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3

Chapter 3
Retailing in Electronic Commerce: Products and Services
Learning Objectives
Describe electronic retailing (e-tailing) and its characteristics.
Define and describe the primary e-tailing business models.
Describe how online travel and tourism services operate and their impact on the industry.
Discuss the online employment market, including its participants, benefits, and limitations.
Describe online real estate services.
Discuss online stock-trading services.
Learning Objectives
Discuss cyberbanking and online personal finance.
Describe on-demand delivery by e-grocers.
Describe the delivery of digital products and online entertainment.
Discuss various e-tail consumer aids, including comparison-shopping aids.
Identify the critical success factors and failure avoidance tactics for direct online marketing and
e-tailing.
Describe reintermediation, channel conflict, and personalization in e-tailing.

Internet Marketing and Electronic Retailing
electronic retailing (e-tailing)
Retailing conducted online, over the Internet
e-tailers
Retailers who sell over the Internet

Internet Marketing and Electronic Retailing
Travel
Computer Hardware and Software
Consumer Electronics
Office Supplies
Sport and Fitness Goods
Books and Music
Toys
Health and Beauty
Entertainment
Apparel and Clothing
Jewelry
Cars
Services
Pet Supplies

Internet Marketing and Electronic Retailing
Characteristics of Successful
E-Tailing
High brand recognition
A guarantee provided by highly reliable or well-known vendors
Digitized format
Relatively inexpensive items
Frequently purchased items
Commodities with standard specifications
Well-known packaged items that cannot be opened even in a traditional store
E-Tailing Business Models
E-Tailing Business Models
Classification by Distribution Channel
Mail-order retailers that go online
Direct marketing from manufacturers
Pure-play e-tailers
Click-and-mortar retailers
Internet (online) malls
E-Tailing Business Models
direct marketing
Broadly, marketing that takes place without intermediaries between manufacturers and buyers; in the context of this book, marketing done online between any seller and buyer
virtual (pure-play) e-tailers
Firms that sell directly to consumers over the Internet without maintaining a physical sales channel
E-Tailing Business Models
click-and-mortar retailers
Brick-and-mortar retailers that offer a transactional Web site from which to conduct business
brick-and-mortar retailers
Retailers who do business in the non-Internet, physical world in traditional brick-and-mortar stores
E-Tailing Business Models
multichannel business model
A business model where a company sells in multiple marketing channels simultaneously (e.g., both physical and online stores)
Retailing in Online Malls
Referring directories
Malls with shared services
E-Tailing Business Models
Other B2C Models and Special Retailing
Representative special B2C services
Postal services
Services and products for adults
Wedding channels
Gift registries


Travel and Tourism Services Online
Special Services
Wireless services
Direct marketing
Alliances and consortia


Travel and Tourism Services Online
Benefits of Online Travel Services
To travelers
Free information accessible at any time from any place
Substantial discounts are available
To travel services providers
Airlines, hotels, and cruise lines sell otherwise-empty spaces
Direct selling saves the provider’s commission and its processing

Travel and Tourism Services Online
Limitations of Online Travel Services
Many people do not use the Internet
The amount of time and the difficulty of using virtual travel agencies may be significant, especially for complex trips and for inexperienced Internet surfers
Complex trips or those that require stopovers may not be available online because they require specialized knowledge and arrangements
Travel and Tourism Services Online
Corporate Travel
To reduce corporate travel costs, companies can make arrangements that enable employees to plan and book their own trips
Impact of EC on the Travel Industry
The Internet may be contributing to a sharp reduction in the number of travel agents
It has also driven the rise of intermediaries—third-party online sellers and portals provide price comparisons and a range of other value-adding services for the consumer
Employment, Placement, and the Job Market Online
Employment, Placement, and the Job Market Online
THE INTERNET JOB MARKET
Job seekers
Employers seeking employees
Job agencies
Government agencies and institutions
A consortium of large employers and college careers advisors
Global online portals
Employment, Placement, and the Job Market Online
Employment, Placement, and the Job Market Online
Limitations of the Electronic Job Market
The gap between those with skills and access to the Internet and those without
Companies find that they are flooded with applicants when they advertise online, screening is a time-consuming and costly process
Security and privacy
High turnover costs for employers by accelerating employees’ movement to better jobs
Employment, Placement, and the Job Market Online
Intelligent Agents in the Electronic Job Market
Intelligent agents for job seekers
Intelligent agents for employers
Employment, Placement, and the Job Market Online
Real Estate, Insurance, and Stock Trading Online
Real Estate
E-commerce and the Internet are slowly but surely having an ever increasing impact on the real estate industry
Real Estate Applications
Advice for consumers on buying or selling
Commercial real estate listings
Links to house listings in all major cities
Maps
Information on current mortgage rates
Real Estate, Insurance, and Stock Trading Online
Real Estate Mortgages
Many sites offer loan calculators
Mortgage brokers can pass loan applications over the Internet and receive bids from lenders that want to issue mortgages
“Name your own price” model
Aggregation of loan seekers package placed for bid on the Internet


