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