Chapter 7 E-Commerce for Consumers and Organizations Introduction to Business Information Systems by Mark Huber, Craig Piercy, Patrick McKeown, and James Norrie
Copyright 2008 John Wiley & Sons Canada Ltd. 2 What Is E-Commerce? E-commerce is the use of _________ _________, _________, and _________ networks to carry out transactions in order to create or support the creation of _________ _________ E-Commerce includes all types of computer networks and all types of transactions, including electronic funds transfers and _________ over private networks as well as retail sales and wholesale exchanges over public networks like the Internet
Copyright 2008 John Wiley & Sons Canada Ltd. 3 Most people think of e-commerce as electronic shopping over the WWW or _____________ to _______________ e- commerce (transactions in hundreds of millions of dollars) However, _________ to _________ e- commerce transactions are valued in trillions of dollars! E-Commerce Defined
Copyright 2008 John Wiley & Sons Canada Ltd. 4 Types of E-Commerce Transactions TransactionDescriptionExample Web sites Online equivalent of retail store as well as other services Electronic exchanges between companies Online sales to government agencies for businesses to provide goods or services to the Ontario Government Electronic payment of taxes to electronically file and pay taxes in Canadawww.netfile.gc.can Use of online auctions like eBay or Yahoo! Auctions auctions.yahoo.com
Copyright 2008 John Wiley & Sons Canada Ltd. 5 E-Commerce and Products: Physical and Electronic Products can be divided into two primary categories: _________ and _________ _________ products include anything that requires an actual shipment of a package to the buyer, e.g., computer hardware _________ products can be received directly over the Internet or other computer network, eg, computer software
Copyright 2008 John Wiley & Sons Canada Ltd. 6 The E-Commerce Advantage The use of computer networks, especially the Internet, to carry out transactions between a variety of buyers and sellers is creating a tangible “e-commerce advantage” in our economy, especially with regard to _________
Copyright 2008 John Wiley & Sons Canada Ltd. 7 E-Commerce Advantage Innovative uses of the Internet have produced global _____________ with sellers being able to reach any potential buyer in the world Technology has increased _________ _________ - quality and quantity of information about products and services
Copyright 2008 John Wiley & Sons Canada Ltd. 8 Mass Customization and Personalization One response to _________________________ is to create business value based on a customization- oriented approach to e-commerce There are two approaches to customization _________ _________ is the ability to create custom products or services on-demand, e.g., Dell customers can customize their PCs _________ is a marketing message that a business personalizes for each potential customer’s interests based on searching, browsing, or buying habits, e.g., Amazon.ca
Copyright 2008 John Wiley & Sons Canada Ltd. 9 Business and E-Commerce Strategy A _________ is a broad-based formula for how a business is going to compete, what its goals should be, and what plans and policies will be needed An ____________________________ is a general formula for how a business is going to use computer networks and information systems to compete in a global marketplace One strategy being used by many companies is _________ _________ management which enables them to create one-to-one marketing experiences for their customers
Copyright 2008 John Wiley & Sons Canada Ltd. 10 E-Commerce Business Models A ____________________ defines how a company will meet the needs of its customers while making a profit An _______________________ is a business model appropriate for conducting business via electronic networks
Copyright 2008 John Wiley & Sons Canada Ltd. 11 Business Model DescriptionExamplesComments Brokers bring buyers and sellers together for a fee. eBay, Priceline, PayPal There are many types of brokerage models in all types of e- commerce. An extension of the traditional media broadcasting model in which ads appear on Web sites. Yahoo!, Netscape, CNN.com, Google There are many different types of advertising, but all depend on a large volume of viewer traffic. Sell products, both physical and electronic, to consumers Amazon.com, CanadianTire.com, Walmart.com, iTunes, and many others Commonly referred to as e-tailers, merchants can use pure e- commerce or a combination (click and mortar). E-commerce Business Models
