topic1 intdsadro
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Introduction to E-commerce
Definitions: What is e-commerce?
Major types of e-commerce
E-commerce: Then and now EC evolution
EC forecast Benefits and limitations of E-commerce
eadin!s: Te"t#oo$ % Chapter &
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What is e-commerce?E-business?
E-commerce
The use of the Internet and the Web to transact
business, i.e. digitally enabled commercial
transactions between and among organizations
and individuals.
E-business
Digital enablement of transactions and processeswithin a firm, involving information systems under
the control of the firm.
EC definitions
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Why Study E-commerce?
E-commerce technology is different, more
powerful than previous technologies
E-commerce bringing fundamental changes to
commerce
Traditional commerce:
Passive consumer
Sales-force driven
Fixed prices
nformation asymmetry
E! definitions
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Keep in mind when studyingIT1004 .
Are there really NEW concepts in e-commerce
vs traditional commerce?
Is this an old concept in new packaging?
Is this an old concept with a new twist?
Is this a brand new concept?
What is the implication? The impact?
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8 Unique features of E-commerce technologies
5
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EC Technology Features(Read on your own)
EC definitions
EC tech dimension Business Significance
Ubiquity Extension of mktplace beyond traditional boundaries.
Marketplace is no longer restricted to a physical spaceGlobalreach
Commerce enabled across cultural and national boundariesseamlessly and ithout modification
Uni!ersal stds "ne set of technical media standards across the globe
#ichness $ideo% audio% text messages integrated into a singlemarketing message and consuming experience
&nteracti!ity Consumers are engaged in a dialog that dynamically ad'uststhe experience of users. Consumers are co(participant in the
process of deli!ering goods to market&nfo density &nformation is cheap% plentiful and accurate
)ersonali*ation )ersonali*ation of marketing messages and customi*ation ofproducts+ser!ices based on indi!idual characteristics
Social technology &nternet social , business models enable user content
creation and distribution and support social netork
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Web 2.0
User-centered applications and social mediatechnologies create, edit, and distribute content
share preferences, bookmarks, and online personas
participate in virtual lives
Build online communities
Examples YouTube, Photobucket, nstagram
!acebook, "inkedn, Tumblr T#itter,
$ikipedia
E% definitions
Ch i i f W b 2 0 E( d fi iti
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Characteristics of Web 2.0applications
User-created/consumer-generated content
E.g. blogs, home-made videos, facebook widgets
Easy search capability
High interactive, connecting to people
E.g. facebook friend finders, games etc.
Attract etremely large audience
!n" How can companies harness these #ualities of $eb%.& applications to their benefit'
E( definitions
f EC
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Major Types of E-commerce
Classified by relationship
Business-to-Consumers (B2C)
Business-to-Business (B2B)
Consumer-to-Consumer (C2C)
E-Government
Classified by technology
Peer-to-Peer (P2P)
M-Commerce
ypes of EC
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E-commerce: Brief History
19952000: Innovation
Key concepts developed
Dot-coms; heavy venture capital investment
20012006: onsolidation
!mphasis on "usiness-driven approach
2006#resent: $einvention
!%tension o& technolo'ies
(e) models "ased on user-'enerated content* social
net)or+s* services
!#: )en and now
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EC 1995-2000: Innovation
For computer scientists Inexpensive, universal communications and computing
environment accessible by all
For economists: Nearly perfect competitive market;
friction-free commerce
Lowered searc costs, disintermediation, price transparency,elimination of unfair competitive advantage
For entrepreneurs
!xtraordinary opportunity to earn far above normal returns oninvestment"first mover advantage
#onclusion: $isions of profiting from new tec, acieving very ig market
visibility% &ource of finance ' venture capital funds (econstruction and disintermediation
!#: )en and now
!#: )en and now
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EC 2000-2006:
Consolidation
&ift of focus from tecnology driven to business
driven
)raditional firms learn to use te *eb to strengtenteir market position and brand extension%
#apital market sun start-ups and return to more
traditional bank financing based on profitability
returned%
!#: )en and now
!#: )en and now
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EC 2007 Future:
Reinvention
+ise of new business models based on
consumer-generated content, social networking
and virtual online lives%
!#: )en and now
E commerce Then s!#: )en and now
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E-commerce: Then vs
Now
!#: )en and now
1995-2000 2000-2006 2007-future
)ec-driven usiness driven #ommunity driven
+evenue growt
empasis
!arnings and profits
empasis
udience . social network growt
empasis$enture capital
financing
)raditional financing !arly small buyouts by large online
players
/ngoverned &tronger regulation and
governance
!xtensive government surveillance