Real Estate, Insurance, and Stock Trading Online
Insurance Online
Standard insurance policies, such as auto, home, life, or health are offered at a substantial discount
Third-party aggregators offer free comparisons of available policies
Several large insurance and risk-management companies offer comprehensive insurance contracts online
Real Estate, Insurance, and Stock Trading Online
Online Stock Trading
Investment information
Related financial markets
The risk of having an online stock account
Real Estate, Insurance, and Stock Trading Online
Banking and Personal Finance Online
electronic (online) banking (e-banking)
Various banking activities conducted from home or the road using an Internet connection; also known as cyberbanking, virtual banking, online banking, and home banking
Banking and Personal Finance Online
Banking and Personal Finance Online
International and Multiple-Currency Banking
Some international retail purchasing can be done by providing a credit card number, other transactions may require international banking support

Banking and Personal Finance Online
Online Financial Transaction Implementation Issues
Securing financial transactions
Access to banks’ intranets by outsiders
Imaging systems
Pricing online versus offline services
Risks
Banking and Personal Finance Online
Personal Finance Online
Online Billing and Bill Paying
Automatic transfer of mortgage payments
Automatic transfer of funds to pay monthly utility bills
Paying bills from online banking accounts.
Merchant-to-customer direct billing
Using an intermediary for bill consolidation
Person-to-person direct payment
Pay bills at bank kiosks
Taxes
On-Demand Delivery Systems and E-Grocers
e-grocer
A grocer that takes orders online and provides deliveries on a daily or other regular schedule or within a very short period of time
on-demand delivery service
Express delivery made fairly quickly after an online order is received
Online Delivery of Digital Products, Entertainment, and Media


Online Delivery of Digital Products, Entertainment, and Media
Online Entertainment
Examples of online entertainment
Web browsing
Internet gaming
Fantasy sports games
Single and multiplayer games
Adult entertainment
Card games
Social networking sites
Participatory Web sites
Reading
Live events
Online Delivery of Digital Products, Entertainment, and Media
Entertainment-related services
Event ticketing
Restaurants
Information retrieval
Retrieval of audio and video entertainment

