Download to read offline
Presentation on Electronic Commerce - Basics
- 1. 1 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning E-COMMERCE CHAPTER 8 Hossein BIDGOLI MIS
- 2. 2 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce LO1 Define e-commerce and describe its advantages, disadvantages, and business models. LO2 Explain the major categories of e-commerce. LO3 Describe the business-to-consumer e-commerce cycle. LO4 Summarize the major models of business-to- business e-commerce. LO5 Describe mobile- and voice-based e-commerce. l e a r n i n g o u t c o m e s
- 3. 3 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning LO6 Explain two supporting technologies for e- commerce. l e a r n i n g o u t c o m e s (cont’d.) Chapter 8 E-Commerce
- 4. 4 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Defining E-Commerce • E-business – Activities a company performs for selling and buying products and services, using computers and communication technologies • E-commerce – Buying and selling goods and services over the Internet – Builds on traditional commerce by adding the flexibility that networks offer and the availability of the Internet
- 5. 5 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Defining E-Commerce (cont’d.) • Business applications that use the Internet: – Buying and selling products and services – Collaborating with other companies – Communicating with business partners – Gathering business intelligence on customers and competitors – Providing customer service – Making software updates and patches available – Offering vendor support – Publishing and disseminating information
- 6. 6 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce The Value Chain and E-Commerce • Value chain – Michael Porter – 1985 – Series of activities designed to meet business needs by adding value (or cost) in each phase of the process • Supporting activities: – Organizational infrastructure, human resource management, technological development, and procurement
- 7. 7 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Exhibit 8.1 Michael Porter’s Value Chain
- 8. 8 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce The Value Chain and E-Commerce (cont’d.) • Primary activities: – Inbound logistics – Operations – Outbound logistics – Marketing and sales – Service • The Internet – Increases the speed and accuracy of communication between suppliers, distributors, and customers – Low cost means companies of any size can participate in value chain integration
- 9. 9 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce E-Commerce versus Traditional Commerce • Internet and telecommunication technologies play major role • No physical store • Click-and-brick e-commerce – Mix of traditional and e-commerce
- 10. 10 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Twitter Helps Businesses to Find Customers • Twitter can be used by businesses as a promotional tool and as a way to find sales leads • Boloco, a burrito restaurant chain, posted a photo of a coupon on Twitter and invited customers to bring in any image of the coupon -- a photocopy, a printout, or even an image on a mobile phone -- to get the discount • The promotion was a big success, given that 900 customers redeemed the coupon (including by bringing their mobile phones) as opposed to the usual 350
- 11. 11 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Advantages and Disadvantages of E-Commerce • Advantages: – Better relationships with suppliers, customers, business partners – Price transparency – Round the clock and globe operations – More information on potential customers – Increasing customer involvement – Improving customer service – Increasing flexibility and ease of shopping
- 12. 12 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Advantages and Disadvantages of E-Commerce (cont’d.) – Increasing the number of customers – Increasing opportunities for collaboration with business partners – Increasing return on investment because inventory needs are reduced – Offering personalized services and product customization – Reducing administrative and transaction costs
- 13. 13 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Advantages and Disadvantages of E-Commerce (cont’d.) • Disadvantages: – Bandwidth capacity problems – Security issues – Accessibility – Acceptance
- 14. 14 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce E-Commerce Business Models • E-commerce companies focus their operations in different parts of the value chain • Types: – Merchant – Brokerage – Advertising – Mixed – Informediary – Subscription
- 15. 15 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Major Categories of E-Commerce Exhibit 8.3 Business-to-Consumer E-Commerce Business-to-Consumer E-Commerce
- 16. 16 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Business-to-Consumer E-Commerce (cont’d.) • Companies sell directly to consumers • Examples: – Amazon.com – Barnesandnoble.com – Onsale.com • Types: – Pure-play – Brick and mortar stores with virtual storefronts
- 17. 17 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Business-to-Business E-Commerce • Involves electronic transactions between businesses • Electronic data interchange (EDI) and electronic funds transfer (EFT) • Fastest growing segment of e-commerce • Uses: – Purchase orders, invoices, inventory status, shipping logistics, business contracts, and other operations • Example: – Walmart
- 18. 18 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Consumer-to-Consumer E-Commerce • Involves business transactions between users • Online classified ads: – Craigslist.org • Online auction sites: – eBay.com
- 19. 19 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Consumer-to-Business E-Commerce • Involves people selling products or services to businesses • Example: – Creating online surveys • Search for sellers of a product and services – Priceline.com
- 20. 20 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Government and Nonbusiness E-Commerce • E-government applications • Categories: – Government-to-citizen (G2C) – Government-to-business (G2B) – Government-to-government (G2G) – Government-to-employee (G2E)
- 21. 21 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Government and Nonbusiness E-Commerce (cont’d.) • Nonbusiness organizations: – Universities – Nonprofits – Political and social organizations
