MBA Lecture 6b

8/7/2019 MBA Lecture 6b

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10.1 2010 by Prentice Hall

6Chapter

EE--Commerce: DigitalCommerce: DigitalMarkets, Digital GoodsMarkets, Digital GoodsEE--Commerce: DigitalCommerce: Digital

Markets, Digital GoodsMarkets, Digital Goods


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LEARNING OBJECTIVES

Identify the unique features of e-commerce, digital

markets, and digital goods.

Describe how Internet technology has changed

business models. Identify the various types of e-commerce and

explain how e-commerce has changed consumer

retailing and business-to-business transactions.

Identify the principal payment systems for

electronic commerce.

Management Information SystemsManagement Information SystemsChapter 10 EChapter 10 E--Commerce: Digital Markets, Digital GoodsCommerce: Digital Markets, Digital Goods


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10.3 2010 by Prentice Hall3

Technology is no longer an afterthought in forming business

strategy, but the actual cause and driver.

The ability to streamline the structure, influence, and control

of the flow of information is dramatically more powerful and

cost-effective than moving and manufacturing physicalproducts.

Inability to overthrow the dominant, outdated business design

often leads to business failure.

The goal of new business designs is to create flexibleoutsourcing alliances between companies that not only off-

load costs, but also make customers ecstatic.

Why study this course


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E-commerce is enabling companies to listen to their customers

and become either the cheapest, the most familiar, or the

best.

Dont use technology just to create the product. Usetechnology to innovate, entertain, and enhance the entire

experience surrounding the product, from selection and

ordering to receiving and service.

The business design of the future increasingly uses

reconfigurable e-business community models to best meetcustomers needs.

The tough task for management is to align business strategies,

processes, and applications fast, right, and all at once. Strong

leadership is imperative.

Why study this course


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Electronic Commerce (E-commerce) is an

emerging concept that describes the process

buying and selling or exchanging of products

and services and information via computernetworks including the internet.

E-business is a broader definition of EC, including

buying and selling of goods and services, andalso servicing customers, collaborating with

partners, conducting e-learning and conducting

electronic transactions within an organization.

Definition of E-commerce


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Figure 10-1

Retail e-commerce revenues have grown

exponentially since 1995 and have only recently

slowed to a very rapid 16 percent annual

increase, which is projected to remain the same

until 2010.

The Growth of EThe Growth of E--CommerceCommerce


Electronic Commerce and the Internet


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Eight unique features of e-commerce technology

1. Ubiquity

Internet/Web technology available everywhere: work, home,

etc., and anytime2. Global reach

The technology reaches across national boundaries, around

Earth

3. Universal standards One set of technology standards: Internet standards

4. Richness

Supports video, audio, and text messages




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Eight unique features (cont.)

5. Interactivity

The technology works through interaction with the user

6. Information density

Vast increases in information densitythe total amount and

quality of information available to all market participants

7. Personalization/Customization:

Technology permits modification of messages, goods

8. Social technology

The technology promotes user content generation and social

networking




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Key concepts in e-commerce

Digital markets reduce

Information asymmetry

Search costs

Transaction costs

Menu costs

Digital markets enable

Price discrimination

Dynamic pricing

Disintermediation




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Figure 10-2

The typical distribution channel has several intermediary layers, each of which adds to the final

cost of a product, such as a sweater. Removing layers lowers the final cost to the consumer.

The Benefits of Disintermediation to the ConsumerThe Benefits of Disintermediation to the Consumer




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Dimensions of E-commerce

Digital Agent

Digital Product

Digital

Process

Physical

Product

Physical

Agent

Physical

Process


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Traditional Commerce:

All dimensions are physical in nature

Perform all transactions off-line

Buy and sell all products and services through

physical agents and representatives


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Pure E-commerce:

All the dimensions are digital in nature

Pure online (virtual) organisations

Buy and sell all products and services online

Hybrid approach:

A combination of digital and physical dimensions


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Electronic Commerce:

ConceptsWhere EC is conductedelectronic market (e-marketplace)

An online marketplace where buyers and sellers meet

to exchange goods, services, money, or informationinterorganizational information systems (IOSs)

Communications system that allows routinetransaction processing and information flow between

two or more organizationsintraorganizational information systems

Communication systems that enable e-commerceactivities to go on within individual organizations


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Classifications of E-commerce

Business-to-business (B2B)

Business-to-consumers (B2C)

Consumer-to-consumer (C2C)

Consumer-to-Business-(C2B) Mobile commerce (m-commerce)

Location base e-commerce

Intra-business (organizational) EC Non-business EC


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business-to-business (B2B)E-commerce model in which all of the participants arebusinesses or other organizations

business-to-consumer (B2C)

E-commerce model in which businesses sell to individualshoppersconsumer-to-business (C2B)

E-commerce model in which individuals use the Internetto sell products or services to organizations or individuals

seek sellers to bid on products or services they need

consumer-to-consumer (C2C)E-commerce model in which consumers sell directly toother consumers


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mobile commerce (m-commerce)E-commerce transactions and activities conducted in a wirelessenvironment

location-based commerce (l-commerce)M-commerce transactions targeted to individuals in specificlocations, at specific times

intrabusiness EC

E-commerce category that includes all internal organizationalactivities that involve the exchange of goods, services, orinformation among various units and individuals in anorganization


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business-to-employees (B2E)E-commerce model in which an organizationdelivers services, information, or products to itsindividual employees

collaborative commerce (c-

commerce)E-commerce model in which individuals orgroups communicate or collaborate online


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Benefits E-Commerce

To Consumers

Open 24 hours a day

More choices

Better prices

Quick delivery

Product information in seconds

Interact with other consumers

Facilitates competition


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Benefits E-Commerce

To Organizations

Expands the marketplace

Decreases the cost (less paper)

Pull-type supply chain management

Customisation = competitive advantage

Less time between outlay of capital and receipt of

products and services Supports BPR efforts


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Benefits E-Commerce

To Society

Work at home less traveling less trafficand pollution

Lower prices benefit less affluent people

Third world and rural areas access productsotherwise unavailable

Public services at a reduced cost andimproved quality


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Limitations E-Commerce

MBA Lecture 6b

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Transcript of MBA Lecture 6b