Class 1, 2 and 3

E-Business & E-Commerce

Management

The 10 Books Every

eCommerce Professional

Should Read

Friday, 29 January 2016 2




Convert!: Designing Web Sites to increase Traffic and Conversion -Benjamin Hunt

Don’t Make me Think - Steve Krug

The Complete E-Commerce Book: Design, Build & Maintain a Successful Web-Based Business -Janice Reynolds

Electronic Commerce: A Managerial Perspective - Efraim Turban, Michael Chung, Jay Lee

Return on Relationship - Ted Rubin and Kathryin Rose

Definition of Marketing

• Philip Kotler

• Social and Managerial process by which individuals and groups obtain

what they need and want through creating, offering, and exchanging

products of value with others.

• This definition rests on the following core concepts: needs, wants,

demands, products, value, cost and satisfaction, exchange and

transactions, relationships and networks, markets, marketers and

prospects.


Definition (cont)

• Needs – exist in biology they are not created by marketers – i.e.

shelter, food, clothing, safety, belonging, esteem

• Wants – Need food want hamburger, fries, coke.

• Desire – Wants for specific products backed by an ability and

willingness to buy them


Definition of Commerce

• The exchange of goods and services for money

• Consists of:

• Buyers - these are people with money who want to purchase a good or

service.

• Sellers - these are the people who offer goods and services to buyers.

• Producers - these are the people who create the products and services

that sellers offer to buyers.


Elements of Commerce

• You need a Product or service to sell

• You need a Place from which to sell the products

• You need to figure out a way to get people to come to your place.

• You need a way to accept orders.

• You also need a way to accept money.

• You need a way to deliver the product or service, often known as fulfillment.

• Sometimes customers do not like what they buy, so you need a way to

accept returns.

• You need a customer service and technical support department to assist

customers with products.


History of The Internet

• Started as a US government project in 1969.

• The purpose was to create a net that can function even if one center is

destroyed in a military attack.

• - “Hub and spokes” can be useless if the hub is destroyed.

• - Network can continue to be functional even if some nodes are

destroyed, as long as information can pass through other nodes.

• Effective in 1971 with computers on both coasts of the US.


In the 1980´s

• Personal computers or terminals were connected to a server.

• The server was a mainframe, or connected to a mainframe computer.

• The mainframe was connected to another mainframe of the company in

another location via dedicated lines.

• Only large companies could afford the expense and investment in

equipment.


Today

• Connections across countries and continents made through dedicated

fast lines.

• A company may have one local network (LAN) in NY, which is

connected to the Internet through a Regional network.


Computer classifications

• Mainframes:

• Midrange:

• Micro-computer:



What is a network

• Series of points or nodes interconnected by communication paths

• Node is a connection point for transmitting data

• Network can interconnect with other networks to form global networks


Benefits of a network

• Facilitates resource sharing

• Provides reliability

• Cost effective

• Provide a powerful medium across geographical divide


Different kinds of networks

• Type of signal

• Nature of connection

• Types of physical links

• Topology

• Communication model

• Geographical distance


Geographical Distance

• Local area network (LAN): small area, share a single server

• Metropolitan area network (MAN): a wider network, can bridge several

LAN’s

• Wide area network (WAN): a broader area covered, can include several

MAN’s

• Internet: a network of networks that covers the entire globe


TCP/IP Protocol

• Allows any two computers to communicate and exchange data.

• The Internet transfers data packets among computers.

• Each packet is identified by the sender address and a receiver

address.

• The sender´s computer transfers the data packet to another computer

on the Internet, which transfers it to a chain of other computers until it

reaches the final destination.


Internet addressing system

• Internet uses TCP/IP, therefore every computer on the Internet has an

IP address

• IP address is numerical, separated by dots

• Works with DNS:

– com: for commercial purposes

– net: for Internet Service Providers

– org: for non-profit, non-commercial groups

– gov: reserved for government

– mil: reserved for military

– int: reserved for international organizations


Assimilation of Technology

• Technology first adopted to increase efficiency – doing the same tasks

faster e.g. word processing instead of typing

• Technology next adopted to increase effectiveness – doing tasks not

only faster but better e.g. spreadsheets transformed finance and

accounting (as well as science and other fields)


Introduction to E-commerce

• E-Commerce, Web, Networks, Internet

• The evolution of new businesses

• The adoption of Brick and Mortar companies to the new economy

• Market failures and economic explanations for the new economy


Electronic Commerce

• Activity of offering and contracting products and services via electronic

ways, including all actuations which takes place before, while or after

concluding the contract, such as

• Distribution of catalogues

• Delivery of commercial communications

• Electronic payments

• After-sale services (i.e. maintenance)


Electronic Commerce

• Every signed contract with:

• offer and acceptance transmitted via electronic equipment, which itself

is

– used for data processing and storing and

– connected to a telecommunication network.

