Management Information System : E-Commerce

E-Commerce:
Business & Technology
By Mandalay University
MBA 8th Batch , Group 7

E-Commerce
E-COMMERCE
E-commerce refers to use of the Internet and the Web to
transact business.
More formally, e-commerce is about digitally enabled
commercial transations between and among organizations
and individuals.

E-Commerce
E-COMMERCE
transact business.
and individuals.
2015 – Worldwide spending on digital commerce platform software
reached approximately $ 4.7 B (a 15% year-over-year increase)
2018 – World population is 7.6 billion and the internet
has 4.1 billion users.
U.S shoppers spent $5 billion online during 2017’s black Friday.
On average, millennials now make 54% of purchases online
(versus 49% of non-millennials).

E-Commerce
E-COMMERCE
transact business.
and individuals.
69% of B2B businesses say they expect to stop printing catalogs
within five years.
E-commerce is growing 23% year-over-year.
Americans spend 64% of their shopping budget in-store, and 36%
online.
Mobile commerce hit $700 billion in revenue in 2017, which is more
than 300% growth over the past four years.

E-Commerce
E-COMMERCE
transact business.
and individuals.
69% of B2B businesses say they expect to stop printing catalogs
within five years.
E-commerce is growing 23% year-over-year.
Americans spend 64% of their shopping budget in-store, and 36%
online.
Mobile commerce hit $700 billion in revenue in 2017, which is more
than 300% growth over the past four years.
There are over 500,000 businesses who make use of instagram as
an advertising platform.
The average order value for customers referred from instagram is
$65.
YouTube has over a billion users- nearly one-third of people online.
Consumers spent $453,46 billion on the web for retail purchases
In 2017, a 16% increase compared with $390.99 billion in 2016.

0
100
200
300
400
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
The Growth Of E-Commerce B2B Revenue in Billion USD

Why E-Commerce Is Different
! Ubiquity
! Global Reach
! Universal Standards
! Richness
! Interactivity
! Information Density
! Personalization/Customization
! Social Technology

Ubiquity
Internet/Web technology is available everywhere:
at work, at home, and elsewhere via mobile devices.
Mobile devices extend service to local areas and
merchants.

Global Reach
The technology reaches across national boundaries,
around the Earth.

Universal Standards
There is one set of technology standards, namely
Internet standards.

Richness
Video, audio, and text messages are possible.

Interactivity
The technology works through interaction with the
user.

Information Density
The technology reduces information costs and raises
quality.

Personalization/Customization
The technology allows personalized messages to be
delivered to individuals as well as groups.

Social Technology:
User Content Generation & Social Networking
User content generation and social networking.

Key Concepts In
E-Commerce
Digital Markets & Digital Goods In
Global Marketplace

Manufacturer
Manufacturer
Manufacturer
Distributor Retailer
Retailer
Customer
Customer
Customer
Cost Per Sweater
$48.50
$40.34
$20.45
The Benefits Of Disintermediation To The Customer

Digital Goods Traditional Goods
Cost Of Production Hight (Most Of The Cost) Variable
Copying Cost Zero Greater Than Zero, High
Marginal Cost/Unit Zero Greater Than Zero, High
Distributed Delivery Cost Approximately 0 Greater Than Zero, High
Inventory Cost Low High
Marketing Cost Variable Variable
Pricing More Variable
(Bundling, Random Pricing
Games )
Fixed , Based on unit costs
Digital Markets Traditional Market
Information asymmetry Asymmetry reduced Asymmetry high
Search costs Low High
Transaction costs Low (sometimes virtually nothing) High (time, travel)
Delayed gratification High (or lower in the case of a
digital good) Lower: purchase now
Menu costs Low High
Dynamic pricing Low cost, instant High cost, delayed
Price discrimination Low cost, instant High cost, delayed
Market segmentation Low cost, moderate precision High cost, less precision
Switching costs Higher/lower (depending on
product characteristics) High
Network effects Strong Weaker
Disintermediation More possible/likely Less possible/unlikely
Digital Markets Compared to Traditional Markets

Digital Goods Traditional Goods
Cost Of Production Hight (Most Of The Cost) Variable
Copying Cost Zero Greater Than Zero, High
Marginal Cost/Unit Zero Greater Than Zero, High
Distributed Delivery Cost Approximately 0 Greater Than Zero, High
Inventory Cost Low High
Marketing Cost Variable Variable
Pricing More Variable
(Bundling, Random Pricing
Games )
Fixed , Based on unit costs

E-Commerce :
Business &
Technology

E-Commerce: Business & Technology
Business-To-Consumer (B2C)
❖Retailing Products & Services

Consumer-To-Consumer (C2C)
❖ Sell Goods To Other Customers By Auctioning Their Merchandise
❖ Off To The Highest Bidder Or A Fixed Price

Business-To-Business (B2B)
❖ Sales Of Goods & Services Among Businesses

E-Commerce Business Models
Portals
Gateways to World Wide Web (WWW.)