Online Delivery of Digital Products, Entertainment, and Media
Developments in the Delivery of Digital Products
CD customization sites
The disintermediation of traditional print media
Digital delivery may replace or enhance traditional delivery methods for various types of digital content
Online Purchase-Decision Aids
shopping portals
Gateways to e-storefronts and e-malls; may be comprehensive or niche oriented
shopping robots (shopping agents or shopbots)
Tools that scout the Web on behalf of consumers who specify search criteria
“Spy” services
Wireless Shopping comparisons
Online Purchase-Decision Aids
Business Ratings Sites
Trust Verification Sites
Other Shopping Tools
Amazon.com’s A9 Search Engine
Answers.com
Problems with E-Tailing and Lessons Learned
The reasons that retailers give for not going online include:
Their product is not appropriate for Web sales
Lack of significant opportunity
High cost
Technological immaturity
Online sales conflict with core business
Problems with E-Tailing and Lessons Learned
Lessons Learned
Don’t ignore profitability
Manage new risk exposure
Watch the cost of branding
Do not start with insufficient funds
The web site must be effective
Keep it interesting
Problems with E-Tailing and Lessons Learned
Successful Click-and-Mortar Strategies
Speak with one voice
Leverage the multichannels
Empower the customer
Issues in E-Tailing
disintermediation
The removal of organizations or business process layers responsible for certain intermediary steps in a given supply chain
reintermediation
The process whereby intermediaries (either new ones or those that had been disintermediated) take on new intermediary roles
Issues in E-Tailing
Issues in E-Tailing
cybermediation (electronic intermediation)
The use of software (intelligent) agents to facilitate intermediation
hypermediation
Extensive use of both human and electronic intermediation to provide assistance in all phases of an e-commerce venture
Unbundling
Issues in E-Tailing
channel conflict
Situation in which an online marketing channel upsets the traditional channels due to real or perceived damage from competition
Issues in E-Tailing
Determining the Right Price
Personalization
Fraud and Other Illegal Activities
How to Make Customers Happy
Managerial Issues
What should our strategic position be?
Are we financially viable?
How should we introduce wireless shopping?
Are there international legal issues regarding online recruiting?
Managerial Issues
Do we have ethics and privacy guidelines?
How will intermediaries act in cyberspace?
Should we set up alliances?

2

Chapter 2
E-Marketplaces: Structures, Mechanisms, Economics, and Impacts
Learning Objectives
Define e-marketplaces and list their components.
List the major types of e-marketplaces and describe their features.
Describe the various types of EC intermediaries and their roles.
Describe electronic catalogs, shopping carts, and search engines.
Describe the major types of auctions and list their characteristics.
Learning Objectives
Discuss the benefits, limitations, and impacts of auctions.
Describe bartering and negotiating online.
Define m-commerce and explain its role as a market mechanism.
Discuss competition in the digital economy.
Describe the impact of e-marketplaces on organizations and industries.
E-Marketplaces
A virtual marketplace in which buyers and seller meet and conduct business transactions.
Usually we use the term to refer to B-B.
The three types of e-marketplaces are private, public, and consortia
E-Marketplaces
E-Marketplaces
marketspace
A marketplace in which sellers and buyers exchange goods and services for money (or for other goods and services) but do so electronically
What is the difference between marketspace & marketplace?

e-marketplace and transactions electronically
E-marketplace transactions may not be electronic but manual
Hence is a subset of e-marketplace

Customers
Sellers
Products and services
Physical products
digital products
Goods that can be transformed to digital format and delivered over the Internet
Infrastructure
Front end
Back end
Intermediaries
Third parties that operates between sellers and buyers
Other business partners
Support services
E-Marketplaces
front end
The portion of an e-seller’s business processes through which customers interact, including the seller’s portal, electronic catalogs, a shopping cart, a search engine, and a payment gateway
back end
The activities that support online order fulfillment, inventory management, purchasing from suppliers, payment processing, packaging, and delivery
Types of E-Marketplaces: From Storefronts to Portals
Electronic Storefronts
storefront
A single company’s Web site where products or services are sold
e-mall (online mall)
An online shopping center where many online stores are located
Visualization and virtual realty in shopping malls
Types of E-Marketplaces: From Storefronts to Portals
Types of Stores and Malls
General stores/malls
Specialized stores/malls
Regional versus global stores
Pure-play online organizations versus click-and-mortar stores


Types of E-Marketplaces: From Storefronts to Portals
Types of E-Marketplaces: From Storefronts to Portals
Types of E-Marketplaces
private e-marketplaces
Online markets owned by a single company; may be either sell-side and/or buy-side e-marketplaces
sell-side e-marketplace
A private e-marketplace in which one company sells either standard and/or customized products to qualified companies
buy-side e-marketplace
A private e-marketplace in which one company makes purchases from invited suppliers
Types of E-Marketplaces: From Storefronts to Portals
Types of E-Marketplaces
public e-marketplaces
B2B marketplaces, usually owned and/or managed by an independent third party, that include many sellers and many buyers; also known as exchanges

