Statistics And Forecasts

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  • Statistics And Forecasts

    1. 1. Electronic Commerce - Overview – KAIST EC Lecture September 3, 2002 Jae Kyu Lee (jklee@kgsm.kaist.ac.kr) G raduate School of Management Korea Advanced Institute of Science and Technology
    2. 2. Table of Contents <ul><li>The Internet, Intranet and Extranet </li></ul><ul><li>Jargons and Business Models in EC </li></ul><ul><li>Statistics and Forecasts </li></ul><ul><li>Key Happenings in EC </li></ul><ul><ul><li>B2C vs. B2B </li></ul></ul><ul><ul><li>Dilemmas in EC </li></ul></ul><ul><ul><li>EC Strategy in Slow Economy </li></ul></ul><ul><ul><li>Types of Exchanges </li></ul></ul><ul><li>E-Procurement Strategies </li></ul><ul><li>Key Prospects in 2001 </li></ul><ul><li>EC and MIS </li></ul>
    3. 3. The Internet <ul><li>Hypertext and World Wide Web on TCP/IP </li></ul><ul><li>Multi-media: text, voice, image and video </li></ul><ul><li>No Charge on Backbone usage </li></ul><ul><li>Internet Service Provider (ISP) </li></ul><ul><li>Platform of e-Commerce </li></ul>Seller Buyer The Internet
    4. 4. History of the Internet – Worldwide [www.isc.org/ds/host-count-history.html] Host Counts Remarks 1969: 1 . ARPANET 1971: 23 . Universities 1974: 62 1982: 235 1983: 500 . TCP/IP(Transmission Control Protocol 1984: 1,000 /Internet Protocol 1986: 5,000 1987: 20,000 1989. 1. 80,000 . NSFNET .T1(1.5Mbps) 1991. 1. 376,000 . CIX founded(Commercial Internet Exchange) 1992. 1. 727,000 . WWW(World Wide Web) . T3(45Mbps) 1993. 1. 1,313,000 1994. 1. 2,217,000 . Electronic Shopping Emerged 1995. 1. 5,846,000 1996. 1. 14,352,000 . Cyberbank Emerged 1997. 1. 21,819,000 . SET Standard Announced 1998. 1. 29,670,000 . B2B EC and Exchanges 1999. 1. 43,230,000 . SCM and Private Exchanges 2000. 1. 72,398,092 2001. 1. 109,574,429
    5. 5. Internet Statistics in Korea (Stat.nic.or.kr; June 2002) <ul><li>Users: </li></ul><ul><ul><li>June 2002: 25,650 K (58% of 6 year old persons) </li></ul></ul><ul><ul><li>Dec 2001: 24,380 K (1.4% increased since then) </li></ul></ul><ul><ul><ul><li>Near Saturation </li></ul></ul></ul><ul><li>Gender </li></ul><ul><ul><li>Male: 14,050 K (54.9%) ; Female: 11,600 K (45.1%) </li></ul></ul><ul><ul><li>Oct ’99 : 66.9% vs. 33.1% </li></ul></ul><ul><li>Usage Level by Age </li></ul><ul><ul><li>6-19 years old: 93.4%; 20s: 86%; 30s:66.7%; 40s: 38.9%; 50s: 9.6% </li></ul></ul><ul><li>Usage by Occupation </li></ul><ul><ul><li>Students (94.9%), Secretary (81.2%), Professional (80.9%), </li></ul></ul><ul><ul><li>Housewife (37.1%), Blue Color (29.2%), Unemployed and others (31.1%) </li></ul></ul><ul><ul><li>[Source: http://www. nic .or. kr / cgi -bin/ EnterBoard / enboard . cgi ? dbname = snews & ActionID =12&index=156& tempfilename = snewsV .html ] </li></ul></ul><ul><ul><li>국내 인터넷동계관련 사이트 : http://stat. nic .or. kr / statlist .html </li></ul></ul>
