A WEB APPLICANTION FOR THE TOURISM INDUSTRY IN HANOI by Dinh Huu Son

A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration

A WEB APPLICANTION FOR THE TOURISM INDUSTRY IN HANOI

by

Dinh Huu Son

A research study submitted in partial fulfillment of the requirements for the degree of Master

Hanoi Construction CollegeHanoi, Vietnam

Asian Institute of TechnologySchool of ManagementBangkok, Thai landApril, 2001

I would like to express my sincere thankfulness to my research advisor Dr Bechter Clemensfor his invaluable advice and encouragement through out the research work I also highlyappreciate the research examination of Dr Truong Quang and Dr Hans Stoessel as well astheir helpful and innovative ideas to enhance the value of the research

Now that I have finished the application, it’s time to stop for a moment to reflect andacknowledge those people who have made this research possible and successful

First of all, the most important thanks is due to Dr Hans Stoessel and others in SwissVietnam AIT Management Development Program and Swiss Government who gave financialsupport to my study in AIT

When I think of one-year period living in AIT, I can not help but think of my family for theirsupport and encouragement through my study in terms of both finance and mentality

I would like to express the deepest thanks and appreciation to my closest friend for herencouragement, to my sister for her help in the survey Special words go to Mr Do MinhPhuong for his valuable ideas to my program

Finally, special thanks go to my classmates, those with I have been having great lives together

in AIT

This research is carried so that the reality of tourism industry in Hanoi is understood.Several scopes such as banking, internet service etc will be assessed Most importantly, aqualitative survey is carried out to understand what tourists and foreigners who livepermanently expect from a website for tourism purpose Another qualitative survey ofmanagers and officials of tourism industry is done to uncover their thinking towardsInternet What are their current problems of not launching internet as a competitiveweapon

From the problems of “customers” and those of “suppliers”, we come to a solution of how

to solve the conflict An application (website) is created as the illustration of the solution.The business model can not be a perfect solution Yet, it is worth looking at it so thatfurther innovative ideas can follow

Table of Contents

1 1 INTRODUCTION 1

1.1 B ACKGROUND 1

1.1.1 Tourism industry in Vietnam 1

1.1.2 Internet in Vietnam 1

1.1.3 Level of participating in E-commerce of tourism companies 1

1.1.4 Hanoi 1

1.2 P ROBLEM STATEMENT 2

1.3 O BJECTIVES OF STUDY 2

1.4 S COPE OF STUDY 2

1.5 M ETHODOLOGY 2

1.5.1 Survey methodology 2

1.5.2 Web development tools/languages 3

1.6 L IMITATIONS OF THE RESEARCH 3

1.7 O RGANIZATION OF THE RESEARCH 3

2 2 LITERATURE REVIEW 5

2.1 I NTERNET HISTORY 5

2.2 C OMMERCE 10

2.3 I NTERNET E- COMMERCE OVERVIEW 12

2.4 B ENEFITS OF I NTERNET FOR E- COMMERCE 13

2.5 T RADING ENVIRONMENT 14

2.6 A PPLICATIONS OF E- COMMERCE 18

2.7 L EVELS OF INTERNET EXPLOITATION 18

2.8 T OWARDS E- PAYMENTS 19

2.8.1 Conventional Payment Mechanisms 19

2.8.2 Electronic Payment Mechanisms 20

2.9 I NTERNET IN V IETNAM 21

2.10 H ANOI 21

2.10.1 Geographical 30

2.10.2 Tourist Potential 31

2.10.3 Hanoi – Point of Departure to neighboring regions 32

2.10.4 The development of Hanoi tourism industry in recent years 35

2.11 O VERVIEW OF L ANGUAGES AND T OOLS USED FOR THE APPLICATION 21

2.11.1 Hyper text markup language (html) 21

2.11.2 Active server pages (asp) 22

2.11.3 Javascript 22

2.11.4 Microsoft access 23

2.11.5 Dreamweaver 4.0 23

2.11.6 Dreamweaver UltraDev 24

2.11.7 Photoshop 24

2.11.8 Fireworks 24

3 3 NEEDED FEATURES OF A WEB-SITE FOR TOURISTS AND PERMANENT INVESTORS (SURVEY FINDINGS) 25

3.1 S URVEY M ETHODOLOGY 37

3.2 S URVEY R ESULTS ( TOURISTS AND LONG - TERM INVESTORS ) 37

3.3 S URVEY R ESULTS ( OFFICIALS IN TOURISM INDUSTRY IN H ANOI ) 39

3.3.1 Infrastructure preparation 40

3.3.2 Web site promotion 40

3.3.3 The method of payment through network trading 40

4 4 WEB DEVELOPMENT 44

4.1 R ATIONALE 44

4.1.1 Service and normal features of a website 44

4.1.2 Hotel Booking 45

4.2 W EB DESIGN 45

5 5 CONCLUSION AND RECOMMENDATIONS 47

5.1 T HE ROLE OF E- COMMERCE FOR H ANOI TOURISM INDUSTRY 47

5.2 L EVEL OF PARTICIPATING IN E- COMMERCE OF TOURISM COMPANIES IN H ANOI 47

5.3 R ECOMMENDATIONS 47

5.4 D IRECTION FOR FURTHER RESEARCH 48

Chapter 1

1 Introduction

1.1 Background

1.1.1 Tourism industry in Vietnam

In developing countries, tourism industry is often one of the important most industries thatattract large amounts of hard currencies from more developed countries On the way ofdevelopment, VN is no exception In early 1990s to the mid of the decade, the number oftourists coming to Vietnam increased by 30 percents However, there was a decline of 10percent from 1997 to 1999 There are several causes that are clear:

in region Low quality service could be found everywhere

other currencies in the region, making it expensive to go to Vietnam

Yet, tourism industry is coming back to be attractive in the year 2000 with the number oftourists increased by 15 percent.1

1.1.2 Internet in Vietnam

Internet network was launched in December 1997 There has been 5 ISP so far includingVNPT/VDC, FPT, Saigon Postel, Netnam and Vietel The number of ICP is 15 providingmainly public medium of the Internet The number of Internet users is growing fastincluding both individual users and enterprise side With the amazing development oftelephone, internet has been, is and is going to be a vital means of communication, ofresource exchanging and most importantly, of doing business in Vietnam

