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ELC 200ELC 200

Introduction to E-Commerce

Copyright, Tony Gauvin, UMFK, 2006

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Introduction

Class roll call Instructor Introduction Instructor’s Educational Philosophy BlackBoard accounts Syllabus review General Information about class Classroom Contract Discussion The Dawn of a Maturing Industry

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Instructor

Tony GauvinAssociate Professor Of E-Commerce216 Nadeau Hall(207) 834-7519 or Extension 7519TonyG@maine.eduBlackBoard Tony's ResumeWebSite (http://tonyg.umfk.maine.edu)

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Instructional Philosophy

Out-Come based education Would rather discuss than lecture

Requires student preparation Hate grading assignments

Especially LATE assignments Use class interaction, assignments, quizzes

and projects to determine if outcomes are met.

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ELC 200 Survival Primer

Read Material BEFORE the class discussion Summary & Key Terms at EOC Test Your Understanding and Discussion Questions in EOC Web Exercises

Check BlackBoard Often Use the additional resources identified in syllabus & in WebCT ASK questions about what you didn’t understand in readings DON’T do homework at last minute. REVEIW lectures and notes Seek HELP if you are having difficulties OFFER feedback and suggestions to the instructor in a constructive

manner

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ELC 200 Specifics

Blackboard used to augment course Two Desired outcomes

E-Commerce’s impact on Business & Global Economies Entrepreneurship

Students have the ability to create the framework for a viable e-commerce initiative

Managerial Perspectives instead of technical Technical Portions will be covered in COS XXX classes Understanding “Why” instead of “How”

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Blackboard

https://www.courses.maine.edu Login

Your @maine.edu name and password Help with Blackboard is available from

Blake Library staff All quizzes and assignments will be

administered from BlackBoard

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Computer Accounts

Computer login Sys admin

Pete Cyr (x7547) or Art Drolet (x7809)

Applications MSDN Academic Alliance

Free Stuff See Dr. Ray Albert

Access Cards $10 deposit See Lisa Fournier

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Syllabus review

Requirements Grading Course outline Special Notes Subject to change

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Contract on Classroom Behavior

A contract for students and Professor on what is expected and encouraged behavior in the classroom

Created through a collaborative process Individually agreed to in writing

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Premise to Contract

The Business Management, eCommerce and Computer Application programs are preparing students for professional positions where professional behaviors will be expected of them. These behaviors will be reinforced by requiring the students to adopt the rules agreed to in this contract. Adherence to the rules in this contract will be part of the student’s grade in this class.

Learning is a group activity, and the behavior of each person in class in some way or the other affects the learning outcomes of others. If we keep these thoughts and the following rules in mind, the classroom experience will be a better one for everyone involved.

More serious breeches of student behavior in the classroom will be dealt with through the UMS Student Conduct Code procedures outlined in the conduct code booklet which can be found at the following link. http://www.maine.edu/pdf/06-09conductcodebookcleancopyfinal052206.pdf

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My thoughts

Most students exhibit appropriate behavior in class, but there is some disagreement what “appropriate” behavior is. At times, a consumer culture creeps into the classroom, with students sometimes perceiving faculty as employees hired to serve them. This is not the appropriate comparison – a professor is not here to give you what you want, but rather to help you obtain what you need. A professor is more like a physician. Just as any doctor who tells you “everything is fine” so that you’ll be happy (when everything isn’t fine) should be sued for malpractice, any faculty member who gives you an “A” regardless of your performance or allows anything to happen primarily because that is what will make you happy is doing you and other students a disservice.

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Suggested rules (Professor)

This professor Will be knowledgeable and current on the topics Will be a role model of a professional in the discipline Will provide prompt feedback on assignments and quizzes (within one week) Will not cancel classes without a good reasons and will inform students promptly

of his absence Will make time available outside of classes for student professor meetings Will be fair and impartial in student assessments Will follow published UMFK policy Will be sensitive to issues of gender, diversity, disability and student privacy Will “stick” to the syllabus and will not make any unnecessary changes to the

class that adversely effects student learning outcomes ???

