1 Pertemuan 2 Understanding e-Commerce and e-Business Matakuliah: J0324 / Sistem e-Bisnis Tahun: 2005 Versi: 02/02

2 Learning Outcomes Pada akhir pertemuan ini, diharapkan mahasiswa akan mampu : menyebutkan fungsi dan perbedaan antara e-Commerce dan e-Business

3 Outline Materi Electronic Commerce: Definitions and Concepts The EC Framework, Classification and Content E-commerce Business Plans, Cases and Models Benefits and Limitations of EC

4 The Interdisciplinary Nature of EC Major EC disciplines –Computer science –Marketing –Consumer behavior –Finance –Economics –Management information systems

5 The Future of EC 2004—total online shopping and B2B transactions in the US between $3 to $7 trillion by 2008: –number of Internet users worldwide should reach 750 million –50 percent of Internet users will shop –EC growth will come from: B2C B2B e-government e-learning B2E c-commerce

6 E-commerce Business Models Business models—a method of doing business by which a company can generate revenue to sustain itself Examples: –Name your price –Find the best price –Dynamic brokering –Affiliate marketing

7 E-commerce Business Plans and Cases Business plan: a written document that identifies the business goals and outlines the plan of how to achieve them Business case: a written document that is used by managers to garner funding for specific applications or projects; its major emphasis is the justification for a specific investment

8 Structure of Business Models Business model: A method of doing business by which a company can generate revenue to sustain itself

9 Structure of Business Models (cont.) Revenue model: description of how the company or an EC project will earn revenue –Sales –Transaction fees –Subscription fees –Advertising –Affiliate fees –Other revenue sources

10 Typical Business Models in EC 1.Online direct marketing 2.Electronic tendering systems tendering (reverse auction): model in which a buyer requests would-be sellers to submit bids, and the lowest bidder wins 3.Name your own price: a model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price

11 Typical Business Models in EC (cont.) 4.Affiliate marketing: an arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to the selling company’s Web site 5.Viral marketing: word-of-mouth marketing in which customers promote a product or service to friends or other people

12 Typical Business Models in EC (cont.) 6.Group purchasing: quantity purchasing that enables groups of purchasers to obtain a discount price on the products purchased 7.SMEs: small to medium enterprises 8.Online auctions

13 Typical Business Models in EC (cont.) 8.Product and service customization customization: creation of a product or service according to the buyer’s specifications 8.Electronic marketplaces and exchanges 9.Value-chain integrators 10.Value-chain service providers

14 Typical Business Models in EC (cont.) 12.Information brokers 13.Bartering 14.Deep discounting 15.Membership 16.Supply chain improvers Business models can be independent or they can be combined amongst themselves or with traditional business models

15 Benefits of EC Global reach Cost reduction Supply chain improvements Extended hours: 24/7/365 Customization New business models Vendors’ specialization Rapid time-to-market Lower communication costs Efficient procurement Improved customer relations Up-to-date company material No city business permits and fees Other benefits Benefits to organizations

16 Benefits of EC (cont.) Ubiquity More products and services Cheaper products and services Instant delivery Information availability Participation in auctions Electronic communities “Get it your way” No sales tax Benefits to consumers

17 Benefits of EC (cont.) Benefits to society –Telecommuting –Higher standard of living –Hope for the poor –Availability of public services

18 Limitations of EC

19 Barriers of EC Security Trust and risk Lack of qualified personnel Lack of business models Culture User authentication and lack of public key infrastructure Organization Fraud Slow navigation on the Internet Legal issues

20 Major Business Pressures and the Role of EC

21 Major Business Pressures (cont.) Societal and environmental pressures  Changing nature of workforce  Government deregulation of banking and other services  Shrinking government subsidies  Increased importance of ethical and legal issues  Increased social responsibility of organizations  Rapid political changes

22 Major Business Pressures (cont.) Technological pressures  Rapid technological obsolescence  Increase innovations and new technologies  Information overload  Rapid decline in technology cost vs. performance ratio

23 The Networked Organization

24 Source : Turban, Efraim, David King, Jae Lee and Dennis Viehland. Electronic Commerce. A Managerial Perspective (2004). Prentice Hall. PPT for Chapter : 1