1. Chapter 1 What Is E-Commerce?

2. Copyright © 2003, Addison-Wesley Figure 1.1 Dot- com Super Bowl advertisers. How many XXXIV ads do you remember? What product did each dot-com advertise?

3. Copyright © 2003, Addison-Wesley Figure 1.2 The Pets.com sock puppet.

4. Copyright © 2003, Addison-Wesley The Myth Start with an idea Sell a product or a service over the Web Get seed money – venture capitalist Get your name out there Get paid in stock options Cash in following company sale or IPO You’re an instant billionaire!!!

5. Copyright © 2003, Addison-Wesley Figure 1.3 Technology stock prices tumbled in 2000. The bubble bursts Look at those percentage drops! Do you know anyone who lost money?

6. Copyright © 2003, Addison-Wesley The surviving 2001 dot-com advertisers. Just what an out-of- work dot-commer needs 2 job placement sites 1 stock trading site to dump that worthless stock

7. Copyright © 2003, Addison-Wesley What happened? Poor business planning Excessively narrow focus A business is more than a storefront Even if the storefront is virtual Greed and ignorance Immature technology The average consumer was not ready Speculative bubbles always burst Ignorance is not bliss. It’s ignorance.

8. Copyright © 2003, Addison-Wesley What were they thinking? AllAdvantage.com paid surfers Several sites marketed funerals Bidforsurgery.com—bid on surgery Furniture? Mylackey.com—neat name (Live) fish delivery service

9. Copyright © 2003, Addison-Wesley Why study e-commerce? The dot-com debacle Hype got it wrong on the way up Hype got it wrong on the way down E-commerce is: More than just selling stuff online Redefining how business does business Focused on efficiency, not revenue generation A source of technological innovation Forget the dot-com hype. Electronic commerce is a source of good, old-fashioned technological innovation that improves efficiency and spawns competitive advantage. That’s the reality

10. Copyright © 2003, Addison-Wesley E-commerce and E-business E-commerce Encarta Transactions conducted over the Internet By consumers Directly between businesses Webopedia Conducting business online E-business – a broader term E-business is the objective & encompasses electronically buying, selling, servicing customers as well as interacting with business partners and intermediaries over the Internet. E-commerce is the means

11. Copyright © 2003, Addison-Wesley Figure 1.4 Direct business-to-customer transactions represent the visible tip of the e-commerce iceberg.

12. Copyright © 2003, Addison-Wesley Layering The process of adding onto or tapping into an existing infrastructure. Electric power distribution Communication infrastructure Water and sewer Network of roads and highways New applications on top of infrastructure In an information system or e-commerce application, a layer is a program or set of programs that provide services to the layer above it and uses the services provided by the layer below it Infrastructure essentially disappears

13. Copyright © 2003, Addison-Wesley The black box concept Contents of black box unknown Functional independence Black box Input parameters Output parameters

14. Copyright © 2003, Addison-Wesley Figure 1.6 Layering. Functionally independent layers Common interface Stacking layers is like stacking building blocks

15. Copyright © 2003, Addison-Wesley Figure 1.7 Islands of automation.

16. Copyright © 2003, Addison-Wesley Islands of automation Early computer applications Single-function focus Efficiency within functional group Payroll Manufacturing Accounting Result—isolated fiefdoms Problem—no function is an island

17. Copyright © 2003, Addison-Wesley Figure 1.8 Corporate databases provided a means for integrating the islands of automation.

18. Copyright © 2003, Addison-Wesley Figure 1.9 Proprietary systems allowed suppliers and distributors to selectively access the database.

19. Copyright © 2003, Addison-Wesley Some definitions Internet Global network of networks defined by set of open standards for communicating data and information between computers World Wide Web Standard set of naming and linking conventions that uses the Internet to locate and transport hypertext documents and other files stored on computers located all over the world Browser Application program—point-and-click interface to access the Web

20. Copyright © 2003, Addison-Wesley Figure 1.11 The value chain. The set of integrated internal processes that combine to deliver value to customers by transforming raw materials into finished products.

21. Copyright © 2003, Addison-Wesley Figure 1.12 The arrows connecting adjacent value chain entities represent product flows and data flows. Note the complexity

22. Copyright © 2003, Addison-Wesley Physical and Logical Value Chain Flows Physical product flows Delivery Data flows Control info Physical data flows Paperwork Logical data flows E-commerce

23. Copyright © 2003, Addison-Wesley E-commerce advantages Gain efficiency by: Eliminating redundant data entry Reducing errors Eliminating paperwork clutter Delivering information more quickly Coordinating related processes

24. Copyright © 2003, Addison-Wesley Competitive advantage Something a company has that its customers want and its competitors cannot (or choose not to) match. Gives customers a reason to buy from you rather than from a competitor. Technological innovation is a common source.

25. Copyright © 2003, Addison-Wesley Figure 1.16 The competitive advantage model.

26. Copyright © 2003, Addison-Wesley Figure 1.18 E-commerce categories.

27. Copyright © 2003, Addison-Wesley Why study e-commerce? E-commerce is: The way modern business does business A mechanism for integrating across the value chain and the supply chain A source of Technical innovation Efficiency gains Competitive advantage E-commerce is changing the way we live.