    6. 6. Internet Tools <ul><li>Hypertext(and Hypermedia) and World Wide Web </li></ul><ul><ul><li>XML (eXtensible Markup Language) </li></ul></ul><ul><ul><li>Semantic Web </li></ul></ul><ul><li>E-Mail, File Transfer, and Chatting </li></ul><ul><li>Bulletin Board and Community Solutions </li></ul><ul><li>Search, Portal, Comparison and Agent </li></ul><ul><li>Internet Telephony </li></ul><ul><li>Video on Demand; Audio on Demand </li></ul><ul><li>Common Gateway Interface </li></ul><ul><li>Java </li></ul><ul><li>Security, PKI and Intranet/Extranet </li></ul><ul><li>Packet-CDMA; Mobile GPRS (General Packet Radio Service) </li></ul>
    7. 7. Security: Intranet and Extranet <ul><li>Extranet = Ex tended Int ranet </li></ul><ul><li>Platform of B2B EC </li></ul>Internet Suppliers Distributors Customers Manufacturer Extranet Intranet Intranet Firewall Firewall
    8. 8. Major Business Pressures <ul><li>Market and </li></ul><ul><li>economic pressures </li></ul><ul><li>Strong competition </li></ul><ul><li>Global economy </li></ul><ul><li>Regional trade agreements (e.g. NAFTA) </li></ul><ul><li>Extremely low labor cost in some countries </li></ul><ul><li>Frequent and significant changes in markets </li></ul><ul><li>Increased power of consumers </li></ul>
    9. 9. Major Business Pressures (cont.) <ul><li>Societal and environmental pressures </li></ul><ul><li>Changing nature of workforce </li></ul><ul><li>Government deregulation of banking and other services </li></ul><ul><li>Shrinking government subsidies </li></ul><ul><li>Increased importance of ethical and legal issues </li></ul><ul><li>Increased social responsibility of organizations </li></ul><ul><li>Rapid political changes </li></ul>
    10. 10. Major Business Pressures (cont.) <ul><li>Technological pressures </li></ul><ul><li>Rapid technological obsolescence </li></ul><ul><li>Increase innovations and new technologies </li></ul><ul><li>Information overload </li></ul><ul><li>Rapid decline in technology cost vs. performance ratio </li></ul>
    11. 11. Organizational Responses <ul><li>Strategic systems </li></ul><ul><li>Continuous improvement efforts </li></ul><ul><li>Business process reengineering (BPR) </li></ul><ul><li>Business Alliances </li></ul><ul><li>using Electronic commerce </li></ul>
    12. 12. Organizational Responses Framework for Organizational and Societal Impacts of Information Technology Management and Business Process Organization Structure and the Corporate Culture Individual and Roles Information Technology The Organization’s Strategy External Environment, Social, Economic, Political, etc
    13. 13. <ul><ul><li>Reducing cycle time and time to market </li></ul></ul><ul><ul><li>Empowerment of employees and collaborative work </li></ul></ul><ul><ul><li>Supply chain improvements </li></ul></ul><ul><ul><li>Mass customization </li></ul></ul><ul><ul><li>Change management </li></ul></ul>Benefits of EC
    14. 14. Figure 1-1 The Dimensions of Electronic Commerce Source : Choi et al. (1997), p. 18.
