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E-commerce
Kenneth C. Laudon
Carol Guercio Traver
business. technology. society.
Sixth Edition
BY:MADDY.KALEE
M Slide 1-1
Copyright © 2007 Pearson Education, Inc. Slide 1-2
Chapter 1
The Revolution Is Just Beginning
BY:MADDY.KALEE
M
Learning Objectives
 After reading this chapter, you will be able to:
 Define e-commerce and describe how it differs from e-business.
 Identify and describe the unique features of e-commerce technology and discuss
their business significance.
 Describe the major types of e-commerce.
 Discuss the origins and growth of e-commerce
 Understand the vision and forces operating during the first five years of e-
commerce, and assess its successes, surprises and failures.
 Identify several factors that will define the next five years of e-commerce.
 Describe the major themes underlying the study of e-commerce.
 Identify the major academic disciplines contributing to e-commerce research.
Slide 1-3
BY:MADDY.KALEE
M
Slide 1-4
Slide 1-4
BY:MADDY.KALEE
M
E-commerce Trends 2009–2010
 New business models based on social technologies,
consumer-generated content, and services
 2009 a flat year, but growth expected to resume in
2010
 Broadband and wireless access continue to grow
 Mobile e-commerce begins to take off
 Traditional media losing subscribers
Slide 1-5
BY:MADDY.KALEE
M
What is E-commerce?
 Use of Internet and Web to transact
business
 More formally:
Digitally enabled commercial transactions
between and among organizations and
individuals
Slide 1-6
BY:MADDY.KALEE
M
E-commerce vs. E-business
 E-business:
Digital enablement of transactions and processes
within a firm, involving information systems under
firm’s control
Does not include commercial transactions
involving an exchange of value across
organizational boundaries
Slide 1-7
BY:MADDY.KALEE
M
Why Study E-commerce?
 E-commerce technology is different, more
powerful than previous technologies
 E-commerce bringing fundamental changes to
commerce
Slide 1-8
BY:MADDY.KALEE
M
Why Study E-commerce?
 Traditional commerce:
 Time consuming
 Wastage of resources
 Less informative
 Less comparative
 Information asymmetry (irregularity)
Slide 1-9
BY:MADDY.KALEE
M
Unique Features of E-commerce Technology
1. Ubiquity (It is available just about everywhere and at all times)
2. Global reach (The potential market size is roughly equal to the size of the
online population of the world.)
3. Universal standards (The technical standards of the Internet and
therefore of conducting e-commerce, are shared by all of the nations in
the world)
4. Information richness (Information that is complex and content-rich can
be delivered without sacrificing reach.)
5. Interactivity (E-commerce technologies allow two-way communication
between the merchant and the consumer).
6. Information density (The total amount and quality of information
available to all market participants is vastly increased and is cheaper to
deliver.
7. Personalization/customization
8. Social technology Slide 1-10
BY:MADDY.KALEE
M
Web 2.0
 Applications, technologies that allow
users to:
 Create and share content, preferences, bookmarks, and
online personas
 Participate in virtual lives
 Build online communities
 Examples
 YouTube, Photobucket, Flickr, Google, iPhone
 MySpace, Facebook, LinkedIn
 Second Life
 Wikipedia
Slide 1-11
BY:MADDY.KALEE
M
Types of E-commerce
 Classified by market relationship
 Business-to-Consumer (B2C)
 Business-to-Business (B2B)
 Consumer-to-Consumer (C2C)
 Classified by technology used
 Peer-to-Peer (P2P)
 Mobile commerce (M-commerce)
Slide 1-12
BY:MADDY.KALEE
M
The Internet
 Worldwide network of computer networks
built on common standards
 Created in late 1960s
 Services include the Web, e-mail, file
transfers, etc.
 Can measure growth by looking at number of
Internet hosts with domain names
Slide 1-13
BY:MADDY.KALEE
M
The Growth of
the Internet,
Measured by
Number of
Internet Hosts
with Domain
Names
Figure 1.3, Page 23
Slide 1-14
SOURCE: Internet Systems Consortium,
Inc., 2009.
