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1 4273ElectronicCommerce 2 Agenda YourinstructorCourseoutlineQ Aaboutthecourse4 LectureOverviewofeCommerce 3 YourInstructor Whatwouldyouliketoknowaboutme 4 ResearchInterests M Sc inComputerScienceMBAinElectronicBusinessPhDinMISThirdyearatLU OverviewofElectronicCommerce 6 LearningObjectives Defineelectroniccommerce EC anddescribeitsvariouscategories DescribeanddiscussthecontentandframeworkofEC DescribethemajortypesofECtransactions DescribethedigitalrevolutionasadriverofEC 7 LearningObjectives DescribethebusinessenvironmentasadriverofEC DescribesomeECbusinessmodels DescribethebenefitsofECtoorganizations consumers andsociety DescribethelimitationsofEC DescribethecontributionofECtoorganizationsrespondingtoenvironmentalpressures 8 ElectronicCommerce DefinitionsandConcepts electroniccommerce EC Theprocessofbuying selling orexchangingproducts services orinformationviacomputernetworks 9 ElectronicCommerce DefinitionsandConcepts ECisdefinedthroughtheseperspectivesCommunications deliveryofinfoandproductsovernetworksCommercial trading buyingandsellingBusinessprocess virtualinfoexchangeService cutservicecostsandimprovequalityLearningCollaborativeCommunity 10 ElectronicCommerce DefinitionsandConcepts e businessAbroaderdefinitionofECthatincludesnotjustthebuyingandsellingofgoodsandservices butalsoservicingcustomers collaboratingwithbusinesspartners andconductingelectronictransactionswithinanorganizationInthiscourse weusethebroadestmeaningofEC whichisequivalenttoEB above 11 ElectronicCommerce DefinitionsandConcepts PureVersusPartialECECtakesseveralformsdependingonthedegreeofdigitization thetransformationfromphysicaltodigital 1 theproduct service sold 2 theprocess 3 thedeliveryagent orintermediary 12 TheDimensionsofElectronicCommerce 13 ElectronicCommerce DefinitionsandConcepts ECorganizationsbrick and mortarorganizationsOld economyorganizations corporations thatperformmostoftheirbusinessoff line sellingphysicalproductsbymeansofphysicalagentsvirtual pure play organizationsOrganizationsthatconducttheirbusinessactivitiessolelyonlineclick and mortar click and brick organizationsOrganizationsthatconductsomee commerceactivities butdotheirprimarybusinessinthephysicalworld 14 ElectronicCommerce DefinitionsandConcepts WhereECisconductedelectronicmarket e marketplace Anonlinemarketplacewherebuyersandsellersmeettoexchangegoods services money orinformationinterorganizationalinformationsystems IOSs CommunicationssystemthatallowsroutinetransactionprocessingandinformationflowbetweentwoormoreorganizationsintraorganizationalinformationsystemsCommunicationsystemsthatenablee commerceactivitiestogoonwithinindividualorganizations 15 TheECFramework Classification andContent AnECFramework supportsfivepolicymakingsupportareasPeoplePublicpolicyMarketingandadvertisementSupportservicesBusinesspartnerships 16 AFrameworkforeCommerce 17 ECClassification Classificationbynatureofthetransactionsorinteractionsbusiness to business B2B E commercemodelinwhichalloftheparticipantsarebusinessesorotherorganizationsbusiness to consumer B2C E commercemodelinwhichbusinessesselltoindividualshoppers 18 ECClassification e tailingOnlineretailing usuallyB2Cbusiness to business to consumer B2B2C E commercemodelinwhichabusinessprovidessomeproductorservicetoaclientbusinessthatmaintainsitsowncustomers 19 ECClassification consumer to business C2B E commercemodelinwhichindividualsusetheInternettosellproductsorservicestoorganizationsorindividualsseeksellerstobidonproductsorservicestheyneedconsumer to consumer C2C E commercemodelinwhichconsumersselldirectlytootherconsumers 20 ECClassification peer to