Chapter 1Overview of Electronic Commerce

EC 2006 Prentice Hall 2

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, technologies and interactions.

4. Describe some EC business models.

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

6. Describe the limitations of EC.

EC 2006 Prentice Hall 3

Electronic Commerce: Definitions and Concepts

What is electronic commerce (EC)?

What is e-business?

EC 2006 Prentice Hall 4

Electronic Commerce: Definitions and Concepts

• Pure Versus Partial EC– EC takes several forms depending on the degree of

digitization (the transformation from physical to digital) (1) the product (service) sold,

(2) the process,

(3) the delivery agent (or intermediary

• Examples?

EC 2006 Prentice Hall 5

Electronic Commerce: Definitions and Concepts

• EC organizationsbrick-and-mortar organizationsvirtual (pure-play) organizationsclick-and-mortar (click-and-brick) organizations

• Examples?• Godiva.com

– What type of an organization is Godiva?– Navigational features of the site exercise

• “Lotus Bowl platter with truffles”

EC 2006 Prentice Hall 6

Electronic Commerce: Definitions and Concepts

• Where E-business is conductedelectronic market (e-marketplace)

interorganizational information systems (IOSs)

intraorganizational information systems

EC 2006 Prentice Hall 7

Exhibit 1.2 A Framework for Electronic Commerce

EC 2006 Prentice Hall 8

EC Classification: Transactions

• Classification by nature of the transactions or interactions

business-to-business (B2B)

business-to-consumer (B2C)

consumer-to-consumer (C2C)

Examples?

EC 2006 Prentice Hall 9

EC Classification: Technology

peer-to-peer

mobile commerce (m-commerce)

what is location-based commerce (l-commerce)?

example?

EC 2006 Prentice Hall 10

EC Classification: Type of Interaction

collaborative commerce (c-commerce)

what is collaborative commerce?

example?

e-learning

EC 2006 Prentice Hall 11

Electronic Commerce: Major Historical Landmarks

• ETF (1970’s)

• EDI (1980’s), proprietary, expensive

• WWW (1990’s)

• .com boom (late 1990’s, early 2000’s)

• .com bust (2001-2002)

• Google IPO (2004)

EC 2006 Prentice Hall 12

Digital Evolution Drives EC

Digital economy:

What are three characteristics of digital economy?

Digital Convergence

EC 2006 Prentice Hall 13

Business Environment Drives EC

• Critical Response Activities: What companies must do to survive in competitive business environment as it changes– Traditional Responses?– Innovative Responses?

• Categories of business pressures– market (economic): examples?– Societal: examples?– Technological: examples?

EC 2006 Prentice Hall 14

Business Environment Drives EC

• Organizational response strategies: What EC-enabled initiatives can organizations and businesses undertake to deal with those pressures?– BPR– CRM– Business Alliances– Electronic Markets– Time to Market Reduction– Mass Customization

EC 2006 Prentice Hall 15

EC Business Models

• The Structure of Business Models: – What are the six elements of a comprehensive

business model?

EC 2006 Prentice Hall 16

EC Business Models

• What are major revenue models?• Examples?

EC 2006 Prentice Hall 17

EC Business Models

• Value proposition (to whom?)

• What are some typical EC Business Models?

EC 2006 Prentice Hall 18

EC Business Models: Orbis Group

• Describe Traditional Supply Chain (process) for product catalog acquisition.

• Describe Process with ProductBank.– What processes are eliminated?– What players are eliminated?– Who benefits?– Who loses?

EC 2006 Prentice Hall 19

Benefits of EC

Benefits to Organizations

EC 2006 Prentice Hall 20

Benefits of EC

Benefits to Consumers

EC 2006 Prentice Hall 21

Benefits of EC

• Benefits to Society

EC 2006 Prentice Hall 22

Exhibit 1.7 Limitations of EC

• Most prominent technical limitations/barriers?

• Most prominent non-technical limitations/barriers?

• How can we overcome them?

EC 2006 Prentice Hall 23

Exhibit 1.8 The Networked Organization

EC 2006 Prentice Hall 24

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 major EC business models.

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

6. Limitations of EC.