BY:MADDY.KALEE
M
The Web
 Most popular Internet service
 Developed in early 1990s
 Provides access to Web pages
HTML documents that may include text,
graphics, animations, music, videos
 Web content has grown exponentially
2 billion Web pages in 2000
 At least 40–50 billion pages today
Slide 1-15
BY:MADDY.KALEE
M
The Growth of B2C E-commerce
Figure 1.4, Page 25
Slide 1-16
SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b; authors’ estimates.
BY:MADDY.KALEE
M
The Growth of B2B E-commerce
Figure 1.5, Page 28
Slide 1-17
SOURCES: U.S. Census Bureau, 2009a; authors’ estimates.
BY:MADDY.KALEE
M
Early Visions of E-commerce
 Computer scientists:
 Inexpensive, universal communications and computing
environment accessible by all
 Economists:
 Nearly perfect competitive market and friction-free
commerce
 Lowered search costs, disintermediation, price
transparency, elimination of unfair competitive advantage
 Entrepreneurs:
 Extraordinary opportunity to earn far above normal
returns on investment—first mover advantage
Slide 1-18
BY:MADDY.KALEE
M
Predictions for the Future
 Technology will propagate through all commercial activity
 Prices will rise to cover the real cost of doing business
 E-commerce margins and profits will rise to levels more
typical of all retailers
 Number of successful pure online stores will remain smaller
than integrated offline/online stores
 Growth of regulatory activity worldwide
 Influence of cost of energy
Slide 1-19
BY:MADDY.KALEE
M
Understanding E-commerce:
Organizing Themes
 Technology:
 Development and mastery of digital computing and
communications technology
 Business:
 New technologies present businesses with new ways of
organizing production and transacting business
 Society:
 Intellectual property, individual privacy, public welfare
policy
Slide 1-20
BY:MADDY.KALEE
M
The Internet
and the
Evolution
of Corporate
Computing
Figure 1.9, Page 44
Slide 1-21
BY:MADDY.KALEE
M
Academic Disciplines Concerned
with E-commerce
 Technical approach
 Computer science
 Management science
 Information systems
 Behavioral approach
 Information systems
 Economics
 Marketing
 Management
 Finance/accounting
 Sociology
Slide 1-22
BY:MADDY.KALEE
M
Slide 1-23
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
BY:MADDY.KALEE
M

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E-commerce

  • 1. E-commerce Kenneth C. Laudon Carol Guercio Traver business. technology. society. Sixth Edition BY:MADDY.KALEE M Slide 1-1
  • 2. Copyright © 2007 Pearson Education, Inc. Slide 1-2 Chapter 1 The Revolution Is Just Beginning BY:MADDY.KALEE M
  • 3. Learning Objectives  After reading this chapter, you will be able to:  Define e-commerce and describe how it differs from e-business.  Identify and describe the unique features of e-commerce technology and discuss their business significance.  Describe the major types of e-commerce.  Discuss the origins and growth of e-commerce  Understand the vision and forces operating during the first five years of e- commerce, and assess its successes, surprises and failures.  Identify several factors that will define the next five years of e-commerce.  Describe the major themes underlying the study of e-commerce.  Identify the major academic disciplines contributing to e-commerce research. Slide 1-3 BY:MADDY.KALEE M
  • 5. E-commerce Trends 2009–2010  New business models based on social technologies, consumer-generated content, and services  2009 a flat year, but growth expected to resume in 2010  Broadband and wireless access continue to grow  Mobile e-commerce begins to take off  Traditional media losing subscribers Slide 1-5 BY:MADDY.KALEE M
  • 6. What is E-commerce?  Use of Internet and Web to transact business  More formally: Digitally enabled commercial transactions between and among organizations and individuals Slide 1-6 BY:MADDY.KALEE M
  • 7. E-commerce vs. E-business  E-business: Digital enablement of transactions and processes within a firm, involving information systems under firm’s control Does not include commercial transactions involving an exchange of value across organizational boundaries Slide 1-7 BY:MADDY.KALEE M
  • 8. Why Study E-commerce?  E-commerce technology is different, more powerful than previous technologies  E-commerce bringing fundamental changes to commerce Slide 1-8 BY:MADDY.KALEE M
