06 e-commerce.ppt

7/27/2019 06 E-Commerce.ppt

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10.1 2007 by Prentice Hall

E-Commerce: DigitalMarkets, Digital Goods


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LEARNING OBJECTIVES

Describe the unique features of e-commerce, digital markets, anddigital goods. Analyze how Internet technology has changed value propositions andbusiness models. Describe the various types of e-commerce and how e-commerce haschanged consumer retailing and business-to-business transactions. Evaluate the role of m-commerce in business and describe the mostimportant m-commerce applications. Compare the principal payment systems for electronic commerce.


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Ubiquity: Internet is available everywhere, anytime.

Global reach: the technology reaches across national boundaries.

Universal standards: one set of technology standards.

Richness: Complexity & content of message. video, audio and text

messages are possible. Interactivity: the technology works through interaction with the

user.

Information density: Total & quality information are available to

all participant. The technology reduces information costs andraises quality.

Personalization/customization: The technology allowspersonalized messages to be delivered to individuals as well asgroups.

Why E-commerce is different


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Information Asymmetry : One party has more information

essential to the transaction than the other party. The

Internet shrinks information asymmetry

Disintermediation: The elimination of organizationsor business process layers responsible for certain

intermediary steps in a value chain, reducing costs to

the consumer

Key concepts in E-commerce: Digital markets

and Digital Goods in a Global Market Place


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The Benefits of Disintermediation to the Consumer


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10.6 2007 by Prentice Hall6

Internet Business Models

Virtual storefront: Sells physical products directly to

consumers or businesses. (Amazon.com)

Information broker: Provides product pricing and

availability information; generates revenue from

advertising or directing buyers to sellers.

Transaction Broker: Processes online sales

transactions for fee.

New Business Models and Value Propositions


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Internet Business Models Online Marketplace: Provides digital environment where

buyers and sellers meet. (eBay.com)

Content Provider: Provides digital content, such as news;revenue from fees or advertising sales. (WSJ.com, TheStreet.com)

Online Service Provider: Provides connectivity; revenuefrom fees, advertising, or marketing information.

(Xdrive.com)



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Internet Business Models (cont.)

Virtual Community: Provides online meeting place forpeople of similar interests. (Friendster.com, iVillage.com)

Portal: Provides initial point of entry to the Web, along with

specialized content and services. (Yahoo.com, MSN.com)

Syndicator: aggregates content or applications to resell as

package to third-party Web sites



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Types of Electronic Commerce

Business-to-customer (B2C): Retailing of products and

services directly to individual customers

(Wal-Mart.com)

Business-to-business (B2B): Sales of goods and

services to other businesses (Grainger.com,

Ariba.com)

Consumer-to-consumer (C2C): Individuals using the

Web for private sales or exchange (eBay.com )



Click-stream tracking tools: Collect data on customer activities at Websites and store them in a log

Interactive Marketing and

Personalization



Create unique personalized Web pages for each

customer

Increased closeness to customer increases value to

the customer, while reducing costs of interacting

with the customer

Web Personalization



Web Site Personalization



Blog: An informal yet structured web site wheresubscribing individual can publish stories, opinion, andalso link to other web site of interest. Personal Web pagethat contains a series of chronological entries by itsauthor, and links to related Web pages.

Business-to-business (B2B) electronic commerce: Newefficiencies and relationships

EDI

Procurement

Private industrial networks (private exchanges)

Net marketplaces

Exchanges



Electronic Data Interchange (EDI): Enables the

computer-to-computer exchange between two

organizations of standard transactions. Currently

80% of B2B e-commerce uses this system.

EDI is being replaced by more powerful Web-based

alternatives.

Business-to-Business Electronic Commerce:

New Efficiencies and Relationships



Electronic Data Interchange (EDI)

Companies use EDI to automate transactions for B2B e-commerce and continuous inventory replenishment. Suppliers can

automatically send data about shipments to purchasing firms. The purchasing firms can use EDI to provide production and

inventory requirements and payment data to suppliers.



Private Industrial Networks

The largest Web-based form of B2B commerce

Private B2B extranets that focus on continuous business

process coordination between a small group of companies

for collaboration and supply chain management. Wal-Mart

uses its own private network to coordinate more than

15,000 suppliers to its stores.



A Private Industrial Network



Net marketplaces (e-hubs) provide a single

marketplace for many different buyers and

sellers.

ELECTRONIC COMMERCE



A Net Marketplace : Net marketplaces (e-hubs) provide a single

marketplace for many different buyers and sellers.


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M-commerce: The use of the Internet for purchasing goods

and services and also for transmitting messages using

wireless mobile devices


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M-Commerce Services and Applications

Information-based services: Instant messaging, e-

mail, searching for a movie or restaurant using a cell

phone or handheld PDA

Transaction-based services: Purchasing stocks,

concert tickets, music, or games; searching for the

best price for an item using a cell phone and buying it

in a physical store or on the Web


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Personalized services: Services that anticipate

what a customer wants based on that persons

location or data profile, such as updated airline

flight information or beaming coupons for nearby

restaurants

M-Commerce Services and Applications (Continued)


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M-Commerce Challenges

Slow data transfer speeds on second-generation

cellular networks, resulting in higher costs tocustomer

Limited memory and power supplies


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More Web sites need to be designed specifically

for small wireless devices.

Keyboards and screens on cell phones are still

tiny and awkward to use.

M-Commerce Challenges (Continued)

Electronic Commerce Payment Systems


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Digital wallets Electronic storage of I.D. and digital cash.

Accumulated balance Used for micro payments. Similar to monthly telephone bills.

Stored value Used for micro payments. Pre-payment of funds, debited on use.

Smart Cards I.D. and credit information stored on a chip attached to a card. Used in E

Digital cash Electronic currency that can be transferred over the Web.

Peer-to-Peer payment Interpersonal transfer of funds such as PayPal.

Digital checking Electronic checks with digital signatures, used most often in B2B commer

Electronic billing presentmentand payment

Used by consumers to pay bills online, provided by many banks.

Credit cards The most common form of payment.


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Digital credit card payment systems: Secure credit card

payment over Web

Digital wallet: Stores credit card and owner identification,shipping information, to facilitate payment process

Accumulated balance digital payment systems:

Accumulates micro-payment purchases as debit balancepaid periodically on credit card or telephone bills



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Stored value payment system: Enables consumers

to make instant payments based on value stored in

digital account

Digital cash: Digital currency that can be used for

micropayments or larger purchases

Peer-to-Peer payment systems: Enables payments to

vendors not set up for credit-card payments

Electronic Commerce Payment SystemsElectronic Commerce Payment Systems


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Digital checking: Electronic check with secure digital

signature

Electronic billing presentment and payment system:Supports electronic payment for online and physical store

purchases after purchase has taken place

Electronic Commerce Payment SystemsElectronic Commerce Payment Systems

06 e-commerce.ppt

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