6668 EC 03 EC Overview
Transcript of 6668 EC 03 EC Overview
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Electronic commerce (EC)The process of buying, selling, or exchangingproducts, services, or information via
computer Other definitions from different perspectives
Business Processdoing businesselectronically by implementing businessprocesses over electronic networks, therebysubstituting information for physical businessprocesses
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Servicea tool that addresses the desire ofgovernments, firms, consumers, andmanagement to cut service costs whileimproving the quality of customer service
LearningEC is an enabler of online trainingand education in schools, universities, and
other organizations, including businesses CollaborativeEC is the framework for inter-
and intra-organizational collaboration
CommunityEC provides a gathering placefor community members to learn, transact,and collaborate. Popular community is socialnetworks, such as MySpace and Facebook
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E-Business
A broader definition of EC that includes notjust the buying and selling of goods and
services, but also servicing customers,collaborating with business partners, andconducting electronic transactions within anorganization
Some exclude buying and selling Some define e-business as dealing with firms
internal activities only, whereas e-commerce
deals with the external activities only We use the broadest definition of E-
Commerce
However, the two terms will be used
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OTHER EC CONCEPTS
Pure Versus Partial EC
EC can take several forms depending onthe degree of digitization ofthe product(service) sold, the process (e.g., ordering,
payment, fulfillment), and the deliverymethod
The possible configurations of these 3
dimensions determine different levels of EC
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A product may be physical or digital, theprocess may be physical or digital, and the
delivery method may be physical or digital These alternatives create 8 cubes, each of
which has 3 dimensions
In traditional commerce, all 3 dimensionsof the cube are physical (lower-left cube)
In pure EC, all dimensions are digital
(upper-right cube)Other cubes include a mix of digital and
physical dimensions
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If there is at least 1 digital dimension, weconsider the situation EC, but only partial EC
Ex. Purchasing a computer from Dells Website or a book from Amazon.com is partial EC,because of the physical delivery
However, buying an e-book fromAmazon.com, or a software product fromBuy.com is pure EC, because the product,payment, and delivery are all digital
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EC Organizations
brick-and-mortar (old economy) organizations
Old-economy organizations (corporations) that
perform their primary business off-line, sellingphysical products by means of physical agents
virtual (pure-play) organizations
Organizations that conduct their businessactivities solely online
click-and-mortar (click-and-brick) organizations
Organizations that conduct some e-commerce
activities, usually as an additional marketingchannel
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electronic market (e-marketplace)
An online marketplace where buyers andsellers meet to exchange goods, services,money, or information
Any individual can also open a marketselling products or services online
Electronic markets are connected to sellersand buyers via the Internet
But, they may be supplemented byconnecting inter-organizational or intra-organizational information systems
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Inter-organizational information systems(IOSs)
Communications systems that allow
routine transaction processing andinformation flow between two or moreorganizationsusing standard protocolssuch as EDI
Intra-organizational information systems
Communication systems that enable e-commerce activities to go on within
individual organizationsalso known asintrabusiness EC
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Internet - Vast majority of people use theglobally networked environment, theInternet
Intranet - An internal corporate orgovernment network that uses Internettools, such as Web browsers, and Internet
protocols Extranet - A network that uses the Internet
to link multiple intranets in a secure manner
Retail sales are on the increase continually12
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AN EC FRAMEWORK
The EC field is diverse, involves many activities,organizational units, and technologies
A framework that describes its contents isuseful
EC applications shown at the top
To execute these applications, companiesneed the right information, infrastructure, andsupport services
So, the EC applications are supported byinfrastructure, and the five support services
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l ll b i di i i f
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Peoplesellers, buyers, intermediaries, infosystems & technology, and any otherparticipants
Public policycompliance with legal andother policy and regulations, such asprivacy protection and taxation, that aredecided by governments; also the issue oftechnical standards established bygovernment and/or industry-mandatedgroups
Marketing and advertisementlike anyother business, EC requires the marketingsupport, to bridge the gap betweenbuyers and sellers
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Support servicesmany supportservices such as content creation,
order management & delivery,payments and so on are essential
Business partnershipsassociations
such as joint ventures, exchanges,and business partnerships of varioustypes are common in EC applications;these occur frequently throughout thesupply chain
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The infrastructure for EC is shown at thebottom
The infrastructure describes the hardware,software, and networks used in EC
All these components require soundmanagement practices
So, companies need to plan, organize,motivate, devise strategy, and restructureprocesses, as needed, to optimize business
use of EC models and strategies
Essentially management deals with thestrategic, tactical ,and operational
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EC IS CLASSIFIED BY THE NATURE, DIRECTIONOF TRANSACTIONS, AND INTERACTIONS
business-to-business (B2B) - E-commercemodel in which all of the participants arebusinesses or other organizations
business-to-consumer (B2C) - E-commercemodel in which businesses sell to individualshoppers (also called e-tailing
Online retailing)
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i t b i C t
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intra-business EC - E-commerce categorythat includes all internal organizationalactivities that involve the exchange of
goods, services, or information amongvarious units and individuals in anorganization (usually performed over
intranets or corporate portals business-to-employees (B2E)subset of
the intra-business category in which an
organization delivers services, information,or products to its individual employees(B2ME)
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t (C2C)
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consumer-to-consumer(C2C) -E-commerce model in which consumerssell directly to other consumers (selling
residential property, cars in online classifiedads; use of auction sites to place items forsale)
collaborative commerce (c-commerce)
E-commerce model in which individuals orgroups communicate or collaborateonline, multi-located business partners
designing a product together, using screensharing; managing inventory online)
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e-learning
The online delivery of information for
purposes of training or education (e-training, virtual universities)
e-government
E-commerce model in which agovernment entity buys or provides goods,services, or information from or to
businesses (G2B)or individual citizens (G2C)
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First applications developed in the early 1970s
for electronic fund transfer and the EDIs (fordocument transfers)
These were first generation IOS applications
EC coined during early 1990s, butapplications expanded from mid 1990s
1999emphasis shifted from B2C to B2B
2001from B2B to B2E, C-commerce, e-government, e-learning, and m-commerce
2005social networks received attention asdid the wireless applications
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EC Failuresstarting 1999 many e-tailing and
B2B exchanges began to fail (seedisobey.com/ghostsites)
B2C failureseToys, Xpeditor, MarchFirst,
Drkoop, Webvan, and Boo B2B failuresChemdex, Ventro, and
Verticalnet (see businessplanarchive.org)
A survey by Strategic Direction (2005) foundthat 62% of the dot-coms lacked financialskills, 50% had little experience in marketing,many firms had poor inventory and logistics
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D t th t EC d
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Does not mean that ECs days arenumbered
First, the dot-com failure rate is decliningsharply
Second, the EC field is basicallyexperiencing consolidation as companiestest different business models andorganization structures
Third, many pure EC companies such as
Amazon.com are expanding operations
Finally, click-and-mortar model works verywell in e-tailing (Wal-mart, eBay)
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EC S l t f h i
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EC Successeslast few years have seen riseof extremely successful EC companies such aseBay, Google, Yahoo!, AOL, E-Trade
Click and mortar companies such as Cisco,Wal-Mart online, GE, IBM, Intel also have seengreat success
Despite the failure of individual companiesand initiatives, the total volume of EC hasbeen growing by 15 to 25% every year
Finally, ECs success is now being shapedlargely by social computing and networking
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