1.1.3 Level of participating in E-commerce of tourism companies

At the current, there are some reasons that make the Internet unattractive to the tourismcompanies as lacking information and technical skill As the result of unawareness of theopportunities from the Internet, the level of utilization of the new media stayed at the emailand some advertisement with low information content from companies’ websites But whatforeigners want is not provided Foreigners want to see concrete information referring tothe location, means of traveling, hotel booking, boat renting etc But these kinds ofwebsites just reveal mere information describing how beautiful the destination is.Therefore, the aid created by website establishment by tourism companies contribute littlehelp to the development of the tourism industry in Vietnam

1 http://www.vietnamtourism.com

1.1.4 Hanoi

Hanoi is the capital of Vietnam It is the second biggest city of the country, behindHochiminh City in terms of size With the advantage that it is the place where thegovernment locates, Hanoi is the destination for many investors who are ambitiouslyseeking opportunities to make money Besides, it is very famous for its rich culture withmany historical and historic places as well as for its tranquil scenery… As the result, moreand more foreigners are coming to Hanoi for the purpose not only of visiting but also ofliving permanently It has another advantage to attract tourists It is the location advantage.Due to the fact that there is only international airport, which is Noibai airport, in the North

of Vietnam So, every tourist wanting to visit beautiful scenes in the North of Vietnam has

to visit this airport and Hanoi is the first city to stop by after going out of the airport Thoseadvantages above do make Hanoi an attractive place for an investment in the tourismindustry

1.2 Problem statement

When surveying websites about Hanoi, I found that there are several websites But notenough information is provided The contents of those websites are advertising oriented.There are no websites to bring an over view of Hanoi but at the same time to give detailsabout a large number of various services that can satisfy the needs of not only a fastidioustourist but also a permanently staying foreign investor

1.3 Objectives of study

and lives of tourists and those who stay permanently

historical places, entertainment locations (in Hotel category, list all big hotels withnumber of rooms, room rates, address, etc.)

short-time tourists and permanent investors

1.4 Scope of study

The research/project mainly focuses on tourism industry in Hanoi Survey is done tounderstand the most important needs of tourists/ investors Then, another intensive survey

is carried out to see what is available in Hanoi Matching demand with supply is achieved

by the creation of a Website that provides information about Hanoi such as informationabout historic places, hotels, restaurants, discotheques, supermarkets etc More importantly,the website makes it possible for visitors to book online some of those services

1.5 Methodology

1.5.1 Survey methodology

An in-depth pilot interview is carried out first to understand general needs of a typical time tourist and a typical permanent investor There are 15 in each category to beinterviewed So, there should be a total number of 30 people to take part in this study Allthese people are selected arbitrarily

short-For understanding services available in Hanoi, secondary data is best Sources ofinformation can be taken from magazines, newspapers and the yellow book Informationfrom pilot interview may be useful for this part However, it is necessary to validate all thisinformation by contacting directly by telephone and site-surveying

Further, I carried out a small qualitative survey of officials in the tourism industry in Hanoi.The sample size is only 15 As mentioned above, the sample size for qualitative work isusually small because we do not need to have too accurate result while spending lots oftime

1.5.2 Web development tools/languages

There are several tools/languages used in the website development Here is the list of most

of them More are added later

1.6 Limitations of the research

The research is application oriented Therefore, it can not avoid several setbacks

present the needs of the whole population coming and living in Hanoi

 The application developed may not be used to the full extent for other locations.Modifications should be made as the result

 The use or the outcome of the application is hindered by the difficult Internetaccessibility, low speed of information transmission, and the high Internet use price

convenient to provide a website with the customers interface and another interface forservice suppliers to update their own database So, there is no immediate link from theapplication’s database and the database of the suppliers

1.7 Organization of the research

 Introduction

 Literature review

Internet

E-commerce

Tourism industry in Hanoi

Tools and languages

 Needed features of a website for tourists and permanent investors (Survey findings)

 Website development

 Conclusion and recommendations

The Internet today is a widespread information infrastructure, the initial prototype of what isoften called the National (or Global or Galactic) Information Infrastructure Its history iscomplex and involves many aspects - technological, organizational, and community And itsinfluence reaches not only to the technical fields of computer communications butthroughout society as we move toward increasing use of online tools to accomplishelectronic commerce, information acquisition, and community operations Now, lets goback step by step to the history of internet.

The first recorded description of the social interactions that could be enabled throughnetworking was a series of memos written by J.C.R Licklider of MIT in August 1962discussing his "Galactic Network" concept He envisioned a globally interconnected set ofcomputers through which everyone could quickly access data and programs from any site

In spirit, the concept was very much like the Internet of today Licklider was the first head

of the computer research program at DARPA, starting in October 1962 While at DARPA

he convinced his successors at DARPA, Ivan Sutherland, Bob Taylor, and MIT researcherLawrence G Roberts, of the importance of this networking concept

Leonard Kleinrock at MIT published the first paper on packet switching theory in July 1961and the first book on the subject in 1964 Kleinrock convinced Roberts of the theoreticalfeasibility of communications using packets rather than circuits, which was a major stepalong the path towards computer networking The other key step was to make the computerstalk together To explore this, in 1965 working with Thomas Merrill, Roberts connected the

TX-2 computer in Mass to the Q-32 in California with a low speed dial-up telephone linecreating the first (however small) wide-area computer network ever built The result of thisexperiment was the realization that the time-shared computers could work well together,running programs and retrieving data as necessary on the remote machine, but that thecircuit switched telephone system was totally inadequate for the job Kleinrock's conviction

of the need for packet switching was confirmed

In late 1966 Roberts went to DARPA to develop the computer network concept and quicklyput together his plan for the "ARPANET", publishing it in 1967 At the conference where

he presented the paper, there was also a paper on a packet network concept from the UK byDonald Davies and Roger Scantlebury of NPL Scantlebury told Roberts about the NPLwork as well as that of Paul Baran and others at RAND The RAND group had written apaper on packet switching networks for secure voice in the military in 1964 It happenedthat the work at MIT (1961-1967), at RAND (1962-1965), and at NPL (1964-1967) had allproceeded in parallel without any of the researchers knowing about the other work Theword "packet" was adopted from the work at NPL and the proposed line speed to be used inthe ARPANET design was upgraded from 2.4 kbps to 50 kbps

