06 e-commerce.ppt
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E-Commerce: DigitalMarkets, Digital Goods
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LEARNING OBJECTIVES
Describe the unique features of e-commerce, digital markets, anddigital goods. Analyze how Internet technology has changed value propositions andbusiness models. Describe the various types of e-commerce and how e-commerce haschanged consumer retailing and business-to-business transactions. Evaluate the role of m-commerce in business and describe the mostimportant m-commerce applications. Compare the principal payment systems for electronic commerce.
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Ubiquity: Internet is available everywhere, anytime.
Global reach: the technology reaches across national boundaries.
Universal standards: one set of technology standards.
Richness: Complexity & content of message. video, audio and text
messages are possible. Interactivity: the technology works through interaction with the
user.
Information density: Total & quality information are available to
all participant. The technology reduces information costs andraises quality.
Personalization/customization: The technology allowspersonalized messages to be delivered to individuals as well asgroups.
Why E-commerce is different
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Information Asymmetry : One party has more information
essential to the transaction than the other party. The
Internet shrinks information asymmetry
Disintermediation: The elimination of organizationsor business process layers responsible for certain
intermediary steps in a value chain, reducing costs to
the consumer
Key concepts in E-commerce: Digital markets
and Digital Goods in a Global Market Place
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The Benefits of Disintermediation to the Consumer
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Internet Business Models
Virtual storefront: Sells physical products directly to
consumers or businesses. (Amazon.com)
Information broker: Provides product pricing and
availability information; generates revenue from
advertising or directing buyers to sellers.
Transaction Broker: Processes online sales
transactions for fee.
New Business Models and Value Propositions
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Internet Business Models Online Marketplace: Provides digital environment where
buyers and sellers meet. (eBay.com)
Content Provider: Provides digital content, such as news;revenue from fees or advertising sales. (WSJ.com, TheStreet.com)
Online Service Provider: Provides connectivity; revenuefrom fees, advertising, or marketing information.
(Xdrive.com)
New Business Models and Value Propositions
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Internet Business Models (cont.)
Virtual Community: Provides online meeting place forpeople of similar interests. (Friendster.com, iVillage.com)
Portal: Provides initial point of entry to the Web, along with
specialized content and services. (Yahoo.com, MSN.com)
Syndicator: aggregates content or applications to resell as
package to third-party Web sites
New Business Models and Value Propositions
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Types of Electronic Commerce
Business-to-customer (B2C): Retailing of products and
services directly to individual customers
(Wal-Mart.com)
Business-to-business (B2B): Sales of goods and
services to other businesses (Grainger.com,
Ariba.com)
Consumer-to-consumer (C2C): Individuals using the
Web for private sales or exchange (eBay.com )
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Click-stream tracking tools: Collect data on customer activities at Websites and store them in a log
Interactive Marketing and
Personalization
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Create unique personalized Web pages for each
customer
Increased closeness to customer increases value to
the customer, while reducing costs of interacting
with the customer
Web Personalization
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Web Site Personalization
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Blog: An informal yet structured web site wheresubscribing individual can publish stories, opinion, andalso link to other web site of interest. Personal Web pagethat contains a series of chronological entries by itsauthor, and links to related Web pages.
Business-to-business (B2B) electronic commerce: Newefficiencies and relationships
EDI
Procurement
Private industrial networks (private exchanges)
Net marketplaces
Exchanges
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Electronic Data Interchange (EDI): Enables the
computer-to-computer exchange between two
organizations of standard transactions. Currently
80% of B2B e-commerce uses this system.
EDI is being replaced by more powerful Web-based
alternatives.
Business-to-Business Electronic Commerce:
New Efficiencies and Relationships
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Electronic Data Interchange (EDI)
Companies use EDI to automate transactions for B2B e-commerce and continuous inventory replenishment. Suppliers can
automatically send data about shipments to purchasing firms. The purchasing firms can use EDI to provide production and
inventory requirements and payment data to suppliers.
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Private Industrial Networks
The largest Web-based form of B2B commerce
Private B2B extranets that focus on continuous business
process coordination between a small group of companies
for collaboration and supply chain management. Wal-Mart
uses its own private network to coordinate more than
15,000 suppliers to its stores.
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A Private Industrial Network
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Net marketplaces (e-hubs) provide a single
marketplace for many different buyers and
sellers.
ELECTRONIC COMMERCE
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A Net Marketplace : Net marketplaces (e-hubs) provide a single
marketplace for many different buyers and sellers.
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M-commerce: The use of the Internet for purchasing goods
and services and also for transmitting messages using
wireless mobile devices
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M-Commerce Services and Applications
Information-based services: Instant messaging, e-
mail, searching for a movie or restaurant using a cell
phone or handheld PDA
Transaction-based services: Purchasing stocks,
concert tickets, music, or games; searching for the
best price for an item using a cell phone and buying it
in a physical store or on the Web
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Personalized services: Services that anticipate
what a customer wants based on that persons
location or data profile, such as updated airline
flight information or beaming coupons for nearby
restaurants
M-Commerce Services and Applications (Continued)
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M-Commerce Challenges
Slow data transfer speeds on second-generation
cellular networks, resulting in higher costs tocustomer
Limited memory and power supplies
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More Web sites need to be designed specifically
for small wireless devices.
Keyboards and screens on cell phones are still
tiny and awkward to use.
M-Commerce Challenges (Continued)
Electronic Commerce Payment Systems
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Electronic Commerce Payment Systems
Digital wallets Electronic storage of I.D. and digital cash.
Accumulated balance Used for micro payments. Similar to monthly telephone bills.
Stored value Used for micro payments. Pre-payment of funds, debited on use.
Smart Cards I.D. and credit information stored on a chip attached to a card. Used in E
Digital cash Electronic currency that can be transferred over the Web.
Peer-to-Peer payment Interpersonal transfer of funds such as PayPal.
Digital checking Electronic checks with digital signatures, used most often in B2B commer
Electronic billing presentmentand payment
Used by consumers to pay bills online, provided by many banks.
Credit cards The most common form of payment.
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Digital credit card payment systems: Secure credit card
payment over Web
Digital wallet: Stores credit card and owner identification,shipping information, to facilitate payment process
Accumulated balance digital payment systems:
Accumulates micro-payment purchases as debit balancepaid periodically on credit card or telephone bills
Electronic Commerce Payment Systems
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Stored value payment system: Enables consumers
to make instant payments based on value stored in
digital account
Digital cash: Digital currency that can be used for
micropayments or larger purchases
Peer-to-Peer payment systems: Enables payments to
vendors not set up for credit-card payments
Electronic Commerce Payment SystemsElectronic Commerce Payment Systems
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Digital checking: Electronic check with secure digital
signature
Electronic billing presentment and payment system:Supports electronic payment for online and physical store
purchases after purchase has taken place
Electronic Commerce Payment SystemsElectronic Commerce Payment Systems
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