Mid Term Exam

Chapters 1,3,4,5,6,10 & (additional readings)

Two parts:Multiple choice (get scantron form 889 E

available in book store)Short cases

MINI CASE 2: Amazon & eBayWhat are the business benefits of adopting open-source software?

Web Services provide a standard way to package pieces of the business logic and make them accessible to something else (another database, device or partner).

Using protocols Web Services make integration across platform possible without recreating interfaces for every new project.

It provides the host organization an avenue to allow discrete and controlled access to its business, and provides the partner or user with the ability to integrate content and services online without extensive customization or data transfers.

Do no need to reinvent wheel

What are the benefits of Web services to Amazon, eBay, and their developer partners?

Benefits to Amazon and eBay would include:• Strategic alliances that feed customers, develop “pug-ins”• Increased number of listings and transactions happening through their

platform.• Reinforces their strategic positions in industries where the size of the

associated network of partners and users is critical to its success.

Benefits to partners would include:• Partners can display information and offer capabilities that are tested

and popular with minimum additional investment.• Partners can provide additional value that supports their main value

proposition but that would be cost-prohibitive to develop themselves.• Time savings

What are the business challenges of Web services? Visit the Web services websites of IBM (www.ibm.com/solutions/webservices) and Microsoft (www.microsoft.com/webservices) help

with your answer.

• ROI• Security & Privacy • Deciding on the boundaries and depth of

information and services to be provided, i.e. giving out enough so that is attractive, but not as much as to present a risk to the organization.

• Drafting agreements with partners as to what can then be done with the data and services provided.

• Technical issues to be worked out in both sides (host organization and partners).

CH 8: Electronic Commerce CH 8: Electronic Commerce SystemsSystems

What’s a URL?Uniform Resource LocatorIt provides not only location of a file but also how to access that

fileyour browser, uses the URL to retrieve a file from the host

computer where it is stored Ex:http://www.ubalt.edu

http: is the protocol hypertext transfer protocolNext is the host address, i.e., www.ubalt.eduubalt is university of Baltimoreedu..implies education

Domain NamesA domain name is an internet protocol address ("IP address") made of a

string of four sets of numbers separated by periods such as “204.52.129.211 ." 

The IP address is similar to a telephone number in that it can be used to send and receive electronic communications to and from the IP address.

Numbers are hard to remember they are translated into more meaningful terms..like www.ubalt.edu

Domain names must be unique

You can find your IP address using many different servicesTracertSourcehttp://www.keytlaw.com/urls/whatisdomain.htm

E-commerceSource:http://www.online-commerce.com/index.html

It allows people to exchange goods and services immediately and with no barriers of time or distance. Any time of the day or night, you can go online and buy almost anything you want.

E-Commerce rootsE-Commerce roots• Electronic funds transfer (EFT)Electronic funds transfer (EFT) : the oldest large-scale e-

commerce root. Banks have been exchanging financial transactions through Automated Clearing Houses for decades.

• Transaction automation (TA)Transaction automation (TA): consumers and businesses have been using TA in a variety of Point of Sales (POS) applications, like credit-cards, purchase scanning, etc. Verifone was the pioneer.

• Inter Organizational Systems (IOS)Inter Organizational Systems (IOS): business to business commerce over proprietary networks particularly for order entry and purchasing, using Electronic Data Interchange (EDI) technology and standards.

• Electronic Commerce todayElectronic Commerce today: business to business (B2B), business to consumers (B2C), consumers to consumers (C2C), government to customers (G2C) and govt to govt (G2G).

E-Commerce TechnologiesE-Commerce Technologies• Traditional technologies

– Operating SystemsOperating Systems: scalability, portability, security, interoperability

– Networking & telecommunicationsNetworking & telecommunications: bandwidth, reliability, scalability, security

– Data basesData bases: dynamic catalog management and display, order entry, fulfillment and delivery.

