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ElectronicCommerce ManagementSchoolofTJNU Chapter1IntroductiontoElectronicCommerce EC ContentsofChapter1 EC LearningObjectives Inthischapter youwilllearnabout EC 1 1ElectronicCommerce TheSecondWave EC Fromhumblebeginningsinthemid 1990s electroniccommercegrewrapidlyuntil2000 whenamajordownturnoccurred Manypeoplehaveseennewsstoriesaboutthe dot comboom followedbythe dot comburst orthe dot bomb Inthe2000to2003period manyindustryobserverswerewritingobituaries 讣告 forelectroniccommerce Justastheunreasonableexpectationsforimmediatesuccessfueledthehighexpectationsduringtheboomyears overlygloomynewsreportscoloredperceptionsduringthistime Beginningin2003 withthegeneraleconomystillinthedoldrums electroniccommercebegantoshowsignsofnewlife Companiesthathadsurvivedthedownturnwerenotonlyseeinggrowthinsalesagain butmanyofthemwereshowingprofits Althoughtherapidexpansionandhighlevelsofinvestmentoftheboomyearsarenotlikelytoberepeated thesecondwaveofelectroniccommerceiswellunderway Contents ElectroniccommerceandElectronicbusiness 1 2 EC CategoriesofElectronicCommerce 3 TheDevelopmentandGrowthofE Commerce 4 5 Thedot comboom bust andrebirth TheSecondWaveofElectronicCommerce ElectronicCommerce TheSecondWave cont 1ElectroniccommerceandElectronicbusiness EC Electronicbusiness e business broadersenseTermusedinterchangeablywithe commerceThetransformationofkeybusinessprocessesthroughtheuseofInternettechnologies IBM sdefinition Electroniccommerce e commerce narrowersenseshoppingonthepartoftheInternetcalledtheWorldWideWeb theWeb alsoincludesmanyotheractivities suchasbusinessestradingwithotherbusinessesandinternalprocessesthatcompaniesusetosupporttheirbuying selling hiring planning andotheractivities BusinessactivitiesconductedusingelectronicdatatransmissionovertheInternetandtheWorldWideWeb 2CategoriesofElectronicCommerce Business to business B2B 请看中国新能源网 2 Businessprocesses 见ElementofElectronicCommerce 3 Business to consumer B2C 请看当当网 B2C Fivegenerale commercecategories 4 Business to government B2G 请看握奇信安网 B2G ElectronicCommerce TheSecondWave cont EC 5 Consumer to consumer C2C 请看淘宝网 C2C mostcommonlyused Glossary ActivityataskperformedbyaworkerinthecourseofdoinghisorherjobTransactionAnexchangeofvaluesuchasapurchase asale ortheconversionofrawmaterialsintoafinishedproductAtransactionalwayshasoneormoreactivitiesassociatedwithit butanactivitymightnotberelatedtoatransaction BusinessprocessesThegroupoflogical related andsequentialactivitiesandtransactionsinwhichbusinessesengageEg Thebusinessprocessofshippinggoodstocustomers inspectingthegoods packingthegoods negotiatingwithafreightcompanytodeliverthegoods creatingandprintingtheshippingdocuments loadingthegoodsontothetruck sendingachecktothefreightcompany TelecommutingorteleworkEmployeeslogintocompanycomputersthroughtheInternetinsteadoftravelingtotheoffice CategoriesofElectronicCommerce Thethreecategoriesthataremostcommonlyusedare ConsumershoppingontheWeb oftencalledbusiness to consumer orB2C TransactionsconductedbetweenbusinessesontheWeb oftencalledbusiness to business orB2B sometimescallede procurement Transactionsandbusinessprocessesinwhichcompanies governments andotherorganizationsuseInternettechnologiestosupportsellingandpurchasingactivities EXAMPLE Consideracompanythatmanufacturesstereospeakers ThecompanymightsellitsfinishedproducttoconsumersontheWeb B2C ItmightalsopurchasethematerialsitusestomakethespeakersfromothercompaniesontheWeb B2B Thecompanymustalsoundertakemanyotheractivitiestoconvertthepurchasedmaterialsintospeakers Theseactivitiesmightinclude