  • 9. Why Study E-commerce?  Traditional commerce:  Time consuming  Wastage of resources  Less informative  Less comparative  Information asymmetry (irregularity) Slide 1-9 BY:MADDY.KALEE M
  • 10. Unique Features of E-commerce Technology 1. Ubiquity (It is available just about everywhere and at all times) 2. Global reach (The potential market size is roughly equal to the size of the online population of the world.) 3. Universal standards (The technical standards of the Internet and therefore of conducting e-commerce, are shared by all of the nations in the world) 4. Information richness (Information that is complex and content-rich can be delivered without sacrificing reach.) 5. Interactivity (E-commerce technologies allow two-way communication between the merchant and the consumer). 6. Information density (The total amount and quality of information available to all market participants is vastly increased and is cheaper to deliver. 7. Personalization/customization 8. Social technology Slide 1-10 BY:MADDY.KALEE M
  • 11. Web 2.0  Applications, technologies that allow users to:  Create and share content, preferences, bookmarks, and online personas  Participate in virtual lives  Build online communities  Examples  YouTube, Photobucket, Flickr, Google, iPhone  MySpace, Facebook, LinkedIn  Second Life  Wikipedia Slide 1-11 BY:MADDY.KALEE M
  • 12. Types of E-commerce  Classified by market relationship  Business-to-Consumer (B2C)  Business-to-Business (B2B)  Consumer-to-Consumer (C2C)  Classified by technology used  Peer-to-Peer (P2P)  Mobile commerce (M-commerce) Slide 1-12 BY:MADDY.KALEE M
  • 13. The Internet  Worldwide network of computer networks built on common standards  Created in late 1960s  Services include the Web, e-mail, file transfers, etc.  Can measure growth by looking at number of Internet hosts with domain names Slide 1-13 BY:MADDY.KALEE M
  • 14. The Growth of the Internet, Measured by Number of Internet Hosts with Domain Names Figure 1.3, Page 23 Slide 1-14 SOURCE: Internet Systems Consortium, Inc., 2009. BY:MADDY.KALEE M
  • 15. The Web  Most popular Internet service  Developed in early 1990s  Provides access to Web pages HTML documents that may include text, graphics, animations, music, videos  Web content has grown exponentially 2 billion Web pages in 2000  At least 40–50 billion pages today Slide 1-15 BY:MADDY.KALEE M
  • 16. The Growth of B2C E-commerce Figure 1.4, Page 25 Slide 1-16 SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b; authors’ estimates. BY:MADDY.KALEE M
  • 17. The Growth of B2B E-commerce Figure 1.5, Page 28 Slide 1-17 SOURCES: U.S. Census Bureau, 2009a; authors’ estimates. BY:MADDY.KALEE M
  • 18. Early Visions of E-commerce  Computer scientists:  Inexpensive, universal communications and computing environment accessible by all  Economists:  Nearly perfect competitive market and friction-free commerce  Lowered search costs, disintermediation, price transparency, elimination of unfair competitive advantage  Entrepreneurs:  Extraordinary opportunity to earn far above normal returns on investment—first mover advantage Slide 1-18 BY:MADDY.KALEE M
  • 19. Predictions for the Future  Technology will propagate through all commercial activity  Prices will rise to cover the real cost of doing business  E-commerce margins and profits will rise to levels more typical of all retailers  Number of successful pure online stores will remain smaller than integrated offline/online stores  Growth of regulatory activity worldwide  Influence of cost of energy Slide 1-19 BY:MADDY.KALEE M
  • 20. Understanding E-commerce: Organizing Themes  Technology:  Development and mastery of digital computing and communications technology  Business:  New technologies present businesses with new ways of organizing production and transacting business  Society:  Intellectual property, individual privacy, public welfare policy Slide 1-20 BY:MADDY.KALEE M
  • 21. The Internet and the Evolution of Corporate Computing Figure 1.9, Page 44 Slide 1-21 BY:MADDY.KALEE M
  • 22. Academic Disciplines Concerned with E-commerce  Technical approach  Computer science  Management science  Information systems  Behavioral approach  Information systems  Economics  Marketing  Management  Finance/accounting  Sociology Slide 1-22 BY:MADDY.KALEE M
  • 23. Slide 1-23 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. BY:MADDY.KALEE M