Course Objectives

1. Impact of electronic commerce (EC) on today’s business.

2. E-Business mechanisms.
3. Major types of EC transactions for product & services.
4. B2C, B2B, C2C, Etc...
5. Role of mobile computing & commerce.
6. Dynamic e-transaction (Auctions & Barter)
7. Securing EC transactions
8. E-Payments
9. What makes EC successful
10. Legal & Ethical issues

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Chapter 1

Overview of Electronic Commerce

© 2008 Pearson Prentice Hall, Electronic Commerce 2008, Efraim Turban, et al.
Learning Objectives

1. Define electronic commerce (EC)

2. EC categories
3. Framework of EC
4. Types of EC transactions.
5. Business environment need for EC
6. Benefits of EC to organizations, consumers,
and society.
6. Limitations of EC.
7. Role of online social and business networks.

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Electronic Commerce:
Definitions and Concepts
 electronic commerce (EC)
The process of buying, selling, or
exchanging products, services, or
information via computer networks

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Electronic Commerce:
Definitions and Concepts
 e-business
A broader definition of EC that includes not
just the buying and selling of goods and
services, but also servicing customers,
collaborating with business partners, and
conducting electronic transactions within an
organization.
i.e. Combining of the traditional business
information systems with vast reach of the
Web.
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Electronic Commerce:
Definitions and Concepts
 EC can be defined from these
perspectives:
 Business process(Traditional transaction activities)
 Service
 Learning(E learning, cost reductive plus huge improvement in
infrastructure)

 Collaboration(VOIP)
 Community(Social networks, Face book)

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Electronic Commerce:
Degrees of Digitalization
 Pure versus Partial EC
1. the product (service) sold
2. the process (e.g., ordering, payment,
fulfillment)
3. the delivery method

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Electronic Commerce:
Dimensions

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Electronic Commerce:
Definitions and Concepts
 brick-and-mortar (old economy)
organizations
Old-economy organizations
(corporations) that perform their primary
business off-line, selling physical
products by means of physical agents
 virtual (pure-play) organizations
Organizations that conduct their
business activities solely online

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Electronic Commerce:
Definitions and Concepts
 click-and-mortar (click-and-brick)
organizations
Organizations that conduct some e-
commerce activities, usually as an
additional marketing channel

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Electronic Commerce:
Definitions and Concepts
 Internet versus Non-Internet EC
 Most EC is done over the Internet, but EC
also can be conducted on private networks,
such as value-added networks, local area
networks, or on a single computerized
machine
 Non-Internet EC includes the use of mobile
handwriting-recognition computers used by
field reps to write their notes in the field

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Electronic Commerce:
Definitions and Concepts
 electronic market (e-marketplace)
An online marketplace where buyers and
sellers meet to exchange goods,
services, money, or information

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Electronic Commerce:
Framework
 interorganizational information systems
(IOSs)
 intraorganizational information systems
 intranet
extranet

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The EC Framework,
Classification, and Content

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Sustaining the EC Framework,

 Support areas:
 People
 Public policy
 Marketing and advertisement
 Support services
 Business partnerships

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The EC Framework, Classification

 business-to-business (B2B)
 business-to-consumer (B2C)
 e-tailing
 business-to-business-to-consumer (B2B2C)
 consumer-to-business (C2B)
 mobile commerce (m-commerce)
 intrabusiness EC
 business-to-employees (B2E)
 collaborative commerce (c-commerce)
 consumer-to-consumer (C2C)

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The EC Framework,
Other Classification
 peer-to-peer (P2P)
 e-learning
 e-government
 exchange-to-exchange (E2E)

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The EC Future

Web 2.0
The second-generation of Internet-based
services that let people collaborate and
share information online in perceived new
ways—such as social networking sites,
wikis, communication tools, and
folksonomies

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The EC Framework,
Classification, and Content

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The EC Framework,
Classification, and Content

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Digital Revolution Drives EC

 digital economy
An economy that is based on digital
technologies, including digital
communication networks, computers,
software, and other related information
technologies; also called the Internet
economy, the new economy, or the Web
economy

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Digital Revolution Drives EC

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Business Environment Drives EC

 The Business Environment

 The business environment impact model
 Business pressures
 Organizational response strategies

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Business Environment Drives EC

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Business Environment Drives EC

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EC Business Models
 business model
A method of doing business by which a
company can generate revenue to
sustain itself

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EC Business Models
 Six elements of a business model include
descriptions of:
1. Customers to be served and the company’s relationships
with these customers including customers’ value proposition
2. All products and services the business will offer
3. The business process required to make and deliver the
products and services
4. The resources required and the identification of which ones
are available, which will be developed in house, and which
will need to be acquired
5. The organization’s supply chain, including suppliers and
other business partners
6. The revenues expected (revenue model), anticipated costs,
sources of financing, and estimated profitability (financial
viability)

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EC Business Models
 revenue model
Description of how the company or an
EC project will earn revenue
 value proposition
The benefits a company can derive from
using EC

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EC Business Models
 The major revenue models are:
 Sales
 Transaction fees
 Subscription fees
 Advertising fees
 Affiliate fees
 Other revenue sources

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EC Business Models

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EC Business Models
 Functions of a Business Model
 Articulate a customer value proposition
 Identify a market segment
 Define the venture’s specific value chain structure
 Estimate the cost structure and profit potential
 Describe the venture’s positioning within the value
network linking suppliers and customers
 Formulate the venture’s competitive strategy

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EC Business Models
Typical EC Business Models
 Online direct marketing  Information brokers
 Electronic tendering systems. (informediaries)
 Name your own price  Bartering
 Find the best price  Deep discounting
 Affiliate marketing  Membership
 Viral marketing  Value-chain integrators
 Group purchasing  Value-chain service providers
 Online auctions  Supply chain improvers
 Product and service  Social networks,
customization communities, and blogging
 Electronic marketplaces and  Direct sale by manufacturers
exchanges  Negotiation

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EC Business Models
 tendering (bidding) system
 name-your-own-price model
 affiliate marketing
 viral marketing
 e-co-ops
 customization

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Benefits and Limitations of EC

 Benefits to
 Organizations
 Consumers
 Society
 Limitations
 Technological
 Nontechnological

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Social and Business Networks
 social networks
Web sites that connect people with
specified interests by providing free
services such as photo presentation, e-
mail, blogging, etc.
 Business-oriented networks are social
networks whose primary objective is to
facilitate business

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The Digital Enterprise
 digital enterprise
 corporate portal

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The Digital Enterprise

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Managerial Issues

1. Is it real?
2. Why is B2B e-commerce so attractive?
3. There are so many EC failures—how
can one avoid them?
4. How do we transform our organization
into a digital one?

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Managerial Issues

5. How should we evaluate the magnitude

of business pressures and
technological advancement?
6. How can we exploit social/business
networking?
7. What should be my company’s strategy
toward EC?
8. What are the top challenges of EC?

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