Introduction to Electronic Commerce 3/e - · PDF fileIntroduction to Electronic Commerce 3/e...
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Introduction toElectronic Commerce 3/e
Efraim TurbanUniversity of Hawaii
David KingJDA Software Group, Inc.
Judy Lang
Lang Associates
with contributions from
Linda LaiMacau Polytechnic University, China
Carol PollardAppalachian State University
Deborrah C. TurbanUniversity of Santo Tomas, Philippines
Linda VoloninoCanisius College
Ivan C. Seballos IILa Salle Lipa, Philippines
Boston Columbus Indianapolis New York San Francisco Upper Saddle RiverAmsterdam Cape Town Dubai London Madrid Milan Munich Paris
Montreal Toronto Delhi Mexico City Sao Paulo SydneyHong Kong Seoul Singapore Taipei Tokyo
Contents
PREFACE 35
1 Introduct ion to E-Commerce and E-Marketplares 45
CHAPTER 1 OVERVIEW OF ELECTRONIC COMMERCE 45
Zappos Wows Their Customers 46
1.1 ELECTRONIC COMMERCE: DEFINITIONS
AND CONCEPTS 48
Defining Electronic Commerce 48
Defining E-Business 48
Major EC Concepts 49
Electronic Markets and Networks 50
1.2 THE ELECTRONIC COMMERCE FIELD: CLASSIFICATION,
CONTENT, AND HISTORY 50
An EC Framework 51
Classification of EC by the Nature of the Transactions
and the Relationships Among Participants 52
Case 1.1 E C A p p l i c a t i o n : Want to Buy Chocolate Online?Try Godiva.com 54
A Brief History of EC 55
The Future of EC 56
1.3 E-COMMERCE 2.0: FROM WEB 2.0 TO ENTERPRISE
SOCIAL NETWORKING AND VIRTUAL WORLDS 57
Social Computing 57
Web 2.0 57
Social Networks and Social Network Services 58
Business-Oriented Social Networks 60
Enterprise Social Networks 60
Case 1.2 EC A p p l i c a t i o n : MySpace: A World's PopularSocial Networking Web Site 61
Virtual Worlds and Second Life 62
The Major Tools of Web 2.0 63
1.4 THE DIGITAL WORLD: ECONOMY, ENTERPRISES,
AND SOCIETY 64
The Digital Economy 64
The Digital Enterprise 66
The Digital Society 67
1.5 ELECTRONIC COMMERCE DRIVERS AND THE CHANGING
BUSINESS ENVIRONMENT 69
The Drivers of EC and Its Growth 69
Performance, Business Pressures,
and Organizational Responses 71
10 Contents
1.6 ELECTRONIC COMMERCE BUSINESS MODELS 73The Structure and Properties of Business Models 74Typical EC Business Models 76
1.7 BENEFITS, LIMITATIONS, AND IMPACTS OF ELECTRONICCOMMERCE 77
The Benefits and Impacts of EC 78The Limitations and Barriers of EC 79Why Study E-Commerce? 80
1.8 OVERVIEW OF THIS BOOK 80
Case 1.3 EC Appl icat ion: How College StudentsBecome Entrepreneurs 81
Part 1 : Introduction to E-Commerceand E-Marketplaces 82
Part 2: Internet Consumer Retailing 82Part 3: Business-to-Business E-Commerce 82Part 4: Other EC Models and Applications 83Part 5: EC Support Services 83Part 6: EC Strategy and Implementation 83Online Part 7: Application and Site Development 83Online Tutorial 83Online Appendices ' 83Online Supplements 83
MANAGERIAL ISSUES 83
SUMMARY 84
KEY TERMS 85
QUESTIONS FOR DISCUSSION BY INDIVIDUAL STUDENTS 85
TOPICS FOR CLASS DISCUSSION 86
INTERNET EXERCISES 86
TEAM ASSIGNMENTS AND PROJECTS 87