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Bribe List (2008) 2008 BMW M6 1947 HD FLH “knucklehead” 2008 Audi R8 Waltz HardCore Chopper 1950 Buick RoadMaster Convertible 1972 SS 402 El Camino 1970 Oldsmobile 442 (W-30 option) 1967 Shelby Cobra GT350 2009 Harley-Davison CVO

CVO™ Ultra Classic® Electra Glide®

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Compliance

Contract for ELC 200

I have read and understand the Contract on Student Behavior, the syllabus for this course and the UMFK Student Academic Integrity Policy and I agree to abide by the terms outlined in the three documents

Signed and dated by Student and Professor

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UMFK’s Definition of E-Commerce

An attempt to achieve transactional efficiency in all aspects of the design, production, marketing and sales of products or services for existing and developing marketplaces through the utilization of current and emerging electronic technologies

E-Commerce IS NOT E-Business DOT-COMS (or Dot-Bombs) E-Marketing Easy or Cheap NEW

There are other definitions..The text book’s author has another less inclusive definition Electronic commerce is the process of buying, selling, or exchanging products,

services, and information via computer networks.

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E-Commerce Degree Program

Combination of Technical Skills and Management know-how

Prepares students for Leadership RolesCadre (team) buildingBroad-based technical underpinnings with one or

two specialist areasUnderstanding of implications of E-Commerce

within an organizational context and within broader social issues

Elias M. Awad

Third Edition

ELECTRONIC COMMERCE

From Vision to Fulfillment

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The Dawn of a Maturing Industry

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The focus of this chapter is on several learning objectives• Conceptual understanding of e-commerce, e-business and

e-strategy

• E-commerce Drivers

• The rise of specialized Web sites such as blogs

• Value-chain and supply-chain management and how they relate to e-commerce and e-business

• Business models of the e-environment

• A trend toward integrating e-commerce

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First Things First

• Welcome to the new world of electronic commerce (e-commerce or EC)

– The industry of the twenty-first century– Do business electronically from virtually

anywhere in the world that has a computer (and a network).

– In 2004 alone, e-commerce generated well over $100 billion in retail business and over $1.5 trillion business-to-business traffic.

• 2006 E-commerce Multi-sector Report

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First Things First – CONT’D• The Internet - an international network of

independent computer systems precipitated the revolution.

– Security– Privacy– Other problems– Has permeated virtually every phrase of

society.

The Good Life in Blogging• A blog is a shared online journal where people post entries

about their hobbies or personal experiences on the job on vacation, and so forth. (See www.blogger.com)

– http://blogsearch.google.com/

• Blogs are:– Available on the Internet like any other Web page– Automatically indexed by search engines like Yahoo.com

and Google.com• http://blogsearch.google.com/

– There are eight million personal blogs in the United States

– Blogging in China is causing the Chinese Communist Party some discomfort

• Today’s Internet promotes individualism.

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The Digital Divide

• Digital Divide refers to:– The gap between the haves and have nots in computers,

Internet access, access to information, and e-commerce– Is slowly leveling off, but not fast enough

• Digital Divide Network (www.digitaldividenetwork.org) is the Internet’s largest environment– Concerned citizens and activists can build their own

online community– Publish blogs, share documents, and announce news

and events

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E-Learning

• E-learning: technology-based learning; learning materials are delivered via the Internet to remote learners worldwide.

• E-learning’s increasing popularity comes from its learner-centricity and self-paced learning environment.

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E-Learning - cont’d

• Traditional classrooms learning and e-learning

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Marks of Maturity

• Characteristics of early e-commerce:

– Slow dial-up modems– E-mail was a novelty– Bar codes scanned for fulfillment phase of the

e-commerce life cycle– Digital products were a challenge to sell on the

Internet– Took deep pockets to set up Web sites and the

accompanying technical infrastructure– E-commerce activities were primarily national

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Marks of Maturity – cont’d• Maturation of E-commerce

– Broadband connections to homes is fulfilling the ultimate mission of e-commerce.