• New technologies– HTMLHTML: Web Design and store-front tools– Web programmingWeb programming: Server management & CGI

programming

Electronic Commerce

• More than just buying and selling products online

• Includes the entire online process of – Developing, marketing, selling, delivering, servicing

and paying for products and services– Transacted on the internetworked global

marketplaces of customers– With the support of a worldwide network of business

partners

Categories of e-Commerce

Processes involved in E-commerce

Essential e-commerce process

Access Control and Security

• E-commerce processes must establish mutual trust and

• Secure access between the parties in an e-commerce transaction

• By authenticating users, authorizing access, and enforcing security features

Profiling and Personalizing

• “Customized” services• Gather data on you and your website behavior and

choices• Build electronic profiles of your characteristics and

preferences• Profiles are used to recognize you and provide you with

a personalized view of the contents of the site with product recommendations and personalized advertising

• One-to-one marketing strategy

Search Management

• Search processes that helps customers find the specific product or service they want to evaluate or buy

• Content, key word, range, multiproperty based searches

• How many clicks are too many?• Google, ask jeevan, akami, bidu

Event Notification

• event-driven applications• Respond to events such as customer’s first website access,

payment, delivery• Event notification software monitors e-commerce

processes• Records all relevant events including problem situations• Notifies all involved stakeholders• Ex: Dell, Lazy boy

Electronic Payment Processes

• Web Payment Processes– Shopping cart process– Credit card payment process– Other more complex payment processes

• Electronic Funds Transfer (EFT) – Capture and process money and credit transfers

between banks and businesses and their customers

Secure Electronic Payment Example

Securing Electronic Payments

• Network sniffers– Software that recognizes and intercepts credit

card number formats• Security measures to combat

– Encrypt (code and scramble) data between customer and merchant

– Encrypt credit card authorizations– Take sensitive information off-line

e-Commerce Success Factors

• Selection and Value– Attractive product selections, competitive prices,

satisfaction guarantees, and customer support after the sale• Performance and Service

– Fast, easy navigation, shopping, and purchasing, and prompt shipping and delivery

• Look and Feel– Attractive web storefront, website shipping areas,

multimedia product catalog pages, and shopping features

e-Commerce Success Factors

• Advertising and Incentives– Targeted web page advertising and e-mail promotions,

discounts and special offers, including advertising at affiliate sites

e-Commerce Success Factors• Personal Attention

– Personal web pages, personalized product recommendations, Web advertising and e-mail notices, and interactive support for all customers

• Community Relationships – Virtual communities of customers, suppliers, company

representatives, and others via newsgroups, chat rooms, and links to related sites

• Security and Reliability– Security of customer information and website transactions,

trustworthy product information, and reliable order fulfillment

Web Store Requirements

Developing a Web Store

• Build website– Use simple website design tools– Predesigned templates– Build your own website or use outside

contractor• Market website to attract visitors and

transform them into loyal customers

Serving Customers

• Serve customers by creating user profiles, personal Web pages and promotions that help develop a one-to-one relationship

• Transact with customers by providing an attractive, friendly, and efficient Web store

• Support customers with– Self-help menus, tutorials, FAQs – E-mail correspondence with customer service

representatives

Managing a Web Store

• Manage both the business and the website– Record and analyze traffic, inventory and sales– Link to accounting system

• Operate twenty-four hours a day, seven days a week

• Protect transactions and customer records, use firewalls, and repel hacker attacks

Strategic Areas: MarketingStrategic Areas: Marketing• designdesign

• presence• visibility

• catalog developmentcatalog development• price & availability• description, image

• order entryorder entry• billing• credit cards, etc

• customer servicecustomer service• FAQ• returns

Strategic Areas: OperationsStrategic Areas: Operations• supplier ordering and receivingsupplier ordering and receiving

• partners• JIT (just-in-time)

• distribution centersdistribution centers• warehouse(s)• packing• shipping

• order-tracking• internal• external

• delivery services

Strategic Areas: Business modelsStrategic Areas: Business models• extranetextranet

• firewall• tunneling

• Web front-end + outsourcingWeb front-end + outsourcing• store-front tools• outsourcers

• extranet + Web front-end + outsourcingextranet + Web front-end + outsourcing• combination of above

B2B e-Commerce

• B2B e-commerce is the wholesale and supply side of the commercial process, where businesses buy, sell, or trade with other businesses.

