LESSON 9 - E-Commerce

• E-business

  • Activities a company performs for selling and buying products and services, using computers and communication technologies
• E-commerce

  • Buying and selling goods and services over the Internet
  • Builds on traditional commerce by adding the flexibility that networks offer and the availability of the Internet
• Value chain

  • Michael Porter
  • 1985
  • Series of activities designed to meet business needs by adding value (or cost) in each phase of the process
• PRIMARY ACTIVITIES IN VALUE-CHAIN

  1. Inbound Logistic
  2. Operations
  3. Outbound logistics
  4. Marketing and Sales
  5. Service
• SUPPORTING ACTIVITIES IN VALUE-CHAIN

  1. Organizational infrastructure
  2. Human Resource Management
  3. Technological development
  4. Procurement
• The Internet

  • Increases the speed and accuracy of communication between suppliers, distributors, and customers
  • Low cost means companies of any size can participate in value chain integration
• Internet and telecommunication technologies

  play major role
• Click-and-brick e-commerce

  • Mix of traditional and e-commerce
• E-Commerce Business Models

  • E-commerce companies focus their operations in different parts of the value chain
• Types of E-Commerce Business Models

  • Merchant
  • Brokerage
  • Advertising
  • Mixed
  • Informediary
  • Subscription
• Business-to-Consumer E-Commerce

  • Companies sell directly to consumers
  • Examples: Amazon.com. Barnesandnoble.com, Onsale.com
• TYPES OF B2C E-Commerce

  • Pure-play
  • Brick and mortar stores with virtual storefronts
• Business-to-Business E-Commerce

  • Involves electronic transactions between businesses
  • Electronic data interchange (EDI) and electronic funds transfer (EFT)
  • Fastest growing segment of e-commerce
  • Example: Walmart
• USES OF B2B E-Commerce

  • Purchase orders
  • Invoices
  • Inventory Status
  • Shipping logistics
  • Business contracts
  • Other operations
• Consumer-to-Consumer E-Commerce

  • Involves business transactions between users
  • Online classified ads: Craigslist.org
  • Online auction sites: eBay.com
• Consumer-to-Business E-Commerce

  • Involves people selling products or services to businesses
  • Example: Creating online surveys
  • Search for sellers of a product and services: Priceline.com
• E-government applications Categories:

  • Government-to-citizen (G2C)
  • Government-to-business (G2B)
  • Government-to-government (G2G)
  • Government-to-employee (G2E)
• Nonbusiness organizations:

  • Universities
  • Nonprofits
  • Political and social organizations
• Organizational or Intrabusiness E-Commerce

  • Involves e-commerce activities that take place inside an organization
  • Can include: Exchange of goods, services, or information among employees, Conducting training programs and offering human resource services
  • Supporting activities in Porter’s value chain
• Major Activities in B2C E-Commerce Cycle

  • Information sharing
  • Ordering
  • Payment
  • Fulfillment
  • Service and support
• B2B E-Commerce Additional Technologies

  • Intranet
  • Extranet
  • Virtual Private Network
  • Electronic Data Interchange (EDI)
  • Electronic Funds Transfer (EFT)
• Three major types of B2B e-commerce models,

  based on who controls the marketplace:

  1. Seller
  2. Buyer
  3. Intermediary (Third-party)
  4. Trading partner agreement (Fourth model)
• Seller-Side Marketplace

  • Most popular B2B model
  • Sellers who cater to specialized markets come together to create a common marketplace for buyers
  • Major vendors of e-commerce and B2B solutions include I2 Technologies, IBM, Oracle, and SAP
• E-procurement

  • Enables employees in an organization to order and receive supplies and services directly from suppliers
  • Can also automate some buying and selling activities
• E-procurement system for order processing

  • Has reduced the cost per order by streamlining paperwork
  • Replaced a centralized electronic data interchange (EDI) procurement system
  • Easy-to-use interface
• Buyer-Side Marketplace

  • Buyer, or a group of buyers, opens an electronic marketplace: Invites sellers to bid on announced products or requests for quotation (RFQs)
  • Buyers can: Manage the procurement process more efficiently, Lower administrative costs, Implement uniform pricing
  • Large corporations, such as General Electric or Boeing
• Third-Party Exchange Marketplace

  • Controlled by a third party
  • Marketplace generates revenue from the fees charged for matching buyers and sellers
  • Usually active in vertical or horizontal market
  • Offers suppliers a direct channel of communication to buyers through online storefronts
• Worldbid.com

  • International marketplace
  • Designed to help small to mid-sized companies buy and sell products or services domestically or internationally
• Trading Partner Agreements

  • Automate negotiating processes and enforce contracts between participating businesses
  • Business partners can send and receive bids, contracts, and other information needed when offering and purchasing products and services
  • Enables customers to submit electronic documents via the Internet that previously required hard copies with signatures: Using XML
• 
  

  Mobile commerce (m-commerce)

  • Based on Wireless Application Protocol (WAP)
  • Using handheld devices, such as smart phones or PDAs, to conduct business transactions
  • Examples: iPhone apps, Internet Explorer Mobile, Google mobile
• Supporting technologies of M-Commerce

  • Wireless wide-area networks and 3G networks
  • Short-range wireless communication technologies
• Voice-based e-commerce

  • Rely on voice recognition and text-to-speech technologies
  • Can conduct business using e-wallets
  • Security features: Call recognition, voice recognition, fixed shipping address
• E-Commerce Supporting Technologies

  • Electronic payment systemsWeb marketing

  Search engine optimization
• Electronic payment

  • Money or scrip that is exchanged only electronically
• Payment cards

  • Credit
  • Debit
  • Charge
  • Smart Cards
• Smart cards

  • Credit card sized
  • Contain an embedded microprocessor chip storing important financial and personal information
• Other types of payments:

  • E-cash
  • E-check
  • E-wallet
  • Paypal
  • Micropayments
• Web Marketing

  • Uses the Web and its supporting technologies to promote goods and services
• Terms of web marketing

  • Ad impression
  • Banner ads
  • Click
  • Cost per thousand (CPM)
  • Cost per click (CPC)
  • Click-through rate (CTR)
  • Cookie
  • Hit
  • Meta tag
  • Page view (PV)
  • Pop-up ads
  • Pop-under ads
  • Splash screen
  • Spot leasing
• Search Engine Optimization

  • Method for improving the volume or quality of traffic to a Web site