– E-mail is now the very connectivity of e-commerce.– Bar code scanning is on the way out, replaced by

sophisticated biometric technology (and RFIDs).• http://electronics.howstuffworks.com/smart-label.htm

– Legal downloading of music, video, and other digital products via the Web is increasing.

– Big businesses, as well as small- and medium-sized firms, can afford to develop a Web presence quickly, reliably, and at an affordable cost.

– E-commerce has gone international.

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What Is E-commerce?1. Communications Perspective - the ability to deliver products,

services, information, or payments via networks.2. Interface View - e-commerce means information and

transaction exchanges:1. Business-to-Business (B2B)2. Business-to-Consumer (B2C)3. Consumer-to-Consumer (C2C)4. Business-to-Government (B2G)

3. Business Process - e-commerce means activities that support commerce electronically by networked connections.

4. Online Perspective - e-commerce is an electronic environment that allows sellers to buy and sell products, services, and information on the Internet.

5. A Structure - e-commerce deals with various media: data, text, Web pages, Internet telephony, and Internet desktop video.

6. A Market - e-commerce is a worldwide network.

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E-commerce Is Not E-business• E-business - the conduct of business on the

Internet, in supply-chain planning, tracking, fulfillment, invoicement, and payment.

– Includes buying and selling as well as servicing customers and collaborating with business partners

– Electronic information is used to boost performance and create value by forming new relationships between and among businesses and customers.

– One example of e-business is SAP (www.sap.com)

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E-commerce Versus E-business• E-commerce

– Selling goods and services on the retail level with anyone, anywhere, via the Internet

– Greater efficiency and effective exchange of goods and services

– Exchange based upon transaction

• A block of information exchange between the merchant and its customers via the corporate Web site

• www.amazon.com

• E-business– Connecting critical business systems and

constituencies directly via the Internet

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The Drivers for E-commerce• Digital Convergence - digital devices communicating with one another

• Anytime, anywhere, anyone - e-commerce is available to anyone (24/7)

• Changes in Organizations - today’s businesses empower frontline workers to do the kind of work once performed by junior management

• Increasing pressure on operating costs and profit margins - global competition and the proliferation of products and services worldwide have added pressure on operating costs and profit margins

• Demand for customized products and services - mass customization puts pressure on firms to handle customized requests on a mass-market scale

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Changes in Organizational Makeup

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Myths about E-commerce• Setting up a Web site is easy.

• E-commerce means no more mass marketing.

• E-commerce means a new economy.

• E-commerce is revolutionary.

• E-commerce is a commercial fad that crashed in 2000.

• All products can be sold online using identical business models.

• Build it and they will come.

• The middleman is out.

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Advantages through E-commerce• Lower cost to the E-merchant• Economy• Higher margins• Better customer service• Quick comparison shopping• Productivity gains• Teamwork• Growth in knowledge markets• Information sharing, convenience, and control• Customization

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Issues and Constraints of E-commerce• The co$t factor• Security• System and data integrity• System scalability• E-commerce is not free• Fulfillment and customer relations problems• Products people resist buying online• Cultural, language, and trust issues• Corporate vulnerability• Lack of a blueprint for handling E-commerce• High risk of Internet start-up

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Benefits of the Internet• Benefits

– The Internet is the enabler of the e-commerce– Marketing and selling products and services– Doing business fast– Gathering opinions and trying out new ideas– Leveling the playing field– Promoting a paper-free environment– Providing superior customer service and support

resources– Efficiency and unequaled cost-effectiveness– Supporting managerial functions, spreading ideas, ease

of technical support– Triggering new business– Providing Web services

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Limitations of the Internet• Limitations

– Security and privacy

– Fakes and forgeries

– Cyber terrorism• Cyber warfare http://www.itoc.usma.edu/

– Problems and stress

– Abuses in the workplace

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Role of E-strategy

• For a successful e-commerce business:– Identify the critical success factors (CSFs)