In August 1968, after Roberts and the DARPA funded community had refined the overallstructure and specifications for the ARPANET, an RFQ was released by DARPA for thedevelopment of one of the key components, the packet switches called Interface MessageProcessors (IMP's) The RFQ was won in December 1968 by a group headed by FrankHeart at Bolt Beranek and Newman (BBN) As the BBN team worked on the IMP's withBob Kahn playing a major role in the overall ARPANET architectural design, the networktopology and economics were designed and optimized by Roberts working with HowardFrank and his team at Network Analysis Corporation, and the network measurement systemwas prepared by Kleinrock's team at UCLA

Due to Kleinrock's early development of packet switching theory and his focus on analysis,design and measurement, his Network Measurement Center at UCLA was selected to be thefirst node on the ARPANET All this came together in September 1969 when BBN installedthe first IMP at UCLA and the first host computer was connected Doug Engelbart's project

on "Augmentation of Human Intellect" (which included NLS, an early hypertext system) atStanford Research Institute (SRI) provided a second node SRI supported the NetworkInformation Center, led by Elizabeth (Jake) Feinler and including functions such asmaintaining tables of host name to address mapping as well as a directory of the RFC's Onemonth later, when SRI was connected to the ARPANET, the first host-to-host message wassent from Kleinrock's laboratory to SRI Two more nodes were added at UC Santa Barbaraand University of Utah These last two nodes incorporated application visualizationprojects, with Glen Culler and Burton Fried at UCSB investigating methods for display ofmathematical functions using storage displays to deal with the problem of refresh over thenet, and Robert Taylor and Ivan Sutherland at Utah investigating methods of 3-Drepresentations over the net Thus, by the end of 1969, four host computers were connectedtogether into the initial ARPANET, and the budding Internet was off the ground Even atthis early stage, it should be noted that the networking research incorporated both work on

the underlying network and work on how to utilize the network This tradition continues tothis day.

Computers were added quickly to the ARPANET during the following years, and workproceeded on completing a functionally complete Host-to-Host protocol and other networksoftware In December 1970 the Network Working Group (NWG) working under S.Crocker finished the initial ARPANET Host-to-Host protocol, called the Network ControlProtocol (NCP) As the ARPANET sites completed implementing NCP during the period1971-1972, the network users finally could begin to develop applications

In October 1972 Kahn organized a large, very successful demonstration of the ARPANET

at the International Computer Communication Conference (ICCC) This was the first publicdemonstration of this new network technology to the public It was also in 1972 that theinitial "hot" application, electronic mail, was introduced In March Ray Tomlinson at BBNwrote the basic email message send and read software, motivated by the need of theARPANET developers for an easy coordination mechanism In July, Roberts expanded itsutility by writing the first email utility program to list, selectively read, file, forward, andrespond to messages From there email took off as the largest network application for over adecade This was a harbinger of the kind of activity we see on the World Wide Web today,namely, the enormous growth of all kinds of "people-to-people" traffic

The original ARPANET grew into the Internet Internet was based on the idea that therewould be multiple independent networks of rather arbitrary design, beginning with theARPANET as the pioneering packet switching network, but soon to include packet satellitenetworks, ground-based packet radio networks and other networks The Internet as we nowknow it embodies a key underlying technical idea, namely that of open architecturenetworking In this approach, the choice of any individual network technology was notdictated by a particular network architecture but rather could be selected freely by aprovider and made to interwork with the other networks through a meta-level

"Internetworking Architecture" Up until that time there was only one general method forfederating networks This was the traditional circuit switching method where networkswould interconnect at the circuit level, passing individual bits on a synchronous basis along

a portion of an end-to-end circuit between a pair of end locations Recall that Kleinrock hadshown in 1961 that packet switching was a more efficient switching method Along withpacket switching, special purpose interconnection arrangements between networks wereanother possibility While there were other limited ways to interconnect different networks,

they required that one be used as a component of the other, rather than acting as a peer of

the other in offering end-to-end service

In an open-architecture network, the individual networks may be separately designed anddeveloped and each may have its own unique interface which it may offer to users and/orother providers including other Internet providers Each network can be designed inaccordance with the specific environment and user requirements of that network There aregenerally no constraints on the types of network that can be included or on their geographicscope, although certain pragmatic considerations will dictate what makes sense to offer

The idea of open-architecture networking was first introduced by Kahn shortly after havingarrived at DARPA in 1972 This work was originally part of the packet radio program, butsubsequently became a separate program in its own right At the time, the program wascalled "Internetting" Key to making the packet radio system work was a reliable end-endprotocol that could maintain effective communication in the face of jamming and otherradio interference, or withstand intermittent blackout such as caused by being in a tunnel orblocked by the local terrain Kahn first contemplated developing a protocol local only to thepacket radio network, since that would avoid having to deal with the multitude of differentoperating systems, and continuing to use NCP.

However, NCP did not have the ability to address networks (and machines) furtherdownstream than a destination IMP on the ARPANET and thus some change to NCP wouldalso be required (The assumption was that the ARPANET was not changeable in thisregard) NCP relied on ARPANET to provide end-to-end reliability If any packets werelost, the protocol (and presumably any applications it supported) would come to a grindinghalt In this model NCP had no end-end host error control, since the ARPANET was to bethe only network in existence and it would be so reliable that no error control would berequired on the part of the hosts

Thus, Kahn decided to develop a new version of the protocol which could meet the needs of

an open-architecture network environment This protocol would eventually be called theTransmission Control Protocol/Internet Protocol (TCP/IP) While NCP tended to act like adevice driver, the new protocol would be more like a communications protocol

Kahn began work on a communications-oriented set of operating system principles while atBBN and documented some of his early thoughts in an internal BBN memorandum entitled

"Communications Principles for Operating Systems" At this point he realized it would benecessary to learn the implementation details of each operating system to have a chance toembed any new protocols in an efficient way Thus, in the spring of 1973, after starting theinternetting effort, he asked Vint Cerf (then at Stanford) to work with him on the detaileddesign of the protocol Cerf had been intimately involved in the original NCP design anddevelopment and already had the knowledge about interfacing to existing operating systems

