Seminar 4 – Part 1 E-Business and E-Commerce Ref: Chapter 6

Learning Objectives Describe electronic commerce, its scope, benefits, limitations, and types. Explain how online auctions and bartering work. Understand the major applications of business- to-consumer commerce, including service industries and the major issues faced by e- tailers. Describer business-to-business applications. Explain why intrabusiness and B2E are considered e-commerce.

Learning Objectives cont’d 6. Describe e-government activities and consumer-to-consumer e-commerce. Identify the e-commerce support services, specifically payments and logistics. Understand the importance and activities of online advertising. Identify and describe ethical and legal issues relating to e-commerce.

Problem – Leader & target for Compaq. Losses exceed $100 million. Solution – Rapid expansion with selling via online. Result – Leading systems provider in US; second worldwide. Fortune’s top 5 “Most Admired” companies since 1999. By-product – sell refurbished Dell computers. Click images for homepage.

Dell’s Vast Customer Base Business-to-Business What is B2B? Why/how is B2B an important strategy in meeting Dell’s performance goals? It is a much bigger market than B2C. They could expect higher revenue as business would tend to purchase in greater numbers & more often than the individual consumer. According to Wikipedia: Business-to-business (B2B) is a term commonly used to describe commerce transactions between businesses, as opposed to those between businesses and other groups, such as business-to-consumers (B2C) or business-to-government (B2G). More specifically, B2B is often used to describe an activity, such as B2B marketing, or B2B sales, that occurs between businesses and other businesses. The volume of B2B transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving subcomponent or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windshields, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction. Hot link to good articles for further discussion enhancement. Dell becomes British Airways' preferred partner Intel invests $23 million in three Indian firms

Dell’s Vast Customer Base – cont’d How Dell Does IT: Order Management Online self-learning about Dell products along with IT & management topics Training services Click hot link to article for discussion & homepage for training services offered by Dell.

E-Business and E-Commerce Compare eBusiness to eCommerce. Provide examples. eBusiness is using internet technology for entire business operations: marketing, financial, distribution, etc. eCommerce is using the technology for sales. Click businesses that come from brick & mortar businesses may be good examples of eCommerce…businesses with only web presence may be good examples of eBusiness. Hot link to interesting article for possible discussion. According to Wikipedia: Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well. A large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic commerce presence on the World Wide Web. More…. http://en.wikipedia.org/wiki/Electronic_commerce

E-Business(EC) and E-commerce (EB) EC or EB Pure vs Partial EC – Degree of Digitization EC Organisation Brick-and-Motor  Click-and- MotorVirtual

EC Transactions B2B C-COMMERCE B2C (e-tailing) C2C B2B2C C2B INTRABUSINESS G2C, G2G, G2B

Click-&-mortar vs Brick-&-mortar organizations More shoppers proceed to checkout online………… Click images for homepages. Travelocity, Clogwild, Expedia are just e-businesses while Williams-Sonoma & Wells Fargo have also physical location options for their customers. Hot link to article.

A General E-Commerce Model The objective of eCommerce is to automate as many of the business processes as possible. This would be a good exercise for students to review within their own organizations to propose possible change. Anything that really does not need human intervention should be automated to the extent possible leaving available resources for customer service and/or other things that really does require a human.

Social Commerce – Company-sponsored Socially Oriented Sites to Bring People Together Hannah Montana Click to go “there” for more. Hot link to Forbes article. Discuss the “social” responsibilities for those who control these types of sites. Many are for children with additional responsibilities. TheirSpace.com

Application Programming Interface - Examples Click images for homepages. These are provided to stimulate discussion about the scope of EC. YouTube represents people. PayPal supports & makes possible closure from marketing activities.

A framework for E-commerce Open for discussion on possibilities for expansion in EC in the future. Home security for keyless entry such as available for cars today.

E-Market Trends Virtual Greats Profile YouTube video hot link of current direction in virtual markets. What is the impact to traditional business functions? In many ways, the brick & mortar business offering is in jeopardy because people aren’t as likely to actually “go” shopping especially when what they want is less expensive & more conveniently offered online.

Major EC Mechanisms e-market e-catalogues e-auctions – soliciting bids from/by buyers and sellers Forward auction – for sale by sellers Reverse Auctions – buyer puts request for quote E-bartering

Electronic Catalogs All of Your Suppliers’ Products in One Online Catalog What is the difference between purely e-market companies versus those with physical & virtual presence? Online catalogs, Catalogs.com, CollegeSource- are only click businesses while the others have a brick & mortar along with web presence.

E-Auctions What are some benefits to business of online auctions? They can sell overstock inventory. Can get a premium for something unique/high demand item. eBay conducts mostly forward auctions. What are the 2 types of forward auctions? See IT at Work, 6.1. In reverse auctions, there is one buyer, usually an organization, that wants to buy a product or service. This prompts a request for quote (RFQ). This is an example of a reverse auction.