• A sound strategy that has the full support of top management

• A clear goal of long-term customer relationships and value

• Making full use of the Internet and related technologies

• A scalable and integrated business process and infrastructure

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Role of E-strategy – cont’d• Develop a realistic strategy for the

business• Sustainable business strategy based on

unique opportunities to provide value for the firm

• Requires a clear understanding of the company, the industry and available Internet technologies

• Strategy should be difficult to duplicate, have high barriers to entry for competitors, and high switching costs to customers

• Be realistic

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Value Chain in E-commerce• Value Chain: a way of organizing the activities of

a business so that each activity adds value (value-added activity) or productivity to the total operation of the business.– Michael Porter

• Competitive Advantage: Creating and Sustaining Superior Performance

• A strategic tool for identifying how the critical components of a business tie together to deliver value for the business across the value-chain process.

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Value Chain in E-commerce - cont’d• Organizations are open systems

– They do not consist of isolated sets of functions

– They are a chain of value-creating activities that assure competitive advantages by delivering value to the customer

• Depicts the series of interdependent activities of a business

• A business evaluates its value to find opportunities for improving the value activities

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Competitive Advantage

• Competitive advantage is achieved when an organization links the activities in its value chain more cheaply and effectively than its competitors.

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Value Chain Primary Activities1. Inbound logistics

2. Operations

3. Outbound logistics

4. Marketing and sales

5. Service

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Value Chain Support Activities1. Corporate infrastructure

2. Human resources

3. Technology development

4. Procurement

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Value Chain for American Airlines

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Analyzing Value Chain Activities• What type of activity is being performed? Does it add value? Does

it ensure the quality of other activities?

• How does the activity add value to the customer?

• Could the same activity be reconfigured or performed in a different way?

• What inputs are used? Is the expected output being produced?

• Is the activity vital? Could it be outsourced, deleted completely, or combined with another activity?

• How does information flow into and out of the activity?

• Is the activity a source of competitive advantage?

• Does the activity fit the overall goals of the organization?

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E-commerce Value Chain• The E-commerce Value Chain means identifying:

– The competitive forces within the company’s e-commerce environment

– The business model it will use– Identifying the value activities that help the

e-commerce value chain do its homework

• E-commerce views information technology as part of a company’s value chain

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Roles for E-commerce• Reducing costs

• Improving product quality and integrity

• Promoting a loyal customer base

• Creating a quick and efficient way of selling products and services

• Incorporate information technology and telecommunications to improve overall productivity

• Web sites are used to provide and collect information between the e-merchant and the customer

– Competitive pricing information– Invoicing facilitates online payment flows– Customized products or orders can be shipped and delivered by

independent shippers directly to the customer

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Trend in E-commerce

• Integrate the entire transaction life cycle, from the time the consumer purchases the product on the Web site to the time the product is actually received

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A Generic E-commerce Model

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Key Elements of Internet, Extranet, and Intranet E-commerce

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Path to Successful E-commerce• The path to success is integration of the various links

(departments) in the (value) chain to work together for a common objective - profitability and customer satisfaction.

– Supplier links with manufacturing– Manufacturing adds value by the finished products– Finished products are then made available to sales– Finished products– Sales add value by advertising and selling the products

to the customer– Today, ERP software integrates information about

finished products, costs, sales figures, accounting and human resources

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An Integrated Approach to

E-commerce

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E-commerce Application

• Business-to-Consumer (Internet)

• Business-to-Business (Internet and Extranet)

• Supply-Chain Management

• Business-within-Business (Intranet)

• Business-to-Government (B2G)

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Business-to-Consumer (Internet)• The consumer’s use of a merchant’s Web

storefront or Web site

• Modeled on the traditional shopping experience

• Shopping cart is used to hold goods until the customer is ready to check out

– Online order form supported by the appropriate software

• Checkout is order and payment processing

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Business-to-Business (Internet and Extranet)