• The process of buying, selling, or exchanging products, services, or

information via computer networks


EC is defined through these perspectives

• Communications

• Commercial (trading)

• Business process

• Service

• Learning

• Collaborative

• Community


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


Pure Versus Partial EC

• EC takes several forms depending on the degree of digitization (the

transformation from physical to digital)

– the product (service) sold,

– the process,

– the delivery agent (or intermediary)


The Dimensions of Electronic Commerce


EC organizations

• Brick-and-Mortar organizations

– Old-economy organizations (corporations) that perform most of their

business off-line, selling physical products by means of physical

agents

• Virtual (pure-play) organizations

– Organizations that conduct their business activities solely online

• Click-and-Mortar (click-and-brick) organizations

– Organizations that conduct some e-commerce activities, but do their

primary business in the physical world


Where EC is conducted

• Electronic market (e-marketplace)

– An online marketplace where buyers and sellers meet to exchange

goods, services, money, or information

• Inter organizational information systems (IOSs)

– Communications system that allows routine transaction processing

and information flow between two or more organizations

• Intra organizational information systems

– Communication systems that enable e-commerce activities to go on

within individual organizations


The EC Framework, Classification, and Content

• Networked computing is the infrastructure for EC, and it is rapidly

emerging as the standard computing environment for business, home,

and government applications

– Networked computing connects multiple computers and other

electronic devices located in several different locations by

telecommunications networks, including wireless ones

– Allows users to access information stored in several different

physical locations and to communicate and collaborate with people

separated by great geographic distances


The EC Framework

• Intranet

– An internal corporate or government network that uses Internet tools,

such as Web browsers, and Internet protocols

• Extranet

– A network that uses the Internet to link multiple intranets


The EC Framework, Classification, and Content

• An EC Framework—supports five policymaking support areas

– People

– Public policy

– Marketing and advertisement

– Support services

– Business partnerships

•



E-commerce as the Networked Economy

• Create value largely through gathering, synthesizing and distribution of

information

• Formulate strategies that make management of the enterprise and

technology convergent

• Compete in real time rather than in “cycle time”

• Operate in a world characterized by low barriers to entry, near-zero

variable costs of operation and shifting competition

• Organize resources around the demand side rather than supply side

• Manage better relationships with customers through technology


E-commerce Today

• The Internet is the perfect vehicle for e-commerce because of its open

standards and structure.

• No other methodology or technology has proven to work as well as the

Internet for distributing information and bringing people together.

• It’s cheap and relatively easy to use it as a medium for connecting

customers, suppliers, and employees of a firm.

• No other mechanism has been created that allow organizations to

reach out to anyone and everyone like the Internet.


E-commerce Today

• The Internet allows big businesses to act like small ones and small

businesses to act big.

• The challenge to businesses is to make transactions not just cheaper

and easier for themselves but also easier and more convenient for

customers and suppliers.

• It’s more than just posting a nice looking Web site with lots of cute

animations and expecting customers and suppliers to figure it out

• Web-based solutions must be easier to use and more convenient than

traditional methods if a company hopes to attract and keep customers.


Key Drivers of E-commerce

• Technological – degree of advancement of telecommunications

infrastructure

• Political – role of government, creating legislation, funding and support

• Social – IT skills, education and training of users

• Economic – general wealth and commercial health of the nation


Key Drivers of E-business

• Organizational culture- attitudes to R&D, willingness to innovate and

use technology

• Commercial benefits- impact on financial performance of the firm

• Skilled/committed workforce- willing and able to implement and use

new technology

• Requirements of customers/suppliers- in terms of product and service

• Competition- stay ahead of or keep up with competitors


Appeal of E-commerce

• Lower transaction costs - if an e-commerce site is implemented well, the web can significantly lower both order-taking costs up front and customer service costs

• Larger purchases per transaction - Amazon offers a feature that no normal store offers

• Integration into the business cycle

• People can shop in different ways. – The ability to build an order over several days

– The ability to configure products and see actual prices

– The ability to easily build complicated custom orders

– The ability to compare prices between multiple vendors easily

– The ability to search large catalogs easily

• Larger catalogs

• Improved customer interactions - company.


