Chapter 1 Overview of Electronic Commerce. Chapter 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall1 Learning Objectives 1.Define

Chapter 1

Overview of Electronic Commerce

Chapter 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

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Learning Objectives

1. Define electronic commerce (EC) and describe its various categories.

2. Describe and discuss the content and framework of EC.

3. Describe the major types of EC transactions.

4. Describe the digital revolution as a driver of EC.

5. Describe the business environment as a driver of EC.


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Learning Objectives

6. Describe some EC business models.

7. Describe the benefits of EC to organizations, consumers, and society.

8. Describe the limitations of EC.

9. Describe the contribution of EC to organizations responding to environmental pressures.

10. Describe online social and business networks.


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Electronic Commerce:Definitions and Concepts

electronic commerce (EC)

The process of buying, selling, transferring, or exchanging products, services, or information via computer networks.


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e-business

A broader definition of EC that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organization.


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The EC Framework, Classification, and Content


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CLASSIFICATION OF EC BY THE NATURE OF THE TRANSACTIONS OR INTERACTIONS business-to-business (B2B)

E-commerce model in which all of the participants are businesses or other organizations.

business-to-consumer (B2C)

E-commerce model in which businesses sell to individual shoppers.


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e-tailing

Online retailing, usually B2C.business-to-business-to-consumer

(B2B2C)

E-commerce model in which a business provides some product or service to a client business that maintains its own customers.


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consumer-to-business (C2B)

E-commerce model in which individuals use the Internet to sell products or services to organizations or individuals who seek sellers to bid on products or services they need.

mobile commerce (m-commerce)

E-commerce transactions and activities conducted in a wireless environment.


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location-based commerce (l-commerce)M-commerce transactions targeted to individuals in specific locations, at specific times.

intrabusiness ECE-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization.


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business-to-employees (B2E)E-commerce model in which an organization delivers services, information, or products to its individual employees.

collaborative commerce (c-commerce)E-commerce model in which individuals or groups communicate or collaborate online.

consumer-to-consumer (C2C)E-commerce model in which consumers sell directly to other consumers.


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peer-to-peerTechnology that enables networked peer computers to share data and processing with each other directly; can be used in C2C, B2B, and B2C e-commerce.

e-learningThe online delivery of information for purposes of training or education.

e-governmentE-commerce model in which a government entity buys or provides goods, services, or information from or to businesses or individual citizens.


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exchange

A public electronic market with many buyers and sellers.

exchange-to-exchange (E2E)

E-commerce model in which electronic exchanges formally connect to one another for the purpose of exchanging information.


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THE INTERDISCIPLINARY NATURE OF ECThe Google RevolutionEC FailuresEC Successes


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The Digital Revolution Drives E-Commerce

digital economy

An economy that is based on digital technologies, including digital communication networks, computers, software, and other related information technologies; also called the Internet economy, the new economy, or the Web economy.


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The Business Environment Drives E-Commerce

THE BUSINESS ENVIRONMENTThe Business Environment Impact ModelBusiness Pressures and OpportunitiesOrganizational Response Strategies


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The Business Environment Drives E-Commerce


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EC BUSINESS MODELS

business model

A method of doing business by which a company can generate revenue to sustain itself.


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EC BUSINESS MODELS

TYPICAL EC BUSINESS MODELS Online direct marketing Electronic tendering systems for procurement

tendering (bidding) system

Model in which a buyer requests would-be sellers to submit bids; the lowest cost or highest value bidder wins.

name-your-own-price model

Model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price.


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EC BUSINESS MODELS

Find the best price also known as a search engine model

affiliate marketing

An arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to the selling company’s Web site.

viral marketing

Word-of-mouth marketing in which customers promote a product or service to friends or others.


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EC BUSINESS MODELS

group purchasing

Quantity (aggregated) purchasing that enables groups of purchasers to obtain a discount price on the products purchased.

SMEs

Small-to-medium enterprises.e-co-ops

Another name for online group purchasing organizations.


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EC BUSINESS MODELS

Online auctionsProduct customization and service

personalizationcustomization

Creation of a product or service according to the buyer’s specifications.

personalization

The creation of a service or information according to specific customer specifications.


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EC BUSINESS MODELS

Electronic marketplaces and exchanges Information brokers (infomediaries)BarteringValue-chain integratorsValue-chain service providersSupply chain improversSocial networks, communities, and bloggingNegotiation


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Benefits and Limitations of EC

THE BENEFITS OF ECBenefits to OrganizationsBenefits to ConsumersBenefits to SocietyFacilitating Problem Solving


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Benefits and Limitations of EC

THE LIMITATIONS AND BARRIERS OF ECTechnological LimitationsNontechnological Limitations


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SOCIAL AND BUSINESS NETWORKS

social networks

Web sites that connect people with specified interests by providing free services such as photo presentation, e-mail, blogging, and so on.

Business-Oriented Networks Revenue Models of Social and Business

Networks


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The Digital Enterprise

digital enterprise

A new business model that uses IT in a fundamental way to accomplish one or more of three basic objectives: reach and engage customers more effectively, boost employee productivity, and improve operating efficiency. It uses converged communication and computing technology in a way that improves business processes.


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The Digital Enterprise

intranetextranetelectronic market


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Summary

1. Definition of EC and description of its various categories.

2. The content and framework of EC.

3. The major types of EC transactions.

4. The role of the digital revolution.

5. The role of the business environment as an EC driver.


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Summary

6. The major EC business models.

7. Benefits of EC to organizations, consumers, and society.

8. Barriers to EC.

9. Social and business online networks.

Chapter 2

E-Marketplaces:

Structures and Mechanisms


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Learning Objectives

1. Define e-marketplaces and list their components.

2. List the major types of e-marketplaces and describe their features.

3. Describe the various types of EC intermediaries and their roles.

4. Describe electronic catalogs, shopping carts, search engines, and portals.


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Learning Objectives

5. Describe the major types of auctions and list their characteristics.

6. Discuss the benefits, limitations, and impacts of auctions.

7. Describe bartering and negotiating online.

8. Describe the major mechanisms for delivering Web 2.0.


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E-MARKETPLACES

e-marketplace

An online market, usually B2B, in which buyers and sellers exchange goods or services; the three types of e-marketplaces are private, public, and consortia.


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E-MARKETPLACES

E-MARKETPLACE COMPONENTS AND PARTICIPANTSCustomersSellersProducts and services

digital products

Goods that can be transformed to digital format and delivered over the Internet.

Infrastructure


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E-MARKETPLACES

front end

The portion of an e-seller’s business processes through which customers interact, including the seller’s portal, electronic catalogs, a shopping cart, a search engine, and a payment gateway.

back end

The activities that support online order fulfillment, inventory management, purchasing from suppliers, payment processing, packaging, and delivery.


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E-MARKETPLACES

intermediary

A third party that operates between sellers and buyers.

Other business partnersSupport services


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Types of E-Marketplaces and Mechanisms: from Storefronts to Portals

TYPES OF E-MARKETPLACES private e-marketplaces

Online markets owned by a single company; may be either sell-side and/or buy-side e-marketplaces.

sell-side e-marketplace

A private e-marketplace in which one company sells either standard and/or customized products to qualified companies.

buy-side e-marketplace

A private e-marketplace in which one company makes purchases from invited suppliers.


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public e-marketplaces

B2B marketplaces, usually owned and/or managed by an independent third party, that include many sellers and many buyers; also known as exchanges.


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information portal

A single point of access through a Web browser to business information inside and/or outside an organization.

Documents

Chapter 1 Overview of Electronic Commerce. Chapter 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall1 Learning Objectives 1.Define