Closing tase: Beijing 2008: A Digital Olympics 88
ONLINE RESOURCES AVAILABLE ATpearsonhighered.com/turban 90
CHAPTER 2 E-MARKETPLACES: MECHANISMS, TOOLS,AND IMPACTS OF E-COMMERCE 9 1Web 2.0 Tools at Eastern Mountain Sports 92
2.1 ELECTRONIC COMMERCE MECHANISMS: AN OVERVIEW . . . 94EC Activities and Mechanisms 94Sellers, Buyers, and Transactions 94
2.2 E-MARKETPLACES 96Electronic Markets 96E-Marketplace Components and Participants 98Disintermediation and Reintermediation 99Types of E-Marketplaces 100
Contents 11
2.3 CUSTOMER INTERACTION MECHANISMS:
STOREFRONTS, MALLS, AND PORTALS 100
Electronic Storefronts 101
Electronic Malls and Large Retailers 101
Types of Stores and Malls 102
Web (Information) Portals 102
The Roles and Value of Intermediaries
in E-Marketplaces 104
Case 2.1 EC A p p l i c a t i o n : WebMD 105
2.4 ELECTRONIC CATALOGS, SEARCH ENGINES,
AND SHOPPING CARTS 106
Electronic Catalogs 106
EC Search Activit ies, Types, and Engines 107
Shopping Carts 109
2.5 AUCTIONS, BARTERING, AND NEGOTIATING ONLINE 109
Definition and Characteristics 109
Traditional Auctions Versus E-Auctions 110
Innovative Auctions 111
Dynamic Pricing and Types of Auctions 111
Benefits, Limitations, and Impacts of E-Auctions 113
Online Bartering 114
Online Negotiating 115
2.6 WEB 2.0 TOOLS AND SERVICES: FROM BLOGS
TO WIKIS TO TWITTER 115
Blogging (Weblogging) 116
Mechanism Aids for Web 2.0 Tools: Tags,
Folksonpmy, and Social Bookmarks 118
Wikis 119
Social Network Services 119
Case 2.2 EC A p p l i c a t i o n : Craigslist: The UltimateOnline Classified Site 120
2.7 VIRTUAL WORLDS AS AN ELECTRONIC
COMMERCE MECHANISM 121
Avatars 121
Business Activities and Value in Virtual Worlds 121
MANAGERIAL ISSUES 123
SUMMARY 123
KEY TERMS 124
QUESTIONS FOR DISCUSSION BY INDIVIDUAL STUDENTS 124
TOPICS FOR CLASS DISCUSSION 125
INTERNET EXERCISES 125
TEAM ASSIGNMENTS AND PROJECTS 126
Closing Case: Second Life 127
ONLINE RESOURCES AVAILABLE ATpearsonhighered.com/turban 128
12 Contents ""
2 Internet Consumer Retailing 12SL
CHAPTER 3 RETAILING IN ELECTRONIC COMMERCE:PRODUCTS AND SERVICES 129Amazon.Com: E-Tailing Grows Despite
the Slumping Economy 130
3.1 INTERNET MARKETING AND ELECTRONIC RETAILING 132Overview of Electronic Retailing 132
J-- Size and Growth of the B2C Market 133What Sells Well on the Internet 133Considered Commerce 135Characteristics and Advantages
of Successful E-Tailing 135
3.2 E-TAILING BUSINESS MODELS 137Classification of Models by Distribution Channel 137
Insights and Additions 3.1: Selling Cars Online:Build-to-Order
Other B2C Models and Special Retailing 141B2C in Social Networks . 142
3.3 TRAVEL AND TOURISM (HOSPITALITY)SERVICES ONLINE 143
Services Provided 143Special Services Online 143Benefits and Limitations of Online Travel Services 144
Case 3.1 EC Application: WAYN: A Social Networkfor Travelers 145
Corporate Travel 145
3.4 EMPLOYMENT PLACEMENT AND THE JOBMARKET ONLINE 146
The Internet Job Market 146
Insights and Additions 3.2: Social NetworkingSites for Business Professionals . .
