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Copyright © 2002 Pearson Education, Inc.

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Presentation on theme: "Copyright © 2002 Pearson Education, Inc."— Presentation transcript:

1 Copyright © 2002 Pearson Education, Inc.

2 The Revolution Is Just Beginning
CHAPTER 1 The Revolution Is Just Beginning Created by, David Zolzer, Northwestern State University—Louisiana Copyright © 2002 Pearson Education, Inc.

3 Learning Objectives Define e-commerce and describe how it differs from e-business Identify the unique features of e-commerce technology and their business significance Describe the major types of e-commerce Understand the visions and forces behind the E-Commerce I era Copyright © 2002 Pearson Education, Inc.

4 Learning Objectives Understand the successes and failures of E-Commerce I Identify several factors that will define the E-commerce II era Describe the major themes underlying the study of e-commerce Identify the major academic disciplines contributing to e-commerce research Copyright © 2002 Pearson Education, Inc.

5 Amazon.com: Before and After
Copyright © 2002 Pearson Education, Inc.

6 Amazon.com: Before and After
Most well-known e-commerce company Conceived by Jeff Bezos in 1994 Opened in July 1995 Four compelling reasons to shop Selection (1.1 million titles) Convenience (anytime, anywhere) Price (high discounts on bestsellers) Service (automated order confirmation, tracking, and shipping information) Copyright © 2002 Pearson Education, Inc.

7 Amazon.com: Before and After
($1.4 Billion) $2.7 Billion 2000 ($720 Million) $1.6 Billion 1999 ($125 Million) $610 Million 1998 ($31 Million) $148 Million 1997 ($6.24 Million) $15.6 Million 1996 Earnings Revenues Revenues and Earnings Copyright © 2002 Pearson Education, Inc.

8 E-commerce vs. E-business
E-commerce involves Digitally enabled commercial transactions between organizations and individuals. Digitally enabled transactions include all transactions mediated by digital technology Commercial transactions involve the exchange of value across organizational or individual boundaries in return for products or services Copyright © 2002 Pearson Education, Inc.

9 E-commerce vs. E-business
E-business involves Digital enablement of transactions and processes within a firm, involving information systems under the control of the firm E-business does not involve commercial transactions across organizational boundaries where value is exchanged Copyright © 2002 Pearson Education, Inc.

10 The Difference Between E-commerce and E-Business
Page 8, Figure 1.1 Copyright © 2002 Pearson Education, Inc.

11 Unique of E-commerce Technology and Their Business Significance
is ubiquitous has global reach operates according to universal standards provides information richness is interactive increases information density permits personalization Copyright © 2002 Pearson Education, Inc.

12 Seven Unique Features of E-commerce Technology and Their Business Significance
Page 9, Table 1.1 Copyright © 2002 Pearson Education, Inc.

13 Changing Trade-Off Between Richness and Reach
Page 11, Figure 1.2 Copyright © 2002 Pearson Education, Inc.

14 Major Types of E-Commerce
Market relationships Business-to-Consumers (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C) Technology-based Peer-to-Peer (P2P) Mobile Commerce (M-commerce) Copyright © 2002 Pearson Education, Inc.

15 Major Types of E-Commerce
Page 14, Table 1.2 Copyright © 2002 Pearson Education, Inc.

16 Business-to-Consumer E-commerce
Most commonly discussed type Online businesses attempt to reach individual consumers Consumers will spend $65 billion in 2001. Copyright © 2002 Pearson Education, Inc.

17 Business-to-Business E-commerce
Businesses focus on sell to other businesses Largest form of e-commerce $700 billion in transactions in 2001 Primarily involved inter-business exchanges at first Other models have developed e-distributors infomediaries B2B service providers Copyright © 2002 Pearson Education, Inc.

18 Consumer-to-Consumer E-commerce
Provide a way for consumers to sell to each other Estimated $5 billion market Consumer: prepares the product for market places the product for auction or sale relies on market maker to provide catalog, search engine, and transaction clearing capabilities Copyright © 2002 Pearson Education, Inc.

19 Peer-to-Peer E-commerce
Enables Internet users to share files and computer resources Napster Copyright © 2002 Pearson Education, Inc.

20 Wireless digital devices enable transactions on the Web
Mobile E-commerce Wireless digital devices enable transactions on the Web Uses personal digital assistants (PDAs) to connect Used most widely in Japan and Europe Copyright © 2002 Pearson Education, Inc.

21 Growth of the Internet and the Web
Created in the late 1960s About 350 million computers worldwide to date Links businesses, educational institutions, government agencies, and individuals Provides services such as , document transfer, newsgroups, shopping, research, instant messaging, music, video, and news Copyright © 2002 Pearson Education, Inc.

22 Growth of the Internet and the Web
Internet hosts are growing at a rate of 45% per year Extraordinary growth -- time to reach 30% US households Radio - 38 years Television - 17 years Internet/Web - 8 years (1993) Copyright © 2002 Pearson Education, Inc.

23 The Growth of the Internet
Page 16, Figure 1.3 Copyright © 2002 Pearson Education, Inc.

24 The Growth of Web Content
Page 17, Figure 1.4 Copyright © 2002 Pearson Education, Inc.

25 The Growth of B2C E-Commerce
Page 20, Figure 1.5 Copyright © 2002 Pearson Education, Inc.

26 The Growth of B2B E-Commerce
Page 21, Figure 1.6 Copyright © 2002 Pearson Education, Inc.

27 Origins and Growth of E-Commerce
Baxter Healthcare Primitive form of B2B using telephone-based modem to permit hospitals to reorder supplies (early 1970s) PC-based remote order entry system (1980s) Electronic Data Interchange (EDI) standards developed that permitted firms to exchange commercial documents and conduct digital commercial transactions across private networks (1980s) Copyright © 2002 Pearson Education, Inc.

