1. TOPIC 1: E-COMMERCE FRAMEWORK, BUSINESS MODELS AND ENVIRONMENT
1.1 Define electronic commerce (EC) and describe its various categories.
1.2 The EC framework, classification and content
1.3 The digital revolution as a driver for EC.
1.4 The business environment as a driver for EC EC contribution to organisations responding to environmental pressures.
1.5 EC business models.
1.6 Benefits of EC to organisations, consumers, and society.
1.7 Limitations of EC.
1.8 Networks for EC.

2. The Old Economy The New Economy
1.1: Taking Photographs
The Old Economy The New Economy
1. Buy film in a store
2. Load your camera
3. Take pictures
4. Take roll of film to store for processing
5. Pickup the film when ready
6. Select specific photos for enlargement
7. Mail to family and friends
1st Gen. Digital Photography
Old economy except 6 and 7 were replaced by using a scanner and ing
2nd Gen.Digital Photography
Use a Digital Camera, no film, no processing.
3rd Gen.Digital Photography
Your Digital Camera is now your mobile phone, in your binoculars or a palmtop computer.

3. 1.1: The Brave New World Cisco Ariba Charles Schwab CommerceOne
Covisint
Microsoft
Oracle
Dell
NTT DoCoMo
Nokia
Amazon
eBay
Google
Yahoo
Wal-Mart
Singapore
PayPal

4. 1.1: Or Jurassic Park? Osborne Ashton-Tate Drkoop.com Visicalc Ambra
Chemdex
Beyond.com
People’s Express
Prodigy
HomeGrocer
ZapMail
CONFIRM
Kmart
Pathfinder
Railroads

5. 1.1: Competing with IT: Strategy and Structure
Competing via strategy
Product leadership (Charles Schwab)
Operational excellence (Federal Express)
Customer intimacy (Home Depot)
Competing via structure
Alliances (Star Alliance)
Value added partnerships (Amazon.com)
Networked organisation (Cisco)

6. 1.1: Competing via Structure: the Role of EC
Wal-Mart provides suppliers with access to its internal databases.
Dell Computer virtually-integrates its entire value chain
Airline reservation systems facilitate the coordination of schedules and code-sharing arrangements.
GM, Ford and DaimlerChrysler are creating an electronic market in the automobile industry (Covisint).
Control no longer requires ownership.
The Internet dramatically reduces transaction costs, facilitating the
creation and utilisation of electronic markets and value networks.

7. 1.1: Electronic Commerce: Definitions and Concepts
1. Electronic Commerce (EC)
The process of online buying, selling, or exchanging products, services, or information via computer networks within firms, between firms, between firms and their customers, and between consumers. EC
E-Business

8. 1.1: Electronic Commerce: Definitions and Concepts
2. E-Business
A broader definition of EC.
Automating all business processes and integrating them with E-Commerce (previous slide) applications to create one seamless, digital enterprise in order
to service customers,
to collaborate with business partners,
to conduct electronic transactions within an organisation

9. 1.1: Electronic Commerce: Definitions and Concepts
3. Pure Versus Partial EC
EC takes several forms depending on the degree of digitisation (the transformation from physical to digital).
Companies utilising pure EC conduct all of their business online.
Businesses utilising partial EC conduct a portion of their business online and a portion of their business off-line

10. Exhibit 1.1 The Dimensions of Electronic Commerce

11. 1.1: Electronic Commerce: Definitions and Concepts
4. EC organisations
Brick-and-mortar organisations
Old-economy organisations (corporations) that perform most of their business off-line, selling physical products by means of physical agents
Virtual (pure-play) organisations
Organisations that conduct their business activities solely online
Click-and-mortar (click-and-brick) organisations
Organisations that conduct some e-commerce activities, but do their primary business in the physical world

12. 1.1: Electronic Commerce: Definitions and Concepts
5. Where EC is conducted
Electronic market (e-marketplace)
An online marketplace where buyers and sellers meet to exchange goods, services, money, or information
Interorganisational information systems (IOSs)
Communications system that allows routine transaction processing and information flow between two or more organisations
Intraorganisational information systems
Communication systems that enable e-commerce activities to go on within individual organisations

