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In this chapter, you will learn about:   What electronic commerce is and how    it is poised for a second wave of    grow...
   How economic forces have created a    business environment that is fostering    a rebirth of electronic commerce   Ho...
   Electronic commerce (e-commerce)    • Businesses trading with other businesses and     internal processes   Electroni...
   Five general e-commerce categories    •   Business-to-consumer    •   Business-to-business    •   Business processes  ...
Electronic Commerce, Sixth Edition                                     6
   Transaction    • An exchange of value   Business processes    • The group of logical, related, and sequential     act...
Electronic Commerce, Sixth Edition                                     8
   Electronic funds transfers (EFTs)    • Also called wire transfers    • Electronic transmissions of account exchange   ...
   Trading partners    • Businesses that engage in EDI with each other   Value-added network (VAN)    • Independent firm...
Electronic Commerce, Sixth Edition                                     11
   Defining characteristics of first wave    • Dominant influence of U.S. businesses    • Extensive use of the English la...
   As second wave begins    • Future of electronic commerce will be     international in scope    • Language translation ...
   Business model    • A set of processes that combine to yield a     profit   Revenue model    • Used to       Identif...
   Merchandising    • Combination of store design, layout, and     product display knowledge   Commodity item    • Hard ...
   Shipping profile    • Collection of attributes that affect how easily     a product can be packaged and delivered   H...
   Electronic commerce can increase sales    and decrease costs   If advertising is done well on the Web, it    can get ...
   It increases purchasing opportunities    for buyers   Negotiating price and delivery terms    is easier   The follow...
   Perishable grocery products are much    harder to sell online   It is difficult to    • Calculate return-on-investmen...
   Economics    • Study of how people allocate scarce     resources   Two conditions of a market    • Potential sellers ...
   Total costs that a buyer and seller    incur   Significant components of transaction    costs    • Cost of informatio...
   Businesses and individuals    • Can use electronic commerce to reduce     transaction costs by      Improving flow of...
   Network economic structures    • Companies coordinate their strategies,     resources, and skill sets   Strategic all...
   Virtual companies    • Strategic alliances that occur between or     among companies operating on the Internet   Stra...
   Law of diminishing returns    • Most activities yield less value as the amount of     consumption increases   Network...
   Firm    • Multiple business units owned by a common     set of shareholders   Industry    • Multiple firms that sell ...
   Value chain    • A way of organizing the activities that each     strategic business unit undertakes   Primary activi...
Electronic Commerce, Sixth Edition                                     28
   Value system    • Larger stream of activities into which a     particular business unit’s value chain is     embedded ...
Electronic Commerce, Sixth Edition                                     30
   SWOT analysis    • An analyst first looks into the business unit to     identify its strengths and weaknesses    • The...
Electronic Commerce, Sixth Edition                                     32
Electronic Commerce, Sixth Edition                                     33
   Companies with established    reputations    • Often create trust by ensuring that customers      know who they are   ...
Electronic Commerce, Sixth Edition                                     35
   To do business effectively in other    cultures    • Must adapt to those cultures   Researchers have found that    • ...
   Important element of business trust    • Anticipate how the other party to a transaction     will act in specific circ...
   Internet infrastructure includes    • Computers and software connected to the     Internet    • Communications network...
   Flat-rate access system    • Consumer or business pays one monthly fee for     unlimited telephone line usage    • Con...
Electronic Commerce, Sixth Edition                                     40
   Commerce    • Negotiated exchange of goods or services   Electronic commerce    • Application of new technologies to ...
   Using electronic commerce, businesses    have    • Created new products and services    • Improved promotion, marketin...