    15. 15. Opening Vignette: Qantas Airways <ul><li>Business-to-business (B2B) E-marketplace member </li></ul><ul><li>Business-to-customer (B2C): Online booking & wireless communications </li></ul><ul><li>Business-to-employee (B2E): Online training & banking </li></ul>
    16. 16. Business Models (cont.) <ul><li>Orbis Corporation: </li></ul><ul><ul><li>Retail Catalog Service </li></ul></ul><ul><ul><li>Cost of One Picture:AUD 150 </li></ul></ul><ul><ul><li>Cycle Time: 4-6 Weeks </li></ul></ul>
    17. 17. Business Models (cont.) <ul><li>Orbis Corporation </li></ul><ul><li>Cost: </li></ul><ul><li>30-40% down </li></ul><ul><li>Cycle Time: </li></ul><ul><li> 50-70% </li></ul><ul><li>shorter </li></ul>
    18. 18. Jargons in E-Commerce <ul><li>Online Advertisement, E-Marketplaces </li></ul><ul><li>B2C, C2C, B2B, B2E, G2B, P2P EC </li></ul><ul><li>Auction, Reverse Auction and Exchanges </li></ul><ul><li>SCM, eLogistics and Collaborative Commerce (CPFR) </li></ul><ul><li>CRM and Web Mining </li></ul><ul><li>E-Procurement and Integration with ERP </li></ul><ul><li>E-Hub and ASP </li></ul><ul><li>XML/EDI and Software Agents </li></ul><ul><li>E-Service: Banking, Stock Trading, Insurance, and </li></ul><ul><ul><ul><ul><ul><li>Travel Agency </li></ul></ul></ul></ul></ul><ul><li>E-Payment, Certificate </li></ul><ul><li>E-Transformation </li></ul>
    19. 19. Timmers’ e-Business Models <ul><li>Missed e-Transformation </li></ul>Yahoo, Comparison Shopping Verisign Fedex, UPS e-Bay Amazon eHub Exchanges
    20. 20. eTransformation of Traditional Business Bricks & Mortar Pure Clicks Clicks & Mortar Reengineer Traditional Way of Doing Business <ul><li>Replace Offline Inefficiency </li></ul><ul><li>Supplement the Traditional Channels </li></ul><ul><li>Online and Offline Synergy </li></ul><ul><li>• Online Only </li></ul><ul><li>Dis-intermediation </li></ul><ul><li>Channel Conflict </li></ul>Traditional Business <ul><li>Focus of eTransformation : </li></ul><ul><li>Boost Online Sales; Reduce Cost; Resolve the Channel Conflict </li></ul>
    21. 21. eCommerce Business Models (Turban, Table 1.1, p.9) <ul><li>중개형 (Brokerage) </li></ul><ul><li>광고형 (Advertising) </li></ul><ul><li>정보중개형 (Informediary) </li></ul><ul><li>상인형 (Merchant) </li></ul><ul><li>제조업자형 (Manufacturer) </li></ul><ul><li>제휴형 (Affiliate) </li></ul><ul><li>공동체형 (Community) </li></ul><ul><li>등록형 (Subscription) </li></ul><ul><li>사용료형 (Utility) – Pay by the byte </li></ul>
    22. 22. Business Models (Turban Ch. 1) <ul><li>Name your price </li></ul><ul><li>Find the best price </li></ul><ul><li>Dynamic brokering </li></ul><ul><li>Affiliate marketing </li></ul><ul><li>Group purchasing </li></ul><ul><li>Electronic tendering systems </li></ul><ul><li>Online auctions </li></ul><ul><li>Customization and personalization </li></ul><ul><li>Electronic marketplaces and exchanges </li></ul><ul><li>Supply chain improvers </li></ul><ul><li>Collaborative commerce </li></ul>
    23. 23. Comparative Estimates: Worldwide Total eCommerce
    24. 24. Worldwide eComemrce Market  From B2C To B2B *2000~2003 : Forecasts ($Billion) Source: IDC
    25. 25. Comparative Estimates of B2B (eMarketer, April 20, 2001: Note different past record)
    26. 26. Percentage of Online Seeking and Purchasing Frequence [2000] <ul><li>Items purchased online(Respodnets # = 645) </li></ul><ul><li> Dichotomy Percentage of responses </li></ul><ul><li>1 Software 14.8 </li></ul><ul><li>2 Books 13.4 </li></ul><ul><li>3 Hardware 12.4 </li></ul><ul><li>4 Music 10.6 </li></ul><ul><li>5 Travel 7.7 </li></ul><ul><li>6 Video 4.0 </li></ul><ul><li>7 Magazines 3.8 </li></ul><ul><li>8 Electronics 3.6 </li></ul><ul><li>9 Apparel 3.5 </li></ul><ul><li>10 Flowers 3.4 </li></ul><ul><li>11 Banking 3.1 </li></ul><ul><li>12 Others 3.1 </li></ul><ul><li>13 Investments 3.0 </li></ul><ul><li>14 Concerts 2.5 </li></ul><ul><li>15 