Transcript E-Business and E-Commerce

Lecture 5
Ch. 6
E-Business and E-Commerce
6.1 e-Business Challenges and Str
ategies
• Mix of online channels & media gives consumers strong co
ntrol over where and how they interact with a business or b
rand.
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Managers need to know how to respond to changing cons
umer behavior & needs of business customers –
and how to deal with IT software vendors and consulting
firms.
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E-Business
– EC Organizations
E-commerce describes the process of buying, selling,
transferring, or exchanging products, services, and/or information
via computer networks, including the Internet. E-business refers
to a broader definition of e-commerce, not just the buying and
selling of goods and services, but also servicing customers,
collaborating with business partners, conducting e-learning, and
processing electronic transactions.
• Brick-and-mortar (or old-economy) refer to pure phy
sical organizations (corporations).
• Virtual (or pure-play) organizations are companies t
hat are engaged only in EC .
• Click-and-mortar (or click-and-brick) organizations a
re those that conduct some e-commerce activities, yet
their primary business is done in the physical world.
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Types of E-Business Transactions
• Business-to-business (B2B). Over 85% of EC volume is B2B.
• Business-to-consumers (B2C). Also called e-tailing.
• Consumers-to-business (C2B). Consumers make known a particu
lar need for a product or service, and then suppliers compete to
provide that product or service at the requested price;
e.g., Priceline.com
• Government-to-citizens (G2C) and to others. A government age
ncy provides services to its citizens via EC technologies.
• Mobile commerce (m-commerce). Transactions and activities are
conducted via wireless networks.
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E-Business Web Site Requirements and Challenges
• Availability relates to the server-side of e-business. An always on
facility is needed to maintain the business critical apps.
• Accuracy and Quick Response. Web software must be capable of
searching, sorting, processing promotions and payments, verifying
that the credit card number belongs to the person trying to use it
, confirming the purchase in real-time, etc. In time-sensitive B2B,
errors that delay delivery are intolerable.
• Security and PCI DSS Compliance. PCI DSS (Payment Card Indus
try Data Security Standard) is a set of infosec requirements to hel
p prevent credit card fraud.
• Integrating EC systems with enterprise systems. Need better int
egration across all customer points of interactions.
• Web analytics. Learning from Web traffic and log data.
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E-business Models
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Comparison shopping engines
Affiliate marketing
Electronic marketplaces and exchanges
Information brokers and matching services
Memberships
Forward auctions
Reverse auctions
Name-your-own-price
Online auctions
Online direct marketing.
Viral marketing
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6.2 B2C e-Commerce
• Most well-known B2C site is Amazon.com,
whose patented IT developments
provide a competitive edge
• ING Direct, largest online bank with high rates,
high-volume, low-margins, and high profits
• Online job market. Most companies and
government agencies advertise job openings,
accept résumés, and take applications via the Internet.
• Despite B2C ongoing growth, many e-tailers still face challe
nges that interfere with the growth of its e-tailing efforts
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Issues in E-tailing
1. Resolving channel conflict between an online selling
channel and physical selling channels
2. Resolving conflicts within click-and-mortar
organizations.
3. Managing order fulfillment, logistics, and reverse
logistics.
4. Determining viability and risk of online e-tailers.
5. Identifying appropriate revenue (business) models.
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6.3 B2B e-Commerce & e-Procure
ment
B2B
• comprises about 85% of e-commerce dollar volume.
• covers apps that enable an enterprise to form
electronic relationships with its distributors, resellers,
suppliers, customers, and other partners.
• By using B2B, organizations can restructure their
supply chains and partner relationships.
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6.4 E-Government
E-commerce models apply to government & the public s
ector
E-government is the use of Internet technology to
deliver information and public services to citizens,
business partners and suppliers of government entities
Benefits
• Improves the efficiency and effectiveness of govn’t
functions, including the delivery of public services
• Increases transparency by giving access to govn’t
information
• Citizens can provide feedback and more actively
participate in democratic institutions and processes
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Advertising Strategies and Revenu
e Models
• Affiliate marketing and advertising: an
organization refers consumers to other
companies’ Web sites.
• Viral marketing: word-of-mouth marketing;
customers promote a product or service by
telling many others about it, often via
tweets or texts.
• Customizing ads: marketing managers can
customize display ads based on users’
profiles.
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E-payment systems
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Electronic funds transfer (EFT)
Electronic checks
Electronic credit cards
Purchasing e-cards
e-Cash—smart cards
e-Cash—person-to-person
Electronic bill presentment and payments
Pay at ATMs
Micropayments
B2B special methods
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IT at Work 6.6
E-Money: The Future Currency
The growing e-money lifestyle in
Japan is making life more
convenient for consumers by
allowing transactions via mobiles.
The Mobile Suica system was
debuted by NTT DoCoMo in 2006.
Mobile Suica is a phone-based
smartcard that can be used for buying
rail tickets or accessing buildings.
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Figure 6.11 Contactless
Mobile Suica on mobile
phone; based on RFID
6.6 E-Business Ethics and Legal Iss
ues
• Privacy: Most e-payment systems know who the
buyers are; therefore, it’s necessary to protect the
buyers’ identities.
• Web tracking: By using tracking software and log files,
companies can track individuals’ movements on the
Internet.
• Job loss: EC may eliminate jobs.
• Disintermediation: Technology eliminates the need for
intermediaries, such as travel and insurance agents.
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