THREE 1

E-Commerce

THREE 2

Pentagon’s Arpanet was first attempt to use computer networks to share knowledge electronically

National Science Foundation developed system further to permit public access to build first internet

Now local area networks (LANS) connected to wider area networks (WANS) using TCP/IP protocol

Originally text based now evolved into visual, audio and text knowledge format transfers

THREE 3

Internet is only one component of way organisations use electronic media to share knowledge

Volume and quality of knowledge exchange has been dramatically improved

Anderson project concluded “5 Truths” of: New market structures Knowledge gains value Zero cost of operation Reduction in prices Instant delivery

THREE 4

Economics

E-Commerce provides knowledge and as knowledge approaches perfect competition (“everybody is informed”) should move prices downwards

Evidence from some sectors (e.g. Tickets; books) In B2B markets administration costs are reduced

due to electronic data transferMarketing costs are lowered by advent of

automated web sites providing customer with knowledge at “touch of a button”

THREE 5

Scale of e-commerce is massive In 1999 e-commerce in USA equalled entire

GDP of Switzerland Industrial e-commerce markets are much

bigger than on-line consumer marketsRapid growth of e-commerce attracted

entrepreneurs and venture capitalists

THREE 6

Many dot.com start-ups had high expenses but lacked knowledge of how to build viable sales base

Late 90s saw the dot.com unsustainable bubble burst

Real success stories are existing terrestrial firms that moved on-line

Able to exploit existing knowledge of markets and exploit customers’ knowledge of their existence

THREE 7

BenefitsRange of benefits to customers from on-line

trading: Convenience of 24/7 operations More knowledge provision Fewer hassles (no shopping trip) Multi-media knowledge delivery New products/services

For firms—benefits include: Lower operating costs Improved distribution Reduced personal selling costs Ability to build closer customer relations Customised promotions Faster market response New opportunities

THREE 8

FIGURE 3:1 AN E-COMMERCE ALTERNATIVE ORIENTATION MATRIX

Low High

High

Low

Knowledge content focus orientation

Integratede-commerce knowledge orientation

Low knowledge involvement orientation

Transaction knowledge focus orientation

Role of E-commerce in Knowledge Provision

Role of E-commerce in using knowledge to support the Purchase Transaction

THREE 9

Terrestrial good practice still applies in cyberspace

Technology is only a facilitator Marketers must lead process Technology must offer additional benefits to

customers

Originally technology was designed to permit e-mails and discussion groups

Original web sites published static knowledgeGateway interface technology permitted on-

line data interaction between supplier and user

THREE 10

Applications programme interface (API) allowed supplier and user to store data usage and speed up knowledge-access activities

Certain firms more successful (e.g. Cisco) because:

Customer driven Established commitment to TQM and JIT High level of expertise in IT High expertise in supply chain management

Success requires move to systems automation to optimise knowledge exchange

THREE 11

FIGURE 3:2 AN AUTOMATED E-BUSINESS DATABASE SYSTEM

Firm’s Database

Customer Web Browser

Rational Database Server

Web-to-Database Middleware

API Interface

Web Server

Integration of Data from all internal operations

Internet

THREE 12

Needs to exploit automated data utilisation: All data integrated on single location Data must be organised by topic Data must remain accurate over time

Move to use relationship databases to enhance ability to analyse data and generate new knowledge

Real Time Data Mining permits almost instant access to knowledge, identifying market change and new opportunities