IS4838

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IS4838

• Fundamentals of Electronic Commerce

Robert Davison http//www.is.cityu.edu.hk/staff/is
robert
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Aims

• How new information technologies and networks
  will affect the exchange of goods and services
  between buyers and sellers in the 21st century
  in Hong Kong and globally

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Objectives

• Assessment and understanding of
• Technologies - Internet, interactive television,
  virtual reality, digital cash, etc.
• Business strategies and initiatives
• Contextual issues politics, economics, consumer
  psychology and global forces

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Syllabus

• Impact of emerging national and global
  information superhighways on the way goods and
  services are transacted
• Stakeholder issues
• Transaction types advertising, purchasing,
  customer service
• Critical evaluation of business strategies

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Syllabus

• Models of web-based business
• E-Commerce developments in China
• Effectiveness of web sites for commerce
• Legal and ethical issues
• Practitioner Perspectives guest lectures

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Week by Week

• 1 Introduction
• 2 Infrastructure
• 3 Regulatory Framework
• 4 Virtual Teams
• 5 B2B
• 6 B2C
• 7 - Trust

• 8 Internet Marketing
• 9 EC in China Guest Speaker
• 10 M-Commerce, L-Commerce U-Commerce
• 11 B2C Guest Speaker
• 12 To be decided
• 13 Revision

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Week by Week

• Cultural Perspectives
• Legal Issues
• Ethical Concerns
• Privacy Matters
• Local Examples
• Global Perceptions

• E-everything?
• Virtual Teams
• Virtual Organisations
• The Social Dimension
• Political Realities
• Psychological Differences

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Teaching Methods

• Lectures concepts, models, examples
• Tutorials a mixture of lab and discussion
• case studies of successful (and unsuccessful)
  instances of EC
• problems in EC for discussion
• critical analyses

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Assessment

• Exam (2 hours) 50
• Coursework 50
• Coursework
• One group, virtual team project (40)
• Participation in tutorial classes (10)
• Questions, answers, ideas, willingness to be
  involved there will be many opportunities!

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Set Texts

• Farhoomand, A. and Lovelock, P. (2001) Global
  E-Commerce, Prentice Hall 0-13-061229-4
• Turban, E., Lee, J., King, D. and Chung, H.M.
  (2002) Electronic Commerce A Managerial
  Perspective, Prentice Hall 0-13-975285-4

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Flavour of IS4838

• Primarily looking at consumer and organisational
  perspectives of electronic commerce.
• Less attention to systems analysis/design and
  developmental issues this is not intended to be
  a technical course (the only prerequisite is
  FB2500 which itself is essentially
  non-technical)
• !

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The Marketspace Ecosystem

• A virtual location on the web where transactions
  take place
• A location that is defined and governed by
  information
• Reliable, quality information is of paramount
  importance for effective decision making by all
  stakeholders
• A new ecosystem with new objects and
  relationships, models and dynamics

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Spaces

• Buying/selling - Marketspace
• Working - Workspace
• Info-/Enter- tainment Infospace
• There is an almost unlimited variety of spaces
  for different purposes, where many different
  types of digitised information products can be
  transacted much more cheaply than in the
  physical marketplace

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Products

• Documents
• Data (inc. statistics)
• Dictionaries/Encyc.
• Investments
• Bookings and tickets
• News
• Musical performance
• Images

• Video (inc. TV, VC)
• info, enter, edu tainment
• Money - digicash
• Insurance
• Software
• Weather forecasts
• etc.

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E.g. Financial Products/Services

• Teller-based transaction costs 10
• Internet-based transaction costs 0.1
• Travel reservation through an agent 80
• Travel reservation through the Internet 16
• Stock purchase through an agent 500 up
• Stock purchase on the Internet 0 up

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Marketplace vs. Marketspace

• In the transition from place to space,
  information is a critical strategic resource
• Adding efficiency and adding value.
• Linking businesses, partners, customers ever
  more dynamically into a virtual value chain
• The vast majority of companies operate in both
  space and place few are space only.

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Mixing and Matching

• In the marketspace, we can mix and match product
  and infrastructure characteristics so as to add
  value
• Building relationships with non-traditional
  partners
• Identifying new customers
• Personalisation is a major part of this new wave
  of mix 'n' match

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Personalisation

• Content online information in online stock
  trading
• Context development of customer loyalty e.g.
  Amazon,
• Infrastructure searching for products,
  'test-driving' new products, customisation of
  products, e.g. ABEBooks, Dell,

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Marketspace Types I

• Seller-controlled Cisco www.cisco.com
• On-line ordering, customisation, documentation
• Buyer-controlled JAL www.jal.co.jp
• On-line procurement to search for suppliers
• Buyer intermediaries Freemarkets
  www.freemarkets.com
• act as agents or aggregators, identifying a pool
  of competitive suppliers

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Marketspace Types II

• Neutral auction houses and other third-party
  intermediaries
• FastParts www.fastparts.com
• anonymous spot market for trade in electronics
  components
• eBay www.ebay.com
• Red Dots www.red-dots.com
• consumer-consumer trading
• IceRed www.icered.com
• consumer-consumer conversations

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Marketspace Themes I

• EC is changing the importance of time. 24-hour
  communication continuous buying and selling
• EC is diminishing the importance of geographical
  boundaries anytime, anyplace transactions, but
• legal issues? logistics? finance/payment?
  security/jurisdictions? culture?

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Marketspace Themes II

• EC is changing the character of intermediation
• HK has traditionally built much of its wealth out
  of intermediating trade between China and the
  outside
• Intermediation functions still exist, but they
  look different with disintermediation and
  reintermediation

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Marketspace Themes III

• EC is premised on technical and philosophical
  openness
• The Internet is fundamentally open and
  non-proprietary
• Customers can be partners a new open strategic
  approach
• Major implications for CRM, social
  transformations, transparency and privacy

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Marketspace Themes IV

• EC acts as a catalyst to many other changes in
  economics, politics and organisational
  structures, including globalisation
• EC produces synergies, with multiple winners and
  win-win scenarios

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Virtual Value Chains

• The value chain is a model that describes how
  value is added to a product as it progresses from
  raw materials through design, production and out
  to the customer.
• Producer gt Wholesaler gt Retailer gt Consumer 200
• Producer gt Retailer gt Consumer 145
• Producer gt Consumer 88
• IT enables the producer to disintermediate the
  wholesaler and retailer

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Infomediaries I

• New entrants can disintermediate existing
  relationships online travel agents, stock
  brokers, etc.
• Established organisations can reintermediate or
  reinvent existing markets, creating new value for
  customers
• Both practices come from the emergence of
  information as a critical strategic resource.

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Infomediaries II

• An infomediary (information intermediary) derives
  its primary or only source of revenue from
  consumer information and profiling for use by
  (selected) third-party vendors
• Infomediaries negotiate with consumers for their
  information
• Analysis of website visitors www.doubleclick.net

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Summary

• In the shift from marketplace to marketspace,
  there are fundamental business and economic
  changes.
• New business models emerge.
• Information is a source of value, not just a
  supporting element.
• Sustainability in the longer term depends on
  building and maintaning a critical mass of
  consumers, stable networks, trust, security,
  standardisation and compelling content.