So armed with Kahn's architectural approach to the communications side and with Cerf'sNCP experience, they teamed up to spell out the details of what became TCP/IP

The give and take was highly productive and the first written version of the resultingapproach was distributed at a special meeting of the International Network Working Group(INWG) which had been set up at a conference at Sussex University in September 1973.Cerf had been invited to chair this group and used the occasion to hold a meeting of INWGmembers who were heavily represented at the Sussex Conference

The original Cerf/Kahn paper on the Internet described one protocol, called TCP, whichprovided all the transport and forwarding services in the Internet Kahn had intended thatthe TCP protocol support a range of transport services, from the totally reliable sequenced

delivery of data (virtual circuit model) to a datagram service in which the application made

direct use of the underlying network service, which might imply occasional lost, corrupted

or reordered packets

However, the initial effort to implement TCP resulted in a version that only allowed forvirtual circuits This model worked fine for file transfer and remote login applications, butsome of the early work on advanced network applications, in particular packet voice in the1970s, made clear that in some cases packet losses should not be corrected by TCP, butshould be left to the application to deal with This led to a reorganization of the originalTCP into two protocols, the simple IP which provided only for addressing and forwarding

of individual packets, and the separate TCP, which was concerned with service featuressuch as flow control and recovery from lost packets For those applications that did not wantthe services of TCP, an alternative called the User Datagram Protocol (UDP) was added inorder to provide direct access to the basic service of IP

The early implementations of TCP were done for large time sharing systems such as Tenexand TOPS 20 When desktop computers first appeared, it was thought by some that TCPwas too big and complex to run on a personal computer David Clark and his research group

at MIT set out to show that a compact and simple implementation of TCP was possible.They produced an implementation, first for the Xerox Alto (the early personal workstationdeveloped at Xerox PARC) and then for the IBM PC That implementation was fullyinteroperable with other TCPs, but was tailored to the application suite and performanceobjectives of the personal computer, and showed that workstations, as well as large time-sharing systems, could be a part of the Internet In 1976, Kleinrock published the first book

on the ARPANET It included an emphasis on the complexity of protocols and the pitfallsthey often introduce This book was influential in spreading the lore of packet switchingnetworks to a very wide community

Widespread development of LANS, PCs and workstations in the 1980s allowed the nascentInternet to flourish Ethernet technology, developed by Bob Metcalfe at Xerox PARC in

1973, is now probably the dominant network technology in the Internet and PCs andworkstations the dominant computers This change from having a few networks with amodest number of time-shared hosts (the original ARPANET model) to having manynetworks has resulted in a number of new concepts and changes to the underlyingtechnology First, it resulted in the definition of three network classes (A, B, and C) toaccommodate the range of networks Class A represented large national scale networks(small number of networks with large numbers of hosts); Class B represented regional scalenetworks; and Class C represented local area networks (large number of networks withrelatively few hosts)

A major shift occurred as a result of the increase in scale of the Internet and its associatedmanagement issues To make it easy for people to use the network, hosts were assignednames, so that it was not necessary to remember the numeric addresses Originally, therewere a fairly limited number of hosts, so it was feasible to maintain a single table of all thehosts and their associated names and addresses The shift to having a large number ofindependently managed networks (e.g., LANs) meant that having a single table of hosts was

no longer feasible, and the Domain Name System (DNS) was invented by Paul Mockapetris

of USC/ISI The DNS permitted a scalable distributed mechanism for resolving hierarchicalhost names (e.g www.acm.org) into an Internet address

The increase in the size of the Internet also challenged the capabilities of the routers.Originally, there was a single distributed algorithm for routing that was implementeduniformly by all the routers in the Internet As the number of networks in the Internetexploded, this initial design could not expand as necessary, so it was replaced by ahierarchical model of routing, with an Interior Gateway Protocol (IGP) used inside eachregion of the Internet, and an Exterior Gateway Protocol (EGP) used to tie the regionstogether This design permitted different regions to use a different IGP, so that differentrequirements for cost, rapid reconfiguration, robustness and scale could be accommodated.Not only the routing algorithm, but the size of the addressing tables, stressed the capacity ofthe routers New approaches for address aggregation, in particular classless inter-domainrouting (CIDR), have recently been introduced to control the size of router tables

As the Internet evolved, one of the major challenges was how to propagate the changes tothe software, particularly the host software DARPA supported UC Berkeley to investigatemodifications to the Unix operating system, including incorporating TCP/IP developed atBBN Although Berkeley later rewrote the BBN code to more efficiently fit into the Unixsystem and kernel, the incorporation of TCP/IP into the Unix BSD system releases proved

to be a critical element in dispersion of the protocols to the research community Much ofthe CS research community began to use Unix BSD for their day-to-day computingenvironment Looking back, the strategy of incorporating Internet protocols into a supportedoperating system for the research community was one of the key elements in the successfulwidespread adoption of the Internet

One of the more interesting challenges was the transition of the ARPANET host protocolfrom NCP to TCP/IP as of January 1, 1983 This was a "flag-day" style transition, requiringall hosts to convert simultaneously or be left having to communicate via rather ad-hocmechanisms This transition was carefully planned within the community over several yearsbefore it actually took place and went surprisingly smoothly (but resulted in a distribution ofbuttons saying "I survived the TCP/IP transition")

TCP/IP was adopted as a defense standard three years earlier in 1980 This enabled defense

to begin sharing in the DARPA Internet technology base and led directly to the eventualpartitioning of the military and non- military communities By 1983, ARPANET was beingused by a significant number of defense R&D and operational organizations The transition

of ARPANET from NCP to TCP/IP permitted it to be split into a MILNET supportingoperational requirements and an ARPANET supporting research needs

Thus, by 1985, Internet was already well established as a technology supporting a broadcommunity of researchers and developers, and was beginning to be used by othercommunities for daily computer communications Electronic mail was being used broadlyacross several communities, often with different systems, but interconnection between

different mail systems was demonstrating the utility of broad based electroniccommunications between people.