Do not 2.5 </li></ul><ul><li>16 Quotes 2.3 </li></ul><ul><li>17 Recreation 1.3 </li></ul><ul><li>18 Autos 1.1 </li></ul><ul><li>19 Wine 0.6 </li></ul><ul><li>20 Generic 0.6 </li></ul><ul><li>21 Insurance 0.6 </li></ul><ul><li>22 Real estate 0.5 </li></ul><ul><li>23 Jewelry 0.4 </li></ul><ul><li>24 Brand 0.3 </li></ul><ul><li>25 Legal 0.3 </li></ul><ul><li>26 Metals 0.2 </li></ul>Items Seeked for with intent to buy(Respodnets # = 645) Dichotomy Percentage of responses 1 Hardware 12.3 2 Software 11.7 3 Books 10.1 4 Music 18.9 5 Travel 8.2 6 Electronics 5.7 7 Video 4.3 8 Apparel 4.0 9 Magazines 3.9 10 Quotes 3.6 11 Banking 3.4 12 Autos 3.2 13 Investments 3.0 14 Flowers 2.7 15 Concerts 2.7 16 Recreation 2.6 17 Real estate 2.4 18 Others 2.1 19 Insurance 1.2 20 Wine 0.9 21 Generic 0.7 22 Brand 0.7 23 Jewelry 0.6 24 Legal 0.6 25 Metals 0.3 26 Do not 0.2
    27. 27. Percentage of online Purchasing Frequency <ul><li>Items purchased online (Korea) </li></ul><ul><li> Percentage Distribution of </li></ul><ul><li>E-Commerce Sales </li></ul><ul><li>1 Hardware 30.0 </li></ul><ul><li>2 Electronics 22.2 </li></ul><ul><li>3 Book 5.7 </li></ul><ul><li>4 Household commodities 5.7 </li></ul><ul><li>5 Travel 5.2 </li></ul><ul><li>6 Clothing and clothing accessories 3.4 </li></ul><ul><li>7 Toy 3.1 </li></ul><ul><li>8 Software 3.0 </li></ul><ul><li>9 Cosmetics, perfume 2.5 </li></ul><ul><li>10 Food, drink 2.3 </li></ul><ul><li>11 Music and Video 1.9 </li></ul><ul><li>12 Sports and leisure goods 1.7 </li></ul><ul><li>13 Agricultural products 1.6 </li></ul><ul><li>14 Office equipments 1.4 </li></ul><ul><li>15 Commission and fee 1.2 </li></ul><ul><li>16 Flowers 0.8 </li></ul><ul><li>Others 8.3 </li></ul>Items purchased online (USA) Percentage Distribution of E-Commerce Sales 1 Hardware 37.0 2 Books 13.9 3 Music and Video 6.9 4 Software 6.5 5 Clothing and clothing accessories 6.5 6 Office equipments 5.1 7 Electronics 3.4 8 Toy, hobby goods and games 3.3 9 Commission and fee 3.0 10 Drug, health aids 2.2 11 Food, beer and wine 2.0 12 Furniture 2.0 others 8.2 [Source : Korea National Statistics Office , 1/4 2001 eCommerce Statistics Survey ] [Source: U.S. Census Bureau, 1999 Annual Retail Trade Survey]
    28. 28. Korean eMarket Dynamics <ul><li>급성장 분야 (Lee,p.79) : 구성비 2001  2002 </li></ul><ul><ul><li>( 전체 성장률 84.9%) </li></ul></ul><ul><ul><li>생활용품 / 자동차용품 5.0  10.5% </li></ul></ul><ul><ul><li>농수산물 0.9%  5.9% </li></ul></ul><ul><ul><li>의류및 패션 3.3%  8.3% </li></ul></ul><ul><ul><li>각종서비스 0.5%  3.0% </li></ul></ul><ul><ul><li>음식료및 건강식품 1.6%  4.0% </li></ul></ul><ul><ul><li>여행및 예약서비스 4.7%  5.9% </li></ul></ul><ul><ul><li>화장품 / 향수 1.9%  3.5% </li></ul></ul><ul><ul><li>스포츠및 레저용품 1.6%  2.4% </li></ul></ul>
    29. 29. Key Happenings in eCommerce <ul><li>B2C e-Malls evolves to B2B Exchanges </li></ul><ul><li>Shakeout of E-Marketplaces and Restructuring </li></ul><ul><li>E-Procurement Strategies </li></ul><ul><li>Private Exchanges emerge </li></ul><ul><li>E-Transformation </li></ul><ul><li>Enterprise Commerce Management System </li></ul><ul><li>(ERP II) emerges </li></ul>
    30. 30. B2B EC as an Evolution of B2C EC  In the early stage of seller-centric marketplace, the architectures of B2C and B2B are basically the same. B2B EC Business Customer Business Customer Business Suppliers Consumer Consumer Supplier’s Products Catalog Customer’s Order Information B2C EC Supplier’s Electronic Mall
    31. 31. Figure 1-2 Transactions in Electronic Markets
    32. 32. Difference of B2B from B2C <ul><li>Confirm the Inventory Availability at Pre-Order Stage </li></ul><ul><li>Assurance of Delivery Time in Advance </li></ul><ul><li>Buyer businesses have to store the order information in their </li></ul><ul><li>own control </li></ul><ul><ul><li>Integrate multiple e-Marketplaces </li></ul></ul><ul><ul><li>Integrate with back-end information system (e.g. ERP) </li></ul></ul><ul><li>Issues </li></ul><ul><li>What should be the B2B architecture? </li></ul><ul><li>Who should provide the solution? </li></ul>