Limitations of E-commerce

• To organizations: lack of security, reliability, standards, changing

technology, pressure to innovate, competition, old vs. new technology

• To consumers: equipment costs, access costs, knowledge, lack of

privacy for personal data, relationship replacement

• To society: less human interaction, social division, reliance on

technology, wasted resources, JIT manufacturing


Technical limitations

• There is a lack of universally accepted standards for quality, security,

and reliability

• The telecommunications bandwidth is insufficient

• Software development tools are still evolving

• There are difficulties in integrating the Internet and EC software with

some existing (especially legacy) applications and databases.

• Special Web servers in addition to the network servers are needed

(added cost).

• Internet accessibility is still expensive and/or inconvenient


Benefits of E-commerce

• To consumers: 24/7 access, more choices, price comparisons,

improved delivery, competition

• To organizations: International marketplace (global reach), cost

savings, customization, reduced inventories, digitization of

products/services

• To society: flexible working practices, connects people, delivery of

public services


Benefits to Consumers


Convenience

Buying is easy and private

Provides greater product access and selection

Provides access to comparative information

Buying is interactive and immediate

Benefits to Organizations


Powerful tool for building customer relationships

Can reduce costs

Can increase speed and efficiency

Offers greater flexibility in offers and programs

Is a truly global medium

Benefits to Society


More individuals can work from home

Benefits less affluent people

Third world countries gain access

Facilitates delivery of public services

Seven Unique Features of E-commerce Technology and

Their Significance

• Is ubiquitous (available everywhere, all the time)

• Offers global reach (across cultural/national boundaries)

• Operates according to universal standards (lowers market entry for merchants and search costs for consumers)

• Provides information richness (more powerful selling environment)

• Is interactive (can simulate face-to-face experience, but on a global scale)

• Increases information density (amount and quality of information available to all market participants)

• Permits personalization/customization


A simple stage model for buy-side and sell-side e-

commerce

Friday, 29 January 2016 48Ajith Sundaram

The environment in which e-business services are

provided

Friday, 29 January 2016 Ajith Sundaram 49

Environment Constraints and Opportunities

• Customers – which services are they offering via their web site that

your organization could support them in?

• Competitors – need to be benchmarked in order to review the online

services they are offering – do they have a competitive advantage?

• Intermediaries – are new or existing intermediaries offering products or

services from your competitors while you are not represented?



• Suppliers – are suppliers offering different methods of procurement to competitors that give them a competitive advantage?

• Macro-environment

• Society – what is the ethical and moral consensus on holding personal information?

• Country specific, international legal – what are the local and global legal constraints, for example, on holding personal information, or taxation rules on sale of goods?



• Country specific, international economic – what are the economic

constraints of operating within a country or global constraints?

• Technology – what new technologies are emerging by which to deliver

online services such as interactive digital TV and mobile

phone-based access?


An online marketplace map


Major Types of E-commerce

• Business to Business. B2B

• Business to Consumer. B2C

• Business to Government. B2G

• Consumer to Consumer. C2C

• Customer to Business. C2C

• Business to Employee. B2E


Business to Business. B2B

• B2B is that model of e-commerce whereby a company conducts its

trading and other commercial activity through the internet and the

customer is another business itself.


Business to Consumer. B2C

• Visiting the Virtual Mall

• Customer Registers

• Customer Buys Product

• Merchant Processes the order

• Credit/Debit card is processed

• Operations Management

• Shipment and Delivery

• Customer Receives

• After Sales Service


Business to Government. B2G

• Professional affairs conducted between companies and regional,

municipal or federal governing bodies.

• Business to government typically encompasses the determination and

evaluation of government agency needs,

• the creation and submission of proposals and the completion of the

contracted work


Consumer to Consumer. C2C

• Customer sells directly to other customers via

• online classified ads

• auctions

• selling personal services or expertise online.


Customer to Business. C2B

• Consumer-to-business (C2B) is a business model where an end user

or consumer makes a product or service that an organization uses to

complete a business process or gain competitive advantage.


Business to Employee. B2E

• Exchange of intra firm information with employees over the internet or

an intranet.

– term of employment,

– benefits,

– policies,

– operation manuals,

– company newsletter


B2B and B2C interactions between an organization


B2B and B2C Characteristics


Characteristic B2C B2B

Proportion of adopters with access

Low to medium High to very high

Complexity of buying decisions Relatively simple – individual and influencers

More complex – buying process involves users, specifiers, buyers, etc.