The recent development and widespread deployment of the World Wide Web has broughtwith it a new community, as many of the people working on the WWW have not thought ofthemselves as primarily network researchers and developers A new coordinationorganization was formed, the World Wide Web Consortium (W3C) Initially led from MIT'sLaboratory for Computer Science by Tim Berners-Lee (the inventor of the WWW) and AlVezza, W3C has taken on the responsibility for evolving the various protocols and standardsassociated with the Web

Thus, through the over two decades of Internet activity, we have seen a steady evolution oforganizational structures designed to support and facilitate an ever-increasing communityworking collaboratively on Internet issues

2.1.2 Commerce

The meaning of commerce as follows:

Commerce n [MF, fr L commercium, fr com- + merc-, merx merchandise] (1537)

 The exchange or buying and selling of commodities on a large scale involvingtransportation from place to place

The commerce is, quite simply, the exchange of goods and services, usually for money Wesee commerce all around us in in millions of different forms When you buy something at agrocery store or at Wal-mart you are participating in commerce In the same way, if you carthalf of your possessions onto your front lawn for a yard sale, you are participating incommerce from a different angle If you go to work each day for a company that produces aproduct, that is yet another link in the chain of commerce

When you think about commerce in these different ways, you instinctively recognize severaldifferent roles:

Buyers, these are people with money who want to purchase a good or service.

Sellers, these are the people who offer goods and services to buyers Sellers are generally

recognized in two different forms: retailers who sell directly to consumers and wholesalers

or distributors who sell to retailers and other businesses

Producers, these are the people who create the products and services that sellers offer to

buyers A producer is always, by necessity, a seller as well

The producer sells the products produced to wholesalers, retailers or directly to theconsumer You can see that at this high level, commerce is a fairly simple concept! Whether

it is something as simple as a person making and selling popcorn on a street corner or as

complex as a contractor delivering a space shuttle to NASA, all of commerce at its simplestlevel relies on buyers, sellers and producers.

When you get down to the actual elements of commerce and commercial transactions,things get slightly more complicated because you have to deal with the details However,these details boil down to a finite number of steps The following list highlights all of the

elements of a typical commerce activity In this case, the activity is the sale of some product

by a retailer to a customer:

If you would like to sell something to a customer, at the very core of the matter is thesomething itself You must have a product or service to offer The product can be anythingfrom ball bearings to back rubs You may get your products directly from a producer, or you

might go through a distributor to get them, or you may produce the products yourself.

You must also have a place from which to sell your products Place can sometimes be veryephemeral - for example a phone number might be the place If you are a customer in need

of a back rub, if you call "Judy's Backrubs, Inc." on the telephone to order a back rub, and ifJudy shows up at your office to give you a backrub, then the phone number is the placewhere you purchased this service For most physical products we tend to think of the place

as a store or shop of some sort But if you think about it a bit more you realize that the placefor any traditional mail order company is the combination of an address or a catalog and aphone number or a mail box

You need to figure out a way to get people to come to your place This process is known as

marketing If no one knows that your place exists, you will never sell anything Locating

your place in a busy shopping center is one way to get traffic Sending out a mail ordercatalog is another

There is also advertising, word of mouth and even the guy in a chicken suit who stands by

the road waving at passing cars! You need a way to accept orders At Wal-mart this ishandled by the check out line In a mail order company the orders come in by mail or phoneand are processed by employees of the company You also need a way to accept money If

you are at Wal-mart you know that you can use cash, check or credit cards to pay for

products

Business-to-business transactions often use purchase orders Many businesses do not requireyou to pay for the product or service at the time of delivery, and some products and servicesare delivered continuously (water, power, phone and pagers are like this) That gets into thewhole area of billing and collections

You need a way to deliver the product or service, often known as fulfillment At a store likeWal-mart fulfillment is automatic The customer picks up the item of desire, pays for it andwalks out the door In mail-order businesses the item is packaged and mailed Large itemsmust be loaded onto trucks or trains and shipped

Many products today are so complicated that they require customer service and technicalsupport departments to help customers use them Computers are a good example of this sort

of product On-going products like cell phone service may also require on-going customerservice because customers want to change the service they receive over time Traditionalitems (for example, a head of lettuce), generally require less support that modern electronicitems You find all of these elements in any traditional mail order company Whether thecompany is selling books, consumer products, information in the form of reports andpapers, or services, all of these elements come into play

2.1.3 Internet E-commerce overview

Internet Commerce Opportunity Phenomenal growth has occurred and is expected tocontinue for the Internet World Wide Web Estimates for the numbers of consumers andbusinesses online vary considerably for markets around the world Still, experts believe thatmore than 36 million households will have access to the Web by the year 2000 in the U.S.alone In Europe this number is lower, based on lower penetration of personal computers,but still approaches and dazzling figure of near 20 million households In Japanapproximately 12 million households will have access to the Web in the year 2000

The number of business Web sites is equally impressive, reaching more than approximately

2 million by the year 2000 in the U.S., and as many as 1 million each in Europe and Japan.This significant adoption of the Internet World Wide Web by businesses and consumerspresents two tremendous opportunities for businesses First, a growing standard means forbusinesses to communicate transactional information with other businesses more cost-effectively: "business-to-business commerce." Second, a growing channel for efficientdelivery of goods and services to consumers: "business-to-consumer commerce." In thissection, we take a quick look at trends in these two areas of opportunity Commonrequirements are then explored Business-to-Business Commerce Opportunity EDI for AllBusinesses

Businesses today transact with trading partners in one of two generalized fashions First, themajority of businesses use non-automated means of communicating commerce-relatedinformation with trading partners: mail, telephone, and fax Second, a small number ofprimarily the largest companies in the world—fewer than 50,000—conduct a significantportion of their transactions in an automated fashion such as Electronic Data Interchange(EDI) EDI conducted either with leased lines or, more commonly, through Value AddedNetworks (VANs)—can be costly and complex Large companies maintain full-time EDIstaff for the ongoing management of translation systems and auditing of the operation EDIVAN-based systems, because of their complexity and ensuing cost, exclude small andmedium-sized businesses from participation in automated trading communities

Electronic commerce is decreasing the importance of geographical location, as the buyerand seller can be physically located on the other sides of the world and yet conduct businesson-line This is particularly relevant for non-physical, information products, which can besold, paid for and distributed globally by electronic means Although physical products arealso traded electronically on international markets even to consumers (e.g Amazon.com

selling books to consumers all around the world), distance plays a role because it adds to thetime and cost of the delivery.

