2/24/2015

1

GLOBAL E-BUSINESS & TRADE

Part I: Introduction and Developments in E-Business and E-Commerce

Past, Present, and Future

Global E-Business and Trade, 2015 Spring, Assist. Prof. Dr. Ozge Ozgen

1-1

Hi, My Name is Karen!

Karen had a problem.

She was ling in Copenhagen with her baby son

AUGUST

August had NEVER SEEN his father and Karen had

no idea where to find him and didnot EVEN know

his name.

2

Karen had a beautiful baby boy BUT

her son would never know his father

Karen had met a

male tourist,

ended up having

one-night stand

and shorthly

aferwards found

out she was

pregnant.

3

Karen’s Decision

Karen was feeling that she was desperate and

helpless

In Sept. 2009, with August 18 months old, Karen

decided to find August’s father by the help of

internet.

4

2/24/2015

2

Karen’s Actions

Web Page

Blog

Simple

exploratory film

on Youtube

5

Karen26 Video

6

What happened?

Just in few days over a million people watched the

video

Bloggers, social media users shared Karen’s youtube

video

Home-made video reached incredible coverage

And what happenned?

7

“HOUSTON WE HAVE A PROBLEM!”

Karen was a FAKE !

Karen was an actor and the wholestory created and

paid for by

8

2/24/2015

3

Karen26 Video

Low Costs

• Per view based

Mass Coverage

• Fast widespread coverage

• 153 countries in first week

• Afterthat, 2.5 million views in 216 countries

• Youtube’ top 10 most viewed list

No reference

• Reference of VisitDenmark not mentioned on video

• People Believed that it was real

9

VisitDenmark VIRAL CAMPAIGN

Ethical Discussion???

VisitDenmark’s Argument

Video was proper to target market of Denmark as

destination

Aim was creating positive recall

Vide is showing that

Denmark is broad-minded country where you can do what

you want

Dignified, independent Danish women

10

Negative Reactions

People who shared the video felt themselves stupid

Instead of positive recall, negative recall occured

FINALLY; creators of video said sorry and video is

removed from Youtube

BUT? IS IT ENOUGH TO REMOVE???

11

IS IT POSSIBLE TO REMOVE CREATED

CONTENT ON INTERNET?

Video was extensively parodied, remixed &

remade by Youtube users

12

2/24/2015

4

IS IT POSSIBLE TO REMOVE CREATED

CONTENT ON INTERNET? 13

Today, karen26 search result on Google

E-commerce Trends 2014–2015

Retail e-commerce grows over 15%

Continued expansion of mobile, social, and

local e-commerce

Mobile platform rivals PC platform

Continued growth of cloud computing

Explosive growth in Big Data

Continued growth of user-generated content

on social networks, blogs, wikis

The First 30 Seconds

First 20 years of e-commerce

Just the beginning

Rapid growth and change

Technologies continue to evolve at exponential rates

Disruptive business change

New opportunities

What Is E-commerce?

Use of Internet and Web to transact business

More formally:

Digitally enabled commercial transactions between and

among organizations and individuals

2/24/2015

5

Buy-side E-commerce vs. Sell-side E-commerce

17

Social commerce

Social commerce is an

increasingly important part

of e-commerce for site

owners since incorporating

reviews and ratings into a

site and linking to social

networking sites can help

understand customers’ needs

and increase conversion to

sale.

18

E-commerce vs. E-business

E-business:

Digital enabling of transactions and processes within a

firm, involving information systems under firm’s control

Does not only include commercial transactions involving

an exchange of value across organizational boundaries

Copyright © 2015 Pearson Education, Inc.

Intranets, Extranets and the Internet

20

2/24/2015

6

Why Study E-commerce?

E-commerce technology is different, more

powerful than previous technologies

E-commerce brings fundamental changes to

commerce

Traditional commerce:

Consumer as passive targets

Mass-marketing driven

Sales-force driven

Fixed prices

Information asymmetry

Why E-business?

New opportunities with

THE COMBINATION OF

Cost saving methods

Revenue increasing methods

22

Benefits of E-Business and E-Commerce

23

DEBATE ISSUE

Adoption of e-business by established SMEs is

generally less than that in larger businesses.

WHY?

No perceived benefit

Lack of trust

Security problems

Lack of skills

Cost

2/24/2015

7

Eight Unique Features of

E-commerce Technology

1. Ubiquity

1. “it is available just about everywhere, at all times”

2. Marketspace—a marketplace extended beyond

traditional boundaries and removed from a

temporal and geographic location.

