What is E-commerce And its Types

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What is E-commerce And its Types

  1. 1. CHAPTER 1 The Revolution Is Just Beginning By: Liaquat Ali Rahoo 1
  2. 2. Learning Objectives     Define e-commerce and describe how it differs from e-business Identify the unique features of e-commerce technology and their business significance Describe the major types of e-commerce Understand the visions and forces behind the E-Commerce I era By: Liaquat Ali Rahoo 2
  3. 3. Learning Objectives     Understand the successes and failures of E-Commerce I Identify several factors that will define the E-commerce II era Describe the major themes underlying the study of e-commerce Identify the major academic disciplines contributing to e-commerce research By: Liaquat Ali Rahoo 3
  4. 4. Amazon.com: Before and After By: Liaquat Ali Rahoo 4
  5. 5. Amazon.com: Before and After     Most well-known e-commerce company Conceived by Jeff Bezos in 1994 Opened in July 1995 Four compelling reasons to shop     Selection (1.1 million titles) Convenience (anytime, anywhere) Price (high discounts on bestsellers) Service (automated order confirmation, tracking, and shipping information) By: Liaquat Ali Rahoo 5
  6. 6. Amazon.com: Before and After Revenues and Earnings Revenues Earnings 1996 $15.6 Million ($6.24 Million) 1997 $148 Million ($31 Million) 1998 $610 Million ($125 Million) 1999 $1.6 Billion ($720 Million) 2000 $2.7 Billion ($1.4 Billion) By: Liaquat Ali Rahoo 6
  7. 7. E-commerce vs. E-business E-commerce involves    Digitally enabled commercial transactions between organizations and individuals. Digitally enabled transactions include all transactions mediated by digital technology Commercial transactions involve the exchange of value across organizational or individual boundaries in return for products or services By: Liaquat Ali Rahoo 7
  8. 8. E-commerce vs. E-business E-business involves  Digital enablement of transactions and processes within a firm, involving information systems under the control of the firm  E-business does not involve commercial transactions across organizational boundaries where value is exchanged By: Liaquat Ali Rahoo 8
  9. 9. The Difference Between Ecommerce and E-Business Page 8, Figure 1.1 By: Liaquat Ali Rahoo 9
  10. 10. Unique of E-commerce Technology and Their Business Significance E-commerce:  is ubiquitous  has global reach  operates according to universal standards  provides information richness  is interactive  increases information density  permits personalization By: Liaquat Ali Rahoo 10
  11. 11. Seven Unique Features of E-commerce Technology and Their Business Significance Page 9, Table 1.1 By: Liaquat Ali Rahoo 11
  12. 12. Changing Trade-Off Between Richness and Reach Page 11, Figure 1.2 By: Liaquat Ali Rahoo 12
  13. 13. Major Types of E-Commerce  Market relationships  Business-to-Consumers (B2C)  Business-to-Business (B2B)  Consumer-to-Consumer (C2C)  Technology-based  Peer-to-Peer (P2P)  Mobile Commerce (M-commerce) By: Liaquat Ali Rahoo 13
  14. 14. Major Types of E-Commerce Page 14, Table 1.2 By: Liaquat Ali Rahoo 14
  15. 15. Business-to-Consumer Ecommerce    Most commonly discussed type Online businesses attempt to reach individual consumers Consumers will spend $65 billion in 2001. By: Liaquat Ali Rahoo 15
  16. 16. Business-to-Business Ecommerce      Businesses focus on sell to other businesses Largest form of e-commerce $700 billion in transactions in 2001 Primarily involved inter-business exchanges at first Other models have developed  e-distributors  infomediaries  B2B service providers By: Liaquat Ali Rahoo 16
  17. 17. Consumer-to-Consumer Ecommerce    Provide a way for consumers to sell to each other Estimated $5 billion market Consumer:  prepares the product for market  places the product for auction or sale  relies on market maker to provide catalog, search engine, and transaction clearing capabilities By: Liaquat Ali Rahoo 17
  18. 18. Peer-to-Peer E-commerce   Enables Internet users to share files and computer resources Napster By: Liaquat Ali Rahoo 18
  19. 19. Mobile E-commerce    Wireless digital devices enable transactions on the Web Uses personal digital assistants (PDAs) to connect Used most widely in Japan and Europe By: Liaquat Ali Rahoo 19
  20. 20. Growth of the Internet and the Web     Created in the late 1960s About 350 million computers worldwide to date Links businesses, educational institutions, government agencies, and individuals Provides services such as e-mail, document transfer, newsgroups, shopping, research, instant messaging, music, video, and news By: Liaquat Ali Rahoo 20
  21. 21. Growth of the Internet and the Web   Internet hosts are growing at a rate of 45% per year Extraordinary growth -- time to reach 30% US households  Radio - 38 years  Television - 17 years  Internet/Web - 8 years (1993) By: Liaquat Ali Rahoo 21
  22. 22. The Growth of the Internet Page 16, Figure 1.3 By: Liaquat Ali Rahoo 22
  23. 23. The Growth of Web Content Page 17, Figure 1.4 By: Liaquat Ali Rahoo 23
  24. 24. The Growth of B2C E-Commerce Page 20, Figure 1.5 By: Liaquat Ali Rahoo 24
  25. 25. The Growth of B2B E-Commerce Page 21, Figure 1.6 By: Liaquat Ali Rahoo 25
  26. 26. Origins and Growth of ECommerce  Baxter Healthcare  Primitive form of B2B using telephone-based modem to permit hospitals to reorder supplies (early 1970s)  PC-based remote order entry system (1980s)  Electronic Data Interchange (EDI) standards developed that permitted firms to exchange commercial documents and conduct digital commercial transactions across private networks (1980s) By: Liaquat Ali Rahoo 26
