Chapter1 PDF

Chapter 1
Overview of Electronic Commerce
Learning Objectives
1. Define electronic commerce (EC) and describe its
various categories.
2. Describe and discuss the content and framework of
EC.
3. Describe the major types of EC transactions.
4. Discuss e‐commerce 2.0.
5. Describe social commerce and social software.
Copyright © 2012 Pearson Education, Inc.
Publishing as Prentice Hall 1‐1
Learning Objectives
6. Understand the elements of the digital world.
7. Describe the drivers of EC as they relate to business
pressures and organizational responses.
8. Describe some EC business models.
9. Describe the benefits of EC to organizations,
consumers, and society.
10. List and describe the major limitations of EC.
Electronic Commerce:
Definitions and Concepts
⚫ electronic commerce (EC)
The process of buying, selling, or exchanging
products, services, or information via computer
⚫ 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
⚫ MAJOR EC CONCEPTS
⚫ Pure Versus Partial EC
⚫ EC Organizations
⚫ brick‐and‐mortar (old economy) organizations
Old‐economy organizations (corporations) that perform their
primary business offline, selling physical products by means of
physical agents
⚫ virtual (pure‐play) organizations
Organizations that conduct their business activities solely online
⚫ click‐and‐mortar (click‐and‐brick) organizations
Organizations that conduct some e‐commerce activities, usually as
an additional marketing channel
⚫ ELECTRONIC MARKETS AND NETWORKS
⚫ electronic market (e‐marketplace)
An online marketplace where buyers and sellers meet
to exchange goods, services, money, or information
⚫ 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 Electronic Commerce Field:
Classification, Content, and a Brief History
⚫ AN EC FRAMEWORK
⚫ EC applications are supported by infrastructure and by
the following five support areas:
1. People
2. Public policy
3. Marketing and advertising
4. Support services
5. Business partnerships
⚫ CLASSIFICATION OF EC BY THE NATURE OF
THE TRANSACTIONS AND THE RELATIONSHIPS
AMONG PARTICIPANTS
⚫ business‐to‐business (B2B)
E‐commerce model in which all of the participants
are businesses or other organizations
⚫ 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
⚫ 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
⚫ 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
⚫ business‐to‐employees (B2E)
E‐commerce model in which an organization delivers
services, information, or products to its individual
employees
⚫ consumer‐to‐consumer (C2C)
E‐commerce model in which consumers sell directly
to other consumers
⚫ collaborative commerce (c‐commerce)
E‐commerce model in which individuals or groups
communicate or collaborate online
⚫ e‐government
E‐commerce model in which a government entity
buys or provides goods, services, or information from
or to businesses or individual citizens
⚫ A BRIEF HISTORY OF EC
⚫ The Interdisciplinary Nature of EC
⚫ The Google Revolution
⚫ f‐commerce
E‐commerce activities conducted on Facebook or
influenced by the site
⚫ EC Failures
⚫ EC Successes
⚫ THE FUTURE OF EC
E-Commerce 2.0:
From Social Commerce to Virtual Worlds
⚫ social computing
An approach aimed at making the
human–computer interface more natural
⚫ Web 2.0
The second generation of Internet‐based services
that lets people collaborate and share information
online in new ways, such as social networking sites,
wikis, communication tools, and folksonomies
E-Commerce 2.0:
⚫ social network
A category of Internet applications that help
connect friends, business partners, or individuals
with specific interests by providing free services such
as photo presentation, e‐mail, blogging, and so on
using a variety of tools
E-Commerce 2.0:
⚫ social networking service (SNS)
A service that builds online communities by
providing an online space for people to build free
homepages and that provides basic communication
and support tools for conducting different activities in
the social network
⚫ social networking
The creation or sponsoring of a social network service and
any activity, such as blogging, done in a social network
(external or internal)
E-Commerce 2.0:
⚫ ENTERPRISE SOCIAL NETWORKS
⚫ social commerce
The e‐commerce activities conducted in social
networks and/or by using social software (i.e., Web
2.0 tools)
E-Commerce 2.0:
⚫ VIRTUAL WORLDS AND SECOND LIFE
⚫ virtual world
A user‐defined world in which people can interact, play,
and do business; the most publicized virtual world is
Second Life
⚫ How Students Make Money in a Virtual World
⚫ THE MAJOR TOOLS OF WEB 2.0
⚫ Wikis
⚫ RSS feeds
⚫ Blogs
⚫ Microblogs (e.g.,Twitter)
The Digital World:
Economy, Enterprises, and Society
⚫ 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
The Digital World:
Economy, Enterprises, and Society
⚫ 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; uses
converged communication and computing technology in a
way that improves business processes
⚫ corporate portal
A major gateway through which employees, business
partners, and the public can enter a corporate website.
⚫ THE DIGITAL SOCIETY
The Changing Business Environment,
Organizations’ Response, and EC Support
⚫ THE CHANGING BUSINESS ENVIRONMENT
⚫ PERFORMANCE, BUSINESS PRESSURES, AND
ORGANIZATIONAL RESPONSES AND EC
SUPPORT
⚫ The Business Environment and Performance
Impact Model
⚫ Business Pressures
⚫ Organizational Response Strategies
⚫ The support of EC
⚫ The Major Capabilities of E‐Commerce
Electronic Commerce Business Models
⚫ business model
A method of doing business by which a company
can generate revenue to sustain itself
⚫ THE STRUCTURE AND PROPERTIES OF
BUSINESS MODELS
⚫ Revenue Models
⚫ value proposition
The benefits a company can derive from using EC
⚫ Functions of a Business Model
⚫ TYPICAL EC BUSINESS MODELS
1. Online direct marketing
2. tendering (bidding) system
Model in which a buyer requests would‐be sellers to
submit bids; the lowest bidder wins.
3. Electronic marketplaces and exchanges
4. Viral marketing
5. Group purchasing
Benefits, Limitations,
and Impacts of Electronic Commerce
⚫ THE BENEFITS AND IMPACTS OF EC
⚫ EC as a Provider of Competitive Advantage
⚫ THE LIMITATIONS AND BARRIERS OF EC
⚫ ethics
The branch of philosophy that deals with what is
considered to be right and wrong
⚫ WHY STUDY E‐COMMERCE?
Managerial Issues
1. Is EC real?
2. Why is B2B e‐commerce so essential and successful?
3. Which EC business model should I choose?
4. How can we exploit social commerce?
5. What are the top challenges of EC today?
Summary
1. Definition of EC and description of its various
categories
2. The content and framework of EC
3. The major types of EC transactions
4. E‐commerce 2.0
5. Description of social commerce and social software
Summary
6. The elements of the digital world
7. The drivers of EC
8. The major EC business models
9. Benefits of EC to organizations, consumers, and
society
10. Limitations of e‐commerce
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

Publishing as Prentice Hall
Copyright © 2012 Pearson
Education, Inc. Publishing as
Prentice Hall 35

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