Benefits and Limitations of the ElectronicJob Market 149
3.5 REAL ESTATE, INSURANCE, AND STOCKTRADING ONLINE 150
Real Estate Online 150Insurance Online 151Online Stock Trading 152
3.6 BANKING AND PERSONAL FINANCE ONLINE 153Home Banking Capabilities 154
t Virtual Banks 154International and Multiple-Currency Banking 155Online Financial Transaction
Implementation Issues N 156
Contents 13
Case 3.2 EC Application: Security for OnlineBank Transactions 156
Online Billing and Bill Paying 157
3.7 ON-DEMAND DELIVERY OF PRODUCTS, DIGITAL ITEMS,ENTERTAINMENT, AND GAMING 158
On-Demand Delivery of Products 158Online Delivery of Digital Products, Entertainment,
and Media 159Online Entertainment 160
3.8 ONLINE PURCHASE-DECISION AIDS 161Shopping Portals 162Shopbots Software Agents 162Business Ratings Sites 163Trust Verification Sites 163Other Shopping Tools 164
3.9 ISSUES IN E-TAILING AND LESSONS LEARNED 164Disintermediation and Reintermediation 164Channel Conflict 165Determining the Right Price 166Product and Service Customization
and Personalization 166Fraud and Other Illegal Activities 166Lessons Learned from Failures
and Lack of Success . 166
MANAGERIAL ISSUES 167
SUMMARY 168
KEY TERMS 169
QUESTIONS FOR DISCUSSION BY INDIVIDUAL STUDENTS 169
TOPICS FOR CLASS DISCUSSION 170
INTERNET EXERCISES 170
TEAM ASSIGNMENTS AND PROJECTS 171
Closing Case: Walmart Powers Online 171
ONLINE RESOURCES AVAILABLE ATpearsonhighered.com/turban 173
CHAPTER 4 ONLINE CONSUMER BEHAVIOR,MARKET RESEARCH, AND ADVERTISEMENT 174Netflix Increases Sales Using DVD
Recommendations and Advertisements 175
4.1 LEARNING ABOUT CONSUMER PURCHASING ONLINE 176A Generic Purchasing-Decision Model 176Customer Decision Support in Web Purchasing 177Players in the Consumer Decision Process 177One-to-One Marketing 178
Contents
4.2 PERSONALIZATION, LOYALTY, SATISFACTION,AND TRUST IN EC
Personalization and Behavioral Targetingin E-Commerce
Insights and Additions 4.1: Cookiesin E-Commerce
Customer LoyaltySatisfaction in ECTrust in EC
4.3 MARKET RESEARCH FOR ECMethods for Conducting Market Research Online
Case 4.1 EC Application: Internet Market ResearchExpedites Time-to-Market at Procter & Gamble
What are Marketers Looking for in ECMarket Research?
Market Segmentation ResearchMarket Research for One-to-OneLimitations of Online Market Research and How
