Introduction to ECommerce Management

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Introduction to E-Commerce Management
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Learning Objectives

• To understand how companies are using the
  Internet today.
• To assess the state of the Internet economy after
  the recent stock crash.
• To understand the importance of the e-commerce
  triangleInternet technology, business models,
  and marketing.

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Learning Objectives (continued)
4. To understand the influences on the manager
in the information ageefficiency, value,
measurability, dense networking, interactivity,
and a global marketplace.
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Introduction
How do you use the Internet?

• E-mail as a communication tool
• Visit favorite Web sites for fun or research
• Research companies before interviews
• As a resource for homework
• To chat with friends into the late night

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Introduction (continued)
How has business changed?

• Reduced inventory-holding costs
• Reduced time to market
• Improved demand forecasting
• Better communication between business units
• Salespeople face better-informed consumers

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The Rise and Fall of Dot-Coms

• Many firms have fallen
• Pets.com -- Alladvantage.com -- Bigwords.com
  Boo.com -- Mercata.com

• Market share built with zero pricing and free
  services.
• Customer database undervalued.
• Underestimated how easily human behavior can
  change.
• Underestimated the importance of entrenched
  interests.

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The Rise and Fall of Dot-Coms (continued)
Many companies have adapted to the market
downturn. How?

• They shifted to upstream customers.
• Many B2C companies shifted to a B2B model.
• Many B2Bs migrated upward to larger enterprise
  customers.
• They adopted bricks-and-mortar models.

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The Rise and Fall of Dot-Coms (continued)
Many companies have adapted to the market
downturn. How? (continued)

• Some expanded offerings an equal number
  narrowed offerings.
• Some serial morphers have completed as many
  as three transitions.
• Some dot-coms have adopted or acquired entirely
  new businesses.

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Reality Check
Where are we now?

• The Internet is growing at a steady pace. (See
  Table 1.1)
• A wide variety of domains have experienced
  great growth.
• Using three metrics latency, packet loss, and
  reachability to judge Internet quality.
  Increased health has been demonstrated over time.

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Table 1.1 Number of Internet Hosts Over Time
Source Internet Software Consortium, Internet
Domain Survey, January 2002, http//www.isc.org/d
s/WWW-200101/index.html.
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Reality Check (continued)
Where are we now? (continued)

• Household access to online services has
  steadily grown.
• Overall online retail sales have remained
  steady. (See Table 1.5)
• Manufacturers are effectively using the
  Internet to transact directly with customers.
• Networked organizations have continued to
  outperform their counterparts.

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Table 1.5 Top Products Sold Online in 2000
Source Forrester/NRF Survey, 2001,
http//www.forrester.com/NRF.
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Table 1.5- Top Products Sold Online in Korea
(in 2002)
Source http//www.nso.go.kr (???)
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Reality Check (continued)
Where are we now? (continued)

• Even with the fail of many high-profile dot-coms
  many continue to be successful. Examples
  include
• Travelocity
• Eddie Bauer and Sharper Image
• GameColony.com
• Cyworld.com , Auction.co.kr, Hangame.net,
• ncsoft.net(Lineage)

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Reality Check (continued)
How do many high-profile dot-coms continue to be
successful? Keys to success include

• Forget the exit strategy
• Niche-ify yourself
• Aim for high margins

• Get small fast
• Hunt for bargains

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The E-Commerce Triangle

• E-commerce management rests on three pillars
• Internet and related technologies
• Business model
• Marketing

All are inextricably linked to one another in
e-commerce.
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The New Conceptual Model

• Six elements
• Efficiency
• Value
• Measurability
• Dense Networking

• 5. Interactivity
• 6. Global Marketplace

Each element influences the next, creating new
trade-offs for managers.
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The New Conceptual Model (continued)
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Discussion Question

• Find out the related any articles to the failure
  of dot-coms and introduce them to the class

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Discussion Question

• Find out the success stories of dot-coms and
  explain why

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Discussion Question

• Explain your own reasons of the rise and fall of
  dot-coms. Assuming you are manager of a new
  dot.com, how are you going to make success story
  of your company