hiringandmanagingthepeoplewhomakethespeakers rentingorbuyingthefacilitiesinwhichthespeakersaremadeandstored shippingthespeakers maintainingaccountingrecords purchasinginsurance developingadvertisingcampaigns designingnewversionsofthespeakers AnincreasingnumberofthesetransactionsandbusinessprocessescanbedoneontheWeb Manufacturingprocesses suchasthefabricationofthespeakers canbecontrolledusingInternettechnologieswithinthebusiness ClassificationofECbyTransactionsorInteractions fromTurban business to consumer B2C onlinetransactionsaremadebetweenbusinessesandindividualconsumersbusiness to business B2B businessesmakeonlinetransactionswithotherbusinessese tailing onlineretailing usuallyB2Cconsumer to business C2B e commercemodelinwhichindividualsusetheInternettosellproductsorservicestoorganizationsorindividualsseeksellerstobidonproductsorservicestheyneedconsumer to consumer C2C e commercemodelinwhichconsumersselldirectlytootherconsumers ClassificationofECbyTransactionsorInteractions cont mobilecommerce m commerce e commercetransactionsandactivitiesconductedinawirelessenvironmentintrabusinessEC e commercecategorythatincludesallinternalorganizationalactivitiesthatinvolvetheexchangeofgoods services orinformationamongvariousunitsandindividualsinanorganizationbusiness to employees B2E e commercemodelinwhichanorganizationdeliversservices information orproductstoitsindividualemployees ClassificationofECbyTransactionsorInteractions collaborativecommerce c commerce e commercemodelinwhichindividualsorgroupscommunicateorcollaborateonlinee learning theonlinedeliveryofinformationforpurposesoftrainingoreducatione government e commercemodelinwhichagovernmententitybuysorprovidesgoods services orinformationtobusinessesorindividualcitizens ElectronicCommerce TheSecondWave cont EC 3TheDevelopmentandGrowthofElectronicCommerce 1 Electronicfundstransfers EFTs 电子资金转账 AlthoughtheWebhasmadeonlineshoppingpossibleformanybusinessesandindividuals inabroadersense electroniccommercehasexistedformanyyears Formorethan30years bankshavebeenusingelectronicfundstransfers AlsocalledwiretransfersElectronictransmissionsofaccountexchangeinformationoverprivatecommunicationsnetworks 2 Electronicdatainterchange EDI 电子数据交换 Businessesalsohavebeenengaginginatypeofelectroniccommerce knownaselectronicdatainterchange formanyyears Transmittingcomputer readabledatainastandardformattoanotherbusinessBycreatingasetofstandardformatsfortransmittingthatinformationelectronically businesseswereabletoreduceerrors avoidprintingandmailingcosts andeliminatetheneedtoreenterthedata ThestandardformatsusedinEDIcontainthesameinformationthatbusinesshavealwaysincludedintheirstandardpaperinvoices purchaseorders andshippingdocuments cont ElectronicCommerce TheSecondWave cont Electronicdatainterchange EDI TradingpartnersBusinessesthatengageinEDIwitheachotherOneseriousproblemthatpotentialadoptersofEDIfacedwasthehighcostofimplementation TouseEDI buyingexpensivecomputerhardwareandsoftware establishingdirectnetworkconnectionstoalltradingpartnersorsubscribingtoaVAN Value addednetwork VAN Independentfirmthatoffersconnectionandtransaction forwardingservicestobuyersandsellersengagedinEDI ElectronicCommerce TheSecondWave cont EC 4Thedot comboom bust andrebirth Between1997and2000 morethan12 000internet relatedbusinesseswerestartedwithmorethan 100billionofinvestors money Dot ComBoom Morethan5000ofthesecompanieswentoutofbusinessorwereacquiredinthedownturnthatbeganin2000 Dot ComBust Between2000and2003 morethan 200billionwasinvestedinpurchasingelectroniccommercebusinessesthatwereintroubleandstartingnewonlineventures