!ntrepreneurial Large traditional firms Large pure web-based firms
(isinterme-
diation
&trengten
intermediaries
&mall online intermediaries renting bi0
processes of larger firms
1erfect market Imperfect mkt, brands
. network effects
2arket imperfection
1ure online
strategies
2ixed bricks and clicks
strategies
+eturn of pure online strategies in new
mkts; bricks and clicks in traditional mktFirst-mover adv &trategic follower
strengt
First mover adv in new markets
A i E!#: )en and now
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Assessing E-commerce:Successes, Surprises & Failures
&tunning tecnological success
mixed success from business perspective
2any early visions not fulfilled
Friction-free commerce
Consumers less price sensitive Considerable price dispersion
Perfect competition
Information asymmetries persist
Intermediaries have not disappeared
First mover advantage Fast-followers often overtake first movers
!#: )en and now
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What does the future hold? )ecnology will propagate troug all commercial activity
!-commerce margins and profits will rise to levels more
typical of all retailers #ast of players will cange
Traditional Fortune 500 companies will play dominant
role New startup ventures will emerge with new products,
services
Number of successful pure online stores will remainsmaller tan integrated offline5online stores
+egulatory activity worldwide will grow
enefits5Limitations
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Benefits of E-commerce
enefit to 6rgani0ation
!xpands te market place
&ignificant cost savings
Improves business organi0ation and processes
1romotes interactivity wit customers and business
partners
enefits5Limitations
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Benefits of E-commerce
enefits to customers
#onvenience, speed and cost
#onsumer empowerment
uy customi0ed products and personali0ed services
at reasonable costs
Improved interactions wit mercants and oter
customers
Benefits/+imitations
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Benefits of E-commerce
Benefits to society
Enables more individuals to work at home, and to do
less traveling for shopping, resulting in less traffic onthe roads, and lower air pollution
Allows some merchandise to be sold at lower pricesbenefiting less affluent people
Facilitates delivery of public services at a reduced
cost, increases effectiveness, and/or improvesquality
Helping the handicapped
http//www!youtube!com/watch"v#k$i%&%'a(E)*feature#related
+enefits'imitations
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Telecommuting About 37 percent of US companies have adopted some kind of
flexible work arrangement, growing by 11 each year!
"n#office employees took less satisfaction in their $obs and felt less of a
relationship and obligation to their company
disappointed at having fewer and weaker relationships!
frustrated at a perceived increase in workload anddifficulties that telecommuting can present to finishingpro$ects and building strong working relationships!
Suggestions to mitigate this problem %ead the article
Source& http&''arstechnica!com'news!ars'post'())*)113#study#telecommuting#makes#work#worse#for#non#telecommuters!html
Benefits!imitations
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Limitations of E-commerce
Technical limitations
Systems security and reliability continues to be achallenge
Insufficient telecommunication bandwidth (certain
parts of the world) Software development tools and standards are still
evolving
Integration issues with existing applications anddatabases
Problems of interoperability and compatibility acrossplatforms and applications
Benefits!imitations
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Limitations of E-commerce
"onsumer and social factors # $xpensive technology
Sophisticated s%ill set
Security and Privacy
!ac% of touch and feel online &nresolved legal issues
Persistent global ine'uality limiting access to
or% ethics
0enefits12imitations
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Limitations of E-commerce
Work ethics??
CyberSource found that the peak shopping houron a recent
high-volume week (December 3 through December ! duringthe critical online holiday shopping season" was # pm $acifictime (% pm &astern time" ' work hours by anyones definition)
*n the other hand! online transactions hit their low point
between the hours of ## pm and % am $acific time (+ am and, am &astern time") fter that! as employees began going into work on the &ast Coast and then across the nation!shopping volumes also began climbing to their midday peak)
.he survey found a marked difference between workdays andweekends! too) .he highest-volume online shopping dayswere /onday and .uesday! while Saturday and Sunday hadthe lowest volumes)
Source http11www)emarketer)com1rticle)asp4?#55%3,67src8article9head9sitesearch
Wed 4pm peak online
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+%
Wed 4pm peak onlineshopping time :nternet shopping is ,; per cent higher at %pm on Wednesdays
compared to the esearch-shows-peak-time-online-shopping-
work)html
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+;
Read on your own
istory of e-commerce
@rowth of the :nternet and the web
*rigins of e-commerce
.echnology and e-commerce in perspective
$rediction for the future &-commerce organiAation themes
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Interesting References
istory of the :nternet (Bideo clips"
http11www)youtube)com1watch?v8r>pcSck%wo7feat
ure8related