Types of E-Marketplaces: From Storefronts to Portals
information portal
A single point of access through a Web browser to business information inside and/or outside an organization
Types of Portals
Commercial (public)
Corporate
Publishing
Personal
Mobile
Voice
Knowledge
Types of E-Marketplaces: From Storefronts to Portals
Transactions, Intermediation, and Process in E-Commerce
Sellers, Buyers, and Transactions
A seller (retailer, wholesaler, or manufacturer) sells to customers
The seller buys from suppliers: either raw material (as a manufacturer) or finished goods (as a retailer)


Transactions, Intermediation, and Process in E-Commerce
Transactions, Intermediation, and Process in E-Commerce
The Roles and Value of Intermediaries in E-marketplaces
infomediaries
Electronic intermediaries that provide and/or control information flow in cyberspace, often aggregating information and selling it to others

Transactions, Intermediation, and Process in E-Commerce
A broker is a company that facilitates transactions between buyers and sellers
Types of brokers
Buy/sell fulfillment
Virtual mall
Metamediary
Bounty
Search agent
Shopping facilitator
Transactions, Intermediation, and Process in E-Commerce
Intermediaries can address the following five important limitations of direct interaction:
Search costs
Lack of privacy
Incomplete information
Contract risk
Pricing inefficiencies
Transactions, Intermediation, and Process in E-Commerce
e-distributor
An e-commerce intermediary that connects manufacturers with business buyers (customers) by aggregating the catalogs of many manufacturers in one place—the intermediary’s Web site
Transactions, Intermediation, and Process in E-Commerce
disintermediation
Elimination of intermediaries between sellers and buyers
reintermediation
Establishment of new intermediary roles for traditional intermediaries that have been disintermediated, or for newcomers
Transactions, Intermediation, and Process in E-Commerce
Electronic Catalogs and Other Market Mechanisms
electronic catalogs
The presentation of product information in an electronic form; the backbone of most e-selling sites
Three dimensions of electronic catalogs:
The dynamics of the information presentation
The degree of customization
Integration with business processes
Electronic Catalogs and Other Market Mechanisms
Electronic Catalogs and Other Market Mechanisms
search engine
A computer program that can access databases of Internet resources, search for specific information or keywords, and report the results
software (intelligent) agent
Software that can perform routine tasks that require intelligence
Electronic Catalogs and Other Market Mechanisms
electronic shopping cart
An order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop

Auctions as EC Market Mechanisms
auction
A competitive process in which a seller solicits consecutive bids from buyers (forward auctions) or a buyer solicits bids from sellers (backward auctions). Prices are determined dynamically by the bids
Auctions as EC Market Mechanisms
Traditional Auctions versus
E-Auctions
Limitations of traditional offline auctions
rapid process gives potential buyers little time to make a decision
electronic auction (e-auction)
Auctions conducted online
dynamic pricing
Prices that change based on supply and demand relationships at any given time

Auctions as EC Market Mechanisms
Types of Auctions
One buyer, one seller
One seller, many potential buyers
forward auction
An auction in which a seller entertains bids from buyers. Bidders increase price sequentially


Auctions as EC Market Mechanisms
One buyer, many potential sellers
reverse auction (bidding or tendering system)
Auction in which the buyer places an item for bid (tender) on a request for quote (RFQ) system, potential suppliers bid on the job, with the price reducing sequentially, and the lowest bid wins; primarily a B2B or G2B mechanism
“name-your-own-price” model
Auction model in which a would-be buyer specifies the price (and other terms) he or she is willing to pay to any willing and able seller. It is a C2B model that was pioneered by Priceline.com

Auctions as EC Market Mechanisms
Auctions as EC Market Mechanisms
Many sellers, many buyers
double auction
Auctions in which multiple buyers and their bidding prices are matched with multiple sellers and their asking prices, considering the quantities on both sides

Auctions as EC Market Mechanisms
Benefits of E-Auctions
Benefits to Sellers
Benefits to Buyers
Benefits to E-Auctioneers
Limitations of E-Auctions
Minimal security
Possibility of fraud
Limited participation
Auctions as EC Market Mechanisms
Impacts of Auctions
Auctions as a coordination mechanism
Auctions as a social mechanism to determine a price
Auctions as a highly visible distribution mechanism
Auctions as an EC component
Bartering and Negotiating Online
Online Bartering
bartering
The exchange of goods or services
e-bartering (electronic bartering)
Bartering conducted online, usually in a bartering exchange
bartering exchange
A marketplace in which an intermediary arranges barter transactions
Bartering and Negotiating Online
Online Negotiating
Negotiated pricing commonly is used for expensive or specialized products
Negotiated prices also are popular when large quantities are purchased
Much like auctions, negotiated prices result from interactions and bargaining among sellers and buyers