• Business-to-Business e-commerce is industrial marketing among the processes it handles are fulfillment and procurement

• Companies can conveniently and quickly check their suppliers’ inventories or make instant purchases

• Competing online should also force prices for materials and supplies to drop dramatically

• B2B often use an extranet: a shared intranet vendors, contractors, suppliers, and key customers

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Supply-Chain Management

• Integrating the networking and communication infrastructure between businesses and suppliers

• Having the right product in the right place, at the right time, at the right price, and in the right condition

• Delivery of customer and economic value through integrated management of the flow of physical goods and related information

• Designed to improve organizational processes by optimizing the flow of goods, information, and services between buyers and suppliers in the value chain

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Supply-Chain Management – cont’d• SCM is:

– Collaboration among business partners– Coordination of logistics for timely delivery of

goods or products– Cooperation among businesses and suppliers

to make sure orders and inquiries are filled correctly

– Connectivity through networking infrastructure to ensure speed and good response time at all times

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Business-within-Business (Intranet)• Strictly a “within company” type of information

exchange

– Restricted to internal employees and customers

– Firewalls to keep out non employees

• E-mail replaces paper for the communication of messages, order acknowledgement and approvals, and other forms of correspondence

• The intranet becomes a facilitator for the exchange of information and services among the departments or divisions of a company

• Different departments with different PCs or local area networks can interact on an intranet

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Benefits of an Intranet

• Low development and maintenance costs

• Environmentally friendly because it is company-specific

• Availability and sharing of information

• Timely, current information

• Quick and easy dissemination of information

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Business-to-Government (B2G)• The government market is strikingly similar to B2B.

• Huge potential for savings in $1.8 trillion federal and $1 trillion state and local expenditures

• Changing the status quo in government is not so easy

– Changes to employee tasks and job restructuring often create resistance

– Tax savings potential is not easily recognized– Committing to technology means constant need for

upgrades and additional costs

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E-commerce Business Models• Storefront Model

• Click-and-Mortar Model

• Built to Order Merchant Model

• Service Provider Model

• Subscription-based Access Model

• Prepaid Access Model

• Broker Model

• Advertiser Model

• Portal Site Model

• Free Access Model

• Virtual Mall Model

• Virtual Community Model

• Infomediary Model

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Managerial Implications

• It is people and managerial talent that matter

• There is a new focus on building a productive organizational culture, managing change and results, building intellectual capital, creating future leaders, managing organizational learning, and pushing growth and innovation

• The real asset is information and how it is used to create value for the customer

• The top challenge in managing e-business is understanding the consumer

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Chapter Summary

• Electronic commerce (EC) is the ability to deliver products, services, information, or payments via networks such as the Internet and the World Wide Web.

• Electronic business connects critical business systems directly to key constituents

• The rise of specialized Web sites and Web logs (blogs) generated opportunities to read and write on a vast array of topics

• Several drivers promote EC: digital convergence

• Advantages of EC

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Chapter Summary (continued)

• Limitations of EC

• A value chain is a way of organizing the activities of a business so that each activity provides added value or productivity to the total operation of the business.

• The transaction life cycle includes three major e-commerce applications: Business-to-Consumer (B2C), Business-to-Business (B2B), and Business-within-Business.

• An intranet wires the company for information exchange.

• Success in the E-commerce field depends on attracting and keeping qualified technical people and managerial talent.

• There are several types of specialized Web sites on the Internet. Each site is based on a business model as a way of doing business to sustain a business - generated revenue.

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Assignment 1

• Due September 15 @ 11:00 AM• Use Blackboard to download the assignment and

to upload your answers.– Save a copy since the same material can be

incorporated in the eCommerce Initiative paper that will be due at the end of the semester.

• assignment1.doc

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For Next Class

Get Familiar with all the resources identified in the syllabus and Blackboard

Read Chapter 1 Start thinking about an eCommerce business

idea Something to sell over the internet

Existing or new product or service A way to use the Internet to enhance a traditional

brick and mortar business model