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Chapter 1
What is E-Commerce?
Objectives
Understand how E-Commerce developedKnow what business models are used for E-CommerceUnderstand how large a phenomenon E-Commerce has becomeRecite the benefits of E-CommerceExplain what the Internet Economy is
How Created?
1960 – initiation1980 – NSF Funding1992 – Acceptable Use Policy ChangeEmotional Ladder:
Fear and TrepidationExperimentationConfidenceTrust
What is E-Commerce?
Types of networksInternetIntranetExtranet
Commercial Transactions that are based on the electronic processing and transmissions of data, text, sound, and image.
Related Terms
B2CB2B M-commerce
Why buy online?
ComparisonDiscountsDeliverySelectionSales Promotions
What is a business model?The structure and actions by which your organizations operates within its marketplace.A business model is a representation of the activities of a business.In very general terms the three basic modeling products are:
Activity models - what a business doesProcess models - how a business accomplishes what it doesData models - describes the information structure of a business
Business Models
Online RetailerCatalogAggregatorKioskDirect SellerInformation BusinessSame-Day Delivery Service
Online Retailer
Virtual Storefront
Catalog
Electronic form of paper
Aggregator
Electronic MallSuperstore
Kiosk
Order from within the store
Direct Seller
Ultimate Seller to the Ultimate Customer
Information Business
Sells the Facts
Same Day Delivery
Make the orderIt’s there when you get home
Business Aware/Ready
Is your business ready for this phenomenon?
Rapid Growth
Beginning in 1992Initially used for marketing purposesGrowth:
• 1997 - $22 billion• 1998 - $74 billion• 2002 - $1.2 trillion
Web Sites - commercial1998 – 414,000 2002 – 1.6 million
Benefits
Lessened Restrictions and LimitationsWorldwide market
Expansion of market
Eliminates the location variableLower Costs
Internet Economy
Industrial Revolution?http://www.internetindicators.com/
Layers of the Internet Economy
Internet InfrastructureInternet ApplicationsInternet IntermediaryInternet Commerce
Demographics of the Web-Denizen
Age – 38 was 3236.2
Gender - 57.8% male 42.2% femaleIncome - $58,000
$36,000
Education – 56% college educated26%
Occupation - 50% - computer related
Future of E-Commerce
Efficient use of information
Future Trends
PersonalizationInstant FulfillmentAnywhere, AnytimeIntelligent AgentsCustom Pricing
PC Week’s Top 10 E-Commerce Sites
Microsoft ExpediaE*TradeGE Trading Process NetworkAmazon.comManheim Online PhotoDisc Internet Liquidators CD UniverseVirtual VineyardsCisco Connection Online
Microsoft Expedia (www.expedia.com)
Servicesreserving hotel rooms and rental carspurchasing airline ticketsproviding information about weather and foreign currency
Competitorswww.travelocity.comwww.travelweb.com
TechnologyBackOffice, Windows NT Server, Internet Information Server and SQL Server
E*Trade (www.etrade.com)It allows investors to access a wealth of individual stock data.
Basic company informationCharts showing a stock’s performance historyUp-to-the-minute stock prices$14.95 to $ 19.95 per trade
TechnologyCGI programs written in C++Web Pages by using Front PageJava Programs
50,000 Active Accounts$17 Million Quarterly Revenues$7 Million to $10 Millions in new deposit every day
GE Trading Process Network (www.tpn.geis.com)
GE set up this web site in 1994 so its vendors could easily and quickly make bids on GE electronics components contracts.GE gets more companies competing for its business, while the suppliers incur lower selling costs.Other Services
NegotiationOrderingWeb Services
Amazon.com (www.amazon.com)
It is a comprehensive bookstore that claims to offer more than 1.1 million titles.It electronically contracts publishers when it receives orders for their books.It allows customers to browse but also provides significantly more information than they could receive as a conventional bookstore.Customers amazon.com
Publisher
Publisher
Publisher
Manheim Online - www.manheim.comManheim is the largest automobile auction company in the world.It brings the Web to the used automobile supply chain - the network for auto makers, banks, leasing companies, rental companies and users of fleet vehicles.Buying
DealerSellingDealer
ManheimOnline
Administrative Works
PhotoDisc (www.photodisc.com)
It provides digitized stock photography over the Internet for use by design firms, publications and advertising agencies. Customers can view, order and receive any of 50,000 images.Because the images are royalty-free, customers pay only once - from $10 to $199 - for unlimited use, rather than each time an image is used.
Internet Liquidators(www.internetliquidators.com)
Shoppers participate in a real-time Dutch auction.Shoppers can see current auction status information as it changes; The site continuously shows the current price on the item, the number of units remaining and the time left.A wide range of products is available, from gourmet foods to computer equipment and CD-ROM sets to athletic gear.
CD Universe (www.cduniverse.com)
Shoppers can search for CDs from a database of approximately 200,000 artists by sampling sound bites; They also can sign up for an E-mail newsletter that will send weekly alerts about concerts, new releases and artists in music genres selected by the customerIt has the most outstanding searching capability.
Virtual Vineyards (www.virtualvin.com)
It offers detailed information on the 500 wines and food products in stock and guides the customer through the shopping experience.
Cisco Connection Online (www.cisco.com)
It allows customers to enter profiles of themselves, configure products and check on the status of their orders.It has a very useful search function that combs through Cisco’s inventory of 12,600 products.
Chapter 2