Chapter 1 Key Concepts - Introduction to E-Commerce

Introduction to E-Commerce:

Business Model - focused on all the strategic elements of a business and is bottom line driven

Revenue Model - More focused on the sales and how to generate revenue for the company

Know:
-Globalization

-Localization

-Translation

Soundbites:
-Fortunes have been made and lost.
-60% of internet content is in english
-50% of internet users do not speak english
-75% of internet users live outside the USA
-Still riding the learning curve of what works and what doesn't
-EDI (Electronic Data Interchange) and EFT (Electronic Funds Transfer) have been around since the 60's
-Being first to the market is not that important.

E-Commerce Defiined:

E-commerce is the exchange of informations across electronic networks at any stage of the supply chain.

E-commerce is just commerce, but it is commerce accelerated and enhanced by IT.

E-Business Defined:

The transformation of key business processes through the use of internet technologies. -IBM

E-Commerce vs. E-Business:

two views:
1. E-Commerce is broadly equivalent to E-Business
2. E-Commerce is a subset of e-business.

Catagories of E-Commerce (or E-Commerce Models):
1. b2b (supply chain, value chain) eg. dell & their suppliers
2. b2c (commerce over the net) eg. amazon.com
3. c2b (demand aggregation) eg. consumer groups
4. c2c (community groups) eg. ebay

*There is also b2g which is business to government.

B2B vs. B2C:

B2B marketplaces (Ford's Auto Exchange)
B2C Vendors (amazon, otto, wal-mart)

Disintermediation - Getting rid of the middle man

First Wave of E-Commerce Defining Characteristics:

- Dominant influence of US businesses
- Extensive use of the english language
- Many companies started with outside inventors as a way to raise capital

2nd wave of E-commerce:

-Global enterprises are participating in e-commerce; native language websites

Product/process suitability:

-Commodity Item
Hard to distinguish from competitor's products or services.

-Shipping Profile
How easily can a product be packaged and delivered?

-High-value to weight ratio
what is the shipping cost to selling price ratio

-Digital Products

Advantages of E-Commerce:

-Can increase sales through enhanced customer service
-can decrease costs of handling inquiries and transactions
-can reach potential customers in every country
-can increase purchasing opportunities/ options for buyers


Disadvantages:

-Companies may become myopic
-Some products may require inspection by the customer before purchase
-Cultural and legal obstacles.

Global nature of E-commerce:

-Trust Issues
-Language Issues
-Cultural Issues
-Infrastructure Issues