- 22. 22 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Organizational or Intrabusiness E-Commerce • Involves e-commerce activities that take place inside an organization • Can include: – Exchange of goods, services, or information among employees – Conducting training programs and offering human resource services • Supporting activities in Porter’s value chain
- 23. 23 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce A B2C E-Commerce Cycle • Major activities: – Information sharing – Ordering – Payment – Fulfillment – Service and support
- 24. 24 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Exhibit 8.3 Major Activities in B2C E-Commerce
- 25. 25 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce B2B E-Commerce: A Second Look • B2Bs use these additional technologies extensively: – Intranets – Extranets – Virtual private networks – Electronic data interchange (EDI) – Electronic funds transfer (EFT) • Lowers production costs and improves accuracy – By eliminating many labor-intensive tasks
- 26. 26 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Major Models of B2B E-Commerce • Three major types of B2B e-commerce models, based on who controls the marketplace: – Seller – Buyer – Intermediary (third-party) • Fourth model called trading partner agreements
- 27. 27 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Seller-Side Marketplace • Most popular B2B model • Sellers who cater to specialized markets come together to create a common marketplace for buyers • E-procurement – Enables employees in an organization to order and receive supplies and services directly from suppliers – Can also automate some buying and selling activities • Major vendors of e-commerce and B2B solutions include I2 Technologies, IBM, Oracle, and SAP
- 28. 28 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce E-Procurement at Schlumberger • Schlumberger – Oil field services provider • E-procurement system for order processing – Has reduced the cost per order by streamlining paperwork – Replaced a centralized electronic data interchange (EDI) procurement system – Easy-to-use interface
- 29. 29 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Buyer-Side Marketplace • Buyer, or a group of buyers, opens an electronic marketplace – Invites sellers to bid on announced products or requests for quotation (RFQs) • Buyers can: – Manage the procurement process more efficiently – Lower administrative costs – Implement uniform pricing • Large corporations, such as General Electric or Boeing
- 30. 30 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Third-Party Exchange Marketplace • Controlled by a third party • Marketplace generates revenue from the fees charged for matching buyers and sellers • Usually active in vertical or horizontal market • Offers suppliers a direct channel of communication to buyers through online storefronts
- 31. 31 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Worldbid.com: A Third-Party Exchange Marketplace • International marketplace • Designed to help small to mid-sized companies buy and sell products or services domestically or internationally • Provides: – Trade leads – Request for proposals for private and government organizations worldwide
- 32. 32 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Trading Partner Agreements • Automate negotiating processes and enforce contracts between participating businesses • Business partners can send and receive bids, contracts, and other information needed when offering and purchasing products and services • Enables customers to submit electronic documents via the Internet that previously required hard copies with signatures – Using XML
- 33. 33 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Mobile and Voice-Based E-Commerce • Mobile commerce (m-commerce) – Based on Wireless Application Protocol (WAP) – Using handheld devices, such as smart phones or PDAs, to conduct business transactions • Supporting technologies: – Wireless wide-area networks and 3G networks – Short-range wireless communication technologies • Examples: – iPhone apps – Internet Explorer Mobile – Google mobile
- 34. 34 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Mobile and Voice-Based E-Commerce (cont’d.) • Voice-based e-commerce – Rely on voice recognition and text-to-speech technologies – Can conduct business using e-wallets – Security features • Call recognition, voice recognition, fixed shipping address
- 35. 35 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce E-Commerce Supporting Technologies • Electronic payment systems • Web marketing • Search engine optimization
- 36. 36 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Electronic Payment Systems • Electronic payment – Money or scrip that is exchanged only electronically • Payment cards: – Credit, debit, charge, and smart cards • Smart cards – Credit card sized – Contain an embedded microprocessor chip storing important financial and personal information
- 37. 37 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Electronic Payment Systems (cont’d.) • Other types of payments: – E-cash – E-check – E-wallets – PayPal – Micropayments
- 38. 38 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Web Marketing • Uses the Web and its supporting technologies to promote goods and services • Terms: – Ad impression – Banner ads – Click – Cost per thousand (CPM) – Cost per click (CPC) – Click-through rate (CTR) – Cookie
- 39. 39 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Web Marketing (cont’d.) – Hit – Meta tag – Page view (PV) – Pop-up ads – Pop-under ads – Splash screen – Spot leasing
- 40. 40 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Search Engine Optimization • Method for improving the volume or quality of traffic to a Web site • Some companies offer SEO service – Editing a site’s contents and HTML code to increase its relevance to specific keywords • Recommendations for optimizing a Web site: – Keywords – Page title – Inbound links
- 41. 41 MIS, Chapter 8 ©2011Course Technology, a part of Cengage Learning Chapter 8 E-Commerce Summary • Michael Porter’s value chain, compared e- commerce with traditional commerce • Major e-commerce business models • Main categories of e-commerce • B2C e-commerce business cycle • B2B e-commerce business models • Mobile and voice e-commerce • Supporting technologies