The Internet will bring radical change to automation in trading By providing a ubiquitouspublic network and standards for communication, the Internet will help businesses lowercosts in EDI-like transactions More importantly, the Internet will make it easier for smalland medium-sized businesses to participate in automated commerce transactions Manybusinesses—small, medium, and large—will soon send and receive the majority of theirpurchase orders and invoices over the Internet

2.1.4 Benefits of Internet for E-commerce

 Ease of access and global search: there was a consensus that the World Wide Web

(WWW) is an ideal mechanism for providing relevant information to the publicglobally It allows organizations an opportunity for publicizing their products andservices at minimum cost By putting information on routinely asked questions on thehome pages, organizations are saving costs by reducing the number of customer servicerepresentatives Also, customer can place order through the Internet once security issuesare worked out The WWW holds the potential to increase the market share and helpsexpand into new market by virtue of its global reach Additionally, easy access toinformation through the Internet gives the opportunities to compare the costs andcharacteristics of products and services (R Nath et al)

 Low cost advertising medium: there is no doubt that Internet has become an

inexpensive advertising medium for organizations and is being effectively used by somefirms for commerce The comments made by the president of a large IT internationalfirm allude to this issue as: the purpose of Internet offerings is to open their products andservices to a new customer base who prefers to use the Internet for their shipping needsand to maintain a leading edge technology position and image in the market place andagainst their competitions (R Nath et al)

 Low barriers to entry: small and large firms alike have the opportunity to be on the

WWW and conduct business on the Internet The barriers to entry to the Internet areminuscule The home pages give equal footing to small organizations with large nationalfirms (R Nath et al)

 Perceived image enhance: For many companies, they have to present on the Internet

because their competitors are already on the Internet Without it their reputation can betarnished and they will be perceived as laggards in employing state of the arttechnologies (R Nath et al)

 Establish direct link to customers: To deliver new services or by pass intermediaries,

Internet enables build direct connections to customers That means more than justdesigning a web site to market a company’s offerings The behavior of customers whoare already buying goods and services on line clearly indicates that companies can buildmomentum in their digital channels by using Internet technology to deliver three forms

of services to customers First of all, companies can give customers just about the samelevel of service through the Internet that they can currently get directly from a

salesperson Secondly, companies can use the Internet technology to personalize

interactions with their customers and build customer loyalty One way is to tailor theinformation and options customers see at a site to just what they want Finally,companies can provide valuable new services inexpensively Company can draw on datafrom its entire customer base to make available wide-ranging knowledge of some topic.The combination of the three levels of services can make the Internet channel verycompelling for customers (Shikhar Ghosh,1998)

 Bypass other in the value chain: companies may find they have little choice but to risk

damaging relationships in their physical chains to compete in the e- channel Theubiquity of the Internet, the fact that anyone can link to anyone else, makes it potentiallypossible for a participant in the value chain to usurp the role of any other participant(Shikhar Ghosh,1998)

 Develop and delivery new product and service: instead of or perhaps in addition to

pirating value from others in the value chain, company that establishes Internet channelscan choose to introduce new products or services to customers Not only in the Internetchannel a direct connection to customers or to any participant in the value chain, it isalso a platform for innovation It is a way to produce and distribute new combinations ofdigital information or to create new transaction models or services without incurring thetraditional costs of complexity that exist in the physical world Through Internet,companies can create new value by taking away bits of some one else’s business First, acompany can use its direct access to customers, each time customers visit a company’sweb site is an opportunity to deliver additional services or provide a path for otherbusinesses that want to reach that customers The second one, a company can mine itsown digital assets to server new customer segments Lastly, a company can takeadvantage of its ability to conduct transactions over the Internet to take away value fromothers (Shikhar Ghosh,1998)

 Controlling access to customer and setting new business rules: companies can

conceivably use the Internet to become the dominant player in the e- channel of specificindustry or segment First, there are number of reasons that make the companies are notinvalid on the Internet as the physical distance between customer and suppliers, singlestore can differentiate services, thus as the result, a small number of companies can meetthe diverse needs of large segments Furthermore, if customers are not willing to learnhow to navigate hundreds of different sites, each with its own unique layout, then theweb site will turn out to be naturally concentrating medium Therefore, in any cases, it isconceivable that some companies will attempt to control the e- channel by becoming thesite that can provide everything that customers want, i.e Companies can becomemagnets by introducing new business models that take advantage of the interactivecapabilities of the Internet (Shikhar Ghosh,1998)

2.1.5 Trading environment

Business-to-business model:

Business-to-business electronic commerce, or B2B e-commerce, refers to that portion ofelectronic commerce that takes place between businesses Unlike B2C, or business-to-consumer e-commerce, B2B e-commerce emphasizes supply chain integration, directmarketing over the web, and electronic marketplaces B2B e-commerce over the Internetcan be as basic as a manufacturer putting up a bare-bones Web site to let distributorssecurely order a handful of products

It can be as complex as a distributor offering thousands of customers company-specificpricing and content, complex product configuration tools and near real-time access toinventory levels for its entire product line Compared with traditional electronic datainterchange (EDI) systems that run across private networks, Internet-based B2B e-commerce is seen as less of a headache to implement, especially for companies that want toreach smaller customers and suppliers that can't handle EDI's cost and complexity

Potentially, the most productive and profitable electronic commerce applications for smalland large businesses alike are B2B transactions on the Web For example, a company canstreamline its purchasing process by posting its supply requirements on the Web for openbidding And the Internet can be used to profile prospects, qualify leads, and deliverproposals before a sales representative and a corporate prospect actually meet B2B salesproductivity can be significantly improved by providing technical information, pricing,scheduling, and other information to customers over the Internet, enabling sales reps tofocus their efforts on personalized customer relationships Most companies probably dobusiness with only 10 to 15 percent of their customers a year, but with B2B direct marketingover the Internet, a company with limited resources can create demand across its totalcustomer base through all sales channels In addition, feedback from Web sites, onlinesurveys and e-mail can be an important source of leads and market data A smaller companycan use the Internet to reach and serve business customers nationally or internationallywithout having to expand geographically

Business-to-consumer model

Online spending (business to consumer) from five Industry sources Forecasts for the year

2000 range from $17 - $33 bllion Forecasting online business to consumer sales dependsupon the number of people online (maximum is total USA population), the averagelikelihood of buying, and average annual online spending per person According to theWVTM2, the longer someone has been using the Internet the more likely they are to buy(Figure 1) and the more they spend (Figure 5) In 1998, for example, buyers that had beenusing the Internet for 12 months had a median annual purchase amount of $180 whereasbuyers that had been using the Internet for 60 months had a median annual purchase of

$300 Assuming the number of online Internet users was 55 million in July 1998, weapplied our likelihood to buy data and spending data to forecast total online retail sales in

the USA Estimates for the growth of Internet usage in the United States average 2.5% permonth (e.g., Broersma 1998; Court 1997; Emmerce, 1998).