E-Commerce in the Wireless Environment
mobile computing
Use of portable devices, including smart cell phones, usually in a wireless environment. It permits real-time access to information, applications, and tools that, until recently, were accessible only from a desktop computer

E-Commerce in the Wireless Environment
mobile commerce (m-commerce)
E-commerce conducted via wireless devices
m-business
The broadest definition of m-commerce, in which e-business is conducted in a wireless environment

E-Commerce in the Wireless Environment
The Mobility Revolution
Organizations are embracing mobilized computing technologies for several reasons:
Improved productivity of workers in the field
Wireless telecom support for mobility is growing quickly
More applications can run both online and offline
The prices of notebook computers, wireless handhelds, and smart phones continue to fall as their capabilities increase
E-Commerce in the Wireless Environment
The Promise of M-Commerce
location-based commerce (LBC)
An m-commerce application targeted to a customer whose location, preferences, and needs are known in real time
M-Commerce Adoption
Although there are currently many hurdles to the widespread adoption of m-commerce, many companies are already shifting their strategy to the mobile world
Competition in the Digital Economy and Its Impact on Industries
Internet ecosystem
The business model of the Internet economy
Competition in the Digital Economy and Its Impact on Industries
Lower search costs for buyers
Speedy comparisons
Lower prices
Customer service

Barriers to entry are reduced
Virtual partnerships multiply
Market niches abound
Differentiation and personalization
Competition in the Digital Economy and Its Impact on Industries
differentiation
Providing a product or service that is unique
personalization
The ability to tailor a product, service, or Web content to specific user preferences
Competition in the Digital Economy and Its Impact on Industries
Porter’s Competitive Analysis in an Industry
competitive forces model
Model devised by Porter that says that five major forces of competition determine industry structure and how economic value is divided among the industry players in an industry; analysis of these forces helps companies develop their competitive strategy
Competition in the Digital Economy and Its Impact on Industries
Impact on Whole Industries
Patient self-care is growing rapidly
The amount of free medical information is exploding
Patient empowerment is gaining importance
Increasing electronic interaction among patients, hospitals, pharmacies, etc.
Increasing digital hospital and other health-care facilities
Data collected about patients is growing in amount and quality
Easy and shared access to patient data
Elder care and special types of care are improving significantly due to wireless systems
Increasing need to protect patient privacy and contain cost

Impacts of EC on Business Processes and Organizations
Impacts of EC on Business Processes and Organizations
Impacts of e-marketplaces on B2C direct marketing:
Product promotion
New sales channel
Direct savings
Reduced cycle time
Improved customer service
Brand or corporate image
Customization
Advertising
Ordering systems
Market operations
Accessibility
Impacts of EC on Business Processes and Organizations
Transforming Organizations
Technology and organizational learning
The changing nature of work
Redefining Organizations
New and improved product capabilities
New industry order and business models
Improving the supply chain
Impacts of EC on Business Processes and Organizations
Impacts of EC on Business Processes and Organizations
Impacts of EC on Business Processes and Organizations
Impacts on manufacturing
Build-to-Order Manufacturing
build-to-order (pull system)
A manufacturing process that starts with an order (usually customized). Once the order is paid for, the vendor starts to fulfill it
Real-Time Demand-Driven Manufacturing
Virtual Manufacturing
Assembly Lines
Impacts on Finance and Accounting
Impact on Human Resources Management and Training
Managerial Issues
What about intermediaries?
Should we auction?
Should we barter?
What m-commerce opportunities are available?
How do we compete in the digital economy?
What organizational changes will be needed?

