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