peerTechnologythatenablesnetworkedpeercomputerstosharedataandprocessingwitheachotherdirectly canbeusedinC2C B2B andB2Ce commercemobilecommerce m commerce E commercetransactionsandactivitiesconductedinawirelessenvironment 21 ECClassification location basedcommerce l commerce M commercetransactionstargetedtoindividualsinspecificlocations atspecifictimesintrabusinessECE commercecategorythatincludesallinternalorganizationalactivitiesthatinvolvetheexchangeofgoods services orinformationamongvariousunitsandindividualsinanorganizatione g onedepartmentsellsinfotoanotherdept 22 ECClassification business to employees B2E E commercemodelinwhichanorganizationdeliversservices information orproductstoitsindividualemployeescollaborativecommerce c commerce E commercemodelinwhichindividualsorgroupscommunicateorcollaborateonlinee learningTheonlinedeliveryofinformationforpurposesoftrainingoreducation 23 ECClassification exchange electronic Apublicelectronicmarketwithmanybuyersandsellersexchange to exchange E2E E commercemodelinwhichelectronicexchangesformallyconnecttooneanotherforthepurposeofexchanginginformatione governmentE commercemodelinwhichagovernmententitybuysorprovidesgoods services orinformationtobusinessesorindividualcitizens 24 TheFutureofEC Overall thegrowthofthefieldwillcontinuetobestrongintotheforeseeablefutureDespitethefailuresofindividualcompaniesandinitiatives thetotalvolumeofECisgrowingby15to25 everyyear 25 DigitalEvolutionDrivesEC digitaleconomyAneconomythatisbasedondigitaltechnologies includingdigitalcommunicationnetworks computers software andotherrelatedinformationtechnologies alsocalledtheInterneteconomy theneweconomy ortheWebThedigitalrevolutionacceleratesECbyprovidingcompetitiveadvantagetoorganizationsandenablinginnovations 26 BusinessEnvironmentDrivesEC Economic legal societal andtechnologicalfactorshavecreatedahighlycompetitivebusinessenvironmentinwhichcustomersarebecomingmorepowerful 27 BusinessEnvironmentDrivesEC Theenvironment response supportmodelCompaniesmustnotonlytaketraditionalactionssuchasloweringcostsandclosingunprofitablefacilities butalsointroduceinnovativeactionssuchascustomizing creatingnewproducts orprovidingsuperbcustomerservice Thesearecriticalresponseactivities Insomecases ECistheonlysolution 28 MajorBusinessPressuresandtheRoleofEC 29 BusinessEnvironmentDrivesEC OrganizationalresponsestrategiesStrategicsystems e g supplychainmgtsystems AgilesystemsContinuousimprovementeffortsandbusinessprocessrestructuringCustomerrelationshipmanagementBusinessalliancesElectronicmarkets 30 BusinessEnvironmentDrivesEC ReductionsinCycleTimeandTime to MarketcycletimereductionShorteningthetimeittakesforabusinesstocompleteaproductiveactivityfromitsbeginningtoendEmpowermentofEmployeesECallowsthedecentralizationofdecisionmakingandauthorityviaempowermentanddistributedsystems butsimultaneouslysupportsacentralizedcontrolSupplyChainImprovementsECcanhelpreducesupplychaindelays reduceinventories andeliminateotherinefficiencies 31 BusinessEnvironmentDrivesEC MassCustomization Make to OrderinLargeQuantitiesmasscustomizationProductionoflargequantitiesofcustomizeditemsIntrabusiness FromSalesForceAutomationtoInventoryControlknowledgeManagement KM Theprocessofcreatingorcapturingknowledge storingandprotectingit updatingandmaintainingit andusingit 32 ECBusinessModels businessmodelAmethodofdoingbusinessbywhichacompanycangeneraterevenuetosustainitselfECfacilitatesthecreationofnovelbusinessmodels 33 ECBusinessModels TheStructureofBusinessModelsAdescriptionofthecustomerstobeservedandthecompany srelationshipswiththesecustomersAdescriptionofallproductsandservicesthebusinesswilloffer customers valueproposition