Electronic Commerce based Business's Activities and Functions

There are nine key activities in electronic commerce:

The specific functions associated with these activities in an electronic commerce setting arediscussed below Note that not all of these activities are performed in every transaction, norare they necessarily performed in this order; indeed, they may be performed in parallel.Also, the activities are not necessarily all conducted electronically Finally, these activitiescan vary in complexity and importance depending on the size and scope of the transaction

Advertising and Shopping

Advertising and shopping can include the following: A potential buyer browsing electronicyellow pages and catalogs on a network An agent shopping on behalf of one or manybuyers and/or sellers A buyer sending an electronic request for proposal (RFP), and sellersresponding with various offers; Sellers advertising their products and services; and Buyerselectronically navigating and/or browsing through the World Wide Web's online services

A major problem associated with the advertising and shopping activity is the cost and timeexpended in developing, maintaining, and finding relevant information, products, andservices, given the plenitude of available information Obviously, this problem will becomeincreasingly complex as more data and services become available online and the choicesand possibilities multiply exponentially We need new and better ways to find services andinformation and to publish and update this information

Negotiating

Buyers and sellers may elect to negotiate the terms of a transaction (i.e., the terms ofexchange and payment) These terms may cover delivery, refund policies, arranging forcredit, installment payments, copyright or license agreements, usage rights, distributionrights, and so on These terms can be standardized for routine commodity use, orcustomized to suit unique individual situations Often, in the case of two parties with a well-established business relationship, the terms of exchange are prenegotiated as standingcontractual terms for all their future exchanges Often, this process will also includeauthentication of the two parties

Ordering

The buyer eventually issues a contractual agreement of the terms of exchange and payment.This contractual agreement is generally issued as an order, which sets forth the quantity,price, and other terms of the transaction The order may be verbal, in writing, or electronic

It usually includes an acknowledgment of agreement by the various parties in order to helpprevent any future repudiation This agreement can be confirmed electronically throughcryptographic techniques such as digital signatures

In the case of some commodity purchases, the entire transaction may begin at this orderingstage, bypassing the advertising/shopping and negotiating activities The ordering activityapplies to all transactions, regardless of whether billing will be involved For example, evenrequests for free public information should be issued as formal orders so that the serviceprovider can record and account for information requests

Billing

Once a seller has delivered goods or services, a bill is sent to the buyer This bill generallyincludes remittance information that should accompany the payment Sometimes, a sellermay require payment in advance Sometimes, a supplier sends advance shippingnotification, and the customer agrees to authorize payment upon confirmation of the arrival

of the products And in some cases, as with the free information example cited above, thisactivity is eliminated entirely

Payment and Settlement

The buyer, or some financial intermediary, eventually sends some form of electronicpayment (this could be some form of contract or obligation, such as authenticated paymentinstructions or digital cash), usually along with some remittance information to the seller.This payment may occur for a single item, on a usage basis, or with a single payment formultiple items or usage Settlement occurs when the payment and remittance informationare analyzed by the seller or the seller's agent and accepted as valid

Distribution and Receipt

Either before, after, or concurrent with payment, the seller arranges for delivery of thepurchased goods or services to the buyer, and the buyer provides the seller with proof ofreceipt Policies regarding customer satisfaction and return should be negotiated prior to thisactivity and made part of the contract between buyer and seller For larger, more complexorders, distribution may involve more than two parties and entail complicated distributioncoordination strategies An ancillary distribution service involves acting as a fiduciary, andholding goods, certificates, bonds, stocks, and the like in trust

Accounting

This activity is particularly important to corporate customers and suppliers Both buyer andseller must reconcile all electronic transactions in the accounts receivable and accountspayable, inventory information, and accounting systems Account and managementinformation system records must also be updated This activity can involve third parties, ifthe transacting businesses outsource their accounting services

Customer Service

Customer service entails the following:

Providing the buyer with timely information as to the progress of a transaction Handlingcustomer requirements when transactions go awry that is, resolving any mistakes, disputes,

or complaints concerning product quality, delivery, or payment (this includes managingreturns and refunds, further exchanges, and/or repairs);

Providing expert advice and assistance in the use of the products and services

Customer service also involves providing general cash management advice, includingaddressing foreign exchange imbalances and risk exposures, collection of delinquentpayments and late fees, and repossessing products for which payment is long overdue.Information and Knowledge Processing

A final key activity in electronic commerce is the collection, management, analysis, andinterpretation of the various data to make more intelligent and effective transaction-relateddecisions Examples include collecting business references, coordinating and managingmarketing strategies, determining new product offerings, granting and extending credit, andmanaging market risk Performance of these tasks often involves the use of advancedinformation management techniques, including models and simulations and collaborativecomputing technologies to support conferencing and distributed workflow processes

These tasks will become more difficult as the sources of information grow in number andare of increasingly diverse and uncertain quality Additionally, procurement of thisinformation may raise significant privacy concerns and issues

2.1.6 Applications of E-commerce

On Line publishing: The web was designed in order to share the information in the

network It was used as the distribution channel for the published documents The on linepublishers can earn their own money through some different ways as revenue returning fromthe advertisements or fee charged for searching and assessing information (Raymon S.Bamford, 1997)

Advertising: Advertising through Internet is one revenue source, as mentioned, for the

Internet businesses The traditional advertising only presented a simple prototype, but withthe WWW, it can create a multiple prototypes that can offer and deliver value closely to theneed of potential customers (Raymon S Bamford, 1997)

Retailing Through the shop site, customers not only be served the information, full

description about products and services, also can do the on line shopping Their orders can

be automated delivery by linking the organization process, customer support system andbanking system (Raymon S Bamford, 1997)