e-com

Chapter 1
Overview of Electronic Commerce
Learning Objectives
Define electronic commerce (EC) and describe its various categories.
Describe and discuss the content and framework of EC.
Describe the major types of EC transactions.
Describe the digital revolution as a driver of EC.
Describe the business environment as a driver of EC.
Learning Objectives
Describe some EC business models.
Describe the benefits of EC to organizations, consumers, and society.
Describe the limitations of EC.
Describe the contribution of EC to organizations responding to environmental pressures.
Describe online social and business networks.
Electronic Commerce: Definitions and Concepts
electronic commerce (EC)
The process of
buying, selling, or exchanging
products, services, or information
via computer networks

Electronic Commerce: Definitions and Concepts
The Internet has emerged as a major, perhaps eventually the major, worldwide distribution channel for goods, services, managerial and professional jobs
This is profoundly changing economics, markets and industry structure, products and services and their flow, consumer segmentation, consumer values, consumer behavior, jobs, and labor markets
The impact may be even greater on societies and politics, and on the way we see the world and ourselves in it
Electronic Commerce: Definitions and Concepts
EC can be defined from these perspectives:
Business process
Service
Learning
Collaboration
Community

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
Electronic Commerce: Definitions and Concepts
Pure versus Partial EC
EC can take several forms depending on the degree of digitization
the product (service) sold
the process (e.g., ordering, payment, fulfillment)
the delivery method
Electronic Commerce: Definitions and Concepts
Electronic Commerce: Definitions and Concepts
brick-and-mortar (old economy) organizations
Old-economy organizations (corporations) that perform their primary business off-line, selling physical products by means of physical agents
virtual (pure-play) organizations
Organizations that conduct their business activities solely online
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

Brick&Mortar, Click&Mortar or Virtual/Pureplay EC?
www.amazon.com
www.mph.com
www.ebay.com



Traditional Commerce, Partial EC or Pure EC?
Buying physical book from Popular bookstore in Sunway Lagoon Shopping Ctr
Buying physical book from Amazon.com
Buying digital book from Amazon.com
Buying PC from Dell.com
Electronic Commerce: Definitions and Concepts
Internet versus Non-Internet EC
Most 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
Electronic Commerce: Definitions and Concepts
electronic market (e-marketplace)
An online marketplace where buyers and sellers meet to exchange goods, services, money, or information

What is a marketplace?
Electronic Commerce: Definitions and Concepts
interorganizational information systems (IOSs)
Communications systems that allow routine transaction processing and information flow between two or more organizations
intraorganizational information systems
Communication systems that enable e-commerce activities to go on within individual organizations
Selling MMU souvenirs online to MMU Students & Staff
Selling Telecom products to MMU and other Telecom-related subsidiaries
The EC Framework, Classification, and Content
intranet
An internal corporate or government network that uses Internet tools, such as Web browsers, and Internet protocols
extranet
A network that uses the Internet to link multiple intranets
The EC Framework, Classification, and Content
The EC Framework, Classification, and Content
EC applications are supported by infrastructure and by these five support areas:
People
Public policy
Marketing and advertisement
Support services
Business partnerships
The EC Framework, Classification, and Content
Classification of EC by the Nature of the Transactions or Interactions
business-to-business (B2B)
E-commerce model in which all of the participants are businesses or other organizations
The EC Framework, Classification, and Content
business-to-consumer (B2C)
E-commerce model in which businesses sell to individual shoppers
e-tailing
Online retailing, usually B2C
business-to-business-to-consumer (B2B2C)
E-commerce model in which a business provides some product or service to a client business that maintains its own customers
The EC Framework, Classification, and Content
consumer-to-business (C2B)
E-commerce model in which individuals use the Internet to sell products or services to organizations or individuals who seek sellers to bid on products or services they need
mobile commerce (m-commerce)
E-commerce transactions and activities conducted in a wireless environment
The EC Framework, Classification, and Content
location-based commerce (l-commerce)
M-commerce transactions targeted to individuals in specific locations, at specific times
intrabusiness EC
E-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization
The EC Framework, Classification, and Content
business-to-employees (B2E)
E-commerce model in which an organization delivers services, information, or products to its individual employees
collaborative commerce (c-commerce)
E-commerce model in which individuals or groups communicate or collaborate online
consumer-to-consumer (C2C)
E-commerce model in which consumers sell directly to other consumers
The EC Framework, Classification, and Content
peer-to-peer (P2P)
Technology that enables networked peer computers to share data and processing with each other directly; can be used in C2C, B2B, and B2C e-commerce
e-learning
The online delivery of information for purposes of training or education
e-government
E-commerce model in which a government entity buys or provides goods, services, or information from or to businesses or individual citizens
The EC Framework, Classification, and Content
exchange
A public electronic market with many buyers and sellers
exchange-to-exchange (E2E)
E-commerce model in which electronic exchanges formally connect to one another for the purpose of exchanging information
B-C, B-B, B-B-C, C-C, C-B?
Amazon.com - and
Dell.com - and
Godiva.Com- and and
Priceline.com – and
Ebay.com- and and