• Factors for building a successful retail website also apply to websites for B2B e-commerce.

e-Commerce Marketplaces

• One to Many – sell-side marketplaces host one major supplier who dictates product catalog offerings and prices

• Many to One – buy-side marketplaces attract many suppliers that flock to these exchanges to bid on the business of a major buyer

• Many to Many – auction marketplaces used by many buyers and sellers that can create a variety of buyers’ or sellers’ auctions to dynamically optimize prices

Clicks and Bricks

• Should we integrate our e-commerce business operations with our traditional physical business operations

• Or should we keep them separate?

e-Commerce Channel

• The marketing or sales channel created by a company to conduct and manage its chosen e-commerce activities

• Issue is whether the e-commerce channel should be integrated with traditional sales channel.

Checklist for Channel Development

• What audiences are attempting to reach?• What action do we want these audiences to take?

– Learn about us, give us information, make an inquiry, to buy something from website, or buy through another channel?

• Who owns the e-commerce channel within the organization?

• Is the e-commerce channel planned alongside other channels?

Checklist for Channel Development

• Do we have a process for generating, approving, releasing, and withdrawing content?

• Will our brands translate to the new channel or will they require modification?

• How will we market the channel itself?

Cookies• Cookies: small text file that Web sites place on a

visitor’s client computer every time they visit, and during the visit as specific pages are accessed.

• Cookies provide Web marketers with a very quick means of identifying the customer and understanding his or her prior behavior

• Location of cookie files on computer depends on browser version

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A Typical Netscape Cookie File

Advertising Networks• Best known for ability to present users with

banner advertisements based on a database of user behavioral data

• DoubleClick best-known example• Ad server selects appropriate banner ad

based on cookies, Web bugs, backend user profile databases

41

How an Advertising Network such as DoubleClick Works

How eCommerce WORKS?http://www.online-commerce.com/tutorial.html

How eCommerce WORKS?

BROWSEINITIATE ORDERMOVED to the online transaction server in an encrypted environmentPLACE ORDERMOVED TO PROCESSING NETWORKISSUING BANK COMPLETES/DENY THE TRANSACTION

(With the addition of Secure Socket Layer technology, eCommerce is also a very safe way to complete transactions)

Developing an eCommerce Business?

• Getting an Internet Merchant Bank Account• Get domain name• Web Hosting• Obtaining a Digital Certificate• Finding a Provider of Online Transactions• Creating or Purchasing a Shopping Cart

Software

WEB HOSTING

– Good uptime – Good technical support – Fast connection to the Net – Staff that is knowledgeable about eCommerce – Compatibility with major eCommerce

providers

Digital Certificate

A digital certificate, also known as a SSL Server Certificate, enables SSL (Secure Socket Layer encryption) on the web server.

Can use Your web hosting company’s or get your own

SHOPPING CART SOFTWARE

An operating system that can be used to

Allow people to purchase your items, Keep track of your accounts, Tie together all of the aspects of your

eCommerce site into one cohesive whole.

SUMMARY

• Investigate the web sites that are possible rivals and formulate a strategy for competing against them.

• If you anticipate a lot of growth in the amount of orders coming through your site, figure out how you are going to cope with the increased load before you get swamped.

SUMMARY

• If you know nothing about web design, it is probably a good idea to hire a designer.

• Marketing your site is very important on the web. Here are some useful tips:

  - Submit your site to as many search engines as possible.

  - Try finding web sites with similar themes and make deals to create     reciprocal links.

  - Create an advertising banner and purchase space from a popular     website to display it.

  - Put your URL in the signature file of your email and the header of all     business correspondence.

  - Word of mouth is very powerful on the Net; tell all of your friends     about your page.