Channel Relatively simple – direct or from retailer

More complex, direct or via wholesaler, agent or distributor

Purchasing characteristics Low value, high volume or high value, low volume. May be high involvement

Similar volume/value. May be high involvement. Repeat orders (rebuys) more common

Product characteristic Often standardized items Standardized items or bespoke for sale

Disintermediation of a consumer distribution channel


(a) the original situation,

(b) disintermediation omitting the wholesaler, and

(c) disintermediation omitting both wholesaler and retailer

From original situation (a) to disintermediation (b) and

reintermediation (c)


Business Models Based on the Value Chain in the Market Place


Raw

material

producer

Manufacturer

Distributor

Retailer

Consumer

Exchange

C2B

B2C

B2C C2CNew

Middleman

• Independent

market

operators

Service Providers:

• Logistics

• Financial

IT Act 2000

• An Act to provide legal recognition for transactions carried out by

means of electronic data interchange and other means of electronic

communication, commonly referred to as "electronic commerce", which

involve the use of alternatives to paper-based methods of

communication and storage of information, to facilitate electronic filing

of documents with the Government agencies and further to amend the

Indian Penal Code, the Indian Evidence Act, 1872, the Bankers' Books

Evidence Act, 1891 and the Reserve Bank of India Act, 1934 and for

matters connected therewith or incidental thereto.


Important Concepts of IT Act, 2000

• Electronic Record

• Secure electronic Record

• Digital Signature

• Secure Digital Signature

• Certifying authority

• Digital signature certificate



T h e P i r a t e B a y :

Searching for a Safe Haven

The Pirate Bay (TPB) is one of the world’s most popular pirated music

and content sites, offering free access to millions of copyrighted songs

and thousands of copyrighted Hollywood movies. It claims it is the world’s

largest BitTorrent tracker.

In June 2013, TPB reported that it had over 6 million registered users. It

is in the top 500 Web sites in the world in terms of global traffic, with

about 20% of the visitors coming from the United States. It even has a

Facebook page and Twitter feed.




This despite the fact that TPB has been subjected to repeated legal

efforts to shut it down. In fact, the authorities pursuing TPB must feel as if

they are engaged in a never-ending game of Whack-a-mole, as each time

they “whack” TPB, it somehow manages to reappear.

But the battle is far from over. The Internet is becoming a tough place for

music and video pirates to make a living in part because of enforcement

actions, but more importantly because of new mobile and wireless

technologies that enable high-quality content to be streamed for just a

small fee.




TPB is part of a European social and political movement that opposes copyrighted

content and demands that music, videos, TV shows, and other digital content be free and unrestricted. TPB does not operate a database of copyrighted content. Neither

does it operate a network of computers owned by “members” who store the content,

nor does it create, own, or distribute software (like BitTorrent and most other so-called

P2P networks) that permit such networks to exist in the first place.

Instead, TPB simply provides a search engine that responds to user queries for music tracks, or specific movie titles, and generates a list of search results that include P2P networks around the world where the titles can be found. By clicking on a selected link, users gain access to the copyrighted content, but only after downloading software and other files from that P2P network.



Searching for a Safe HavenTPB claims it is merely a search engine providing pointers to existing P2P networks

that it does not itself control. It says that it cannot control what content users

ultimately find on those P2P networks, and that it is no different from any other search

engine, such as Google or Bing, which are not held responsible for the content found

on sites listed in search results.

From a broader standpoint, TPB’s founders also claim that copyright laws in general unjustly interfere with the free flow of information on the Internet, and that in any event, they were not violating Swedish copyright law, which they felt should be the only law that applied.

And they further claimed they did not encourage, incite, or enable illegal downloading. Nevertheless, the defendants have never denied that theirs was a commercial enterprise. Despite all the talk calling for the free, unfettered spread of culture, TPB was a money-making operation from the beginning, designed to produce profits for its founders, with advertising as the primary source of revenue.




However, the First Swedish Court in Stockholm declared TPB’s four founders

guilty of violating Swedish copyright law, and sentenced each to one year in prison

and payment of $3.5 million in restitution to the plaintiffs, all Swedish divisions of

the major record firms (Warner Music, Sony, and EMI Group among them). The court

found that the defendants had incited copyright infringement by providing a Web site

with search functions, easy uploading and storage possibilities, and a tracker.

The court also said that the four defendants had been aware of the fact that copyrighted material was shared with the help of their site and that the defendants were engaged in a commercial enterprise, the basis of which was encouraging visitors to violate the copyrights of owners. In fact, the primary purpose of TPB was to violate copyrights in order to make money for the owners (commercial intent).




Meanwhile, the U.S. government pressured the Swedish government to strengthen

its copyright laws to discourage rampant downloading. In Sweden, downloading music

and videos from illegal sites was very popular, engaged in by 43% of the Swedish

Internet population.