Thissecondwaveoffinancialinvestmenthasnotbeenreportedextensivelyineitherthegeneralorbusinessmedia butitisfuelingarebirthofgrowthinonlinebusinessactivity Dot ComRebirth ElectronicCommerce TheSecondWave cont EC 5TheSecondWaveofElectronicCommerce EconomistsChrisFreemanandFranciscoLou describefourwavesthatoccurredintheIndustrialRevolutionintheirbookAsTimeGoesBy ManyresearcherspredictthatelectroniccommerceandtheinformationrevolutionbroughtaboutbytheInternetwillgothroughsimilarwaves Thoseresearchersagreethatthesecondwaveofelectroniccommercehasbegun TheSecondWaveofElectronicCommerce continued Secondwave GlobalenterprisesinmanycountriesareparticipatinginelectroniccommerceManyECwebsitesavailableinmultiplelanguagesEstablishedcompaniesfundelectroniccommerceinitiativeswiththeirowncapitalRapidlyincreasinguseofbroadbandtechnologiesforinternetconnectionsB2BECincreasinglyareintegratedwithradio frequencyidentification RFID andbiometricdevicestomanageinformationandproductflowseffectivelyUseofmultiplesophisticatedadvertisingapproachesandbetterintegrationofECwithexistingbusinessprocessesandstrategiesNewapproachestothesaleanddistributionofdigitalproductsCustomizede mailstrategiesarenowintegraltocustomercontactRealizethatfirst moveradvantageleadstosuccessonlyforsomecompaniesincertainspecificmarketsandindustries thefirstwave DominantinfluenceofU S businessesExtensiveuseoftheEnglishlanguageManynewcompaniesstartedwithoutsideinvestormoneyManyECparticipantsusedslowinternetconnectionsB2BECreliedonapatchworkofdisparatecommunicationandinventorymanagementtechnologiesUnstructureduseofe mailOver relianceonsimpleformsofonlineadvertisingasarevenuesourceWidespreadpiracyduetoineffectivedistributionofdigitalproductsRelyonfirst moveradvantagetoensuresuccessinalltypesofmarketsandindustries NotallofthefutureofECisbasedinit ssecondwave Someofthefirstwavecompaniesweresuccessful suchasA eBay andYahoo ThesecondwaveofECwillprovidenewopportunitiesforthesebusiness P13 TheSecondWaveofElectronicCommerce continued 1 2BusinessModels 交易模式 RevenueModels 盈利模式 BusinessProcesses 交易流程 EC Businessmodel AsetofprocessesthatcombinetoyieldaprofitAgoodbusinessmodelwasexpectedtoleadtorapidsalesgrowthandmarketdominance Theideathatthekeytosuccesswassimplytocopythebusinessmodelofasuccessfuldot combusinessledthewaytomanybusinessfailures someofthemquitedramatic HarvardBusinessSchoolprofessorMichaelPorter arguedthatbusinessmodelsnotonlydidnotmatter theyprobablydidnotexist copyingoradaptingsomeoneelse sbusinessmodelisneitheraneasynorwiseroadmaptosuccess Instead companiesshouldexaminetheelementsoftheirbusiness thatis theyshouldidentifybusinessprocessesthattheycanstreamline enhance orreplacewithprocessesdrivenbyInternettechnologies Revenuemodel RevenuemodelAspecificcollectionofbusinessprocessesusedto IdentifycustomersMarkettothosecustomersGeneratesalestothosecustomersTherevenuemodelideaishelpfulforclassifyingrevenuegeneratingactivitiesforcommunicationandanalysispurposes 1 2 1RoleofMerchandising Merchandising 零售推销 Combinationofstoredesign layout andproductdisplayknowledgeInaddition manysalespeoplehavedevelopedskillsthatallowthemtoidentifycustomerneedsandfindproductsorservicesthatmeetthoseneeds Theskillsofmerchandisingandpersonalsellingcanbedifficulttopracticeremotely However companiesmustbeabletotransfertheirmerchandisingskillstotheWebfortheirWebsitestobesuccessful SomeproductsareeasiertosellontheInternetthanothersbecausethemerchandisingskillsrelatedtothoseproductsareeasiertotransfertotheWeb 1 2 2Product ProcessSuitabilitytoElectronicCommerce Commodityitem 日用品 商品 HardtodistinguishfromthesameproductsorservicesprovidedbyothersellersIt sfeatureshavebecomestandardizedandwellknownGasoline