  - Avoid spamming - it is a sure way to get a very bad reputation.

Market Entry Strategies• For new firms:

Pure clicks/first mover Mixed “clicks and bricks”/alliances

• For existing firms: Pure clicks/fast follower Mixed “clicks and bricks”/brand extensions

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Generic Market Entry StrategiesFigure 7.17, Page 408

GOOD WEB SITE DESIGN PRACTICES

• Use small (byte-wise) graphics so graphics load more quickly in graphics-capable browsers. (It is not advisable to use GIFs for everything.

• When using graphics, provide textual alternatives for image-disabled or text-only Web browsers and indexing agents

• Test. Every visitor will see your pages differently. Test your pages with as many browsers and platforms as you can.

GOOD WEB SITE DESIGN PRACTICES

• For the future, to add presentational effects and Web page style, validate documents at the HTML 4.0 level (for the cleanest possible markup)

• Spell check and proof-read your documents.• Establish a routine for locating and fixing broken

internal and external Web site links.• Include contact information and a copyright

notice.

GOOD WEB SITE DESIGN PRACTICES

• If your Web site URL or email address will change occasionally, consider using a service that provides email forwarding and URL redirection

• Submit your Web site address to an appropriate newsgroup for a critical peer review

• Promote your Web site by adding your Web address to search engine indices and subject directories. To ensure that people can easily find your Web site, it may be necessary to modify your pages to take best advantage of current search technologies

GOOD WEB SITE DESIGN PRACTICES

(http://goodpractices.com/#STRONG)• Write your pages for multiple types of Web

browsers--to provide trouble-free access to the widest possible audience.

• Run Web pages through a validator to test their compliance with common HTML (HyperText Markup Language) specifications.

• Condense textual content to fit the time and attention constraints of today's busy Web users.

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The Consumer Decision Process and Supporting Communications

Why More People Don’t Shop Online• There are a number of actions e-commerce

vendors could take to increase the likelihood that shoppers and non-shoppers would purchase online more frequently, including:

• Better prices• Making comparison shopping easier• Making it easier to return merchandise• Providing better security for credit card and/or

personal information

Trust, Utility, and Opportunism in Online Markets

• Trust and utility among the most important factors shaping decision to purchase online

• Consumers are looking for utility (better prices, convenience)

• Asymmetry of information can lead to opportunistic behavior by sellers

• Consumers also need to trust merchants before willing to purchase

• Sellers can develop trust by building strong reputations for honesty, fairness, delivery

• Case 3/p311

What is the primary driver behind the Web upgrade activities of Microsoft and Dell?

Probably the major driver is to become more responsive to customer needs. Tied to that are other activities supporting that goal, such as:

• Improving the functionality of the websites up to desktop-application standards as opposed to traditional web computing (limited functionality, static pages, etc)

• Developing a variety of communication avenues, both to push information to interested parties and to learn about their needs and worries

• Creating a consistent one-look interface that can accommodate dynamic content without ever losing its consistency

• Fine-tuning the back-end to improve response times and scale activities throughout the organization, freeing resources for more value-added activities

What is the business value of Microsoft’s web-based, live feedback program?

The main payoff from that program is the communication to and from selected users, those who are either technically up-to-date and will be making recommendations, and those who will be making decisions when purchase-time comes.

Microsoft is able to push new initiatives to them and also garner well-informed feedback. That is why this program is restricted to hand-picked users.

What lessons on developing successful e-commerce projects can be gained from the information in this case?

Examples:• Focus on what the customer needs as opposed to what

the company wants to provide• Successful e-commerce projects are those that develop

once and take advantage of economies of scale and mass-customization to provide localized content within a globalized infrastructure

• As the capabilities of the Web increase (in terms of what is able to do as opposed to its traditional role) companies need to meet new standards of functionality above and beyond static web pages and slow response times

Additional Readings

http://www.online-commerce.com/tutorial.html

http://goodpractices.com/#STRONGhttp://www.ratz.com/featuresgood.html