MELJUN CORTES E Commerce Chapter1
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Transcript of "MELJUN CORTES E Commerce Chapter1"

  1. 1. In this chapter, you will learn about: What electronic commerce is and how it is poised for a second wave of growth and a new focus on profitability Why business models have given way to revenue models and the analysis of business processes as key elements of electronic commerce initiatives Electronic Commerce, Sixth Edition 2
  2. 2.  How economic forces have created a business environment that is fostering a rebirth of electronic commerce How businesses use value chains and SWOT analysis to identify electronic commerce opportunities Why electronic commerce is international by its very nature and what challenges arise in doing global electronic commerce Electronic Commerce, Sixth Edition 3
  3. 3.  Electronic commerce (e-commerce) • Businesses trading with other businesses and internal processes Electronic business (e-business) • Term used interchangeably with e-commerce • The transformation of key business processes through the use of Internet technologies Electronic Commerce, Sixth Edition 4
  4. 4.  Five general e-commerce categories • Business-to-consumer • Business-to-business • Business processes • Consumer-to-consumer • Business-to-government Supply management or procurement • Departments devoted to negotiating purchase transactions with suppliers Electronic Commerce, Sixth Edition 5
  5. 5. Electronic Commerce, Sixth Edition 6
  6. 6.  Transaction • An exchange of value Business processes • The group of logical, related, and sequential activities and transactions in which businesses engage Telecommuting or telework • Employee logs in to a company computer through the Internet instead of traveling to the office Electronic Commerce, Sixth Edition 7
  7. 7. Electronic Commerce, Sixth Edition 8
  8. 8.  Electronic funds transfers (EFTs) • Also called wire transfers • Electronic transmissions of account exchange information over private communications networks Electronic data interchange (EDI) • Transmitting computer-readable data in a standard format to another business Electronic Commerce, Sixth Edition 9
  9. 9.  Trading partners • Businesses that engage in EDI with each other Value-added network (VAN) • Independent firm • Offers connection and transaction-forwarding services to buyers and sellers engaged in EDI Electronic Commerce, Sixth Edition 10
  10. 10. Electronic Commerce, Sixth Edition 11
  11. 11.  Defining characteristics of first wave • Dominant influence of U.S. businesses • Extensive use of the English language • Low bandwidth data transmission technologies • Unstructured use of e-mail • Over-reliance on advertising as a revenue source Electronic Commerce, Sixth Edition 12
  12. 12.  As second wave begins • Future of electronic commerce will be international in scope • Language translation and handling currency conversion problem will need to be solved • E-mail will be used as an integral part of marketing and customer contact strategies Electronic Commerce, Sixth Edition 13
  13. 13.  Business model • A set of processes that combine to yield a profit Revenue model • Used to  Identify customers  Market to those customers  Generate sales to those customers Electronic Commerce, Sixth Edition 14
  14. 14.  Merchandising • Combination of store design, layout, and product display knowledge Commodity item • Hard to distinguish from the same products or services provided by other sellers • Features have become standardized and well known Electronic Commerce, Sixth Edition 15
  15. 15.  Shipping profile • Collection of attributes that affect how easily a product can be packaged and delivered High value-to-weight ratio • Can make overall shipping cost a small fraction of the selling price Electronic Commerce, Sixth Edition 16
  16. 16.  Electronic commerce can increase sales and decrease costs If advertising is done well on the Web, it can get a firm’s promotional message out to potential customers in every country Using e-commerce sales support and order-taking processes, a business can • Reduce costs of handling sales inquiries • Provide price quotes Electronic Commerce, Sixth Edition 17
  17. 17.  It increases purchasing opportunities for buyers Negotiating price and delivery terms is easier The following cost less to issue and arrive securely and quickly • Electronic payments of tax refunds • Public retirement Electronic Commerce, Sixth Edition 18 •
  18. 18.  Perishable grocery products are much harder to sell online It is difficult to • Calculate return-on-investment • Integrate existing databases and transaction- processing software into software that enables e-commerce Cultural and legal obstacles also exist Electronic Commerce, Sixth Edition 19
  19. 19.  Economics • Study of how people allocate scarce resources Two conditions of a market • Potential sellers of a good come into contact with potential buyers • A medium of exchange is available Electronic Commerce, Sixth Edition 20
