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 ( ) Institutional phase ( ) 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)

B2B (4000 billion in 2005)

C2C C2B M-commerce

E-commerce I and I E-commerce IE-commerce II Technology drivenBusiness driven Revenue growth emphasisEarning and profits emphasis Venture capital financingTraditional financing UngovernedStrong regulation and governance EntrepreneurialLarge traditional firms Dis-intermediationStrengthening intermediaries Perfect marketsImperfect markets, brands and network effects Pure online strategiesMixed clicks and bricks strategies First move advantagesStrategic 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 G: 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