e-commerce & internet applications bba (hons) 7 th (ec in service industry) lecture 13,14,15 by:...

E-Commerce & Internet Applications

BBA (Hons) 7th

(EC in Service Industry)

Lecture 13,14,15 By: Farhan Mir

Learning Objectives

• Understand how broker-based services are performed online

• Describe online travel tourism services and their benefits

• Discuss the impact of EC on the travel industry• Describe the online job market, its drivers and

benefits• Describe the electronic real estate market• Understand how stock trading is done online and

its benefits

• Discuss cyberbanking, its drivers and capabilities

• Describe some innovative applications in the service industries

• Discuss the future of intermediaries and their role in cyberspace

Learning Objectives (cont.)

Broker-Based Services

• Brokers work as intermediaries between buyers and sellers

• Agents basically make the markets• Agents provide many services• Most of the value-added tasks of

brokers can be automated• Major electronic agent-based

services– travel– employment– real estate– stocks

– electronic auctions– at-home banking– insurance

• Service Industries Vs. Manufacturing and Product’s Retailing

Broker-Based Services (cont.)

– Service Industries • pure EC is quite possible substantially reduced cost• bank and brokerage houses

– possible digitization of the entire process

• travel and real estate agents– viewing an online video clip or seeing photos of a hotel or a

house for sale

– Manufacturing and Product’s Retailing• physical delivery cost may be high

Travel and Tourism Services• By the year 2006, close to

49 percent of all business-to customer Internet commerce will be related to tourism

• The Internet is an ideal place to plan, explore, and arrange almost any trip

• IBM’s vision of seamless electronic travel using smart cards

• Services Provided

Information and booking of airlines, hotels, cars, and even golf courses

Fare comparisons

360 degree video tours of top destinations

Electronic Travel magazine

Tips provided by people that experienced certain situations (like a visa problem)

Pictures of major attractions

Providing maps

Information about entertainment and ticket purchasing (such as www.ticketmaster.com)

Converting 200 currencies

Travel and Tourism Services (cont.)

Worldwide business and places locator

E-mail to intermediary

Chat rooms and bulletin boards

Major international news

Weather watchExperts’ options

Shopping for travel accessories and books

Special interest vacations

Current status of flights

(real time)

Fare tracker (free e-mail alerts on low fares)

Bed and breakfast recommendations

Restaurant reviewsSpecial discount information

Frequent flier deals

Travel news

Driving directions in the US


8© Prentice Hall, 2000

• Benefits– Free information is tremendous– Free information is accessible

anytime– Substantial discounts


• Impacts on the industry


– Multimedia helps customers understand the products– Offering of lower-cost trips– Providing a more personalized service– Increasing the convenience of getting information at

home– Supporting a customer-focused strategy (such as

targeted advertisement and integration of products); push information to customers

The Employment Placement Market

• Job markets

– Employers are looking for employees with specific skills, and individuals are looking for a job

– Very volatile market– Moved to the Internet– Millions of job seekers, hundred of thousands

of jobs

• Shortcomings of the Non-Internet Job Market

The Employment Placement Market (cont.)

– Cost—Classified ads are expensive.

– Life cycle— Unless renewed, at an additional cost, the life of the ads is only days or weeks.

– Place— Most ads are local. Nationwide ads are very expensive. International ads are even more expensive.

– Minimum information— Because of the high cost, the information provided is minimal and may not appeal to some job seekers.

– Search— It is very time consuming for individuals to find all relevant newspapers. A trip to a library results in finding only major out of town newspapers.

– What about looking for Jobs in International Market?

– Finding applicants— Most job seekers, in the pre Internet era, did not place ads about their availability. Some sent unsolicited letters with resumes. This situation made it difficult for companies to find employees with special skills. They had to use employment agencies and pay them high commissions.

– Matching— It was difficult to match candidates to open jobs as well as to match supply and demand.

– Lost and dated material— Some applications or letters of response tended to get lost, or arrive late. A letter in a big city may travel two weeks to arrive at a distance of a few blocks.

– Speed— Communication by mail is slow and so is the processing of a large number of applications. Frequently, employers lose good employees, since by the time the application is processed, the applicant had taken another job. Similarly, applicants accept less desirable jobs because they are afraid to wait too long.


