less on up front site sponsorship payments and more on the generation of revenues from continuing relationships with people who use their portal sites. The larger portals that have survived are turning to mixed models.
- Monetizing refers to the conversion of existing regular site visitors seeking free info or services info fee paying subscribers or purchasers of services.
-Internal web portals and virtual communities: growing number of large organizations have built web portals to provide info to their employees. Internal web portals run on the intranet – save significant amounts of money by replacing the printing and distribution of paper memos, newsletters, and other correspondence with a web site.

Application
Hedgehog is an online company that works with e-procurement. It develops industry specific auctions and exchanges. It is a company that helps bring suppliers and buyers together and offers a variety of auctions such as: multi-format reverse auctions, Dutch auctions, and sealed bid auctions. In addition, the company provides information for businesses interested in being involved in auctions.

Wednesday, February 6, 2008

Ch. 5 - Key Concept

Key Concept:
This chapter talks about the buying and selling between businesses online. It discusses the processes for managing the purchasing of materials, managing of inventory, creating and maintaining supplier relationships, and the production of end products. It also looks at how these areas are affected by the changes in technology and the growth of the internet.

Purchasing, logistics, and support activities
-Necessary characteristic of purchasing, logistics, and support activities is flexibility
Purchasing Activities
-Include identifying vendors, evaluating vendors, selecting specific products, placing orders, and resolving any issues (late deliveries, incorrect quantities, incorrect items, and defective items)
-Supply chain- all activities in the value chain to design, produce, promote, deliver, and support each component of a product
-Procurement includes all purchasing activities, plus the monitoring of all elements of purchase transactions-managing and developing relationship with key suppliers (supply management)
-Sourcing: identifying suppliers and determining the qualifications of those suppliers (e-sourcing) – specialized web purchasing sites
-Spend –the total dollar amount of the goods and services that a company buys during a year
-Direct materials are materials that become part of the finished product in a manufacturing process. Two types: Replenishment purchasing: (company negotiates long term contracts for most of the materials that it will need), spot market/spot purchasing (purchasing based excess demand)
-Indirect materials: are all other materials that the company purchases, including factory supplies such as sandpaper, hand tools, and replacement parts for manufacturing machinery.
-Logistics- objective to provide the right goods in the right quantities in the right place at the right time. The management of materials as they go from the raw materials through production to become finished goods is important to logistics.
-Knowledge management is the intentional collection, classification, and dissemination of info about a company, its products, and its processes. This type of knowledge is developed over time buy individuals working with a company (difficult to gather and distill).
E-Government-operate businesslike activities-employ people, buy supplies from vendors, and distribute benefit payments of many kinds. They also collect a variety of taxes and fees from their constituents
Network model of economic organization- shift from hierarchical structures towards network structures. More organizations are now giving their Procurement Departments new tools to negotiate with suppliers, including the possibility of forming strategic alliances. Supply web- networks are more flexible and can respond to changes in the economic environment more quickly

Electronic Data interchange
-Electronic data interchange is a computer to computer transfer of business info between two businesses that uses a standard format. -The business info exchanged is often transaction data but can include other info like price quotes and order status inquires.
-Emergence of large businesses in the late 1800s and early 1900s brought the need to create formal records of business transactions.
-1950s: companies began to use computers to store and process internal transaction records, but the info flow between businesses continued to be printed on paper
-1960s: exchanging transaction info on punched cards or magnetic tape.
-1960s and 1970s: Advances in data communications technology -trading partners to transfer data over telephone lines
-1968: freight and shipping companies joined together to form the Transportation Data Coordinating Committee which was charged with exploring ways to reduce paperwork. It created a standardized info set that included all the data elements commonly used.
-a set of cross industry standards for electronic components, mechanical equipment, and other widely used items was created- American National Standards Institute.
-1979: ANSI chartered a new committee to develop uniform EDI standards. This committee is called the Accredited Standards Committee X12 – the administrative body-Data Interchange Standards Association (DISA)
- mid 1980s-the United Nations Economic Commission and EDI experts worked on designing a common set of EDI standards
-1987: UN published its first standards under the title EDI for Administration, Commerce, and Transport

Value added networks
-Trading partners can implement the EDI network and EDI translation processes using one of two basic approaches:
-Direct connection EDI: requires each business in the network to operate its own on site EDI translator computer – connected directly to each other using modems and dial up telephone lines or dedicated leased lines – troublesome when located in different time zones and when transactions are time-sensitive or high in volume. The dedicated leased line option can become very expensive. -a company might decide to use the services of a value added network. A company that provides communications equipment, software, and skills needed to receive, store, and forward electronic messages that contain EDI transaction sets-a company must install EDI translator software that is compatible with the VAN. To send an EDI transaction set to a trading partner, the VAN customer connects to the VAN using a dedicated or dial up telephone line and then forwards the DEI formatted messages to the VAN. The VAN logs the message and delivers it to the trading partner’s mailbox on the VAN computer. The trading partner then dials in to the VAN and retrieves its EDI formatted messages from the mailbox-indirect connection EDI

