KUIT255-02au Electronic Commerce William Doane [email protected] ProfDoane on AIM and Twitter

KUIT255-02au

Electronic Commerce

William [email protected]

ProfDoane on AIM and Twitter

William Doane

Chapter 1 2

KUIT255: eCommerce

Weekly projects due by TuesdayNOTE: the final project (unit 10) is due by

SUNDAY

We'll be using (at least) Adobe Dreamweaver CS3 or CS4 in units 7-10There's a one-time only, 30-day trial version

you can download that will work for this course, as long as you don't install it until unit 7 begins!

Chapter 1 3

KUIT255: eCommerce

You'll each propose an eCommerce business, prepare a business plan (one section each week), and create a website to represent your business

Chapter 1 4

KUIT255: eCommerce

Weekly discussion board postsAt least three (3) posts each week

Your own response to the topicResponses to at least two (2) classmates' posts

First post is due by Saturday each weekMust post on at least three (3) different

daysDB rules are intended to encourage an on-

going dialog, rather than last minute posts

Chapter 1 5

KUIT255: eCommerce

Weekly Flexible Learning Activityattend the seminar (Thursday 9pm ET)

or

take the quizor

both – receive the higher of the two grades

Chapter 1 6

KUIT255: eCommerce

Weekly SeminarTranscript/recording is available within

about 24 hours after the seminar ends.

Chapter 1 7

Q&A About the Course?

Chapter 1 8

Slides, About the (see also PPT)

I'm not usually a fan of PPTI'm using the publisher's slides this termI'm leaving everything inBecause you can download them for referenceBut I may skip through some slides very

quickly, if I choose not to focus on a topicBut you can review them later.

Chapter 1 9

Chapter 1

Overview of Electronic CommerceIf you haven't received your textbook yet, chapters 1-3 are available in the DocShare tab

Chapter 1Copyright © 2009 Pearson Education, Inc.

Publishing as Prentice Hall 11

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.



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.



Electronic Commerce:Definitions and Concepts

electronic commerce (EC)

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




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.




PURE VERSUS PARTIAL ECEC Organizations

brick-and-mortar (old economy) organizations

Old-economy organizations (corporations) that perform their primary business off-line, selling physical products by means of physical agents.

virtual (pure-play) organizations

Organizations that conduct their business activities solely online.




click-and-mortar (click-and-brick) organizations

Organizations that conduct some e-commerce activities, usually as an additional marketing channel.




1.1




INTERNET VERSUS NON-INTERNET ECintranet

An internal corporate or government network that uses Internet tools, such as Web browsers, and Internet protocols.

extranet

A network that uses the Internet to link multiple intranets.




electronic market (e-marketplace)

An online marketplace where buyers and sellers meet to exchange goods, services, money, or information.




Interorganizational information systems (IOSs)

Communications systems that allow routine transaction processing and information flow between two or more organizations.

intraorganizational information systems

Communication systems that enablee-commerce activities to go on within individual organizations.



The EC Framework, Classification, and Content




CLASSIFICATION OF EC BY THE NATURE OF THE TRANSACTIONS OR INTERACTIONSbusiness-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.




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.




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.




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.




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.




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.




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.




THE INTERDISCIPLINARY NATURE OF ECThe Google RevolutionEC FailuresEC Successes




Web 2.0

The second-generation of Internet-based services that let people generate content, collaborate, and share information online in perceived new ways—such as social networking sites, wikis, communication tools, and folksonomies.






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.



The Digital Revolution Drives E-Commerce

The digital revolution accelerates EC mainly by providing competitive advantage to organizations.

The digital revolution enables many innovations



The Business Environment Drives E-Commerce

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



The Business Environment Drives E-Commerce



EC BUSINESS MODELS

business model

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



EC BUSINESS MODELS

TYPICAL EC BUSINESS MODELSOnline direct marketingElectronic 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.



EC BUSINESS MODELS

Find the best pricealso 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.



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.



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.



EC BUSINESS MODELS

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



EC BUSINESS MODELS

virtual world

A user-defined world in which people can interact, play, and do business. The most publicized virtual world is Second Life.



Benefits and Limitations of EC

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



Benefits and Limitations of EC

THE LIMITATIONS AND BARRIERS OF ECTechnological LimitationsNontechnological Limitations

SOCIAL AND BUSINESS NETWORKSsocial 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 NetworksRevenue Models of Social and Business

Networks



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.



The Digital Enterprise

corporate portal

A major gateway through which employees, business partners, and the public can enter a corporate Web site.



Managerial Issues

1. Is it real?

2. Why is B2B e-commerce so attractive?

3. There are so many EC failures—how can one avoid them?

4. How can we exploit social/business networking?

5. What should be my company’s strategy toward EC?

6. What are the top challenges of EC?



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.



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



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.



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.



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.



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



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.



E-MARKETPLACES

intermediary

A third party that operates between sellers and buyers.

Other business partnersSupport services



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

storefront

A single company’s Web site where products or services are sold.

e-mall (online mall)

An online shopping center where many online stores are located.