  27. 27. Origins and Growth of E-Commerce  French Minitel videotext system  First B2C arena (1981)  15 million in use throughout France  World Wide Web  1993 first browsers  1995 first banner ads By: Liaquat Ali Rahoo 27
  28. 28. Technology and E-Commerce in Perspective Internet and the Web are just two of a long list of technologies that have greatly change commerce   Other technologies spawned business models and strategies Explosive early growth followed by retrenchment and then long-term successful exploitation of the technology By: Liaquat Ali Rahoo 28
  29. 29. Technology and E-Commerce in Perspective Although e-commerce has grown explosively, there is no guarantee it will continue to grow    Confront own fundamental limitations B2C only about 1% of overall retail market With current growth rates, B2C will roughly equal the annual revenue of Wal-Mart in 2005 By: Liaquat Ali Rahoo 29
  30. 30. Limitations of the Growth of B2C E-Commerce Page 23, Table 1.3 By: Liaquat Ali Rahoo 30
  31. 31. Web Access Via Wireless Devices in the United States Page 24, Figure 1.7 By: Liaquat Ali Rahoo 31
  32. 32. E-Commerce I and II  E-Commerce I  Explosive growth starting in 1995  Widespread of Web to advertise products  Ended in 2000 when dot.com began to collapse  E-Commerce II  Began in January 2001  Reassessment of e-commerce companies By: Liaquat Ali Rahoo 32
  33. 33. E-Commerce I 1995-2000  For computer scientist and information technologists  Vindication of a set of information technologies developed over 40 years  Extending from the early Internet to the PC and local area networks  The vision of universal communications By: Liaquat Ali Rahoo 33
  34. 34. E-Commerce I 1995-2000  For economists  Raised realistic prospect of perfect Bertrand Market  where price, cost, and quality information is equally distributed  where a nearly infinite set of suppliers compete against one another  where customers have access to all revelant market information worldwide  Merchants have equal direct access to hundreds of millions of customers By: Liaquat Ali Rahoo 34
  35. 35. E-Commerce I 1995-2000 Disintermediation  displacement of market middlemen who traditionally are intermediaries between producers and consumers by a new direct relationship between manufacturers and content originators with their customers By: Liaquat Ali Rahoo 35
  36. 36. E-Commerce I 1995-2000 Friction-free commerce  a vision of commerce in which  information is equally distributed  transaction costs are low  prices can be dynamically adjusted to reflect actual demand  intermediaries decline  unfair competitive advantages are eliminated By: Liaquat Ali Rahoo 36
  37. 37. E-Commerce I 1995-2000  First mover  a firm that is first to market in a particular area and that moves quickly to gather market share  Network effect  occurs where users receive value from the fact that everyone else uses the same tool or product By: Liaquat Ali Rahoo 37
  38. 38. Amounts Raised by Venture-Backed Internet Companies in 1996-2000 Page 25, Table 1.4 By: Liaquat Ali Rahoo 38
  39. 39. E-Commerce II 2001-2006    Crash in stock market values of Ecommerce I companies throughout 2000 is an end to E-commerce I Led to a sobering reassessment of the prospects of e-commerce and the methods of achieving business success. E-commerce II begins in 2001 and ends five year later -- the limit for making technology and business projections By: Liaquat Ali Rahoo 39
  40. 40. E-Commerce II 2001-2006  Reasons for the end of E-Commerce I  run-up in technology stocks due to enormous information technology capital expenditure of firms rebuilding their internal business systems to withstand Y2K  telecommunications industry had built excess capacity in high-speed fiber optic networks  1999 e-commerce Christmas season provided less sales growth that anticipated and demonstrated e-commerce was not easy (eToys.com)  valuations of dot.com and technology companies had risen so high supporters were questioning whether earnings could justify the prices of the shares. By: Liaquat Ali Rahoo 40
  41. 41. Insight on Business: A Short History of dot.com IPOS    Between 1998 and 2000 venture capitalists poured an estimated $120 billion into approximately 12,450 dot.com start-up ventures Investment bankers took 1,262 of these companies public in IPOS IPO shares were targeted to open around $15 per share, and it was not uncommon for them to be trading at $45 a share or more later the same trading day By: Liaquat Ali Rahoo 41
  42. 42. E-Commerce I and E-Commerce II Compared Page 32, Table 1.5 By: Liaquat Ali Rahoo 42
  43. 43. April 2001 NRF/Forrester Online Retail Index Page 33, Table 1.6 By: Liaquat Ali Rahoo 43
  44. 44. Top 25 Properties of March 2001 (Combined Home and Work) Page 34, Table 1.7 By: Liaquat Ali Rahoo 44
  45. 45. Top 20 Web Retailers Among U.S. Home Users (January, 2001) Page 35, Table 1.8 By: Liaquat Ali Rahoo 45
  46. 46. Understanding E-Commerce: Organizing Themes  Technology: Infrastructure  development and mastery of digital computing and communications technology  Business: Basic Concepts  new technologies present businesses and entrepreneurs with new ways of organizing production and transacting business  Society: Taming the Juggernaught  global nature of e-commerce poses public policy issues of equity, equal access, content regulation, and taxation By: Liaquat Ali Rahoo 46
  47. 47. The Internet and the Evolution of Corporate Computing Page 37, Figure 1.8 By: Liaquat Ali Rahoo 47
  48. 48. Disciplines Concerned with ECommerce Page 39, Figure 1.9 By: Liaquat Ali Rahoo 48

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