to Overcome ThemBiometric Marketing
4.4 WEB ADVERTISINGOverview of Web AdvertisingSome Basic Internet Advertising TerminologyWhy Internet Advertising?
4.5 ONLINE ADVERTISING METHODSBannersPop-Up and Similar AdsE-Mail AdvertisingClassified AdsSearch Engine AdvertisementViral Marketing and Advertising
Insights and Additions 4.2: Google's MajorAdvertisement Methods
4.6 ADVERTISING IN SOCIAL NETWORKSAND THE WEB 2.0 ENVIRONMENT
Social Network AdvertisingAdvertising in Chat Rooms and ForumsVideo Ads on the Web and in Social NetworkingViral Marketing in Social Networks
179
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182183
183
184184184
188188
189189190191
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4.7 ADVERTISING STRATEGIES AND SPECIALADVERTISING TOPICS
Affiliate Marketing and AdvertisingAds as a Commodity (Paying People to Watch Ads)Selling Space by PixelsPersonalized Ads and Other PersonalizationOnline Events, Promotions, and Attractions
197198199199200
201201201201202202
Contents 15
4.8 SPECIAL ADVERTISING TOPICS 203
Permission Advertising 203
Advertisement as a Revenue Model 203
Measuring Online Advertising's Effectiveness 204
Mobile Marketing and Advertising 204
Ad Content 205
Software Agents in Marketing and Advertising
Applications 205
Localization 206
MANAGERIAL ISSUES 206
SUMMARY 207
KEY TERMS 208
QUESTIONS FOR DISCUSSION BY INDIVIDUAL STUDENTS 208
TOPICS FOR CLASS DISCUSSION 209
INTERNET EXERCISES 209
TEAM ASSIGNMENTS AND PROJECTS 210
Closing Case: Toyota Scion Goes Social for Advertising
and Market Research 210
ONLINE RESOURCES AVAILABLE AT
pearsonhighered.com/turban 212
I Bnsiness-to-Business E-Commerce £13_
CHAPTER 5 B2B E-COMMERCE 213Auction for Supplies Helps Portsmouth Hospitals 214
5.1 CONCEPTS, CHARACTERISTICS, AND MODELSOF B2B E-COMMERCE 215
Basic B2B Concepts 215Market Size and Content of B2B 215The Basic Types of B2B Transactions
and Activities 216The Basic Types of B2B E-Marketplaces
and Services 217B2B Characteristics 217Supply Chain Relationships in B2B 218Service Industries Online in B2B 218The Benefits and Limitations of B2B 219The Content of the B2B Field 220
5.2 ONE-TO-MANY: SELL-SIDE E-MARKETPLACES 221Sell-Side Models 221Selling from Catalogs 221Example: Cisco Systems 222
Case 5.1 EC Appl icat ion: Brady Corporation ReorganizesIts E-Catalog Production 223
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• V .
, * " <
5.3 SELLING VIA DISTRIBUTORS AND OTHER
INTERMEDIARIES 224
Case 5.2 EC Appl icat ion: W.W. Grainger and GoodrichCorporation 224
5.4 SELLING VIA E-AUCTIONS 225Using Auctions on the Sell Side 225Auctioning from the Company's Own Site 225Auction Rules 226Using Intermediaries in Auctions 226Examples of B2B Forward Auctions 227
5.5 ONE-FROM-MANY: BUY-SIDE E-MARKETPLACESAND E-PROCUREMENT 227
Procurement Methods 228Inefficiencies in Traditional Procurement Management 229The Goals and Benefits of E-Procurement 230
5.6 BUY-SIDE E-MARKETPLACES: REVERSE AUCTIONS 231Conducting Reverse Auctions 232Group Reverse Auctions 233
5.7 OTHER E-PROCUREMENT METHODS 233An Internal Purchasing Marketplace: Aggregating'
Suppliers' Catalogs and Desktop Purchasing 233Buying at Sellers' E-Auctions 234Group Purchasing 234Buying at Sellers' Sites and Collaborative Commerce 236Acquisition Via Electronic Bartering 236
