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Course Objectives

1. Impact of electronic commerce (EC) on today’s business.

2. E-Business mechanisms.

3. Major types of EC transactions for product & services.

4. B2C, B2B, C2C, Etc...

5. Role of mobile computing & commerce.

6. Dynamic e-transaction (Auctions & Barter)

7. Securing EC transactions

8. E-Payments

9. What makes EC successful

10. Legal & Ethical issues

© 2008 Pearson Prentice Hall, Electronic Commerce 2008, Efraim Turban, et al.

Chapter 1

Overview of Electronic Commerce

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Learning Objectives

1. Define electronic commerce (EC)

2. EC categories

3. Framework of EC

4. Types of EC transactions.

5. Business environment need for EC

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

6. Limitations of EC.

7. Role of online social and business networks.

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Electronic Commerce: Definitions and Concepts

electronic commerce (EC)

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

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Electronic Commerce: Definitions and Concepts

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.

i.e. Combining of the traditional business information systems with vast reach of the Web.

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Electronic Commerce: Definitions and Concepts

EC can be defined from these perspectives:Business process(Traditional transaction activities)

ServiceLearning(E learning, cost reductive plus huge improvement in

infrastructure)

Collaboration(VOIP)

Community(Social networks, Face book)

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Electronic Commerce: Degrees of Digitalization

Pure versus Partial EC1. the product (service) sold

2. the process (e.g., ordering, payment, fulfillment)

3. the delivery method

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Electronic Commerce: Dimensions

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Electronic Commerce: Definitions and Concepts

brick-and-mortar (old economy) organizationsOld-economy organizations (corporations) that perform their primary business off-line, selling physical products by means of physical agents

virtual (pure-play) organizationsOrganizations that conduct their business activities solely online

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Electronic Commerce: Definitions and Concepts

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

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

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Electronic Commerce: Definitions and Concepts

Internet versus Non-Internet ECMost EC is done over the Internet, but EC

also can be conducted on private networks, such as value-added networks, local area networks, or on a single computerized machine

Non-Internet EC includes the use of mobile handwriting-recognition computers used by field reps to write their notes in the field

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Electronic Commerce: Definitions and Concepts

electronic market (e-marketplace)

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

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Electronic Commerce: Framework

interorganizational information systems (IOSs)

intraorganizational information systemsintranet

extranet

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The EC Framework, Classification, and Content

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Sustaining the EC Framework,

Support areas:PeoplePublic policyMarketing and advertisementSupport servicesBusiness partnerships

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The EC Framework, Classification

business-to-business (B2B)business-to-consumer (B2C)

e-tailingbusiness-to-business-to-consumer (B2B2C)consumer-to-business (C2B)mobile commerce (m-commerce) intrabusiness ECbusiness-to-employees (B2E)collaborative commerce (c-commerce)consumer-to-consumer (C2C)

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The EC Framework, Other Classification

peer-to-peer (P2P)e-learninge-governmentexchange-to-exchange (E2E)

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The EC Future

Web 2.0

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

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The EC Framework, Classification, and Content

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The EC Framework, Classification, and Content

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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

Digital Revolution Drives EC

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Digital Revolution Drives EC

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Business Environment Drives EC

The Business EnvironmentThe business environment impact modelBusiness pressuresOrganizational response strategies

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Business Environment Drives EC

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Business Environment Drives EC

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EC Business Models

business model

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

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EC Business Models Six elements of a business model include

descriptions of:1. Customers to be served and the company’s relationships

with these customers including customers’ value proposition2. All products and services the business will offer3. The business process required to make and deliver the

products and services4. The resources required and the identification of which ones

are available, which will be developed in house, and which will need to be acquired

5. The organization’s supply chain, including suppliers and other business partners

6. The revenues expected (revenue model), anticipated costs, sources of financing, and estimated profitability (financial viability)

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EC Business Models

revenue model

Description of how the company or an EC project will earn revenue

value proposition

The benefits a company can derive from using EC

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EC Business Models

The major revenue models are:Sales Transaction feesSubscription feesAdvertising feesAffiliate feesOther revenue sources

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EC Business Models

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EC Business Models

Functions of a Business ModelArticulate a customer value propositionIdentify a market segment Define the venture’s specific value chain structureEstimate the cost structure and profit potentialDescribe the venture’s positioning within the value

network linking suppliers and customers Formulate the venture’s competitive strategy

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EC Business Models

Online direct marketing Electronic tendering systems. Name your own price Find the best price Affiliate marketing Viral marketing Group purchasing Online auctions Product and service

customization Electronic marketplaces and

exchanges

Information brokers (informediaries)

Bartering Deep discounting Membership Value-chain integrators Value-chain service providers Supply chain improvers Social networks,

communities, and blogging Direct sale by manufacturers Negotiation

Typical EC Business Models

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EC Business Models

tendering (bidding) systemname-your-own-price modelaffiliate marketingviral marketinge-co-opscustomization

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Benefits and Limitations of EC

Benefits toOrganizationsConsumersSociety

LimitationsTechnologicalNontechnological

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Social and Business Networks

social networks

Web sites that connect people with specified interests by providing free services such as photo presentation, e-mail, blogging, etc.

Business-oriented networks are social networks whose primary objective is to facilitate business

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The Digital Enterprise

digital enterprisecorporate portal

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The Digital Enterprise

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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 do we transform our organization into a digital one?

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Managerial Issues

5. How should we evaluate the magnitude of business pressures and technological advancement?

6. How can we exploit social/business networking?

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

8. What are the top challenges of EC?