How the Internet has changed the way we do business.

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Introduction to E-Commerce
E-Commerce

• How the Internet has changed the way we do
  business.

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Introduction to E-Commerce

• Four Benefits of Internet Technology

• Communication
• Information
• Entertainment
• E-Commerce

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Introduction to E-Commerce

• Internet Technology Provides

• Communication
• Email
• Chat rooms
• Spam ?

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Introduction to E-Commerce
Internet Technology Provides

• Information
• Newsgroups
• Portals AOL, Yahoo
• Specialized Search Sites
• Academic Information

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Introduction to E-Commerce
Internet Technology Provides

• Entertainment
• Webcasts
• Gambling
• Games
• eBooks

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Introduction to E-Commerce
Internet Technology Provides the Vehicle for
E-Commerce
Electronic Commerce is the buying, selling, and
trading of goods on the Internet.
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Introduction to E-Commerce

• Benefits of E-Commerce

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Introduction to E-Commerce

• Improved Customer Service

• Shop-at-home convenience
• Detailed product information
• Customer controls transaction
• Simplified ordering
• Open 24/7/365

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Introduction to E-Commerce

• Expanded Markets

• Elimination of Boundaries
• Direct to customer
• (no middleman)

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Introduction to E-Commerce

• Cost Cutting

• Streamlined order processing
• Fewer errors in order entry
• Increased speed
• Lower marketing costs

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Introduction to E-Commerce

• Higher Profits

• Additional sales channel
• User fee income
• Advertising Income
• Lower marketing costs

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Introduction to E-Commerce

• E-Commerce Challenges

• Security privacy
• Scams Fraud
• Down time poor service
• Awkward design functionality
• Lack of retail experience

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Introduction to E-Commerce

• Evolution of a Merchandise Catalog

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Introduction to E-Commerce
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Introduction to E-Commerce

• http//www.theintelstore.com

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Introduction to E-Commerce

• E-Commerce for Small Business

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Introduction to E-Commerce
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Introduction to E-Commerce

• http//www.maristaylor.com/

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Categories of Electronic Commerce

• Five general e-commerce categories
• Business-to-consumer (Nike)
• Business-to-business (Grainger BDA)
• Business processes (Monster)
• Consumer-to-consumer (ebay)
• Business-to-government (Cal-buy)
• Supply management or procurement
• Departments devoted to negotiating purchase
  transactions with suppliers (Intel)

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Elements of Electronic Commerce
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Categories of Electronic Commerce (Continued)

• Transaction
• An exchange of value
• Business processes
• The group of logical, related, and sequential
  activities and transactions in which businesses
  engage
• Telecommuting or telework
• Employee logs in to company computer through
  Internet instead of traveling to office

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Electronic Commerce Categories
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Actual and Estimated Online Sales in B2C and B2B
Categories
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The Second Wave of Electronic Commerce

• Defining characteristics of first wave
• Dominant influence of U.S. businesses
• Extensive use of the English language
• Low bandwidth data transmission technologies
• Unstructured use of e-mail
• Over-reliance on advertising as a revenue source

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The Second Wave of Electronic Commerce (Continued)

• As second wave begins
• Future of electronic commerce will be
  international in scope
• Language translation and handling currency
  conversion problem will need to be solved
• E-mail will be used as an integral part of
  marketing and customer contact strategies

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Focus on Specific Business Processes

• Merchandising
• Combination of store design, layout, and product
  display knowledge
• Commodity item
• Hard to distinguish from the same products or
  services provided by other sellers
• Features have become standardized and well known

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Focus on Specific Business Processes (Continued)

• Shipping profile
• Collection of attributes that affect how easily a
  product can be packaged and delivered
• High value-to-weight ratio
• Can make overall shipping cost a small fraction
  of the selling price

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Value Chain for a Strategic Business Unit
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Industry Value Chain for a Wooden Chair
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SWOT Analysis Evaluating Business Unit
Opportunities

• SWOT analysis
• Analyst first looks into the business unit to
  identify its strengths and weaknesses
• Analyst then reviews operating environment and
  identifies opportunities and threats

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SWOT Analysis Questions
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Results of Dells SWOT Analysis
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International Nature of Electronic Commerce

• Companies with established reputations
• Often create trust by ensuring that customers
  know who they are
• Can rely on their established brand names to
  create trust on the Web
• Customers inherent lack of trust in strangers
  on the Web
• Logical and to be expected

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This Cartoon from The New Yorker Illustrates
Anonymity on the Web
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Language Issues

• To do business effectively in other cultures
• Must adapt to culture
• Researchers have found that
• Customers are more likely to buy products and
  services from Web sites in their own language
• Localization
• Translation that considers multiple elements of
  local environment

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Culture Issues

• Important element of business trust
• Anticipate how the other party to a transaction
  will act in specific circumstances
• Culture
• Combination of language and customs
• Varies across national boundaries
• Varies across regions within nations

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Infrastructure Issues

• Internet infrastructure includes
• Computers and software connected to Internet
• Communications networks over which message
  packets travel
• Organization for Economic Cooperation and
  Developments (OECD)
• Statements on Information and Communications
  Policy
• Deal with telecommunications infrastructure
  development issues

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Infrastructure Issues (Continued)

• Flat-rate access system
• Consumer or business pays one monthly fee for
  unlimited telephone line usage
• Contributed to rapid rise of U.S. electronic
  commerce
• Targets for technological solutions
• Paperwork and processes that accompany
  international transactions

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Parties Involved in a Typical International Trade
Transaction