E-Classifieds stores eBay case study business Discuss how these businesses, and those within them, have been formed. PayPal formed because customers did not want to purchase online unless they could be guaranteed security. For more, see link to eBay case study. Does eBay’s 2003 change of business model, from pure auctions to adding classifieds and e-tailing make sense? Yes, it is a normal business evolution. Why are wireless auctions promoted? Definitely most cost effective. business

Bartering & Negotiations The New Age of Bartering Click images to homepages. Interesting video for discussion. Will these types of businesses have more/less opportunity for success depending upon the state of the economy? It depends. A good marketer will promote the “experience” rather than the process…making it broader application.

B2C Applications E-storefronts – one shop – 1 URL E-malls – collection of shops – 1 URL Cyberbanking Online Securities Trading Online Job Markets E-Travel E-Real Estate E-Entertainment

Electronic Storefronts Click images for homepages. May be used by retailers…business to consumer….but also by B2B-Dell is an example with a B2B application. They sell to both B2C & B2B. Individual store versus electronic malls which is a collection of individual shops under one Internet address. Task students to find examples of both B2C & B2B electronic storefronts. Perhaps ones they would like to introduce?

Electronic Malls shopping Click images for hot links to home pages. Stores under “one” Internet address.

Amazon – King of E-Tailing Jeff Bezos: The Wizard Of Web Retailing Last Founder Standing The Future of Reading America's Best Leaders: Jeff Bezos, Amazon.com CEO The founder of the massive online retailer is a true Internet pioneer After reading these articles, answer the following questions: What are the critical success factors for Amazoon.com? Great inventory. One stop shopping. Convenience. Reviews. Reasonable $. What does it have over its competition? Recent product reviews. Reasonable $. Convenience. What is the purpose of the alliances Amazon.com has made? Customer loyalty.

Online Job Market Discuss the huge function that these types of sites provide. Not just for those who are unemployed, but also for the recruiters who must fill openings, too. These provide tremendous opportunity to sort through applicants quickly based upon a predetermined criteria. It can be very cost effective & further reaching in attraction of viable candidates. On the other hand, the maze may be very difficult for an applicant to maneuver through.

Travel Services Click images to homepages. Sites such as these have made it a most more competitive market for consumers. Discuss how. Price shopping, benefit shopping much easier utilizing Internet resources.

Real Estate Online Why are these sites ideal for e-commerce? Best deals may be found much easier than physically visiting each one. Much more cost effective when relocating to significant distances.

Customisation and Personalisation The key to successful e-trading

Issues in E-Tailing Resolving channel conflict Resolving conflicts within click-and-motor organisations Organising order fulfillment and logistics Determining the viability and risk of e- tailers Identify appropriate revenue models

B2B Applications Only businesses Sell-side marketplace – buyer is the organisation Buy-side marketplaces – Reverse auctions E-procurement Public exchanges

E-Government to C2C B2E – organizations disseminate information to employees over company intranet. E2E – employees communicate with each other. I.e.: goods & services bought & sold among fellow employees. SBU/SBU – company owned dealerships buy goods & services from main company. Improves internal supply chain operations. E-Collaborative – digital technologies that enable collaboration. E-Government – delivers information & services to citizens, business partners & suppliers. I.e.: G2C, G2B, G2G. B2E – disaster messages, weather related, business specific. E2E – furniture, crafts. SBU/SBU – parts & supplier. E-Collaboration – between organization & suppliers, vendors, etc. E-Government – EBT transfers such as social security payments. What are some others in each category? Task students to find.

EC Support Services Market Research for EC Web Advertising E-Payments – Table 6.4

E-commerce support services Give examples in each category. For instance, in marketing, interactive marketing has given capability for one-to-one advertising through use of internet technologies. Market research is facilitated by social networks now possible. Blogs are great, cheap ways to collect needs & wants data.

Market Research Online Click images to homepages. Examples of this very important category. Why are these so important now? In the past, these activities were very expensive if collected one at a time. Bias would be extremely common due to the expense of collecting vast cross-section of customer opinions.

Credit Cards Student discussion of how the “trust factor” has changed just in the last few years. How identity theft has been guarded against by organizations. Complete process of how credit cards work is shown in this figure. How e-credit cards work. (The numbers 1-9 indicate the sequence of activities.) (Source: Drawn by E. Turban.)

E-Wallet The use of a mobile phone as an e-wallet. COOL! I’ll take a Diet Coke, please! This is very convenient especially on college campuses. There are a bazillion examples. Students name others. RFID technology is integrated into mobile phone. Refer to A Closer Look, 6.3. The use of a mobile phone as an e-wallet. (Source: Koichi Kamoshida/Getty Images.)

E-Wallets – Apple ipod

Order fulfillment and the logistics system Informational slide. A typical EC fulfillment process is shown in this figure. Process begins on the left. Some activities are simultaneous & others are sequential.

Ethical and Legal Issues in EB and EC Privacy Web tracking - draw back of extensive profiling and personalisation Loss of jobs Buyer protection Seller protection

Managerial Issues E-Commerce failures – common. Solid business analyses a must. Failed initiatives within an organization. Success stories & lessons learned should be shared. Managing resistance to change. Integration into business overall. Lack of qualified personnel & outsourcing. Managing impact on organization. Alliances can be very helpful & productive. Choosing appropriate strategy. All of these are extremely important. Perhaps setting strategy & appropriate business model are most critical & set the overall framework.

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