CHAPTER 1
THE SECOND WAVE OF GLOBAL E-BUSINESS
Electronic commerce and electronic business
Electronic commerce categories
Business-to-consumer (B2C)
Business processes that support buying and selling activities
Consumer-to-consumer (C2C)
Business-to-goverment (B2G)
Businesses sell goods or services to governments and government agencies
Businesses and other organizations maintain and use information to identify and evaluate customers, suppliers and employees
Participants in an online marketplace can buy and sell goods to each other
Business-to-business (B2B)
Sell products or services to other businesses
Sell products or services to individual consumers
The development and growth of electronic commerce
Electronic funds transfers (EFTs)
Electronic transmissions of account exchange information over private communications networks
Electronic data interchange (EDI)
Business-to-business transmission of computer-readable data in standard format
Trading partners
Businesses engaging in EDI with each other
Value-added network (VAN)
Independent firm offering EDI connection and transaction-forwarding services
The second wave of electronic commerce
E-COMMERCE
Business trading with other businesses and internal process
E- BUSINESS
Term use interchangeably with e-commerce. The transformation of key business processes through the use of internet technologies.
First wave
Regional scope: United States phenomenon
Start-up capital: easy to obtain
Internet technologies used: slow and inexpensive (especially B2C)
Electronic mail (e-mail) use: unstructered communication
Revenue sources: online advertising (failed)
Second wave
Regional scope: international
Start-up capital: companies using internal funds
Internet technologies used: broadband connections
Electronic mail (e-mail) use: integral part of marketing, customer contact strategies
Revenue sources: internet advertising (more successful)
Third wave
Accentuated by mobile telephone based commerce (mobile commerce or m-commerce)
Smart phone technology and tablet computers have made internet available everywhere
Web 2.0: making new web business possible
Business models, revenue models, and business processes
Business model
A set of processes that combine to yield a profit
Revenue model
Specific collection of business processes
- identify customers
- market to those customers
- generate sales
Role of merchandising
Merchandising
Combination of store design, layout, and product display knowledge
Product/Process suitability to electronic commerce
Commodity item
Shipping profile
High value-to-weight ratio
Advantages of electronic commerce
increase sales and decrease cost
It increases purchasing opportunities for buyers
Negotiating price and delivery term is easier
Disadvantages of electronic commerce
Perishable grocery products are much harder to sell online
Difficult to calculate return on investment
Cultural and legal obstacles also exist
Network economic structures
Strategic partners
Strategic alliances (strategic partnerships)
SWOT Analysis: Evaluating business unit opportunities
Strengths, weaknesses, opportunities, and threats
International nature of electronic commerce
Trust
Culture
Language
Government
Infrastructure