What Is ECommerce

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Chapter 1

• What Is E-Commerce?

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The Myth

• Start with an idea
• Sell a product or a service over the Web
• Get seed money venture capitalist
• Get your name out there
• Get paid in stock options
• Cash in following company sale or IPO
• Youre an instant billionaire!!!

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Reasons for failure?

• Poor business planning
• Excessively narrow focus
• A business is more than a storefront
• Even if the storefront is virtual
• Greed and ignorance
• Immature technology
• The average consumer was not ready

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Questionable Business Models

• AllAdvantage.com paid surfers
• Several sites marketed funerals
• Bidforsurgery.combid on surgery
• Furniture?
• Mylackey.comneat name
• (Live) fish delivery service

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Immature technology

• E-commerce is just entering the intensification
  stage.

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E-commerce advantages

• Gain efficiency by
• Eliminating redundant data entry
• Reducing errors
• Eliminating paperwork clutter
• Delivering information more quickly
• Coordinating related processes

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Layering

• The process of adding onto or tapping into an
  existing infrastructure.
• Electric power distribution
• Communication infrastructure
• Water and sewer
• Network of roads and highways
• New applications on top of infrastructure
• Infrastructure essentially disappears

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Layering.

• Functionally independent layers
• Common interface
• Stacking layers is like stacking building blocks

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Corporate databases
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Proprietary systems integration with suppliers
and distributors
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The Internet and the World Wide Web
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The value chain

• The set of integrated internal processes that
  combine to deliver value to customers.

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The supply chain.

• A set of business processes that allow multiple
  independent entities (suppliers, manufacturers,
  retailers, and so on) to function as one
  virtual organization.

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Intermediaries
The intermediaries reside on the arrows.

• Companies that assist or add value to the
  exchange of products and/or information.

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Competitive advantage

• Something a company has that its customers want
  and its competitors cannot (or choose not to)
  match.
• Gives customers a reason to buy from you rather
  than from a competitor.
• Technological innovation is a common source.

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The competitive advantage model
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E-commerce categories.
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Forces Driving Industry Competition
Potential Entrants
Threat of new entrants
Industry Competitors
Bargaining power Of suppliers
Bargaining power of buyers
Suppliers
Buyers
Rivalry Among Existing Firms
Threat of substitute products or services
Substitutes