    33. 33. B2B Exchange B2B Exchange Buyer Buyer Buyer Seller Seller Seller XML XML XML XML XML XML
    34. 34. Vertical & Horizontal e-Marketplaces
    35. 35. Architecture of eProcurement System with B2B eMarketplaces
    36. 36. An Integrated Architecture Suppliers Customers Business Intelligence Electronic Commerce Supply Chain Management Customer Relationship Management Enterprise Resource planning Application Framework for e-business <ul><li>Web Selling , e-Procurement , EC Hosting , </li></ul><ul><li> Internet Billing, </li></ul>Employees Web-based Sales Online Order Taking Forecast Production Plan Production Customer Service Purchase Dirstribution
    37. 37. Expansion of Solutions and Battlefields Morgan Stanley (2000) C A C B C Scalability B A C C C+ Consulting Resources C+ C+ A SCM C C+ A C+ Workflow C B A B Procurement Window B B Auctioning C B C B A Integration D C C B A Network platform C B C B B+ Content Management B SAP C Oracle A i2 C-One Fulfillment Expertise Ariba
    38. 38. Dynamics in Three Types of Exchanges (InternetWeek, March 13, 2001) <ul><li>Three Types of Exchanges </li></ul><ul><ul><li>Independent Exchange </li></ul></ul><ul><ul><li>Industry Consortia </li></ul></ul><ul><ul><li>Private Exchanges </li></ul></ul><ul><li>Independent Exchange </li></ul><ul><li>Spot market </li></ul><ul><li>Not worked well </li></ul><ul><li>Changing biz model to Supply Chain Enabler or </li></ul><ul><li>software plays </li></ul><ul><li>Be careful to partner with them </li></ul>
    39. 39. Dynamics in Three Types of Exchanges (II) (InternetWeek, March 13, 2001) <ul><li>Industry Consortia </li></ul><ul><ul><li>None are likely to grow into huge spot markets or become a font of cost-saving reverse auctions </li></ul></ul><ul><ul><li>Benefit: Created industry standards </li></ul></ul><ul><ul><li>Wait-and-see if the consortia supply chain ASP services offer enough value to win widespread use </li></ul></ul><ul><li>Private Exchange </li></ul><ul><ul><li>Collaborative Commerce: CPFR </li></ul></ul><ul><ul><li>Attend to the companies need </li></ul></ul><ul><ul><li>Apply to the companies most crucial business problems </li></ul></ul><ul><ul><li>Between a few partners </li></ul></ul><ul><ul><li>Started mostly in 2001 </li></ul></ul>
    40. 40. Collaborative Planning, Forecasting and Replenishment (CPFR) Wal-Mart Operational System ERP RetailLink Sales data about W-L Products Inventory Plan Planner Forecast Review and Comments Manufacturing Plan Planner Warner-Lambert ( Mfr) EDI Internet WWW Data warehouse (Retailer)
    41. 41. Stock Price Peak aroundJan 2000 and August 30, 2002 <ul><li>Commerce One: above $100 to $0.3975 </li></ul><ul><li>Ariba: above $150 to $2.2 </li></ul><ul><li>i2: above $100 to $0.9 </li></ul><ul><li>Siebel Systems: above $100 to $8.47 </li></ul><ul><li>Oracle:above $40 to $9.59 </li></ul><ul><li>SAP AG: above $80 to $19.25 </li></ul><ul><ul><li>Extended ERP: Extended to include B2B EC functions </li></ul></ul><ul><ul><li>SAP’s mySAP.com </li></ul></ul>
    42. 42. EC Strategy in Slow Economy <ul><li>Shift the e-Business Priority </li></ul><ul><li>[AMR Research on 100 large corporations, March 2, 2001] </li></ul><ul><ul><li>: Controlling Cost </li></ul></ul><ul><ul><li>: Customer Relations </li></ul></ul><ul><ul><li>: Boosting Revenue and Market Share </li></ul></ul><ul><li>of 250 IT and e-Biz executives plan to increase the spending on e-Biz this year. (April 2001) </li></ul><ul><li>Strategic focus on e-Biz shifts </li></ul><ul><li>from Boosting Revenue to Cost Control , and </li></ul><ul><li>from Joining the Market Makers to e-Transformation . </li></ul>38% 25% 20% 49%
