THREE1 E-Commerce

THREE 2 §Pentagons Arpanet was first attempt to use computer networks to share knowledge electronically §National Science Foundation developed system further to permit public access to build first internet §Now local area networks (LANS) connected to wider area networks (WANS) using TCP/IP protocol §Originally text based now evolved into visual, audio and text knowledge format transfers

THREE 3 §Internet is only one component of way organisations use electronic media to share knowledge §Volume and quality of knowledge exchange has been dramatically improved §Anderson project concluded 5 Truths of: New market structures Knowledge gains value Zero cost of operation Reduction in prices Instant delivery

THREE 4 Economics §E-Commerce provides knowledge and as knowledge approaches perfect competition (everybody is informed) should move prices downwards §Evidence from some sectors (e.g. Tickets; books) §In B2B markets administration costs are reduced due to electronic data transfer §Marketing costs are lowered by advent of automated web sites providing customer with knowledge at touch of a button

THREE 5 §Scale of e-commerce is massive §In 1999 e-commerce in USA equalled entire GDP of Switzerland §Industrial e-commerce markets are much bigger than on-line consumer markets §Rapid growth of e-commerce attracted entrepreneurs and venture capitalists

THREE 6 §Many dot.com start-ups had high expenses but lacked knowledge of how to build viable sales base §Late 90s saw the dot.com unsustainable bubble burst §Real success stories are existing terrestrial firms that moved on-line §Able to exploit existing knowledge of markets and exploit customers knowledge of their existence

THREE 7 Benefits §Range of benefits to customers from on-line trading: Convenience of 24/7 operations More knowledge provision Fewer hassles (no shopping trip) Multi-media knowledge delivery New products/services §For firmsbenefits include: Lower operating costs Improved distribution Reduced personal selling costs Ability to build closer customer relations Customised promotions Faster market response New opportunities

THREE 8 FIGURE 3:1 AN E-COMMERCE ALTERNATIVE ORIENTATION MATRIX Low High High Low Knowledge content focus orientation Integrated e-commerce knowledge orientation Low knowledge involvement orientation Transaction knowledge focus orientation Role of E- commerce in Knowledge Provision Role of E-commerce in using knowledge to support the Purchase Transaction

THREE 9 §Terrestrial good practice still applies in cyberspace Technology is only a facilitator Marketers must lead process Technology must offer additional benefits to customers §Originally technology was designed to permit s and discussion groups §Original web sites published static knowledge §Gateway interface technology permitted on- line data interaction between supplier and user

THREE 10 §Applications programme interface (API) allowed supplier and user to store data usage and speed up knowledge-access activities §Certain firms more successful (e.g. Cisco) because: Customer driven Established commitment to TQM and JIT High level of expertise in IT High expertise in supply chain management §Success requires move to systems automation to optimise knowledge exchange

THREE 11 FIGURE 3:2 AN AUTOMATED E-BUSINESS DATABASE SYSTEM Firms Database Customer Web Browser Rational Database Server Web-to- Database Middleware API Interface Web Server Integration of Data from all internal operations Internet

THREE 12 §Needs to exploit automated data utilisation: All data integrated on single location Data must be organised by topic Data must remain accurate over time §Move to use relationship databases to enhance ability to analyse data and generate new knowledge §Real Time Data Mining permits almost instant access to knowledge, identifying market change and new opportunities