EDI on the Internet
-The major roadblocks to conducting EDI over the internet were concerns about security and inability to provide audit logs and third party verification. As the TCP/IP structure of the internet was enhanced with secure protocols less worry of security issues.
-Nonrepudiation is the ability to establish that a particular transaction actually occurred
Open Architecture of the Internet
-Mid 1990s-a number of firms began providing EDI services on the internet. Companies that originally provided traditional VAN services now offer EDI on the internet
-Context Inspired Component Architecture –a set of standards for assembling business messages that provides a predictable structure for the content of those messages but that also provides more flexibility than EDI transaction sets.
Financial EDI
-The EDI transaction sets that provide instructions to a trading partner’s bank. When EFT’s involve two banks, they are executed using an automated clearing house system-which is a service that banks use to manage their accounts with each other. EDI capable banks are banks that are equipped to exchange payment and remittance data through VAN services for nonfinancial transactions-value added banks. Non bank VANs that can translate financial transaction sets into ACH formats and transmit them to banks that aren’t EDI capable are called financial VANS

Supply Chain Management using Internet technologies
-When companies integrate their supply management and logistics activities across multiple participants in a particular product’s supply chain, the job of managing that integration is called supply chain management
-Businesses establish long term relationships with a small number of very capable suppliers called tier one suppliers, in turn develop long term relationship with a large number of suppliers that provide components and raw materials to them. These tier two suppliers manage relationships with the next level of suppliers, tier three suppliers-that provide them with components and raw materials. The long term relationships à supply alliances
-Clear communications and quick responses to those communications are key elements of successful supply chain management. The only major disadvantage of using Internet technologies in supply chain management is the cost of the technologies.

Using Materials-tracking technologies with EDI and E-commerce
-Companies have been using optical scanners and bar codes to track the movement of materials
-Bar codes allow companies to scan materials as they are received and track them as they move
-Second wave of e-commerce-radio frequency identification devices -small chips that use radio transmissions to track inventory
-Main goals of supply chain management is to help each company in the chain focus on meeting the needs of the consumer at the end of the supply chain-ultimate consumer orientation
-The task of developing info exchange resources that can provide supplier performance summaries is one of the great challenges that B2B electronic commerce faces as it moves into its second wave

Electronic Marketplaces and portals
- info hubs for each major industry-would offer news, research reports, analyses of trends, and in depth reports on companies in the industry-offer marketplaces and auctions in which companies in the industry could contact each other and transact businesses, hubs would be vertically integrated called vertical portals/vortals-didn’t turn out to be exactly correct
Independent industry marketplaces
-The first company to launch hubs that followed the vertical portal model created trading exchanges that were focused on a particular industry- industry marketplaces (focused on a single industry, independent exchanges (not controlled by a company that was an established buyer or seller in the industry), public marketplaces (open to new buyers and sellers just entering the industry). Collectively à independent industry marketplaces
Private stores and customer portals
-As established companies in various industries watched new businesses open marketplaces, they became concerned that these independent operators would take control of transactions from them in supply chains.
-A private store has a password-protected entrances and offers negotiated price reductions on a limited selection of products-usually those that the customer has agreed to purchase in certain minimum quantities.
-Customer portal sites offer private stores along with services such as part number cross referencing, product usage guidelines, safety info, and other services that would be needlessly duplicated if the sellers were to participate in an industry marketplace.
Private company marketplaces
-E-procurement software allows a company to manage its purchasing function through a web interface. It automates many of the authorizations and other steps that are part of business procurement operations
-Include requests for quote posting areas, auctions, and integrated support for purchasing direct materials
-Companies that implement e-procurement software usually requires their suppliers to bid on their business
Industry consortia-sponsored marketplaces
-An industry consortia-sponsored marketplace is a marketplace formed by several large buyers in a particular industry
Five general forms of marketplaces that exist in B2B electronic commerce today:
-Private stores on sellers’ sites: one seller, many buyers, ex: Dell, few products, fixed pricing
-Customer portals: few sellers, many buyers, ex: Grainger, catalog based, fixed pricing
-Independent industry marketplaces: many sellers, many buyers, ex: ChemConnect, offer auctions, dynamic pricing
-Consortia sponsored marketplaces: few buyers, many sellers, Ex: Exostar, buyer control, fixed pricing
-Private company marketplaces: one buyer, many sellers, Ex: Harley Davidson, sellers bid on major buyers’ business

Application
Walmart at one time used a VAN intermediary to help manage the numerous suppliers the company has around the world. With the growth on the internet, Walmart moved online to internet EDI to help communicate with its suppliers, better manage its inventories, and increase its efficiency while reducing costs. In addition, Walmart deals with many small companies. These small companies can better afford the internet EDI system and compete with the many large companies supplying to Walmart.