    43. 43. E-Procurement Strategies <ul><li>Spot Purchase : Seek Minimun Prices </li></ul><ul><ul><li>Non-strategic MRO(Maintenance, Repair, and Operations) </li></ul></ul><ul><ul><li>Purchase at Public Exchange </li></ul></ul><ul><li>Contract Purchasing : Minimize Inventory along the Key Supply Chains </li></ul><ul><ul><li>Direct Material </li></ul></ul><ul><ul><li>of online B2B Transaction </li></ul></ul><ul><ul><li>of offline B2B Transaction </li></ul></ul><ul><ul><li>Supply Chain Management 와 Private Exchange </li></ul></ul><ul><li>Desktop Purchasing: Internalized eStore and Designated Exchange; </li></ul><ul><ul><li>Eliminate the Approval Process for low end items </li></ul></ul><ul><ul><ul><li>Microsoft, Cisco, Etc. </li></ul></ul></ul><ul><ul><li>External Exchanges with Payment Service </li></ul></ul><ul><ul><ul><li>iMarket Korea; LG MRO; eN2B </li></ul></ul></ul><ul><li>Reduce the Procurement Department and Outsource </li></ul>85% 95%
    44. 44. Key Prospects (AMP Research, Feb 13, 2001) <ul><li>A third of companies over $ 1 Bil will implement Private </li></ul><ul><li>Trading eXchanges by 2005 ; </li></ul><ul><li>Consortia Trading eXchanges on shaky ground this year </li></ul><ul><li>By 2002, 40% of ASP and 60% of broader ASP market will </li></ul><ul><li>fail or be acquired. </li></ul><ul><li>Enterprise Application Integration (EAI) top priority in 2001, </li></ul><ul><li>to make it easier for customers to unify channels, process, </li></ul><ul><li>and data. </li></ul><ul><li>SCM market is expected to reach $7.8 Bil in 2001 with </li></ul><ul><li>Inventory Management, Order Fulfillment, and SC Planning . </li></ul>
    45. 45. Key Prospects <ul><li>Retailers focus on B2B synchronization, collaboration, and </li></ul><ul><li>enterprise integration and optimization. </li></ul><ul><li>Enterprise Commerce Management (ECM) system emerging. </li></ul><ul><ul><li>Vertical business process collaboration </li></ul></ul><ul><ul><li>External content integration with inside </li></ul></ul><ul><li>Product Lifecycle Management (PLT) grow rapidly: </li></ul><ul><ul><li>Reduce time-to-market of new products </li></ul></ul><ul><ul><li>PLT application license revenue grow more than 50% </li></ul></ul><ul><ul><li>This means the Collaborative Commerce </li></ul></ul>
    46. 46. Figure 1-3 A Framework for Electronic Commerce
    47. 47. <ul><li>Marketing </li></ul><ul><li>Computer sciences </li></ul><ul><li>Consumer behavior and psychology </li></ul><ul><li>Finance </li></ul><ul><li>Economics </li></ul><ul><li>Management information systems </li></ul><ul><li>Accounting and auditing </li></ul><ul><li>Management </li></ul><ul><li>Business law and ethics </li></ul><ul><li>Others </li></ul>Electronic Commerce is Interdisciplinary
    48. 48. Benefits of EC to Organization <ul><ul><li>Expands the marketplace to national and international markets </li></ul></ul><ul><ul><li>Decreases the cost of creating, processing, distributing, storing and retrieving paper-based information </li></ul></ul><ul><ul><li>Allows reduced inventories and overhead by facilitating pull-type supply chain management </li></ul></ul><ul><ul><li>The pull-type processing allows for customization of products and services which provides competitive advantage to its implementers </li></ul></ul><ul><ul><li>Reduces the time between the outlay of capital and the receipt of products and services </li></ul></ul><ul><ul><li>Supports business processes reengineering (BPR) efforts </li></ul></ul><ul><ul><li>Lowers telecommunications cost - the Internet is much cheaper than value added networks (VANs) </li></ul></ul>