5.8 B2B ELECTRONIC EXCHANGES: DEFINITIONSAND CONCEPTS 236
Case 5.3 EC Applicat ion: Agentrics: A Giant RetailExchange 237
Functions of Exchanges 238Dynamic Pricing in B2B Exchanges 239Advantages, Limitations, and the Revenue
Model of Exchanges 240
5.9 B2B PORTALS, DIRECTORIES, AND OWNERSHIP
OF B2B MARKETPLACES 241
B2B Portals 241
Case 5.4 EC Appl icat ion: Alibaba.com 242
Ownership of B2B Marketplaces 244Comparing the Many-to-Many B2B Models 245
5.10 B2B IN THE WEB 2.0 ENVIRONMENT AND
SOCIAL NETWORKING 245The Opportunities 245The Use of Web 2.0 Tools in B2B 246Social Networks in the B2B Marketplace 246Examples of Other Activities of B2B Social Networks 247The Future of B2B Social Networking 247
Contents 17
5.11 INTERNET MARKETING IN B2B EC 247
Organizational Buyer Behavior 248
The Marketing and Advertising Processes in B2B 248
Methods for B2B Online Marketing 248
Affi l iate Programs, Infomediaries,
and Data Mining 249
MANAGERIAL ISSUES 250
SUMMARY 250
KEY TERMS . . ^ 252
QUESTIONS FOR DISCUSSION BY INDIVIDUAL
STUDENTS 252
TOPICS FOR CLASS DISCUSSION 252
INTERNET EXERCISES 252
TEAM ASSIGNMENTS AND PROJECTS 253
Closing Case: iMarketKorea 254
ONLINE RESOURCES AVAILABLE ATpearsonhighered.com/turban 256
CHAPTER 6 INNOVATIVE EC SYSTEMS: FROM E-GOVERNMENTAND E-LEARNING TO C2C E-COMMERCEAND COLLABORATIVE COMMERCE 257Caterpillar Champions E-Learning 258
6.1 E-GOVERNMENT: AN OVERVIEW 259Definition and Scope 259Govern ment-to-Citizens 260Govemment-to,-Business 263Government-to-Government 264Government-to-Employees and Internal
Efficiency and Effectiveness 264Implementing E-Govemment 265The Transformation to E-Government 265E-Government 2.0 and Social Networking 265M-Govemment 266
6.2 E-LEARNING 267The Basics of E-Learning: Definitions
and Concepts 267Benefits and Drawbacks of E-Learning 269Distance Learning and Online Universities 271Online Corporate Training 272Implementing E-Learning and E-Training 273Social Networks and E-Learning 273Learning in Virtual Worlds and Second Life 273Visual Interactive Simulation 274E-Learning Tools and Management 274Electronic Books 276
V
18 Contents
6.3 KNOWLEDGE MANAGEMENT, LEARNING,
AND ELECTRONIC COMMERCE 278
An Overview of Knowledge Management 278
KM Types and Activities 279
Case 6.1 EC A p p l i c a t i o n : Knowledge Managementat Infosys Technologies 280
How Is Knowledge Management Related
to E-Commerce? 281
Online Advice and Consulting 282
~ Employee Knowledge Networks
and Expert Location Systems 283
Case 6.2 EC A p p l i c a t i o n : How the U.S. Departmentof Commerce Uses an Expert Location System 285
6.4 CONSUMER-TO-CONSUMER ELECTRONIC COMMERCE 286
E-Commerce: C2C Applications 286
6.5 COLLABORATIVE COMMERCE 288
Essentials of Collaborative Commerce 288
Collaboration Hubs 288
Implementing C-Commerce 290
Barriers to C-Commerce 290
MANAGERIAL ISSUES 291
SUMMARY 291
KEY TERMS 292
QUESTIONS FOR DISCUSSION BY INDIVIDUAL STUDENTS 293
TOPICS FOR CLASS DISCUSSION 293
INTERNET EXERCISES 293
TEAM ASSIGNMENTS AND PROJECTS 294
Closing Case: Social Networking Initiatives
by the New Zealand Government 294
ONLINE RESOURCES AVAILABLE AT
pearsonhighered.com/turban 296
Other Ff Mnriek anrl Applications 2Q7