E-Tailer :
Virtual Stores & Subsidiaries Of Physical Stores

Content Providers
Steaming/podcasting musics , videos , music videos , & movies

Transaction Broker
Saves users money & time by processing online sales transaction & generating a fee each
time a transaction occurs
Financial Services & Travel Services

Market Creator
Provides platform where buyers & sellers meet , display products , establish prices

Service Provider
Sell software as a service(SaaS) / Services Online

Community Provider
Provide digital online environment where people socially network / transact

E-Commerce Revenue Models
Advertising Revenue Model
Highly Specialized , Differentiated Viewership & Those With High Users Attention Can Charge
Higher Ads Rates
❖ Banners
❖ Search Engine Optimization
❖ Targeted Advertising ( Selling Keywords )
❖ Sell User Preference Information

Sales Revenue Model
Revenues from selling goods , informations , or services

Subscription Revenue Model
Contents/Services provided for a price on a regular ongoing basis

Free/Freemium Revenue Model
Basic Contents For Free / Premium For Advanced or Special Features

Transaction Fee Revenue Model
Revenue From Fee For Enabling/Executing A Transaction

Affiliate Revenue Model
Revenue From Referral Fee For Redirecting To A Certain Website

WEB 1.0 WEB 2.0
❖ Mostly Read Only Web ❖ Widely Read-Write Web
❖ Focused On Companies ❖ Focused On Communities
❖ Home Pages ❖ Blogs
❖ Owning Contents ❖ Sharing Contents
❖ Page Views ❖ Cost Per Clicks
❖ Eg.Netscape ❖ Eg.Google

Web 2.0 : Social Networking & The
Wisdom Of Crowds
Wisdom Of Crowds (n)
the collective knowledge of a group of people as
expressed through their aggregated actions or
opinions

PERCENT OF TIME THE AUDIENCE WAS CORRECT
PERCENT OF TIME THE EXPERTS WERE CORRECT

How The Wisdom Of Crowds Impacts Your Business
Seeking Advices & Opinions
Solving Business Problems (Crowdsourcing)
Prediction Markets

E-Commerce Marketing
Enables Long Tail Marketing
Increase Effectiveness Of Ads Through Behavioral Targeting

B2B E-Commerce : New Efficiency & Relationships
Electronic Data Interchange ( EDI )
EDI is an international standard that allows for digital
transactions with minimum error, at maximum speed, with the
lowest cost and in a transparent way for any member of a
business chain

Mobile Digital
Platform & Mobile
E-Commerce

Hosting Vs Co-Location
• Hosting:Hosting company responsible for ensuring site is accessible 24/7,
     for monthly fee
• Co-location:Firm purchases or leases Web server(with control over its
     operation),but server is located at vendor’s facility
What is M Commerce?
• M commerce represented the selling music,
videos, ring tones, applications, movies,
television and location-based services like
local restaurant locators and traffic updates by
paying through wireless handheld devices
such as mobile phone or tablet
Eg. Wavemoney, kbz pay, shop.com, mobile
ticketing(airline, cinema, bus, concert/event)

     for monthly fee
M Commerce services and applications
q Location-based services
q Banking and Financial services
q Wireless Advertising and retailing
q Games and Entertainment

     for monthly fee
Location-based services
- Built-in global positioning system (GPS) and
compass that can identify your precise
location and where the phone is pointed
Eg. Oway, Grab, Wikitude, Loopt, maps, traffic
and weather, directory services
Banking and Financial services
- Banks and credit card companies provide
services to customers to manage their
accounts via mobile devices
Eg. Mobile banking, MPU, Union pay

     for monthly fee
Wireless Advertising and Retailing
Eg. SMS advertising, shopping, booking and
reservations, mobile coupon or voucher, travel
vouchers, ads on homepage (Yahoo, Google),
mobile application, games and videos, websites
Games and Entertainment
- Cell phones have developed into portable
entertainment platforms
Eg. Broadband services like video clips, weather
reports, TV shows and live TV programs such as
MSNBC and Fox Sports, music and ringtones,
mobile apps for social networking sites (facebook,
Myspace, Youtube) and games application on
mobile phones

Building An
E-Commerce
Website

-Business,Technology and social issues
-Needed to be systematic approach ( Business , Technology , Social )
:Two most important management challenges
-(1)clear understanding of business objectives
-(2)how to use the right technology
!

•First
.Aware of main areas
.Bring a team
.Manage closely
• Second
.Make decision about hardware,software and telecommunications
infracture
.determining the demands
.Easy to find out,view,purchase and receive

System Analysis : Business Objectives,System
Functionality and Information Requirements
Business Objectives:
• List of capabilities you want your site have
System functionalities:
• List of information system capabilities needed to achieve business objectives
Information requirements
• Information elements that system must produce in order to achieve
business objectives

Building The Web:In-House Vs Outsourcing
• Outsourcing:Hiring vendors to provide services involved in building site
• Build own vs outsourcing
• Build your own requires team with diverse skill set;
• Choice of software tools;
-Adobe Dreamwaver ,Adobe In-Design , & Microsoft Expression
- Can Change Business Environment
- Unlimited
- Number Of Risks
- Delaying Entry To Market

     for monthly fee

Management Information System : E-Commerce

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