    49. 49. Benefits of EC to Consumers <ul><ul><li>Enables consumers to shop or do other transactions 24 hours a day, all year round from almost any location </li></ul></ul><ul><ul><li>Provides consumers with more choices </li></ul></ul><ul><ul><li>Provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons </li></ul></ul><ul><ul><li>Allows consumers to interact with other consumers n electronic communities and exchange ideas as well as compare experiences </li></ul></ul><ul><ul><li>Facilitates competition, which results in substantial discounts </li></ul></ul><ul><ul><li>Allows quick delivery of products and services (in some cases) especially with digitized products </li></ul></ul><ul><ul><li>Consumers can receive relevant and detailed information in seconds, rather than in days or weeks </li></ul></ul><ul><ul><li>Makes it possible to participate in virtual auctions </li></ul></ul>
    50. 50. Benefits of EC to Society <ul><ul><li>Enables more individuals to work at home, and to do less traveling for shopping, resulting in less traffic on the roads, and lower air pollution </li></ul></ul><ul><ul><li>Allows some merchandise to be sold at lower prices benefiting less affluent people </li></ul></ul><ul><ul><li>Enables people in Third World countries and rural areas to enjoy products and services which otherwise are not available to them </li></ul></ul><ul><ul><li>Facilitates delivery of public services at a reduced cost, increases effectiveness, and/or improves quality </li></ul></ul>
    51. 51. Technical Limitations of EC <ul><ul><li>Lack of sufficient system’s security, reliability, standards, and communication protocols </li></ul></ul><ul><ul><li>Insufficient telecommunication bandwidth </li></ul></ul><ul><ul><li>The software development tools are still evolving and changing rapidly </li></ul></ul><ul><ul><li>Difficulties in integrating the Internet and electronic commerce software with some existing applications and databases </li></ul></ul><ul><ul><li>The need for special Web servers and other infrastructures, in addition to the network servers (additional cost) </li></ul></ul><ul><ul><li>Possible problems of interoperability, meaning that some EC software does not fit with some hardware, or is incompatible with some operating systems or other components </li></ul></ul>
    52. 52. Non-Technical Limitations <ul><li>Cost and justification </li></ul><ul><ul><li>The cost of developing an EC in house can be very high, and mistakes due to lack of experience may result in delays. </li></ul></ul><ul><ul><li>There are many opportunities for outsourcing, but where and how to do it is not a simple issue </li></ul></ul><ul><ul><li>In order to justify the system, one needs to deal with some intangible benefits which are difficult to quantify. </li></ul></ul><ul><li>Security and Privacy </li></ul><ul><ul><li>These issues are especially important in the B2C area, but security concerns are not so serious from a technical standpoint </li></ul></ul><ul><ul><li>Privacy measures are constantly improving too </li></ul></ul><ul><ul><li>The EC industry has a very long and difficult task of convincing customers that online transactions and privacy are, in fact, very secure </li></ul></ul><ul><li>Lack of trust and user resistance </li></ul><ul><ul><li>Customers do not trust: Unknown faceless sellers, Paperless transactions </li></ul></ul><ul><ul><li>Switching from a physical to a virtual store may be difficult: Egghead Case </li></ul></ul>
    53. 53. <ul><li>Other limiting factors are: </li></ul><ul><ul><li>Lack of touch and feel online </li></ul></ul><ul><ul><li>Many unresolved legal issues </li></ul></ul><ul><ul><li>Rapidly evolving and changing EC </li></ul></ul><ul><ul><li>Lack of support services </li></ul></ul><ul><ul><li>Insufficiently large enough number of sellers and buyers </li></ul></ul><ul><ul><li>Breakdown of human relationships </li></ul></ul><ul><ul><li>Expensive and/or inconvenient accessibility to the Internet </li></ul></ul><ul><li>Channel Conflict: </li></ul><ul><ul><li>Strategies (Lee, Ch. 2) </li></ul></ul>Non-Technical Limitations (cont.)