Copyright 2008 John Wiley & Sons Canada Ltd. 12 E-commerce Business Models Business Model DescriptionExamplesComments Make and sell products directly to customer Dell, IBM, Microsoft, McAfee (anti-virus products) Products can be purchased (PCs), leased (servers), or licensed (software). Affiliate Web sites are paid a fee when purchases come through them. Amazon.com fees to affiliate Web sites Can also include banner ad exchange between affiliated sites as well as revenue-sharing. Based on user loyalty because of high investment of time and emotion. Myspace Evite Revenue is generated through sale of ancillary products or voluntary contributions
Copyright 2008 John Wiley & Sons Canada Ltd. 13 Business ModelDescriptionExamplesComments Users are charged fee to subscribe to service to service or information source Classmates, globeandmail.com Subscription may be for premium services; advertising model may be combined with this model Provides data on consumers and consumption habits DoubleClick, NetRatings, Edmunds Usually aimed at helping businesses rather than consumers Enable competitors to cooperate on a Web site AutoTrader.com, VRBO.com, craigslist Usually aimed at individuals or small businesses that cannot attract customers to their own Web site. E-commerce Business Models
Copyright 2008 John Wiley & Sons Canada Ltd. 14 Web Sites Classified By Purpose Web Site Type PurposeExampleBusiness Model A gateway to many other Web sites Netscape.com, Yahoo!, MSN Advertising, Affiliate Finds Web sites that contain a word or phrase Google, Yahoo, MSN, DogPile Advertising, Affiliate, Infomediary Sell goods and services Dell, LandsEnd, iTunes Merchant, Infomediary, Manufacturer Direct, Coopetitive To provide information on a product before or after the sale Microsoft, BMW, McAfee, Cingular Community, Infomediary
Copyright 2008 John Wiley & Sons Canada Ltd. 15 Web Sites Classified By Purpose Web Site Type PurposeExampleBusiness Model To provide news, information, commentary, etc. National Post, TSN, Economist Subscription, Community, Affiliate Facilitate sales between third parties eBay, Priceline, PayPal Brokerage Sell travel tickets and tours Delta, Travelocity, Orbitz, HotWire Merchant, Brokerage, Coopetitive Provide information, product sales and support, and contacts between visitors Lavalife Microsoft support groups, Google Groups Community, Merchant, Affiliate, Infomediary, Advertising
Copyright 2008 John Wiley & Sons Canada Ltd. 16 B2B E-Commerce: E-Commerce Between Organizations Doing business with other organizations (B2B) is by far larger than with consumers (B2C) It is also quite different in terms of the scope of the purchases and the complexity involved in them—especially in the decision making required to make a purchase For example, while you buy one PC, a company may buy thousands _________ systems (IOS) are the information systems that handle the information flow between trading partners
Copyright 2008 John Wiley & Sons Canada Ltd. 17 B2B Transactions In ______________, purchases are made at market prices from an unknown seller In ________________________, prices are set through negotiation in a long-term relationship with a company known to the buyer
Copyright 2008 John Wiley & Sons Canada Ltd. 18 B2B Business Models In the _______________ business model, two companies form a trading relationship with neither company dominating the relationship In the _______________ business model, a company is either a seller to many companies (one-to-many) or a buyer from many companies (many-to-one) ___________________ is often the name for B2B e-commerce in the many-to-one business model
Copyright 2008 John Wiley & Sons Canada Ltd. 19 Types of Exchanges _________ can be co-operative ventures among the companies or it can be run by a larger company that profits from the transactions _________ can be classified as vertical or horizontal From an e-commerce point-of-view, ________________ are often Web sites that buyers and sellers post their needs and offerings
Copyright 2008 John Wiley & Sons Canada Ltd. 20 Using B2B E-Commerce and IOS to Improve Supply Chain Efficiency A _________ _________ is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. _________________is a big part of the supply chain and using e-commerce for e- procurement has resulted in money savings
Copyright 2008 John Wiley & Sons Canada Ltd. 21 Interorganizational Systems (IOS) An ____________________________ is a networked information system used by two or more separate organizations to perform a joint business function.
Copyright 2008 John Wiley & Sons Canada Ltd. 22 Extranets Extranets are _________________________ that use Internet technology to link businesses with their customers. Security measures keep data secure and ___________ is used to transfer the data. An extranet can be thought of as two connected ____________.
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