Transcript Slide 1

Chapter Extension 11
E-Commerce
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
Study Questions
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CE11-2
What is e-commerce?
How does e-commerce improve market
efficiency?
What economic factors disfavor
e-commerce?
What Web technology is used for
e-commerce?
What is three-tier architecture?
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
What Is E-Commerce?
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Buying and selling of goods and services
Over public and private computer networks
Merchant companies
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Non-merchant companies
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Take title to goods they sell
Sell their own services
Do not own goods
Arrange for purchase and sale
Sell services of others
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
E-Commerce Merchant Companies
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B2C
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Business-to-consumer
Sales between supplier and retail costumer
Web storefront application employed
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B2B
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Customers enter site
Manage orders
Business-to-business
Sales between companies
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
E-Commerce Merchant
Companies, continued
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B2G
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Business-to-government
Sales between companies and government
agencies
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
B2B, B2G, and B2C
Figure CE11-2
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© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
Non-Merchant E-Commerce
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E-commerce auctions
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Clearinghouses
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Online versions of standard auctions
Supports competitive bidding
Example: eBay
Provide goods and services
Arrange for delivery
Do not take title
Example: electronic exchanges
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
How Does E-Commerce Improve
Market Efficiency?
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For buyers:
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Leads to disintermediation
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Improves flow of price information
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Elimination of middle layers in supply chain
Distributor and associated inventories are unnecessary
waste
Many sites offer price comparisons
Avoid state tax
Eliminate or reduce shipping expenses
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
How Does E-Commerce Improve
Market Efficiency?, continued
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For sellers:
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Produces information about price elasticity
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Amount that demand rises and falls based on price
changes
Allows companies to experiment on customers
Allows management of prices through direct interaction
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
E-Commerce Market Consequences
Figure CE11-4
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© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
What Economic Factors Disfavor
E-Commerce?
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Companies consider:
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Channel conflict
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Price conflict
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Costs of entering and processing small quantities increases
Customer service expense
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Price offered online may cause conflicts with existing channels
Logistics expense
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Value of lost sales must be less than value of e-commerce
sales
Manufacturer will have to service small customers on one-byone basis
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
What Web Technology Is Used for
E-Commerce?
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SMTP
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FTP
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E-mail
File exchange
HTTP
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Transmits Web pages over the Internet
Web pages encoded in HTML
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Defines structure and layout of Web pages
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
Web Pages
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Encoded in HTML
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Tag used to define data element
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Hyperlinks point to other Web pages
Heading provides metadata about page
Body contains content
Transmitted by Web servers
Consumed by browsers
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Attribute provides properties about tag
Program that processes HTTP protocol
Receives, displays, and processes HTML documents
Transmits responses
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
What Is Three-Tier Architecture?
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Commerce server applications use three-tier
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User tier
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Service tier
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Computers that run Web servers and generate Web pages
Database tier
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Computers use browsers to request and process Web pages
Computers that process SQL requests to retrieve and store
data
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
Three-Tier Architecture
Figure CE11-8
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© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke
Active Review
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What is e-commerce?
How does e-commerce improve market
efficiency?
What economic factors disfavor
e-commerce?
What Web technology is used for
e-commerce?
What is three-tier architecture?
© 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke