Electronic Commerce
Dr. Robert Chi
Chair and Professor, IS department
Chief editor, Journal of Electronic Commerce Research
Year 2000, The bubble burst?
• The party is over – the New York Post
• Next big thing? There never was; There never will be?
What is E-commerce
• Disintermediation• Examples
– Yahoo, myyahoo.com• Individualization
– Dell• Mass customization
– Fedex• Interactivity
– Walmart• Extranet
Origin of the Internet
• Innovation Phase (1961-1974)
• Institutional phase (1975-1995)
• Commercialization Phase (1995-present)
Impacts (1)
• Makes a massive quantitative of data more available and easier to access then ever before (information transparency)– Bring buyers and seller together
• Instantaneous and two way information exchange (Interactivity)– Efficiency, effectiveness and Better customer service
• Customization and individualization– Demand driven business model, Customer centered
approach
Impacts (2)
• Digitalization– Digital products– Digital transaction– Digital delivery
• Globalization– Offshore outsourcing– Globalized logistics
7 unique features of E-commerce Technology)
• Ubiquity
• Global reach
• Universal Standard
• Richness
• Interactivity
• Information Density
• Personalization/Customization
Types of E-commerce
• B2C (150 billion in 2005)
0
50
100
150
200
250
1997 1999 2001 2003 2005 2007
Revenue
• B2B (4000 billion in 2005)
0
1000
2000
3000
4000
5000
6000
1998 2000 2002 2004 2006
B2B (billion)
• C2C
• C2B
• M-commerce
E-commerce I and I
E-commerce I E-commerce II
Technology driven Business driven
Revenue growth emphasis Earning and profits emphasis
Venture capital financing Traditional financing
Ungoverned Strong regulation and governance
Entrepreneurial Large traditional firms
Dis-intermediation Strengthening intermediaries
Perfect markets Imperfect markets, brands and network effects
Pure online strategies Mixed clicks and bricks strategies
First move advantages Strategic follower strength; complimentary assets
E-commerce Business Models– Business models?
• A set of planned activities (business processes) designed to result in a profit in a marketplace.
– Key factors• Value proposition
– How a company’s product or services fulfill the needs of customers. Why should the customer buy from you?
• Revenue model– How the firm will earn revenue, generate profits.
• Market opportunity– What market space do you intend to serve and what is its size
• Competitive environment– What special advantages does your firm bring to the market space
• Market strategy– How do you plan to promote your products or services to attract your target audience
Continued..
• Organizational development– What types of organizational structures within the firm are
necessary to carry out the business plan
• Management team– What kinds of experience and background are important
for the company’s leaders to have
Major B2C Business Models (handout 1)
• Portal: yahoo.com
• Etailer: amazon.com
• Content provider: wsj.com
• Transaction broker: etrade.com
• Market creator: ebay.com
• Service provider: mycfo.com
• Community provider: about.com
Major B2B Business Models (handout 2)
• Net Marketplaces– E-distributor: staples.com
– E-purcurement: Ariba.com
– Exchanges: gepolymerland.com
– Industry consortia:
• Private Industrial Networks– Single firm networks
• Buyer, seller
– Industry-wide networks
Other Business Models (handout 2)
• C2C: ebay.com
• P2P” kazaa.com
• M-commerce:
Web design
• Static vs. dynamic web design– HTML, XML..– ASP, Coldfusion…
• Color Scheme
• Layout
• Domain Names
In class exercise
• Develop an e-commerce business model which is preferred to be unique and design the first page of its web site
• Teamwork, 20 minutes
Internet Marketing Strategy
• Strategy – What to do– How to do it– Led by a slogan
• Microsoft: anywhere anytime• What do you want to do today• Starbucks: a cup at a time• Disneyland: the happiest place on earth
– A company with a good strategy • Conscious • capable
Marketing strategy (handout 6)
• Pure Play– Segmentation
• Meaningful and actionable
– Target market selection• Segment size and growth• Structure attractiveness: porter’s 5 forces model• objectives and resources:
– Positioning: articulate what the brand stand for in the consumer’s mind
The future Infrastructure
• Current limitations– bandwidth, services, architecture, HTML, wired
• The Internet2 project (Next generation Internet project)– High speed network
– Including revolutionary internet applications
– Rapid transfer of new network services ands applications to the broader internet community
Fiber optics and wireless (handout 4,5)
• Fiber• Wireless
– Telephone wireless access• 460 million cell phones sold in 2003• 1G: analog transmission, circuit switch• 2G: digital transmission, circuit switch• 3G: digital transmission, packet switch• Global system for mobile communication (GSM) vs. Code
division multiple access(CDMA)
– Computer network wireless access• WiFi, WiFi5, WiMax, BlueTooth