7 THE WEB 2.0 ENVIRONMENTAND SOCIAL NETWORKS 297Wikipedia and Its Problems of Content,
Quality, and Privacy Protection 298
7.1 THE WEB 2.0 REVOLUTION, SOCIAL MEDIA,
AND INDUSTRY DISRUPTORS 299
What Is Web 2.0? 299
Representative Characteristics of Web 2.0 300
Web 2.0 Companies and New Business Models 300
Social Media 301
Industry and Market Disruptors 302
Contents 19
7.2 VIRTUAL COMMUNITIES 302Characteristics of Traditional Online Communities
and Their Classification 303
7.3 ONLINE SOCIAL NETWORKING: BASICSAND EXAMPLES 305
A Definition and Basic Information 305Representative Social Networks Sites and Services 307Mobile Social Networking 308
7.4 MAJOR^OCIAL NETWORK COMPANIES:FROM FACEBOOK TO FLICKR 309
Facebook: The Network Effect 309Bebo 310Twitter Is Also for Businesses 311Flickr Ticks Off Some of Its Users 312
7.5 BUSINESS AND ENTERPRISE SOCIAL NETWORKS 313Definitions, Concepts, Types, and Examples 313Business Social Networking: Concepts and Benefits 313Business-Oriented Social Networking 314Enterprise Social Networks 314Other Social Networking Structures 316
7.6 COMMERCIAL ASPECTS OF WEB 2.0 AND SOCIAL
NETWORKING APPLICATIONS 317Why Is There an Interest? 317Advertising Using Social Networks, Blogs, and Wikis 318Shopping in Social Networks 320Feedback From Customers: Conversational Marketing 320Commercial Activities in Business
and Enterprise Social Networks 321Revenue-Generation Strategies in Social Networks 323Risks and Limitations When Interfacing
with Social Networks 324
Case 7.1 EC Application: Revenue Sources at YouTube . . . . 324Justifying Social Media and Networking 325
7.7 ENTERTAINMENT WEB 2.0 STYLE: FROM SOCIAL
NETWORKS TO MARKETPLACES 326
Entertainment and Social Networks 326
Mobile Web 2.0 Devices for Entertainment and Work 328
7.8 THE FUTURE: WEB 3.0 AND WEB 4.0 329
Web 3.0: What's Next? 329
MANAGERIAL ISSUES 331
SUMMARY 332
KEY TERMS 332
QUESTIONS FOR DISCUSSION BY INDIVIDUAL STUDENTS 333
TOPICS FOR CLASS DISCUSSION 333
INTERNET EXERCISES 333
TEAM ASSIGNMENTS AND PROJECTS 334
20 ' Contents
Closing Case: Linkedin: The Business-OrientedSocial Network 335
ONLINE RESOURCES AVAILABLE ATpearsonhighered.com/turban 336
CHAPTER 8 MOBILE COMPUTING AND COMMERCE 337The Blooming of Food Lion 338
8.1 MOBILE COMMERCE: ATTRIBUTES, BENEFITS,-" AND DRIVERS 339
Attributes of M-Commerce 340Drivers of M-Commerce 341
8.2 COMPONENTS, TECHNICAL INFRASTRUCTURE,AND SERVICES OF MOBILE COMPUTING 342
Mobile Devices 342Mobile Computing Software and Services 343Wireless Telecommunications Networks 345
8.3 MOBILE FINANCIAL APPLICATIONS 348Mobile Banking 348Mobile Payments • 349
Case 8.1 EC Application: Closing the DigitalDivide with Mobile Microfinance 350
8.4 MOBILE MARKETING AND ADVERTISING 351Mobile Marketing Campaigns 351Mobile Marketing Guidelines 352
8.5 MOBILE WORKFORCE SOLUTIONS 353Needs of the Mobile Workforce 353
8/6 MOBILE ENTERTAINMENT 356Growth of the Mobile Entertainment Market 356Mobile Music and Video 356Mobile Games 357Mobile Gambling 358
8.7 LOCATION-BASED MOBILE COMMERCE 359L-Commerce Infrastructure 360Location-Based Services and Applications 362Barriers to Location-Based M-Commerce 363
8.8 SECURITY AND OTHER IMPLEMENTATION