13. 1.1: Electronic Commerce: Transmission Medium
Most EC is done over the Internet. But EC can also be conducted on private networks, such as
Value-added networks (VANs, networks that add communication services to existing common carriers),
Local area networks (LANs) or
Wide area networks (WANs)
Intranet
An internal corporate or government network that uses Internet tools, such as Web browsers, and Internet protocols
Extranet
A network that uses the Internet to link multiple intranets

14. Exhibit 1.2 A Framework for Electronic Commerce
An EC Framework: supports five policymaking support areas
People
Public policy
Marketing & advertisement
Support services
Business partnerships

15. 1.2: The EC Framework, Classification and Content
To execute these applications, companies need the right framework: information, infrastructure, and support services
People: Sellers, buyers, intermediaries, information systems specialists and other employees, and any other participants.
Public policy: Legal and other policy and regulating issues, such as privacy protection and taxation.
Marketing and advertising: Like any other business, EC usually requires the support of marketing and advertising.
Support services: Many services are needed to support EC. They range from payments to order delivery and content creation.
Business partnerships: Joint ventures, e-marketplaces, and partnerships are some of frequently occurring relationships in e-business

16. 1.2: The EC Framework, Classification and Content
Classification by nature of the transactions or interactions
Business-to-Business (B2B)
E-commerce model in which all of the participants are businesses or other organisations
Business-to-Consumer (B2C)
E-commerce model in which businesses sell to individual shoppers
e-tailing
Online retailing, usually B2C

17. 1.2: The EC Framework, Classification and Content
Business-to-Business-to-Consumer (B2B2C)
E-commerce model in which a business provides some product or service to a client business that maintains its own customers
Consumer-to-Business (C2B)
E-commerce model in which individuals use the Internet to sell products or services to organisations or individuals seek sellers to bid on products or services they need
Consumer-to-Consumer (C2C)
E-commerce model in which consumers sell directly to other consumers

18. 1.2: The EC Framework, Classification and Content
Peer-to-Peer
Technology that enables networked peer computers to share data and processing with each other directly; can be used in C2C, B2B, and B2C e-commerce
Mobile commerce (M-Commerce)
E-commerce transactions and activities conducted in a wireless environment
Location-based commerce (L-Commerce)
M-Commerce transactions targeted to individuals in specific locations, at specific times

19. 1.2: The EC Framework, Classification and Content
Intrabusiness EC
E-commerce category that includes all internal organisational activities that involve the exchange of goods, services, or information among various units and individuals in an organisation.
Business-to-Employees (B2E)
E-commerce model in which an organisation delivers services, information, or products to its individual employees
Collaborative Commerce (C-Commerce)
E-commerce model in which individuals or groups communicate or collaborate online

20. 1.2: The EC Framework, Classification and Content
E-Learning
The online delivery of information for purposes of training or education
Exchange (electronic)
A public electronic market with many buyers and sellers
Exchange-to-exchange (E2E)
E-commerce model in which electronic exchanges formally connect to one another for the purpose of exchanging information
E-Government
E-commerce model in which a government entity buys or provides goods, services, or information to businesses or individual citizens

21. 1.2: The Future of EC
In 2004, total online shopping and B2B transactions in the USA was between $3 to $7 trillion
By 2008:
Number of Internet users worldwide should reach 750 million
50 percent of Internet users will shop
EC growth will come from:
B2C
B2B
e-government
e-learning
B2E
c-commerce

22. 1.3: The Digital Revolution Drives EC
The major driver of EC is the digital revolution (1-23)
A digital economy is an economy based on digital technologies, including digital communication networks, computers, software, and other related information technologies; also called the Internet economy, the new economy, or the Web economy.
The characteristics of the digital economy includes
A wide variety of digitised products
Consumers and firms conducting financial transactions digitally
Microprocessors and network capabilities embedded in physical goods.