2. Global reach

3. Universal standards

4. Information richness

1. “the complexity and content of a message”

Copyright © 2015 Pearson Education, Inc.

Information Richness

http://www.internetlivestats.com/total-number-of-websites/

Number of Web sites is currently estimated at more than 1.2

billion

Number of Web pages is over 50 billion

Deep Web TRILLIONS....

26

Eight Unique Features of

E-commerce Technology

5. Interactivity

1. “two-way communication”

6. Information density

1. the total amount and quality of information

available to all market participants

7. Personalization/customization

the targeting of marketing messages to specific

individuals by adjusting the message to a person’s

name, interests, and past purchases

8. Social technology

Copyright © 2015 Pearson Education, Inc.

Development of E-Business

1994-1997: First Phase

People think that they have to have online presence

1997-2000: Second Phase

Buying and selling over digital media

After 2000

Focus on how internet can impact profitability

2/24/2015

8

Web 1.0 1-29

The Internet started in 1969 as the ARPANET, a

network for academic and military use.

Web pages and browsers appeared in 1993.

The first generation of e-business was like a gold

rush.

Between 2000 and 2002, more than 500 internet

firms shut down in the U.S.

By Q4 2003, almost 60% of public dot-coms were

profitable.

DEVELOPMENT OF INTERNET AND WEB

E-Business to Just Business 1-31

Exhibit 1.5

PETS.COM CASE

Pets.com was a former dot-com enterprise that

sold pet supplies to retail customers.

Excellent domain name!!!

It began operations in August 1998 and closed in

November 2000.

Entrepreneurs should ask!!!

Why should people buy

from us?

32

2/24/2015

9

What are the reasons of

PETS.COM failure?

Pet food and pet supplies were not the type of

goods that the average consumer will order in

advance and wait for 3-5 days to receive. Pets.com

couldn’t compete with the convenience of local pet

stores and grocery stores.

12,000 different products

Low value-to-weight ratio

Shipping costs of pet food

Pet products in all shapes, sizes and weights

No sustainable advantage over a tradional store!!!

33

Power Shift from Companies to Individuals

Web 2.0 1-35

Web 1.0 connected people to networks.

Web 2.0 connected people with machines and each

other.

Web 2.0 is the second generation of internet

technology and includes:

Blogs

Social networking

Photo, video, and bookmark sharing

Web 3.0

The newest technologies allow marketers to focus on

user:

Engagement

Participation

Co-creation

Definition A description of the web around

2009 incorporating high- speed connectivity,

complex cross- community interactions, full range of

digital media (text, voice, video) and an intelligent

or semantic web where automated applications can

access data to perform complex tasks.

2/24/2015

10

37

Types of E-commerce

May be classified by market relationship or technology

Business-to-Consumer (B2C)

Business-to-Business (B2B)

Consumer-to-Consumer (C2C)

Mobile e-commerce (M-commerce)

Social e-commerce

Local e-commerce

The Growth of B2C E-commerce in the U.S. Figure 1.3, Page 19

SOURCE: Based on data from eMarketer, Inc., 2014b; authors’ estimates.

The Growth of B2B E-commerce in the U.S. Figure 1.4, Page 20

Copyright ©

2015 Pearson Education, Inc.

SOURCE: Based on data from U.S. Census Bureau, 2014; authors’ estimates.

Slide 1-40

2/24/2015

11

E-business: A Brief History (Cont.)

2007–Present: Reinvention

Rapid growth of:

Online social networks

Mobile platform

Local commerce

Entertainment content develops as source of revenues

Transformation of marketing

Coordinated marketing on social, mobile, local platforms

Analytic technologies

E-Business is Bigger than the Web 1-42

The Web is the portion of the internet that supports

a graphical user interface for hypertext navigation

with a browser.

The Web is what most people think about when they

think of the Internet.

E-Business is Bigger than Technology 1-43

The internet provides individual users with

convenient and continuous access to information,

entertainment, and communication.

Communities form around shared photos, videos,

and online profiles.

The digital environment enhances processes and

activities for businesses.

Societies are enhanced through more efficient

markets, more jobs, and information access.

Understanding E-business: Organizing Themes

Technology:

Development and mastery of digital computing and

communications technology

Business:

New technologies present businesses with new ways of

organizing production and transacting business

Society:

Intellectual property, individual privacy, public welfare

policy

Copyright © 2015 Pearson Education, Inc.

Slide 1-44

2/24/2015

12

Academic Disciplines

Concerned with E-commerce

Technical approach

Computer science

Management science

Information systems

Behavioral approach

Information systems

Economics

Marketing

Management

Finance/accounting

Sociology

Slide 1-45