• The Internet Job Market


– The Internet offers a perfect environment; it is especially effective for technology-oriented jobs.• Job seekers• Job offerers• Recruiting firms• Government agencies and institutions

• The Advantage of the Electronic Job Market


– For job seekers• Ability to find very detailed and timely information on a

large number of jobs world-wide• Ability to quickly communicate with potential employers• Ability to post resumes for large-volume distribution• Ability to search for jobs quickly from any place at any

time• Obtain several support services at no cost

– writing resume career development how to interview

• Find employer profile & industry guides– www.valuereports.com

– For employers• Ability to advertise to a large number of job seekers• Ability to save on advertisement costs• Lower the cost of processing (using electronic application

forms)• Ability to provide greater ‘equal opportunity’ for job seekers• Ability to find highly skilled employees• Ability to conduct tests quickly, online• Ability to change and update ads quickly• Ability to fill up positions rapidly• Interviewing from distance


• The Limitations of the Electronic Job Markets


– Many people do not use the Internet

– Security

– Privacy

– Lack of face-to-face contact

• Major Services Available on the Net– Finding a job– Writing and posting resumes– Career planning– Newsgroups

• The Intranet Job Market– Most companies organize an internal electronic job

market– Openings are posted for employees to look at, and

search engines enable managers to identify talents even if the people were not actively looking for a job change


Real Estate: From Virtual Realtors to Virtual Reality

• You can view many properties on the screen• You can sort and organize properties• You can find detailed information about the

properties• You can search, compare and apply for loans

• Real Estate Applications

Real Estate: From Virtual Realtors to Virtual Reality (cont.)

– International Real Estate Directory and News is the most comprehensive Web site

www.ired.com

– National listing of real estate propertieswww.cyberhomes.com

– Commercial real estate directorywww.comspace.com

– The complete real estate software catalogwww.mnink.com/re/cover.html

– Mortgage comparisons and calculations and other financing information; mortgage application

www.eloan.com ;www.homeshark.com

– Searching residential real estate in multiple databaseswww.homescout.com

– Real estate related maps are available on:www.mapquest.com

– Automating the closing of real estate transactions, which is overwhelmed by paperwork



– The National Association of Realtors, www.realtor.com has links to property listings in all major US cities

– To find how much house you can afford, consult: www.replace.com/links.html

– Mortgage brokers can pass on loan applications over the Net and receive bids from lenders that want to issue the mortgages



Trading Stocks Online

• Trading Stock of companies through electronic means especially through internet (kSE)

• Costs between $7 and $20 per transaction (Vs. $30 - $100 in traditional brokerage)

• No waiting on busy telephone lines

• No oral communication, less chance for errors

• Place orders from anywhere, any time, day or night

• No biased broker to push you

• Considerable amount of free information

• E*Trade, Schwab OnlineThe order is routed to Schwab’s host computer in San Francisco and, within a split second, forwarded to the trading floor of the New York Sock Exchange (NTSE).

In a few seconds, (most cases), Schwab confirms that trade and the price, relaying the information to the investor’s PC.

Order is transferred to Schwab’s floor brokers at the NYSE, who take it to the specialist, who finds the best price and, if satisfactory, the order is fulfilled.

YesOrder is automatically transferred to a specialist and fulfilled based on the bid and ask prices.

No

Trading Stocks Online (cont.)

Is the order larger than 30,000 shares?

Order is placed, as described earlier, on an electronic form from any computer with access to the Web, anywhere in the world.

• Investment Information

Trading Stocks Online (cont.)

– For municipal bond pricing see : www.bondmarkets.org and www.investinbonds.com

– For overall market information and many links see: www.cyberinvest.com

– For free Gurus’ advice see: www.upside.com

– For stock screening and evaluation try: www.marketguide.com

– www.aaii.com provides articles from the Journal of the American Association of Individual Investors

Cyberbanking and Personal Finance

• Electronic banking

– Saves time and money for users

– Offers an inexpensive alternative to branch banking

– Application Case: Cyberbanking at Wells Fargo

• Implementation Issues in Banking and Online Trading

Cyberbanking and Personal Finance (cont.)

Encrypted Session & Digital Verification Initiated

External Firewall

B of AWeb Server

Internal Firewall

B of A Application

Server

Bank of America Security System

Logon Screen•User ID•User Password

B of AWeb Site

Customer’sComputer

– Securing Financial Transactions• Application Case: Security at NationsBank

Billing Online

• Automatic transfer of mortgages– This method has existed for several years. The payer

authorizes its bank to pay the mortgage, including tax payments.

• Automatic transfer of funds to pay monthly utility bills– As of fall 1997, the city of Long Beach has allowed its

customers to pay their gas and water bills automatically form their bank accounts.

– In 1999, many utility companies worldwide, including those in Hong Kong, allow customers to pay from bank accounts, or ATMs.

• Paying bills from online banking account

Billing Online (cont.)

Consumer

Bill Consolidator Billers

Phone

Credit Card

Utility

– Such payments can be made into any bank account. Many people pay their monthly rent and other bills directly into the payee’s bank accounts.

• A merchant-to-customer direct billing

Billing Online (cont.)

– Under this model, a merchant like American Express posts bills on its Web site, where customers can view and pay them . This means that the customers have to go to many Web sites to pay all their bills. Several utilities in Los Angeles allow customers to pay bills on the utilities’ Web site, charging customers 20 cents per transaction, which is less than the price of a postage stamp.

