1. Chapter 2 E-Marketplaces: Structures, Mechanisms, Economics, and Impacts

2. Electronic CommercePrentice Hall © 2006 2 Learning Objectives 1.Define e-marketplaces and list their components. 2.List the major types of e-marketplaces and describe their features. 3.Describe the various types of EC intermediaries and their roles. 4.Describe electronic catalogs, shopping carts, and search engines. 5.Describe the various types of auctions and list their characteristics. 7.Discuss competition in the digital economy. 8.Describe the impact of e-marketplaces on organizations.

3. Electronic CommercePrentice Hall © 2006 3 E-Marketplaces Markets (electronic or otherwise) have three main functions. What are they?

4. Electronic CommercePrentice Hall © 2006 4 E-Marketplaces How do Electronic marketplaces change processes used in trading and supply chains?

5. Electronic CommercePrentice Hall © 2006 5 E-Marketplaces What are E-Marketspace components?

6. Electronic CommercePrentice Hall © 2006 6 Types of E-Marketplaces: From Storefronts to Portals Electronic Storefronts What are the most common mechanisms/components of a on-line storefront? –electronic catalog –search engine –electronic cart –e-auction facilities –payment gateway

7. Electronic CommercePrentice Hall © 2006 7 Types of E-Marketplaces: From Storefronts to Portals Types of E-Marketplaces who owns private e-marketplaces? who owns public e-marketplaces?

8. Electronic CommercePrentice Hall © 2006 8 Types of E-Marketplaces: From Storefronts to Portals What are major types of portals? –Commercial (public) portals –Corporate portals –Publishing portals –Personal portals –Mobile portals –Voice portals

9. Electronic CommercePrentice Hall © 2006 9 Intermediation in EC Who are intermediaries in physical world? What are the limitations of direct interaction? –Search costs –Lack of privacy –Incomplete information –Contract risk –Pricing inefficiencies

10. Electronic CommercePrentice Hall © 2006 10 Intermediation in EC what is disintermediation? when does it happen? how can an intermediary protect itself from it?

11. Electronic CommercePrentice Hall © 2006 11 Electronic Catalogs and Other Market Mechanisms online catalogs vs. paper catalogs

12. Electronic CommercePrentice Hall © 2006 12 Electronic Catalogs and Other Market Mechanisms Two approaches to creating customized catalogs and other on-line experience –Direct action by customer –Based on customer’s transaction records

13. Electronic CommercePrentice Hall © 2006 13 Electronic Catalogs and Other Market Mechanisms search engine software (intelligent) agent shopping cart

14. Electronic CommercePrentice Hall © 2006 14 Auctions As EC Market Mechanisms Auctions are characterized by dynamic pricing, as opposed to conventional, posted (fixed) price selling of goods and services What are the Limitations of Traditional Off-line Auctions?

15. Electronic CommercePrentice Hall © 2006 15 Auctions As EC Market Mechanisms Types of auctions One seller, many buyers: forward auction –An auction in which one seller entertains bids from multiple potential buyers: price goes up One Buyer, Many Sellers –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 –Sealed bid

16. Electronic CommercePrentice Hall © 2006 16 Exhibit 2.5 The Reverse Auction Process

17. Electronic CommercePrentice Hall © 2006 17 Auctions As EC Market Mechanisms what is a “name-your-own-price” model?

18. Electronic CommercePrentice Hall © 2006 18 Auctions As EC Market Mechanisms Impacts of E-Auctions –Auctions as a coordination mechanism to determine an equilibrium price

19. Electronic CommercePrentice Hall © 2006 19 Competition in the Digital Economy Competitive Factors in the Internet Economy –Lower prices –Customer service –Barriers to entry are reduced –Virtual partnerships multiply –Market niches abound

20. Electronic CommercePrentice Hall © 2006 20 Competition in the Digital Economy competitive forces model Porter’s model highlights five major forces of competition determine industry structure and how economic value is divided among the industry players in an industry; Analysis of these forces helps companies develop their competitive strategy What are the Five Porter’s Forces? How does EC and the Internet affect them?

21. Electronic CommercePrentice Hall © 2006 21 Exhibit 2.6 Porter’s Competitive Forces Model

22. Electronic CommercePrentice Hall © 2006 22 Impacts of EC on Business Processes and Organizations Transforming Organizations –Concentrate on core competences, outsource everything else –Few truly secure jobs –Flexibility of workforce is crucial –For more see T. Friedman “The World is Flat” –What are the impacts of EC on Human Resource Management and Training?

23. Electronic CommercePrentice Hall © 2006 23 Managerial Issues 1.What about intermediaries? 2.Should we auction? 3.Should we barter? 4.What m-commerce opportunities are available? 5.How do we compete in the digital economy? 6.What organizational changes will be needed?

24. Electronic CommercePrentice Hall © 2006 24 Summary 1.E-marketplaces and their components. 2.The role of intermediaries. 3.The major types of e-marketplaces. 4.Electronic catalogs, search engines, and shopping carts. 5.Types of auctions and their characteristics. 6.Competition in the digital economy. 7.The impact of e-markets on organizations.