Introduction to E-Commerce

CHAPTER 1(INTRODUCTION TO E-COMMERCE)

E-Commerce define as involves digitally enabled commercial transactions between and among organizations and individuals, aslo transactions involve the exchange of value across organizational or individual boundaries in return for products or services.

E-Commerce Vs E-Business.

* E-business does not include commercial transactions involving an exchange of value across organizational boundaries.

Seven Unique Features of E-Commerce Technology and Their Significance

1. Is ubiquitous(available everywhere, all the time)

2. Offers global(across cultural/national boundaries)

3. Operates according to universal standards(lowers market entry for merchants and search costs for consumers)

4. Provides information richness(more powerful selling environment)

5. Is interactive(can simulate face-to-face experience, but on a global scale)

6. Increases information density(amount and quality of information available to all market partipants)

7. Permits personalization/customazation)

Types of E-commerce

Classified by nature of market relationship

* Business to Consumer(B2C)

* Business to Business(B2B)

* Consumer to Consumer(C2C)

Classified by type of technology used

* Peer to Peer(P2P)

* Mobile commerce(M-commerce)

Potential Limitations on Growth of B2C E-commerce

*Expensive technology

*Complex software interface

*Sophisticated skill set

*Sophisticated Skill Set

*Persistent Cultural attraction of physical

*Persistent global inequality limiting access to telephones and computers

CHAPTER 2(E-COMMERCE BUSINESS MODELS AND CONCEPTS)

E-commerce business models define as set of planned activities designed to result in profit in a marketplace. While, business plan define as document that describes a firm's model. Lastly is e-commerce business model define as aims to use and leverage the unique qualities of Internet and Web.

Revenue Model

Desribes how the firm will earn revenue, generate profits, and produce a superior return on invested capital

*Major Types:

- Advertising revenue model

- Subscription revenue model

- Transaction fee revenue model

- Sales revenue model

- Affilliate revenue model

Market Strategy

- A plan that details how a company intends to  enter a new market and attract customers

- Best business concepts will fail if not properly  marketed to potential customers

Competitive Environment

* Refers to the other companies selling similar products  and operating in the same marketspace

* Influenced by:

- how many competitors are active

- how large their operations are

- what is the market share for each competitor

- how profitable these firms are

- how they price their products

* Includes both direct competitors and indirector  competitors

Competitive Advantage

* Achieved when a firm can produce a superior product  and/or bring product to market at a lower price than  most, or all, of competitors

* Firms achieve competitive advantage when they are  able to obtain differential access to the factors of  production that are denied to competitors

* Types of competitive advantage include:

- First mover advantage—results from a firm being  first into a marketplace

- Unfair competitive advantage—occurs when one  firm develops an advantage based on a factor that  other firms cannot purchase

Categorizing E-commerce Business Models:  Some Difficulties

- No one correct way

- We categorize business models according to  e-commerce sector (B2C, B2B, C2C)

- Type of e-commerce technology used can  also affect classification of a business model

- Some companies use multiple business  models

Business Models in Emerging E-commerce  Areas

- Consumer to Consumer (C2C): Provides a way for  consumers to sell to each other, with the help of   an  online marketmaker such as eBay.com

- Peer-to-Peer (P2P): Links users, enabling them to  share files and common resources without a           common  server

- M-commerce: Takes traditional e-commerce  business models and leverages emerging new  wireless   technologies

- To date, a disappointment in the United States;  however, technology platform continues to evolve

Industry Structure

* E-commerce changes the nature of players in  an industry and their relative bargaining  power by changing:

- the basis of competition among rivals

- the barriers to entry

- the threat of new substitute products

- the strength of suppliers

- the bargaining power of buyers

CHAPTER 3(THE INTERNET AND WORLD WIDE WEB)

The Internet: Technology Background

* Internet: An interconnected network of  thousands of networks and millions of  computers, linking businesses, educational  institutions, government agencies, and  individuals

* World Wide Web (Web): One of the Internet’s  most popular services, providing access to  over 8 billion Web pages

TCP/IP (Transmission Control Protocol/  Internet Protocol)

* Protocol: A set of rules for formatting, ordering,  compressing, and error-checking messages