• Used when the conventional marketing channels are ineffective or inefficient

• Offer trading opportunities for both buyers and sellers which are not available in the conventional channels

• Internet provides much cheaper infrastructure with many more involved sellers and buyers

• Individual consumers and corporations alike can participate in this rapidly growing and very convenient form of electronic commerce

Auctions: From Theory to Practice

• Limitations of traditional auctions– Last only a few minutes for each item sold– Give buyers little time to make a decision– The bidders do not have much time to examine

the goods– Exclude many potential bidders– May be complicated for sellers to move goods to

the auction site– Commissions are fairly high (rent, advertising,

auctioneer and other employees)

Auctions: From Theory to Practice (cont.)

• Electronic Auctions


– Early auctioning done on local area networks• the auctioning of pigs in Taiwan and Singapore• the auctioning of flowers in Holland• the auctioning of cars in Japan

– Auctions on the Internet started in 1995• similar to offline auctions, except for the fact that they are done on a

computer• some last days, others a short time• detailed information is available• start bidding by sending e-mail or filling out an electronic form• names of bidders are kept coded to maintain privacy

– Auctioning methods• Yankee method• Dutch (Reverse bidding) method• “Straight sale” method

– Examples• www.usaweb.com/auction.html ; a directory of sites, search• Onsale, eBay, uBid


• Electronic Auctions

– Benefits

• For seller– Sells goods efficiently– Sells goods with little action or effort– Creates a greater range of potential

buyers– Sells excess inventories quickly via

this process

• For buyers– Gets a huge variety of goods– Finds quality goods for largely

discounted prices

– Limitations• Inability to physically

see the items• Possibility of fraud• Less competitive

atmosphere may prevail on the Net

• Benefits and Limitations


Impacts

Parameter Impact of the Web

Auctioneer Lower entry barriers, opportunity for direct sales

Access rules Customizable, theoretically millions of potential customers can be reached

Trading rules The trading rules reflect the lack of a guaranteed service

Executionprocess

For digital products the entire trading cycle can be handled on the Web; for physical products the trading process and the physical logistics of the trade objects can be separated, leading to a reduction of costs

Online Publishing

• The electronic delivery of newspapers, magazines, news, and other information through the Internet

• Online Publishing Today and Tomorrow– Today— mainly used for disseminating information

and for conducting sales transactions interactively– Tomorrow— include more customized material that

the reader will receive free, or will pay for

• Publishing Modes– newspapers, magazines, news, textbooks, music,

artwork, video clips, and movies

• Publishing Methods– online archive approach— a digital archive such as

library catalogs and bibliographic databases– new medium approach— add extra comprehensiveness

to any issue or topic – publishing intermediation approach— an online

directory for news services– dynamic or just-in-time approach— create content in

real-time and transmitted on the fly

Online Publishing (cont.)

• Virtual Teaching and Universities

Knowledge Dissemination

– Many universities are offering limited courses and degrees but use innovative teaching methods and multimedia support

– MBA program in Hong Kong• lectures are delivered as an interactive TV (iTV)• students can decide what and when they want to ‘attend’ the

lecture• lecture, support material, exercises etc. are provided on the

Web

• Online Consulting

Knowledge Dissemination (cont.)

– Medical advice— provide consultation with top experts– Management consulting— provide accumulated expertise

from knowledge bases– Legal advice— delivery of legal consultation services to

business has considerable prospects– Financial advice— offer extensive financial advice– Other service online

• insurance, healthcare, future exchanges, matchmaking, venture capital, finding a college, digital delivery of documents, and electronic stamps

The Impact on Intermediaries and Their Changing Roles

• Change the role of agents to :

– Assist in comparison shopping from multiple sources

– Providing total solutions by combining services from several vendors

– Providing certifications and trusted third party control and evaluation systems

• Issues that could impact the future of the intermediaries

The Impact on Intermediaries and Their Changing Roles (cont.)

– The success of intelligent agents— In addition to the travel intelligent agents, there are agents to support job matching and to interpret resumes. The more intelligent the software agents will be, the less you will need human agents.

– Customer attitudes and behavior are important— If you have good experience with online insurance or stock purchasing, or with virtual travel agencies would you ever return to use a human agent?

• New roles of electronic marketing intermediaries

The Impact on Intermediaries and Their Changing Roles (cont.)

– To extend what we are familiar with in physical markets to the virtual world (e.g., search services and electronic malls)

– To extend payment clearing functions into the Internet (e.g. electronic cash and digital credit card services)

Managerial Issues

• Effectiveness of out-of-town recruitment

• Privacy may be in danger

• International legal issues may impact services more than

products

• Ethical issues are prevalent in services

• The intermediaries and their roles are changing

e-commerce & internet applications bba (hons) 7 th (ec in service industry) lecture 13,14,15 by:...

Documents

online travel tourism

travel industry

industry travel

travel accessories

us travel

currencies travel

high slide

entire process travel