officesupplies soap computers andairlinetransportationareallexamplesofcommodityproductsorservices asarethebooksandCDssoldbyA wellsuitedtoelectroniccommerce Product ProcessSuitabilitytoElectronicCommerce continued ShippingprofileCollectionofattributesthataffecthoweasilyaproductcanbepackagedanddeliveredHighvalue to weightratioCanhelpbymakingoverallshippingcostasmallfractionofthesellingpriceAnairlineticketisanexcellentexampleofanitemthathasahighvalue to weightratio Expensivejewelryhasahighvalue to weightratio butmanypeoplearereluctanttobuyitwithoutexaminingitinpersonunlessthejewelryissoldunderawell knownbrandnameandwithagenerousreturnpolicy Aproductthathasastrongbrandidentity suchasaKodakcamera iseasiertosellontheWebthananunbrandeditem becausethebrand sreputationreducesthebuyer sconcernsaboutqualitywhenbuyingthatitemsightunseen Otheritemsthatarewellsuitedtoelectroniccommercearethosethatappealtosmall 销量不大 butgeographicallydispersedgroupsofcustomers Collectiblecomicbooksareanexampleofthistypeofproduct Whenpersonalsellingskillsareafactor asincommercialrealestatesales orwhentheconditionoftheproductsisdifficulttodeterminewithoutmakingapersonalinspection asinpurchasesofhigh fashionclothing antiques orperishablefoodproducts traditionalcommerceoracombinationoftraditionalcommerce fortheinspection andelectroniccommercecanbeabetterwaytoselltheitemsorservices Acombinationofelectronicandtraditionalcommercestrategiesworksbestwhenthebusinessprocessincludesbothcommodityandpersonalinspectionelements ManypeoplearefindinginformationontheWebaboutnewandusedautomobiles Autobytelhashadmuchsuccesshandlingnewcartransactions PeoplearewillingtotakedeliveryofaparticularmakeandmodelofanewvehicleeveniftheydidnottestdrivethespecificcartheyarepurchasingthroughAutobytel Fewerpeoplearewillingtobuyausedcarwithoutdrivingthatspecificcarandpersonallyinspectingit Inthecaseofusedcars electroniccommerceprovidesagoodwayforbuyerstoobtaininformationaboutavailablemodels features reliability prices anddealerships butthevariability 可变性 intheconditionofusedcarsmakesthetraditionalcommercecomponentofpersonalinspectionakeypartofthetransactionnegotiation 1 2 3AdvantagesofE Commerce Alltheadvantagesofelectroniccommerceforbusinessescanbesummarizedinonestatement ElectroniccommercecanincreasesalesanddecreasecostsIfadvertisingisdonewellontheWeb itcangetafirm spromotionalmessageouttopotentialcustomersineverycountryAfirmcanuseelectroniccommercetoreachsmallgroupsofcustomersthataregeographicallyscattered TheWebisparticularlyusefulincreatingvirtualcommunitiesthatbecomeidealtargetmarketsforspecifictypesofproductsorservices virtualcommunityisagatheringofpeoplewhoshareacommoninterest butinsteadofthisgatheringoccurringinthephysicalworld ittakesplaceontheInternet Usinge commercesalessupportandorder takingprocesses abusinesscan ReducecostsofhandlingsalesinquiriesProvidepricequotesdetermineproductavailability AdvantagesofE Commerce continued 1 2 4DisadvantagesofEC Somebusinessprocessesmayneverlendthemselvestoelectroniccommerce PerishablefoodsHigh cost uniqueitemssuchascustom designedjewelry impossibletoinspectadequatelyfromaremotelocation 1 2 4DisadvantagesofEC QuickQuiz Thegroupoflogical related andsequentialactivitiesandtransactionsinwhichbusinessesengageareoftencollectivelyreferredtoas occurswhenonebusinesstransmitscomputer readabledatainastandardformattoanotherbusiness BusinessesthatengageinEDIwitheachotherarecalled Thecombinationofstoredesign layout andproductdisplayknowledgeiscalled 1 3EconomicForcesandElectronicCommerce Contents 1 3 2TheroleofElectronicCommerce 1 3 3NetworkEconomicStructures 