1. E-Marketplaces: Mechanisms, Tools, and Impacts of E-commerce

2. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1.Describe the major electronic commerce (EC) activities and processes and the mechanisms that support them. 2.Define e-marketplaces and list their components. 3.List the major types of e-marketplaces and describe their features. 4.Describe electronic catalogs, search engines, and shopping carts. 5.Describe the major types of auctions and list their characteristics. 2-1

3. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6.Discuss the benefits, limitations, and impacts of auctions. 7.Describe bartering and negotiating online. 8.List the major Web 2.0 tools and their use in EC. 9.Understand virtual worlds and their use in EC. 10.Discuss competition in the digital economy. 11.Describe the impact of e-marketplaces on organizations, intermediation, and industries. 2-2

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8. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall e-marketplace An online market, usually B2B, in which buyers and sellers exchange goods or services; the three types of e-marketplaces are private, public, and consortia marketspace A marketplace in which sellers and buyers exchange goods and services for money (or for other goods and services), but do so electronically 2-7

9. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Three main functions in (E-)Marketplaces 1.Matching buyers & sellers 2.Facilitating the exchange of information, goods, series, & payment 3.Providing an institutional infrastructure, such as legal & regulatory framework 2-8

11. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall E-MARKETPLACE COMPONENTS AND PARTICIPANTS – Customers – Sellers – Infrastructures The marketspace infrastructure includes electronic networks, hardware, software, etc. 2-10

12. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – digital products Goods that can be transformed to digital format and delivered over the Internet – front end The portion of an e-seller’s business processes through which customers interact, including the seller’s portal, electronic catalogs, a shopping cart, a search engine, and a payment gateway 2-11

13. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – back end The activities that support online order fulfillment, inventory management, purchasing from suppliers, payment processing, packaging, and delivery – intermediary A third party that operates between sellers and buyers 2-12

14. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – Other business partners There are several types of partners, such as shippers, use the internet to collaborate, mostly along the supply chain. – Support services Support services ranges from certification and escrow services (to ensure security) to contenet providers. 2-13

15. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall TYPES OF E-MARKETPLACES (background) Malls viewed as collections of stores (i.e. shopping centers) Stores isolated from each other and prices are generally fixed Marketplaces some of which are located outdoors, are often viewed as places where many vendors complete and shoppers look for bargains and are expected to negotiate prices 2-14

16. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall TYPES OF E-MARKETPLACES – Private E-Marketplaces (owned & operate by a single company) sell-side e-marketplace A private e-marketplace in which one company sells either standard and/or customized products to individuals (B2C) or to business (B2B) --- one-to-many buy-side e-marketplace A private e-marketplace in which one company makes purchases from invited suppliers (B2B) --- many-to-one 2-15

17. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall TYPES OF E-MARKETPLACES – Public E-Marketplaces B2B markets Often owned by a third party (not a seller or a buyer) or by a group of buying or selling companies Sometime called exchanges They are open to the public and are regulated by the government or the exchange’s owner 2-16

18. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall storefront A single company’s Web site where products or services are sold e-mall (online mall) An online shopping center where many online stores are located 2-17

19. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Storefront include the following mechanisms – Electronic catalog – Search engine – Electronic cart – E-auction facilities – Payment gateway – Shipment court – Customer services 2-18

20. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall TYPES OF STORES AND MALLS – General stores/malls (e.g. amazon.com) – Specialized stores/malls – Regional versus global stores – Pure-play online organizations versus click-and-mortar stores Web portal A single point of access, through a Web browser, to critical business information located inside and outside (via Internet) of an organization 2-19

21. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Types of Portals – Commercial (public) portal – Corporate portals – Publishing portals – Personal portals – mobile portal A portal accessible via a mobile device – voice portal A portal accessed by telephone or cell phone – Knowledge portals 2-20

22. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall THE ROLES AND VALUE OF INTERMEDIARIES IN E-MARKETPLACES 1. Brokers : a company that facilitates transactions between buyers and sellers Buy/sell fulfillment Virtual mall Metamediary Bounty Comparison agent Shopping facilitator Matching services 2-21

23. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall THE ROLES AND VALUE OF INTERMEDIARIES IN E-MARKETPLACES 2. Infomediaries Electronic intermediaries that provide and/or control information flow in cyberspace, often aggregating information and selling it to others – e-distributor An e-commerce intermediary that connects manufacturers with business buyers (customers) by aggregating the catalogs of many manufacturers in one place—the intermediary’s Web site 2-22

24. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall electronic catalogs (e-catalogs) The presentation of product information in an electronic form; the backbone of most e- selling sites – Online Catalogs Versus Paper Catalogs 2-23

27. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall EC SEARCH ACTIVITIES, TYPES, AND ENGINES – Types of EC Searches 1.Internet/Web Search 2.enterprise search The practice of identifying and enabling specific content across the enterprise to be indexed, searched, and displayed to authorized users 2-26

28. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 3.desktop search Search tools that search the contents of a user’s or organization’s computer files, rather than searching the Internet. The emphasis is on finding all the information that is available on the user’s PC, including Web browser histories, e-mail archives, and word-processed documents, as well as in all internal files and databases 2-27

29. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall search engine A computer program that can access databases of Internet resources, search for specific information or keywords, and report the results Software (Intelligent) Agents It can do more than just “search & match”, it has capabilities that can be used to perform routine tasks that require intelligence 2-28

30. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Voice-Powered Search Google introduced a voice-powered tool that allows you to skip the keyboard altogether 2-29

31. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall electronic shopping cart An order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop – Product Configuration The systems support the acquisition of customer requirements while automating the order-taking process, and they allow customers to configure their products by specifying their technical requirements. 2-30

32. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall auction A competitive process in which a seller solicits consecutive bids from buyers (forward auctions) or a buyer solicits bids from sellers (backward/reverse auctions). Prices are determined dynamically by the bids electronic auctions (e-auctions) Auctions conducted online Innovative Auctions 2-31

33. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall dynamic pricing Prices that change based on supply and demand relationships at any given time 1.One Buyer, One Seller 2.One Seller, Many Potential Buyers forward auction An auction in which a seller entertains bids from buyers. Bidders increase price sequentially 2-32

34. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall reverse auction (bidding or tendering system) Auction in which the buyer places an item for bid (tender) on a request for quote (RFQ) system, potential suppliers bid on the job, with the price reducing sequentially, and the lowest bid wins; primarily a B2B or G2B mechanism “name-your-own-price” model Auction model in which a would-be buyer specifies the price (and other terms) he or she is willing to pay to any willing and able seller. It is a C2B model that was pioneered by Priceline.com 2-33

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36. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 3.Many Sellers, Many Buyers double auction An auction in which multiple buyers and their bidding prices are matched with multiple sellers and their asking prices, considering the quantities on both sides 2-35 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

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38. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – Limitations of E-Auctions Minimal Security Possibility of Fraud Limited Participation – Impacts of Auctions Auctions as a Coordination Mechanism Auctions as a Social Mechanism to Determine a Price Auctions as a Highly Visible Distribution Mechanism Auctions as an EC Component Auctions for Profit for Individuals 2-37

39. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall ONLINE BARTERING – bartering The exchange of goods and services – e-bartering (electronic bartering) Bartering conducted online, usually in a bartering exchange – bartering exchange A marketplace in which an intermediary arranges barter transactions ONLINE NEGOTIATING 2-38

40. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall BLOGGING (WEBLOGGING) – blog A personal Web site that is open to the public to read and to interact with; dedicated to specific topics or issues – vlog (or video blog) A blog with video content 2-39

41. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – micro-blogging A form of blogging that allows users to write messages (usually up to 140 characters) and publish them, either to be viewed by anyone or by a restricted group that can be chosen by the user. These messages can be submitted by a variety of means, including text messaging, instant messaging, e-mail, MP3, or just on the Web 2-40

42. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – Twitter A free micro-blogging service that allows its users to send and read other users’ updates. – tweets Text-based posts up to 140 characters in length posted to Twitter – Commercial Uses of Blogs – Using Blogging to Facilitate Collaboration – Potential Risks of Corporate Blogs – Bloggers and Politics 2-41

43. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Mechanism Aids for Web 2.0 Tools – tag A nonhierarchical keyword or term assigned to a piece of information (such as an Internet bookmark, digital image, video clip, or any computer document) – folksonomy (collaborative tagging, social classification, social indexing, social tagging) The practice and method of collaboratively creating, classifying, and managing tags to annotate and categorize content 2-42

44. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – social bookmarking Web service for sharing Internet bookmarks. The sites are a popular way to store, classify, share, and search links through the practice of folksonomy techniques on the Internet and intranets wiki (wikilog) A blog that allows everyone to participate as a peer; anyone may add, delete, or change content 2-43

45. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall avatars Animated computer characters that exhibit humanlike movements and behaviors BUSINESS ACTIVITIES AND VALUE IN VIRTUAL WORLDS – Types of business activities in virtual worlds: Creating and managing a virtual business Conducting regular business activities Providing services for those who build, manage, or make money with virtual properties 2-44

46. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall COMPETITION IN THE INTERNET ECOSYSTEM – Competitiveness Factors Lower search costs for buyers Speedy comparisons Lower prices Customer service Barriers to entry are reduced Virtual partnerships multiply Market niches abound differentiation Providing a product or service that is unique 2-45

47. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall – Customization, Personalization, and Competition customization Creation of a product or service according to the buyer’s specifications personalization The ability to tailor a product, service, or Web content to specific user preferences 2-46

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50. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall TRANSFORMING ORGANIZATIONS – Technology and Organizational Learning – The Changing Nature of Work – Disintermediation and Reintermediation disintermediation Elimination of intermediaries between sellers and buyers reintermediation Disintermediated entities or newcomers take on new intermediary roles 2-49

51. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall REDEFINING ORGANIZATIONS – New and Improved Product Capabilities – mass customization A method that enables manufacturers to create specific products for each customer based on the customer’s exact needs – build-to-order (pull system) A manufacturing process that starts with an order (usually customized). Once the order is paid for, the vendor starts to fulfill it 2-50

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54. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1.What about intermediaries? 2.Should we auction? 3.Should we barter? 4.How do we compete in the digital economy? 5.What organizational changes will be needed? 2-53