TYPES OF STORES AND MALLSGeneral stores/mallsSpecialized stores/mallsRegional versus global storesPure-play online organizations versus

click-and-mortar stores




TYPES OF E-MARKETPLACESprivate 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.




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.




information portal

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




Types of PortalsCommercial (public) portalsCorporate portalsPublishing portalsPersonal portalsmobile portal

A portal accessible via a mobile device.voice portal

A portal accessed by telephone or cell phone.Knowledge portals



Participants, Transactions,Intermediation, and Processes in EC

SELLERS, BUYERS, AND TRANSACTIONSTHE ROLES AND VALUE OF

INTERMEDIARIES IN E-MARKETPLACESBrokersInfomediariese-distributor

An e-commerce intermediary that connects manufacturers with business buyers (customers) by aggregating the catalogs of many manufacturers in one place—the intermediary’s Web site.







disintermediation

Elimination of intermediaries between sellers and buyers.

reintermediation

Establishment of new intermediary roles for traditional intermediaries that have been disintermediated.












Electronic Catalogs andOther Market Mechanisms

electronic catalogs

The presentation of product information in an electronic form; the backbone of most e-selling sites.

Electronic catalogs can be classified on three dimensions:1. The dynamics of the information presentation

2. The degree of customization

3. Integration with business processes




Online Catalogs Versus Paper CatalogsCustomized CatalogsImplementing E-Catalogs




search engineA computer program that can access databases of Internet resources, search for specific information or keywords, and report the results.

electronic shopping cartAn order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop.Product Configuration

ONLINE CLASSIFIED ADS



Auctions as EC Market Mechanisms

auction

A competitive process in which a seller solicits consecutive bids from buyers (forward auctions) or a buyer solicits bids from sellers (backward auctions). Prices are determined dynamically by the bids.




TRADITIONAL AUCTIONS VERSUS E-AUCTIONSLimitations of Traditional Offline Auctionselectronic auction (e-auction)

Auctions conducted online.DYNAMIC PRICING AND TYPES OF

AUCTIONSdynamic pricing

Prices that change based on supply and demand relationships at any given time.







One Seller, Many Potential Buyersforward auction

An auction in which a seller entertains bids from buyers. Bidders increase price sequentially.

One Buyer, Many Potential Sellersreverse auction (bidding or tendering system)

Auction in which the buyer places an item for bid (tender) on a request for quote (RFQ) system, potential suppliers bid on the job, with the price reducing sequentially, and the lowest bid wins; primarily a B2B or G2B mechanism.

“name-your-own-price” modelAuction model in which a would-be buyer specifies the price (and other terms) he or she is willing to pay to any willing and able seller. It is a C2B model that was pioneered by Priceline.com.







Many Sellers, Many Buyersdouble auction

Auctions in which multiple buyers and their bidding prices are matched with multiple sellers and their asking prices, considering the quantities on both sides.

vertical auctionAuction that takes place between sellers and buyers in one industry or for one commodity.

auction vortalAnother name for vertical auction portal.




BENEFITS, LIMITATIONS, AND IMPACTS OF E-AUCTIONSBenefits of E-AuctionsLimitations of E-Auctions

Minimal securityPossibility of fraudLimited participation




Impacts of AuctionsAuctions as a coordination mechanismAuctions as a social mechanism to determine a

priceAuctions as a highly visible distribution

mechanism

Conducting AuctionsAuctions as an EC component



Bartering and Negotiating Online

ONLINE BARTERINGbartering

The exchange of goods or services.e-bartering (electronic bartering)

Bartering conducted online, usually in a bartering exchange.

bartering exchangeA marketplace in which an intermediary arranges barter transactions.

Consumer-to-Consumer Barter ExchangesONLINE NEGOTIATING



Web 2.0 Mechanisms and Tools

Weblogging (blogging)

Technology for personal publishing on the Internet.

blog

A personal Web site that is open to the public to read and to interact with; often dedicated to specific topics or issues.




Creating Blogs Commercial Uses of Blogs Potential Risks of Blogs

1. Establish comprehensive, written rules and policies

2. Educate employees about blog-related risks, rules, and regulations

3. Enforce blog policy with disciplinary action and technology

Bloggers and Politics




wikilog (wikiblog or wiki)

A blog that allows everyone to participate as a peer; anyone can add, delete, or change content.

RSS

An XML format for syndicating and sharing Web content.




podcastA media file that is distributed over the Internet using syndication feeds for playback on mobile devices and personal computers. As with the term radio, it can mean both the content and the method of syndication.

mashupA Web site that combines content data from more than one source to create a new user experience.



Managerial Issues

1. What about intermediaries?

2. Should we auction?

3. Should we barter?

4. Should we sponsor blogs and wikis?

5. Can we blog for business?



Summary

1. E-marketplaces and their components.

2. The role of intermediaries.

3. The major types of e-marketplaces.

4. Electronic catalogs, search engines, and shopping carts.



Summary

5. Types of auctions and their characteristics.

6. The benefits and limitations of auctions.

7. Bartering and negotiating.

8. The major mechanisms of Web 2.0.

88

Q&A



All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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

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KUIT255-02au Electronic Commerce William Doane [email protected] ProfDoane on AIM and Twitter