28 Origins and Growth of E-Commerce
French Minitel videotext system First B2C arena (1981) 15 million in use throughout France World Wide Web 1993 first browsers 1995 first banner ads Copyright © 2002 Pearson Education, Inc.

29 Technology and E-Commerce in Perspective
Internet and the Web are just two of a long list of technologies that have greatly change commerce Other technologies spawned business models and strategies Explosive early growth followed by retrenchment and then long-term successful exploitation of the technology Copyright © 2002 Pearson Education, Inc.

30 Technology and E-Commerce in Perspective
Although e-commerce has grown explosively, there is no guarantee it will continue to grow Confront own fundamental limitations B2C only about 1% of overall retail market With current growth rates, B2C will roughly equal the annual revenue of Wal-Mart in 2005 Copyright © 2002 Pearson Education, Inc.

31 Limitations of the Growth of B2C E-Commerce
Page 23, Table 1.3 Copyright © 2002 Pearson Education, Inc.

32 Web Access Via Wireless Devices in the United States
Page 24, Figure 1.7 Copyright © 2002 Pearson Education, Inc.

33 E-Commerce I and II E-Commerce I E-Commerce II
Explosive growth starting in 1995 Widespread of Web to advertise products Ended in 2000 when dot.com began to collapse E-Commerce II Began in January 2001 Reassessment of e-commerce companies Copyright © 2002 Pearson Education, Inc.

34 For computer scientist and information technologists
E-Commerce I For computer scientist and information technologists Vindication of a set of information technologies developed over 40 years Extending from the early Internet to the PC and local area networks The vision of universal communications Copyright © 2002 Pearson Education, Inc.

35 E-Commerce I 1995-2000 For economists
Raised realistic prospect of perfect Bertrand Market where price, cost, and quality information is equally distributed where a nearly infinite set of suppliers compete against one another where customers have access to all revelant market information worldwide Merchants have equal direct access to hundreds of millions of customers Copyright © 2002 Pearson Education, Inc.

36 E-Commerce I 1995-2000 Disintermediation
displacement of market middlemen who traditionally are intermediaries between producers and consumers by a new direct relationship between manufacturers and content originators with their customers Copyright © 2002 Pearson Education, Inc.

37 Friction-free commerce
E-Commerce I Friction-free commerce a vision of commerce in which information is equally distributed transaction costs are low prices can be dynamically adjusted to reflect actual demand intermediaries decline unfair competitive advantages are eliminated Copyright © 2002 Pearson Education, Inc.

38 E-Commerce I 1995-2000 First mover Network effect
a firm that is first to market in a particular area and that moves quickly to gather market share Network effect occurs where users receive value from the fact that everyone else uses the same tool or product Copyright © 2002 Pearson Education, Inc.

39 Amounts Raised by Venture-Backed Internet Companies in 1996-2000
Page 25, Table 1.4 Copyright © 2002 Pearson Education, Inc.

40 E-Commerce II Crash in stock market values of E-commerce I companies throughout 2000 is an end to E-commerce I Led to a sobering reassessment of the prospects of e-commerce and the methods of achieving business success. E-commerce II begins in 2001 and ends five year later -- the limit for making technology and business projections Copyright © 2002 Pearson Education, Inc.

41 E-Commerce II 2001-2006 Reasons for the end of E-Commerce I
run-up in technology stocks due to enormous information technology capital expenditure of firms rebuilding their internal business systems to withstand Y2K telecommunications industry had built excess capacity in high-speed fiber optic networks 1999 e-commerce Christmas season provided less sales growth that anticipated and demonstrated e-commerce was not easy (eToys.com) valuations of dot.com and technology companies had risen so high supporters were questioning whether earnings could justify the prices of the shares. Copyright © 2002 Pearson Education, Inc.

42 Insight on Business: A Short History of dot.com IPOS
Between 1998 and 2000 venture capitalists poured an estimated $120 billion into approximately 12,450 dot.com start-up ventures Investment bankers took 1,262 of these companies public in IPOS IPO shares were targeted to open around $15 per share, and it was not uncommon for them to be trading at $45 a share or more later the same trading day Copyright © 2002 Pearson Education, Inc.

43 E-Commerce I and E-Commerce II Compared
Page 32, Table 1.5 Copyright © 2002 Pearson Education, Inc.

44 April 2001 NRF/Forrester Online Retail Index
Page 33, Table 1.6 Copyright © 2002 Pearson Education, Inc.

45 Top 25 Properties of March 2001 (Combined Home and Work)
Page 34, Table 1.7 Copyright © 2002 Pearson Education, Inc.

46 Top 20 Web Retailers Among U.S. Home Users (January, 2001)
Page 35, Table 1.8 Copyright © 2002 Pearson Education, Inc.

47 Understanding E-Commerce: Organizing Themes
Technology: Infrastructure development and mastery of digital computing and communications technology Business: Basic Concepts new technologies present businesses and entrepreneurs with new ways of organizing production and transacting business Society: Taming the Juggernaught global nature of e-commerce poses public policy issues of equity, equal access, content regulation, and taxation Copyright © 2002 Pearson Education, Inc.

48 The Internet and the Evolution of Corporate Computing
Page 37, Figure 1.8 Copyright © 2002 Pearson Education, Inc.

49 Disciplines Concerned with E-Commerce
Page 39, Figure 1.9 Copyright © 2002 Pearson Education, Inc.


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