Adescriptionofthebusinessprocessrequiredtomakeanddelivertheproductsandservices 34 ECBusinessModels TheStructureofBusinessModelsAlistoftheresourcesrequiredandtheidentificationofwhichonesareavailable whichwillbedevelopedin house andwhichwillneedtobeacquiredAdescriptionoftheorganizationsupplychain includingsuppliersandotherbusinesspartnersAdescriptionoftherevenuesexpected revenuemodel anticipatedcosts sourcesoffinancing andestimatedprofitability financialviability 35 ECBusinessModels RevenueModelsDescriptionofhowthecompanyoranECprojectwillearnrevenue MajorrevenuemodelsSalesTransactionfeesSubscriptionfeesAdvertisingfeesAffiliatefees referrals Otherrevenuesources IntermsofEC therearetwocriticalelementsofallbusinessmodels 36 ECBusinessModels ValuepropositionvaluepropositionThebenefitsacompanycanderivefromusingECe g howtheproductorservicemayfulfilltheneedsofcustomersHowdoe marketplacescreatevalue SearchandtransactioncostefficiencyComplementaritiesLock inNovelty 37 CommonRevenueModels 38 ECBusinessModels TypicalECBusinessModelsOnlinedirectmarketingElectronictenderingsystemstendering reverseauction Modelinwhichabuyerrequestswould besellerstosubmitbids thelowestbidderwinsname your own pricemodelModelinwhichabuyersetsthepriceheorsheiswillingtopayandinvitessellerstosupplythegoodorserviceatthatprice 39 ECBusinessModels TypicalECBusinessModelsfindthebestpriceS tryourtextbookbyISBNaffiliatemarketingAnarrangementwherebyamarketingpartner abusiness anorganization orevenanindividual refersconsumerstothesellingcompany sWebsiteviralmarketingWord of mouthmarketinginwhichcustomerspromoteaproductorservicetofriendsorotherpeople 40 ECBusinessModels TypicalECBusinessModelsgrouppurchasingQuantitypurchasingthatenablesgroupsofpurchaserstoobtainadiscountpriceontheproductspurchasede co opsAnothernameforonlinegrouppurchasingorganizations 41 ECBusinessModels TypicalECBusinessModelsproductandservicecustomizationcustomizationCreationofaproductorserviceaccordingtothebuyer sspecificationselectronicmarketplacesandexchangesinformationbrokers 42 BenefitsofEC BenefitstoOrganizations 43 BenefitsofEC GlobalReachCostReductionSupplyChainImprovementsExtendedHoursCustomizationNewBusinessModelsVendors SpecializationRapidTime to Market LowerCommunicationCostsEfficientProcurementImprovedCustomerRelationsUp to DateCompanyMaterialNoCityBusinessPermitsandFeesOtherBenefits BenefitstoOrganizations 44 BenefitsofEC BenefitstoConsumers 45 BenefitsofEC UbiquityMoreProductsandServicesCustomizedProductsandServicesCheaperProductsandServices InstantDeliveryInformationAvailabilityParticipationinAuctionsElectronicCommunitiesNoSalesTaxinsomecases BenefitstoConsumers 46 BenefitsofEC BenefitstoSociety 47 BenefitsofEC BenefitstoSocietyTelecommutingHigherStandardofLivingHopeforthePoorAvailabilityofPublicServices 48 Exhibit1 7LimitationsofEC 49 ManagerialIssues 1 IsitrealthatEChaschangedthebusinessworld 50 ManagerialIssues 1 IsitrealthatEChaschangedthebusinessworld Probably yes RecallECactivitiesinwhichyouhavebeenalreadyinvolved CanyouimaginethewordwithouttheInternet 51 ManagerialIssues 2 WhyisB2Be commercesoattractive 52 ManagerialIssues 2 WhyisB2Be commercesoattractive B2Biseasiertoimplementthantraditionaloff linemodelsB2ChassomeproblemsEasytomoveoff lineB2BrelationshipsonlineThevalue volumeoftransactionsinB2BislargeEasiertoachievecriticalmass 53 ManagerialIssues 3 TherearesomanyECfailures howcanoneavoidthem 54 ManagerialIssues 3 TherearesomanyECfailures howcanoneavoidthem Industryconsolidationoftenoccursaftera goldrush StandardsandbestpracticesappearedLearnfromthemistakesdot comsmadesevenyearsago 55 Manageria
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