What is E-Commerce?

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Chapter 1

• What is E-Commerce?

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Objectives

• Understand how E-Commerce developed
• Know what business models are used for E-Commerce
• Understand how large a phenomenon E-Commerce has
  become
• Recite the benefits of E-Commerce
• Explain what the Internet Economy is

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How Created?

• 1960 initiation
• 1980 NSF Funding
• 1992 Acceptable Use Policy Change
• Emotional Ladder
• Fear and Trepidation
• Experimentation
• Confidence
• Trust

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What is E-Commerce?

• Types of networks
• Internet
• Intranet
• Extranet
• Commercial Transactions that are based on the
  electronic processing and transmissions of data,
  text, sound, and image.

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Related Terms

• B2C
• B2B
• M-commerce

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Why buy online?

• Comparison
• Discounts
• Delivery
• Selection
• Sales Promotions

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What is a business model?

• The structure and actions by which your
  organizations operates within its marketplace.
• A business model is a representation of the
  activities of a business.
• In very general terms the three basic modeling
  products are
• Activity models - what a business does
• Process models - how a business accomplishes what
  it does
• Data models - describes the information structure
  of a business

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Business Models

• Online Retailer
• Catalog
• Aggregator
• Kiosk
• Direct Seller
• Information Business
• Same-Day Delivery Service

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Online Retailer

• Virtual Storefront

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Catalog

• Electronic form of paper

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Aggregator

• Electronic Mall
• Superstore

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Kiosk

• Order from within the store

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Direct Seller

• Ultimate Seller to the Ultimate Customer

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Information Business

• Sells the Facts

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Same Day Delivery

• Make the order
• Its there when you get home

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Business Aware/Ready

• Is your business ready for this phenomenon?

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Rapid Growth

• Beginning in 1992
• Initially used for marketing purposes
• Growth
• 1997 - 22 billion
• 1998 - 74 billion
• 2002 - 1.2 trillion
• Web Sites - commercial
• 1998 414,000
• 2002 1.6 million

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Benefits

• Lessened Restrictions and Limitations
• Worldwide market
• Expansion of market
• Eliminates the location variable
• Lower Costs

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Internet Economy

• Industrial Revolution?
• http//www.internetindicators.com/

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Layers of the Internet Economy

• Internet Infrastructure
• Internet Applications
• Internet Intermediary
• Internet Commerce

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Demographics of the Web-Denizen

• Age 38 was 32
• 36.2
• Gender - 57.8 male 42.2 female
• Income - 58,000
• 36,000
• Education 56 college educated
• 26
• Occupation - 50 - computer related

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Future of E-Commerce

• Efficient use of information

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Future Trends

• Personalization
• Instant Fulfillment
• Anywhere, Anytime
• Intelligent Agents
• Custom Pricing

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PC Weeks Top 10 E-Commerce Sites

• Microsoft Expedia
• ETrade
• GE Trading Process Network
• Amazon.com
• Manheim Online
• PhotoDisc
• Internet Liquidators
• CD Universe
• Virtual Vineyards
• Cisco Connection Online

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Microsoft Expedia (www.expedia.com)

• Services
• reserving hotel rooms and rental cars
• purchasing airline tickets
• providing information about weather and foreign
  currency
• Competitors
• www.travelocity.com
• www.travelweb.com
• Technology
• BackOffice, Windows NT Server, Internet
  Information Server and SQL Server

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ETrade (www.etrade.com)

• It allows investors to access a wealth of
  individual stock data.
• Basic company information
• Charts showing a stocks performance history
• Up-to-the-minute stock prices
• 14.95 to 19.95 per trade
• Technology
• CGI programs written in C
• Web Pages by using Front Page
• Java Programs
• 50,000 Active Accounts
• 17 Million Quarterly Revenues
• 7 Million to 10 Millions in new deposit every
  day

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GE Trading Process Network (www.tpn.geis.com)

• GE set up this web site in 1994 so its vendors
  could easily and quickly make bids on GE
  electronics components contracts.
• GE gets more companies competing for its
  business, while the suppliers incur lower selling
  costs.
• Other Services
• Negotiation
• Ordering
• Web Services

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Amazon.com (www.amazon.com)

• It is a comprehensive bookstore that claims to
  offer more than 1.1 million titles.
• It electronically contracts publishers when it
  receives orders for their books.
• It allows customers to browse but also provides
  significantly more information than they could
  receive as a conventional bookstore.

Publisher
Customers
amazon.com
Publisher
Publisher
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Manheim Online - www.manheim.com

• Manheim is the largest automobile auction company
  in the world.
• It brings the Web to the used automobile supply
  chain - the network for auto makers, banks,
  leasing companies, rental companies and users of
  fleet vehicles.

Buying Dealer
Selling Dealer
Manheim Online
Administrative Works
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PhotoDisc (www.photodisc.com)

• It provides digitized stock photography over the
  Internet for use by design firms, publications
  and advertising agencies. Customers can view,
  order and receive any of 50,000 images.
• Because the images are royalty-free, customers
  pay only once - from 10 to 199 - for unlimited
  use, rather than each time an image is used.

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Internet Liquidators(www.internetliquidators.com)

• Shoppers participate in a real-time Dutch
  auction.
• Shoppers can see current auction status
  information as it changes The site continuously
  shows the current price on the item, the number
  of units remaining and the time left.
• A wide range of products is available, from
  gourmet foods to computer equipment and CD-ROM
  sets to athletic gear.

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CD Universe (www.cduniverse.com)

• Shoppers can search for CDs from a database of
  approximately 200,000 artists by sampling sound
  bites They also can sign up for an E-mail
  newsletter that will send weekly alerts about
  concerts, new releases and artists in music
  genres selected by the customer
• It has the most outstanding searching capability.

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Virtual Vineyards (www.virtualvin.com)

• It offers detailed information on the 500 wines
  and food products in stock and guides the
  customer through the shopping experience.

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Cisco Connection Online (www.cisco.com)

• It allows customers to enter profiles of
  themselves, configure products and check on the
  status of their orders.
• It has a very useful search function that combs
  through Ciscos inventory of 12,600 products.

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Chapter 2