Chapter 7 E-Commerce for Consumers and Organizations Introduction to Business Information Systems by Mark Huber, Craig Piercy, Patrick McKeown, and James

Chapter 7E-Commerce for Consumers and

Organizations

Introduction to Business Information Systems

by Mark Huber, Craig Piercy, Patrick McKeown,

and James Norrie

Copyright 2008 John Wiley & Sons Canada Ltd.2

What Is E-Commerce?

E-commerce is the use of _________ _________ , _________ , and _________ networks to carry out transactions in order to create or support the creation of _________ _________

E-Commerce includes all types of computer networks and all types of transactions, including electronic funds transfers and _________ over private networks as well as retail sales and wholesale exchanges over public networks like the Internet


Most people think of e-commerce as electronic shopping over the WWW or _____________ to _______________ e-commerce (transactions in hundreds of millions of dollars)

However, _________ to _________ e-commerce transactions are valued in trillions of dollars!

E-Commerce Defined


Types of E-Commerce Transactions

Transaction Description Example Web sites

Online equivalent of retail store as well as other services

www.chapters.indigo.comwww.telus.comwww.amazon.com

Electronic exchanges between companies

www.manheim.com, www.boeing.com

Online sales to government agencies

www.ppitpb.go.on.ca for businesses to provide goods or services to the Ontario Government

Electronic payment of taxes www.netfile.gc.can to electronically file and pay taxes in Canada

Use of online auctions like eBay or Yahoo! Auctions

www.ebay.com, auctions.yahoo.com


E-Commerce and Products: Physical and Electronic

Products can be divided into two primary categories: _________ and _________

_________ products include anything that requires an actual shipment of a package to the buyer, e.g., computer hardware

_________ products can be received directly over the Internet or other computer network, eg, computer software


The E-Commerce Advantage

The use of computer networks, especially the Internet, to carry out transactions between a variety of buyers and sellers is creating a tangible “e-commerce advantage” in our economy, especially with regard to

_________ _________ _________


E-Commerce Advantage

Innovative uses of the Internet have produced global _____________ with sellers being able to reach any potential buyer in the world

Technology has increased _________ _________ - quality and quantity of information about products and services


Mass Customization and Personalization

One response to _________________________ is to create business value based on a customization-oriented approach to e-commerce

There are two approaches to customization _________ _________ is the ability to create

custom products or services on-demand, e.g., Dell customers can customize their PCs

_________ is a marketing message that a business personalizes for each potential customer’s interests based on searching, browsing, or buying habits, e.g., Amazon.ca


Business and E-Commerce Strategy

A _________ is a broad-based formula for how a business is going to compete, what its goals should be, and what plans and policies will be needed

An ____________________________ is a general formula for how a business is going to use computer networks and information systems to compete in a global marketplace

One strategy being used by many companies is _________ _________ management which enables them to create one-to-one marketing experiences for their customers


E-Commerce Business Models

A ____________________ defines how a company will meet the needs of its customers while making a profit

An _______________________ is a business model appropriate for conducting business via electronic networks


Business Model

Description Examples Comments

Brokers bring buyers and sellers together for a fee.

eBay, Priceline, PayPal

There are many types of brokerage models in all types of e-commerce.

An extension of the traditional media broadcasting model in which ads appear on Web sites.

Yahoo!, Netscape, CNN.com, Google

There are many different types of advertising, but all depend on a large volume of viewer traffic.

Sell products, both physical and electronic, to consumers

Amazon.com, CanadianTire.com, Walmart.com, iTunes, and many others

Commonly referred to as e-tailers, merchants can use pure e-commerce or a combination (click and mortar).

E-commerce Business Models



Business Model


Make and sell products directly to customer

Dell, IBM, Microsoft, McAfee (anti-virus products)

Products can be purchased (PCs), leased (servers), or licensed (software).

Affiliate Web sites are paid a fee when purchases come through them.

Amazon.com fees to affiliate Web sites

Can also include banner ad exchange between affiliated sites as well as revenue-sharing.

Based on user loyalty because of high investment of time and emotion.

MyspaceEvite

Revenue is generated through sale of ancillary products or voluntary contributions


Business Model


Users are charged fee to subscribe to service to service or information source

Classmates, globeandmail.com

Subscription may be for premium services; advertising model may be combined with this model

Provides data on consumers and consumption habits

DoubleClick, NetRatings, Edmunds

Usually aimed at helping businesses rather than consumers

Enable competitors to cooperate on a Web site

AutoTrader.com, VRBO.com,craigslist

Usually aimed at individuals or small businesses that cannot attract customers to their own Web site.



Web Sites Classified By Purpose

Web Site Type

Purpose Example Business Model

A gateway to many other Web sites

Netscape.com, Yahoo!, MSN

Advertising, Affiliate

Finds Web sites that contain a word or phrase

Google, Yahoo, MSN, DogPile

Advertising, Affiliate, Infomediary

Sell goods and services

Dell, LandsEnd, iTunes

Merchant, Infomediary, Manufacturer Direct, Coopetitive

To provide information on a product before or after the sale

Microsoft, BMW, McAfee, Cingular

Community, Infomediary


Web Sites Classified By Purpose

Web Site Type

Purpose Example Business Model

To provide news, information, commentary, etc.

National Post, TSN, Economist

Subscription, Community, Affiliate

Facilitate sales between third parties

eBay, Priceline, PayPal

Brokerage

Sell travel tickets and tours

Delta, Travelocity, Orbitz, HotWire

Merchant, Brokerage, Coopetitive

Provide information, product sales and support, and contacts between visitors

LavalifeMicrosoft support groups, Google Groups

Community, Merchant, Affiliate, Infomediary, Advertising


B2B E-Commerce: E-Commerce Between Organizations

Doing business with other organizations (B2B) is by far larger than with consumers (B2C)

It is also quite different in terms of the scope of the purchases and the complexity involved in them—especially in the decision making required to make a purchase

For example, while you buy one PC, a company may buy thousands

_________ systems (IOS) are the information systems that handle the information flow between trading partners


B2B Transactions

In ______________, purchases are made at market prices from an unknown seller

In ________________________, prices are set through negotiation in a long-term relationship with a company known to the buyer


B2B Business Models In the _______________ business model, two

companies form a trading relationship with neither company dominating the relationship

In the _______________ business model, a company is either a seller to many companies (one-to-many) or a buyer from many companies (many-to-one)

___________________ is often the name for B2B e-commerce in the many-to-one business model


Types of Exchanges

_________ can be co-operative ventures among the companies or it can be run by a larger company that profits from the transactions

_________ can be classified as vertical or horizontal

From an e-commerce point-of-view, ________________ are often Web sites that buyers and sellers post their needs and offerings


Using B2B E-Commerce and IOS to Improve Supply Chain Efficiency

A _________ _________ is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers.

_________________is a big part of the supply chain and using e-commerce for e-procurement has resulted in money savings


Interorganizational Systems (IOS)

An ____________________________ is a networked information system used by two or more separate organizations to perform a joint business function.


Extranets

•Extranets are _________________________ that use Internet technology to link businesses with their customers.

•Security measures keep data secure and ___________ is used to transfer the data.

•An extranet can be thought of as two connected ____________.


Copyright

Copyright © 2008 John Wiley & Sons Canada, Ltd. All rights reserved. Reproduction or translation of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein.

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Chapter 7 E-Commerce for Consumers and Organizations Introduction to Business Information Systems by Mark Huber, Craig Piercy, Patrick McKeown, and James