2.1.7 Levels of internet exploitation

The applications of the Internet to the world now are so diversified and companies of anylevel can find a suitable Internet application for its operations In general, the implementation

of the Internet for business can be classified to the following levels as categorized by USAcademy of Business and Community Resource

Level 1: Unaware or do not care

Companies of this type:

The majority of businesses and organizations have done just fine without the Net forgenerations

Level 2: Aware but not on line

Companies of this type know of the Internet and can see the value Some of them may be justentering this stage They use Internet for:

Level 3: On line

This means those companies will purchase a home or business computer and will contact with

an Internet service provider for services Level 3 companies will use the Internet to regularlyaccess information, to purchase products or do on line research and they will use the Internet

for product support Level 3 companies can take advantage of many Internet communicationsand public relations advantages:

cost Internet communication features

Level 4: Create a Web site

There are many types of Web sites that can meet the needs of organizations ranging from onepage brochure type-site to a full-fledged interactive E-commerce site

Level 5: E-commerce on the World Wide Web

The implementation of this level varies

 Advertise on line but sell off line

Level 6: In house server

The final evolutionary level of Internet use is where an entity becomes its own Internetservice provider (ISP)

2.1.8 Towards E-payments

2.1.8.1 Conventional Payment Mechanisms

Value has been conventionally transferred using a variety of techniques, including:

Cash

century largely by national governments;

1960s and 1970s, when the intrinsic value of the metals in the coins exceeded their facevalue;

Documents

 money orders written by an accepted authority such as a national post office;

 letters of credit;

These mechanisms have various characteristics, such as the extent to which the parties areidentified, the traceability of the transaction, and the taxability of the transaction The reasonthat so many mechanisms exist is that there are many different circumstances in which value

is exchanged, and each of the mechanisms has niche-markets in which it is perceived by atleast some parties to have advantages

2.1.8.2 Electronic Payment Mechanisms

Information technology has created, and continues to create, many new possibilities forvalue-exchange Some of the new techniques represent automation of existing methods,whereas others are novel or revolutionary

The following mechanisms exist, are in pilot, or are being designed:

* electronic funds transfer at point of sale (EFT/POS)

EFT/POS involves the use of plastic cards in terminals on merchants' premises It actuallycomprises two distinct mechanisms:

 debit-card transactions These were a new form of value-transfer, whereby an

account-holder, authenticated by the presentation of a token (a data-bearing card) and the keying

of a PIN, uses a terminal and network to authorise the transfer of value from theiraccount to that of a merchant;

 credit-card transactions These represent the automated capture of data about

purchases against a revolving credit account, replacing what have hitherto been flack'-generated hard-copy vouchers

'flick-* direct data entry transactions

Direct data entry provides a less circuitous path for transaction data than is the case withcheques It is also of two types:

 direct credit This involves an instruction by a payer to their financial institution to pay

funds into a payee's account with that or another financial institution A particular

sub-class of the direct credit is the standing order, which is a payment instruction activated

at regular intervals (e.g monthly or quarterly);

 direct debit This involves a payer authorising a payee to initiate the collection of funds

periodically, and is appropriate in circumstances where the amount of the paymentvaries from period to period (e.g electricity and telephone bills);

* financial electronic data interchange (F-EDI)

F-EDI involves the transmission of payment transaction data, and associated remittanceadvice data, from a payee to their bank, for onforwarding (via banks and/or value-addednetwork operators) to the payee's bank and the payee;

* 'home banking'

This term is used for a variety of related methods whereby a payer uses an electronic device

in the home or workplace to initiate payment to a payee In addition to computertechnology, it can be performed using the telephone and interactive voice response (IVR);

* stored-value cards

This is a form of automation of cash, in which the tokens are not physical (like notes andcoins), but electronic It is targeted at circumstances in which the card-holder is present at apoint of sale or service There are several variants:

magnetic-stripe cards;

tokens;

value-tokens, but also perform the functions of a debit-card and credit-card This is often

referred to as an electronic purse or wallet;

* electronic cash

This is another form of automation of cash into electronic form It addresses circumstances

in which the payer is *not* present at the point of sale or service, but has electronic

communications facilities available, e.g is connected to the Internet, or to some othermanifestation of the emergent global information infrastructure, such as a cable-TVinstallation with enhanced capabilities

A (very provisional) classification of the kinds of schemes for electronic cash is as follows:

pre-registered credit / debit card numbers

electronic cash-pool value-token creation and passing

 integrated approach:

stored-value card payment

2.2 Internet in Vietnam

2.3 Overview of Languages and Tools used for the application

2.3.1 Hyper text markup language (html)

HTML, or HyperText Markup Language is designed to specify the logical organisation of a

document, with important hypertext extensions It is not designed to be the language of a

WYSIWYG word processor such as Word or WordPerfect This choice was made becausethe same HTML document may be viewed by many different "browsers", of very differentabilities Thus, for example, HTML allows you to mark selections of text as titles or

paragraphs, and then leaves the interpretation of these marked elements up to the browser.

For example one browser may indent the beginning of a paragraph, while another may onlyleave a blank line

HTML instructions divide the text of a document into blocks called elements These can be

divided into two broad categories those that define how the BODY of the document is to

be displayed by the browser, and those that define information `about' the document, such asthe title or relationships to other documents The vocabulary of these elements and adescription of the overall design of HTML documents is given in the rest of Section 2 TheLast part of the section also describes standard naming schemes for HTML documents andrelated files

The detailed rules for HTML (the names of the tags/elements, how they can be used) aredefined using another language known as the standard generalized markup language, orSGML SGML is wickedly difficult, and was designed for massive document collections,such as repair manuals for F-16 fighters, or maintenance plans for nuclear submarines.Fortunately, HTML is much simpler!

However, SGML has useful features that HTML lacks For this reason, markup language

and software experts have developed a new language, called XML (the eXtensible markup language) which has most of the most useful features of HTML and SGML

2.3.2 Active server pages (asp)

Server-side programming used to be pretty difficult Making something work via CGIrequired some knowledge of arcane programming languages like Perl or C To boot, it wasinefficient Each time someone hit a CGI script, a new process was created on the server; ifyour script was written in an interpreted language like Perl, the server had to start upanother Perl interpreter, taking up processing time and memory The situation got evenhairier when it lived on a site that was getting a few thousand hits a day