1 3 1TransactionCosts 1 3 4NetworkEffects EconomicForces Economicsisthestudyofhowpeopleallocatescarceresources 2waysofresourcesallocating Oneimportantwaythatpeopleallocateresourcesisthroughcommercetheothermajorwayisthroughgovernmentactions suchastaxesorsubsidiesManyeconomistsareinterestedinhowpeopleorganizetheircommerceactivities OnewaypeopledothisistoparticipateinmarketsTwoconditionsofamarket PotentialsellersofagoodcomeintocontactwithpotentialbuyersAmediumofexchangeisavailable currencyorbarter Mosteconomistsagreethatmarketsarestrongandeffectivemechanismsforallocatingscarceresources Thus onewouldexpectmostbusinesstransactionstooccurwithinmarkets However muchbusinessactivitytodayoccurswithinlargehierarchicalbusinessorganizations whicheconomistsgenerallyrefertoasfirms orcompanies Theselargefirmsoftenconductmanydifferentbusinessactivitiesentirelywithintheorganizationalstructureofthefirmandparticipateinmarketsonlyforpurchasingrawmaterialsandsellingfinishedproducts EconomicForces Ifmarketsareindeedhighlyeffectivemechanismsforallocatingscarceresources theselargecorporationsshouldparticipateinmarketsateverystageoftheirproductionandvalue generationprocesses Nobellaureate 戴桂冠的人 RonaldCoasewroteanessayin1937inwhichhequestionedwhyindividualswhoengagedincommerceoftencreatedfirmstoorganizetheiractivities Hewasparticularlyinterestedinthehierarchicalstructureofthesebusinessorganizations Coaseconcludedthattransactioncostswerethemainmotivationformovingeconomicactivityfrommarketstohierarchicallystructuredfirms EconomicForces 1 3 1TransactionCosts Transactioncostsarethetotalcoststhatabuyerandsellerincurastheygatherinformationandnegotiateapurchase saletransaction Significantcomponentsoftransactioncosts CostofinformationsearchandacquisitionbrokeragefeesandsalescommissionsInvestmentofthesellerinequipmentorinthehiringofskilledemployeestosupplyproductsorservicestothebuyer Howtransactioncostsoccurinmarkets MarketsandHierarchies Thepracticeofanexistingfirmreplacingoneormoreofitssuppliermarketswithitsownhierarchicalstructureforcreatingthesuppliedproductiscalledverticalintegration 垂直统一管理 MarketsandHierarchies OliverWilliamson Industrieswithcomplexmanufacturingandassemblyoperationstendedtoincludemanyfirmsthatusedhierarchicalstructuresandthatweresubstantiallyverticallyintegrated Manyofthemanufacturingandadministrativeinnovationsthatoccurredinbusinessesduringthe20thcenturyincreasedtheefficiencyandeffectivenessofhierarchicalmonitoringactivities Assemblylinesandothermassproductiontechnologiesallowedworktobebrokendownintosmall easilysupervisedprocedures Theadventofcomputersbroughttremendousincreasesintheabilityofupper levelmanagerstomonitorandcontrolthedetailedactivitiesoftheirsubordinates MarketsandHierarchies DuringtheyearsfromtheIndustrialRevolutionthroughthepresent thesizeandlevelofverticalintegrationoffirmshaveincreased Insomeverylargeorganizations however monitoringsystemshavenotkeptpacewiththeorganization sincreaseinsize Thishascreatedproblemsbecausetheeconomicviability 生存能力 ofafirmdependsonitsabilitytotrackoperationalactivitieseffectivelyatthelowestlevelsofthefirm Thesefirmshaveinstituteddecentralizationprogramsthatallowbusinessunitstofunctionasseparateorganizations negotiatingtransactionswithotherbusinessunitsasiftheywereoperatinginamarketratherthanaspartofthesamefirm MarketsandHierarchies Astrategicbusinessunit orsimplybusinessunit isoneparticularcombinationofproduct distributionchannel andcustomertype Exceptionstothegeneraltrendtowardhierarchiesdoexist Manycommodities suchaswheat sugar andcrudeoil arestilltradedinmarkets Thecommoditynatureoftheproductstradedin