ISSUES IN MOBILE COMMERCE 363M-Commerce Security Issues 364Technological Barriers to M-Commerce 364Ethical, Legal, and Health Issues in M-Commerce 365
MANAGERIAL ISSUES 366
SUMMARY 367
KEY TERMS , 368
QUESTIONS FOR DISCUSSION BY INDIVIDUAL STUDENTS 369
TOPICS FOR CLASS DISCUSSION 369
Contents 21
INTERNET EXERCISES 369
TEAM ASSIGNMENTS AND PROJECTS 370
Closing Case: Walmart Turns to Mobilefor Weather Alerts 370
ONLINE RESOURCES AVAILABLE AT
\ pearsonhighered.com/turban 371
5 EC Support Sen/ires 373
CHAPTER 9 E-COMMERCE SECURITYAND FRAUD PROTECTION 373How Seattle's Hospital
Survived a Bot Attack 374
9.1 THE INFORMATION SECURITY PROBLEM 375What Is EC Security? 375The Drivers of EC Security Problems 378Why Is E-Commerce Security Strategy Needed? 380
9.2 BASIC E-COMMERCE SECURITY ISSUESAND LANDSCAPE 380
The Security Basic Terminology 381The EC Security Battleground 381Security Scenarios and Requirements
in E-Commerce 383The Defense: Defenders and Their Strategy 385
9.3 TECHNICAL ATTACK METHODS 386Technical and Nontechnical Attacks: An Overview 386Malicious Code: Viruses, Worms, and Trojan Horses 386
9.4 PHISHING, FINANCIAL FRAUD, AND SPAM 389Phishing 390Fraud on the Internet 391Spam and Spyware Attacks 393
Case 9.1 EC Application: Internet Stock Fraud Aidedby Spam 394
Social Networking Makes Social Engineering Easy 394
9.5 THE INFORMATION ASSURANCE MODELAND DEFENSE STRATEGY 396
Confidentiality, Integrity, and Availability 397Authentication, Authorization, and Nonrepudiation 397E-Commerce Security Strategy 398
9.6 THE DEFENSE I: ACCESS CONTROL, ENCRYPTION,
AND PKI 399Access Control 399Encryption and the One-Key (Symmetric) System 401Public Key Infrastructure (PKI) 402
9.7 THE DEFENSE I I : SECURING E-COMMERCE NETWORKS . . . 405Firewalls 405
22 Contents
Virtual Private Networks (VPNs) 406Intrusion Detection Systems (IDSs) 407Honeynets and Honeypots 407
9.8 THE DEFENSE I I I : GENERAL CONTROLSAND OTHER DEFENSE MECHANISMS 408
General Controls 408Application Controls 409Internal Control and Compliance Management 410Protecting Against Spam 411Protecting Against Pop-Up Ads 411Protection Against Phishing 412Protecting Against Spyware 412
9.9 BUSINESS CONTINUITY, SECURITY AUDITING,AND RISK MANAGEMENT 412
Business Continuity and DisasterRecovery Planning 413
Case 9.2 EC Appl icat ion: Business Continuityand Disaster Recovery 414
Risk-Management and Cost-Benefit Analysis 415
9.10 IMPLEMENTING ENTERPRISE-WIDE E-COMMERCESECURITY 416
Senior Management Commitment and Support 416EC Security Policies and Training 416EC Security Procedures and Enforcement 417Industry Standards for Credit Card Protection (PCI DSS) 417Why Is I t Difficult to Stop Internet Crime? 417
MANAGERIAL ISSUES 419
SUMMARY 420
KEY TERMS 422
QUESTIONS FOR DISCUSSION BY INDIVIDUAL STUDENTS 423
TOPICS FOR CLASS DISCUSSION 423
INTERNET EXERCISES 423
TEAM ASSIGNMENTS AND PROJECTS 424
Closing Case: UBS PaineWebber's Business OperationsDebilitated by Malicious Code 424
ONLINE RESOURCES AVAILABLE ATpearsonhighered.com/turban 426
CHAPTER 10 ELECTRONIC COMMERCE PAYMENT SYSTEMS 427Pay-Per-View Pages: The Next iTunes 428
10.1 THE PAYMENT REVOLUTION 430
1 0 . 2 USING PAYMENT CARDS ONLINE 431Processing Cards Online 432Fraudulent Card Transactions 432
Contents 23