* TCP: Establishes the connections among sending  and receiving Web computers, handles the assembly  of packets at the point of transmission, and their  reassembly at the receiving end

* IP: Provides the Internet’s addressing scheme

* TCP/IP is divided into 4 separate layers:

- Network Interface Layer

- Internet Layer

- Transport Layer

- Application Layer

IP Addresses

* Internet address (also called IP address): a  32-bit number expressed as a series of four  separate          numbers marked off by periods,  such as 201.61.186.227

* IPv4 the current version of IP. Can handle up  to 4 billion addresses

* IPv6 (next generation of IP) will use 128-bit  addresses and be able to handle up to 1  quadrillion       addresses

Domain Names, DNS, and URLs

* Domain name: IP address expressed in  natural language

* Domain name system (DNS): allows numeric  IP addresses to be expressed in natural  language

* Uniform resource locator (URL): addresses  used by Web browsers to identify location of  content      on the Web

Client/Server Computing

* Model of computing in which very powerful  personal computers (clients) are connected in  a              network with one or more server computers  that perform common functions for the clients,  such        as storing files, software applications,  etc.

Internet Service Providers (ISPs)

* Retail providers that deal with “last mile of  service”

* Major national ISPs include AOL, MSN, and  AT&T WorldNet, etc.

* Offer both narrowband (traditional telephone  modem connection at 56.6 Kbps) and  broadband          (service based on DSL, cable  modem, T1 or T3 telephone lines, and  satellite)

The Internet and Web: Features

* Internet and Web features on which the foundations  of e-commerce are built include:

- E-mail

- Instant messaging

- Search engines

- Intelligent agents (bots)

- Online forums and chat

- Streaming media

- Cookies

E-mail

* One of the most used applications of the Internet

* Uses a series of protocols to enable messages  containing text, images, sound, video clips, etc., to        be  transferred from one Internet user to another

* Also allows attachments (files attached to the e-mail  message)

* Can be an effective marketing tool

* Spam: unsolicited e-mail. A worsening problem

Instant Messaging

- One of fastest growing forms of online human  communication

- Displays words typed on a computer almost  instantly, and recipients can then respond  immediately    in the same way

- Different proprietary systems offered by AOL,  MSN, Yahoo, and Google

Search Engines

- Identifies Web pages that appear to match  keywords (queries) entered by a user, and  provides list of best matches based on one or  more of a variety of techniques

- No longer simply search engines, but also  shopping tools and advertising vehicles  (search engine marketing)

Intelligent Agents (Bots)

- Software programs that gather and/or filter  information on a specific topic and then  provide a list      of results

- Types include search bot, shopping bot, Web  monitoring bot, news bot, chatterbot

CHAPTER 4 (BUILDING AN E-COMMERCE WEB SITE)

Pieces of the Site-Building Puzzle

* Main areas where you will need to make decisions in  building a site include:

- Human resources and organizational  capabilities—creating a team that has the skill set  to build and manage a successful site

- Hardware

- Software

- Telecommunications

- Site design

System Analysis/Planning: Identifying  Business Objectives, System Functionality,  and Information Requirements

- Business objectives: a list of capabilities you  want your site to have

- System functionalities: a list of the types of  information system capabilities you will need  to              achieve your business objectives

- Information requirements: the information  elements that the system must produce in  order to              achieve the business objectives

E-commerce Merchant Server Software  Functionality

- Provides the basic functionality needed for  online sales, including:

- Online catalog

- Shopping cart

- Credit card processing

Merchant Server Software Packages (E-  commerce Suites)

* Offer integrated environment that provides functionality  and capabilities needed to develop                sophisticated,  customer-centric site

* Key factors to consider in choosing include:

- Functionality

- Support for different business models

- Business process modeling tools

- Visual site management tools and reporting

- Performance and scalability

- Connectivity to existing business systems

- Compliance with standards

- Global and multicultural capability

- Local sales tax and shipping rules

Personalization Tools

- Personalization: Ability to treat people based  on their personal qualities and prior history  with your    site

- Customization: Ability to change the product  to better fit the needs of the customer

- Cookies the primary method for achieving  personalization and customization