To strengthen its laws, Sweden adopted the European Union convention on copyrights, which allows content owners to receive from Internet providers the names and addresses of people suspected of sharing pirated files. In France, participating in these pirate sites will result in banishment from the Internet for up to three years. As a result, Internet traffic in Sweden declined by 40%, and has stayed there.




TPB has appealed the court judgment, has paid no fine, and its founders have, as yet, never spent a

night in jail. TPB continues to operate much as before. Well, almost. In 2011, the firm moved its

servers into caves in Sweden, and dispersed multiple copies of its program to other countries just in

case Swedish police tried to confiscate its servers again. Since then, like the fight against the original

Caribbean pirates of the seventeenth century, global forces continue to marshal against TPB. Not the

British Navy this time, but a loose coalition of a number of European countries and the United States.

The firm has been hounded by lawsuits, police raids, and confiscation of servers in France, Finland,

Italy, Germany, Denmark, Ireland, the U.K., and Greece. These countries have in some cases

refused to allow Internet service providers in their countries to host TPB, or link to TPB, no matter

where in the world its servers are located, although TPB has in some cases been able to circumvent

this by frequently changing its IP address. In 2013, authorities shut down TPB’s top-level domains in

Sweden, Greenland, and Iceland. For the time being at least, it has found a safe haven in the the

Caribbean island Saint Maarten, a fitting location for a latter-day pirate organization.




TPB has caused England, France, Malaysia, Finland, and most recently

the United States to consider strong intellectual property protection laws

that will prevent domestic search engines and ISPs from linking to

infringing sites, or resolving their domain names.

Meanwhile, the world’s largest advertising agency, GroupM, keelhauled

TPB and 2,000 other sites worldwide in 2011 by putting the sites on its

blacklist of copyright infringing sites where it will not buy advertising

space. Pirating intellectual property is, above all, about the money, as any

good pirate knows.



Searching for a Safe HavenThe TPB case is just the latest in a saga of court cases involving the record industry, which wants to preserve its dominance of copyrighted music, and Internet users who want free music. In 2005, after several years of heated court battles, the case of Metro-Goldwyn-Mayer Studios v. Grokster, et al. finally reached the U.S. Supreme Court.

In June 2005, the Court handed down its unanimous decision: Internet file-sharing services such as Grokster, StreamCast, BitTorrent, and Kazaa could be held liable for copyright infringement because they intentionally sought to induce, enable, and encourage users to share music that was owned by record companies. Indeed, it was their business model: steal the music, gather a huge audience, and monetize the audience by advertising or through subscription fees.

Since the court ruling, Kazaa, Morpheus, Grokster, BearShare, iMesh, and many others have either gone out of business or settled with the record firms and converted themselves into legal file-sharing sites by entering into relationships with music industry firms. In May 2010, Mark Gorton, founder of the largest U.S. pirate site, LimeWire, lost a copyright infringement case. In May 2011, admitting his guilt (“I was wrong”), and having facilitated the mass piracy of billions of songs over a 10-year period, Gorton and his file-sharing company agreed to compensate the four largest record labels by paying them $105 million.




These legal victories, and stronger government enforcement of copyright laws, have not proven to be the magic bullet that miraculously solves all the problems facing the music industry. The music industry has had to drastically change its business model and decisively move towards digital distribution platforms.

They have made striking progress, and, for the first time, in 2011 sales of music in a purely digital format accounted for more revenue than sales of music in a physical format. To do so, the music industry employed a number of different business models and online delivery platforms, including Apple’s iTunes pay-per-download model, subscription models, streaming models and now music in the cloud.




In each of these new media delivery platforms, the copyright owners—record companies, artists, and Hollywood studios—have struck licensing deals with the technology platform owners and distributors (Apple, Amazon, and Google). These new platforms offer a win-win solution. Consumers are benefitted by having near instant access to high-quality music tracks and videos without the hassle of P2P software downloads.

Content owners get a growing revenue stream and protection for their copyrighted

content. And the pirates? TPB and other pirate sites may not be able to compete with

new and better ways to listen to music and view videos. Like the real pirates of the

Caribbean, who are now just a footnote in history books, technology and consumer

preference for ease of use may leave them behind.


Questions

• Why did TPB believe it was not violating copyright laws? What did the

Swedish court rule?

• How has TPB managed to continue operating despite being found in

violation of copyright laws?

• How has the music industry reacted to the problems created by pirates

like TPB?


Professional Looking e-Commerce Sites











• What was common among them all….??

• How can they still be in market after such a huge competition….??

• As a customer how would you choose a ecommerce site to shop…??

• What feature of an ecommerce site would make you happy…??

• What makes you unhappy…??

• What are you afraid of when buying online…??