    54. 54. Toy R Us Case: Putting It All Together <ul><li>Major concern of today’s companies—how to transform themselves to take part in digital economy </li></ul><ul><li>Example:Toys, Inc. </li></ul><ul><ul><li>Uses intranet for internal communications, collaboration, dissemination of information </li></ul></ul><ul><ul><li>Networked to e-marketspaces and large corporations </li></ul></ul><ul><ul><li>Corporate portal for communication and collaboration with business partners </li></ul></ul>
    55. 55. Figure 1-7 Putting It All Together Prentice Hall, 2002
    56. 56. 전자상거래의 성공요건 <ul><li>풍성한 상품과 정보 </li></ul><ul><li>상품의 품질 보증 </li></ul><ul><li>효과적 물류체계 제공 </li></ul><ul><li>참여기업의 자유경쟁 환경 제공 </li></ul><ul><li>필요한 제도와 법률의 공동 개선 </li></ul><ul><li>채택한 표준이 세계표준과 부합되게 선도 </li></ul>
    57. 57. 전자상거래 수행 전략 및 사업 모형 <ul><li>고객가치 </li></ul><ul><li>범위 </li></ul><ul><li>가격설정 </li></ul><ul><li>수익원천 </li></ul><ul><li>연계된 활동 </li></ul><ul><li>실행 </li></ul><ul><li>사업수행능력 </li></ul><ul><li>지속가능성 </li></ul>
    58. 58. 국외동향 <ul><li>미국 </li></ul><ul><ul><li>글로벌 전자상거래 기본계획 (1997) </li></ul></ul><ul><ul><li>전자상거래작업반 (The U.S. Government Working Group on Electronic Commerce) </li></ul></ul><ul><ul><li>Digital Economy </li></ul></ul><ul><ul><li>GE, Dell, … </li></ul></ul><ul><li>일본 </li></ul><ul><ul><li>E-Japan 구상 (2000) </li></ul></ul><ul><ul><li>IT 기본법 </li></ul></ul><ul><li>영국 </li></ul><ul><ul><li>[email_address] </li></ul></ul><ul><ul><li>E-Minister, e-Envoy </li></ul></ul>
    59. 59. 국내동향 <ul><li>IT 인프라 </li></ul><ul><ul><li>광케이블망 구축 완료 (2000) </li></ul></ul><ul><ul><li>초고속통신망 구축사업 완료 예정 (2005) </li></ul></ul><ul><ul><li>OECD 회원국 중 초고속 인터넷 보급률 1 위 </li></ul></ul><ul><li>산업부문 전자상거래 추진을 위한 노력 </li></ul><ul><ul><li>전자거래기본법 </li></ul></ul><ul><ul><li>전자서명법 </li></ul></ul><ul><ul><li>전자거래정책협의회 </li></ul></ul><ul><ul><li>전자상거래 활성화 종합대책 </li></ul></ul><ul><ul><li>E- 비즈니스 확산 국가전략 </li></ul></ul>
    60. 60. Figure 1-8 Plan of the Book Prentice Hall, 2002
    61. 61. 전자상거래의 구성요소 전자상거래 응용 영역 사이버 쇼핑몰 기반 시스템 부문 전자상거래 수행 전략 인터넷 마케팅 판매  구매 지원 시스템 전자 지급결제 시스템 전자상거래 보안 물류  수송  배달체계 인공지능 기술 인 프 라 부 문 사회적 부문 제도적 부문 사이버 은행  증권회사 사이버 언론  관광  교육 … …

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