10.3 SMART CARDS 435Types of Smart Cards 436Applications of Smart Cards 437
Case 10.1 EC Applicat ion: TaiwanMoney Card 439
10.4 STORED-VALUE CARDS 440
10.5 E-MICROPAYMENTS 441
10.6 E-CHECKING 443
Case 10.2 EC .Application: To POP or BOC: Digital Checksin the Offline World 444
MANAGERIAL ISSUES 447
SUMMARY 448
KEY TERMS 449
QUESTIONS FOR DISCUSSION BY INDIVIDUAL STUDENTS 449
TOPICS FOR CLASS DISCUSSION 449
INTERNET EXERCISES 449
TEAM ASSIGNMENTS AND PROJECTS 450
Closing Case: Freemiums in the SocialGaming World 450
ONLINE RESOURCES AVAILABLE AT
pearsonhighered.com/turban 452
8 Strategy and Implementation 4-53
CHAPTER 11 EC STRATEGY ANDIMPLEMENTATION:JUSTIFICATION, GLOBALIZATION, SMES,AND REGULATORY AND ETHICAL ISSUES 453Travelocity's Successful E-Strategy 454
11.1 STRATEGY, PLANNING, AND IMPLEMENTATIONOF ELECTRONIC COMMERCE 455
Strategy and the Web Environment 455The Strategic Planning Process 457
Case 11.1 EC Appl icat ion: Strategic Planningat InternetNZ 460
Business Planning in E-Commerce 461Business Case 462E-Commerce Strategy: Concepts and Overview 462
11.2 JUSTIFICATION AND COST-BENEFIT ANALYSIS 464Other Reasons Why EC Justification Is Needed 465EC Investment Categories and Benefits 465How Is an EC Investment Justified? 465What Needs to Be Justified? When Should
Justification Take Place? 466Using Metrics in EC Justification 466
24 Contents
11.3 DIFFICULTIES IN MEASURING AND JUSTIFYINGE-COMMERCE INVESTMENTS AND SUCCESS 468
The EC Justification Process 468Difficulties in Measuring Productivity
and Performance Gains 468Determining E-Commerce Success 470
11.4 GLOBAL E-COMMERCE 471Benefits and Extent of Operations 472Barriers to Global EC 472Breaking Down the Barriers to Global EC 474
Case 11.2 EC Applicat ion: Pierre Lang ExpandsInto Eastern Europe 475
11.5 E-COMMERCE IN SMALL AND MEDIUM-SIZED
ENTERPRISES 476Supporting SMEs 476
11.6 INTELLECTUAL PROPERTY AND OTHER
REGULATORY ISSUES 477Laws Are Subject to Interpretation 477
Case 11.3 EC Applicat ion: Is eBay a Store ora Bulletin Board? 478
Personal and Property Rights 478Intellectual Property Law (A Civil Law) 480
11.7 ETHICS IN E-COMMERCE 481Ethical Principals and Guidelines 482Business Ethics 482EC Ethical Issues 483
11.8 PRIVACY, VIOLATION AND PROTECTION, AND THE
CONFLICT WITH FREE SPEECH 484Privacy Rights and Protection 484Free Speech Online Versus Privacy Protection 485The Price of Protecting an Individual's Privacy 485How Information About Individuals Is Collected 486Privacy Issues in Web 2.0 Tools and Social Networks 487Privacy Protection Using Ethical Principles 488The USA Patriot Act 489
11.9 EC AND GREEN COMPUTING 490Operating Greener Businesses and Ecofriendly
Data Centers 490
11.10THE FUTURE OF ELECTRONIC COMMERCE 492Integrating the Marketplace with the Marketspace 492Social Networks 493Future Trends 493
MANAGERIAL ISSUES 494
SUMMARY 495
KEY TERMS " 496
QUESTIONS FOR DISCUSSION BY INDIVIDUAL STUDENTS 496
Contents 25
TOPICS FOR CLASS DISCUSSION 497
INTERNET EXERCISES 497
TEAM ASSIGNMENTS AND PROJECTS 498
Closing Case: Why Is Disney Funding Chinese Pirates? . . . 498
ONLINE RESOURCES AVAILABLE ATpearsonhighered.com/turban 499
CHAPTER 12 LAUNCHING A SUCCESSFUL ONLINE BUSINESSAND EC PROJECTS 500
REFERENCES 501
GLOSSARY 512
INDEX 526