  20. 20.  Total costs that a buyer and seller incur Significant components of transaction costs • Cost of information search and acquisition • Investment of the seller in equipment or in the hiring of skilled employees to supply products or services Sixth Edition buyer Electronic Commerce, to the 21
  21. 21.  Businesses and individuals • Can use electronic commerce to reduce transaction costs by  Improving flow of information  Increasing coordination of actions Electronic Commerce, Sixth Edition 22
  22. 22.  Network economic structures • Companies coordinate their strategies, resources, and skill sets Strategic alliances (strategic partnerships) • Relationships created within the network economic structure Electronic Commerce, Sixth Edition 23
  23. 23.  Virtual companies • Strategic alliances that occur between or among companies operating on the Internet Strategic partners • Come together as a team for a specific project or activity Electronic Commerce, Sixth Edition 24
  24. 24.  Law of diminishing returns • Most activities yield less value as the amount of consumption increases Network effect • As more people or organizations participate in a network, the value of the network to each participant increases Electronic Commerce, Sixth Edition 25
  25. 25.  Firm • Multiple business units owned by a common set of shareholders Industry • Multiple firms that sell similar products to similar customers Electronic Commerce, Sixth Edition 26
  26. 26.  Value chain • A way of organizing the activities that each strategic business unit undertakes Primary activities • Design, produce, promote, market, deliver, and support the products or services it sells Supporting activities • Human resource management and purchasing Electronic Commerce, Sixth Edition 27
  27. 27. Electronic Commerce, Sixth Edition 28
  28. 28.  Value system • Larger stream of activities into which a particular business unit’s value chain is embedded • Also referred to as industry value chain Electronic Commerce, Sixth Edition 29
  29. 29. Electronic Commerce, Sixth Edition 30
  30. 30.  SWOT analysis • An analyst first looks into the business unit to identify its strengths and weaknesses • The analyst then reviews the operating environment and identifies opportunities and threats Electronic Commerce, Sixth Edition 31
  31. 31. Electronic Commerce, Sixth Edition 32
  32. 32. Electronic Commerce, Sixth Edition 33
  33. 33.  Companies with established reputations • Often create trust by ensuring that customers know who they are • Can rely on their established brand names to create trust on the Web Customers’ inherent lack of trust in “strangers” on the Web • Logical and to be expected Electronic Commerce, Sixth Edition 34
  34. 34. Electronic Commerce, Sixth Edition 35
  35. 35.  To do business effectively in other cultures • Must adapt to those cultures Researchers have found that • Customers are more likely to buy products and services from Web sites in their own language Localization • Translation that considers multiple elements of the local environment Sixth Edition Electronic Commerce, 36
  36. 36.  Important element of business trust • Anticipate how the other party to a transaction will act in specific circumstances Culture • Combination of language and customs • Varies across national boundaries • Varies across regions within nations Electronic Commerce, Sixth Edition 37
  37. 37.  Internet infrastructure includes • Computers and software connected to the Internet • Communications networks over which message packets travel Organization for Economic Cooperation and Development’s (OECD) statements on Information and Communications Policy deal with telecommunications infrastructure Electronic Commerce, Sixth Edition 38
  38. 38.  Flat-rate access system • Consumer or business pays one monthly fee for unlimited telephone line usage • Contributed to rapid rise of U.S. electronic commerce Targets for technological solutions • Paperwork and processes that accompany international transactions Electronic Commerce, Sixth Edition 39
  39. 39. Electronic Commerce, Sixth Edition 40
  40. 40.  Commerce • Negotiated exchange of goods or services Electronic commerce • Application of new technologies to conduct business more effectively First wave of electronic commerce • Ended in 2000 Second wave of electronic commerce • New approaches to integrating Internet technologies into business processes Electronic Commerce, Sixth Edition 41
  41. 41.  Using electronic commerce, businesses have • Created new products and services • Improved promotion, marketing, and delivery of existing offerings The global nature of electronic commerce leads to many opportunities and few challenges To conduct electronic commerce across international borders, you must understand the trust, cultural, and language legal issues Electronic Commerce, Sixth Edition 42
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