The EC Framework, Classification, and Content
The Interdisciplinary Nature of EC
Early Years ….90s…Yahoo, Amazon, AOL
The Google Revolution
1999 onwards …..EC Failures e.g. eToys, Webvan.com, Ford Motors…
2002 onwards …EC Successes e.g. Bay, Wal-Mart online, FacetoFace, Campusfood.com, Alibaba.com

The EC Framework, Classification, and Content
The Future of EC
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
The EC Framework, Classification, and Content
The EC Framework, Classification, and Content
Digital Revolution Drives EC
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
What other economies are there?
Digital Revolution Drives EC
Business Environment Drives EC
The Business Environment
The business environment impact model
Business pressures
Organizational response strategies
Business Environment Drives EC
Business Environment Drives EC

Suppose you dream of a FANTASTIC Business idea that can help society and generate lots of $$$, how do you go about convincing the bankers to lend you the $ to start the business?
EC Business Models
business model
A method of doing business by which a company can generate revenue to sustain itself
Business Model subset of Business Plan/ Business Case

Six elements of a business model include descriptions of:
Customers to be served and the company’s relationships with these customers including customers’ value proposition
All products and services the business will offer
The business process required to make and deliver the products and services
The resources required and the identification of which ones are available, which will be developed in house, and which will need to be acquired
The organization’s supply chain, including suppliers and other business partners
The revenues expected (revenue model), anticipated costs, sources of financing, and estimated profitability (financial viability)
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
EC Business Models
The major revenue models are:
Sales
Transaction fees
Subscription fees
Advertising fees
Affiliate fees
Other revenue sources


EC Business Models
Functions of a Business Model
Articulate a customer value proposition
Identify a market segment
Define the venture’s specific value chain structure
Estimate the cost structure and profit potential
Describe the venture’s positioning within the value network linking suppliers and customers
Formulate the venture’s competitive strategy

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
EC Business Models
tendering (bidding) system
Model in which a buyer requests would-be sellers to submit bids; the lowest bidder wins
name-your-own-price model
Model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price
EC Business Models
affiliate marketing
An arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to the selling company’s Web site
viral marketing
Word-of-mouth marketing in which customers promote a product or service to friends or other people
EC Business Models
SMEs
Small-to-medium enterprises
group purchasing
Quantity (aggregated) purchasing that enables groups of purchasers to obtain a discount price on the products purchased

EC Business Models
e-co-ops
Another name for online group purchasing organizations
customization
Creation of a product or service according to the buyer’s specifications
Benefits and Limitations of EC
Benefits to
Organizations
Consumers
Society
Limitations
Technological
Nontechnological
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
The Digital Enterprise
digital enterprise
A new business model that uses IT in a fundamental way to accomplish one or more of three basic objectives: reach and engage customers more effectively, boost employee productivity, and improve operating efficiency. It uses converged communication and computing technology in a way that improves business processes
The Digital Enterprise
corporate portal
A major gateway through which employees, business partners, and the public can enter a corporate Web site


Managerial Issues
Is it real?
Why is B2B e-commerce so attractive?
There are so many EC failures—how can one avoid them?
How do we transform our organization into a digital one?

Managerial Issues
How should we evaluate the magnitude of business pressures and technological advancement?
How can we exploit social/business networking?
What should be my company’s strategy toward EC?
What are the top challenges of EC?