e-commerce chapter 01

8/6/2019 E-Commerce Chapter 01

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E-CommerceChapter: 01

Overview of e-Commerce

Framework


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Overview of E-Commerce Framework Todays Objective

Develop an understanding of the framework of e-commerce


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Chapter 1

Overview of E-Commerce Framework

Definition of e-commerce

Distinct categories of e-commerce

E-commerce vs. traditional commerce

The importance of e-commerce

Decision-making in e-commerce

A framework for e-commerce

What is to come?

Conclusion


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Definition of E-Commerce

E-commerce is characterized by several specific attributes:

It is about the exchange of digitalized information between parties

It is technology-enabled

It is technology-mediated

It includes intra- and inter-organizational activities that support the exchange

E-commerce can be defined as technology-mediated exchange between parties

(individuals, organizations or both) as well as the electronically based intra- and inter-

organizational activities that facilitate such exchange


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What is to come?

Conclusion


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B2B

B2C

C2B

C2CConsumers

Business

And selling

to...

Business originating from...

Business Consumers

Table 1 1: Four Categories of E-Commerce

Four distinct categories of e-commerce can be defined, based on the business origination andthe customer type

e.g., Freemarket,Covisint e.g., Mercata.com

e.g., Groupsgoogle.com,Monster.com

e.g., Amazon,Staples.com


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What is to come?

Conclusion


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How Is E-Commerce Different From Traditional Commerce?

1. Core Strategic Decisions Are Technology-Based

Digital businesses cannot separate technology choices from the strategic decision-making process

1. Real-Time Competitive Responsiveness

Speed is becoming increasingly important as a means to increase differentiation as well as tocompete with competitors

1. 24/7 Access

Consumers expect to be able to constantly access a businesss online storefront, forcing

businesses to adjust their level of responsiveness (both strategic and tactical)1. Technology-Based Consumer Interface

Screen-to-face customer interaction has increased the importance of capturing and delivering apositive customer experience

1. Customer in Control of the Interaction

Technology-based interfaces limit the companys influence on the buying process and give the

customer more control of the interaction1. Increased Knowledge of Customer Behavior

A technology-based interface, however, gives the company the opportunity to more accuratelytrack consumer behavior

1. Networked Economics and Positive Feedback

Networked economics and positive feedback can allow increasing returns


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What is to come?

Conclusion


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Exhibit 1 2: Importance (Estimated Savings From E-Commerce)

E-commerce is important for the cost savings. it can generate as well as for its impact onindustry boundaries and on many aspects of the social life

Cost savings from e-commerce are expectedto exceed $1 trillion by

the end of year 2002


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Importance

An article on e-Commerce and e-Business has been attached to get to know the importanceof e-Commerce.


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What is to come?

Conclusion


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E-Commerce Decision-Making Process

New E-Commerce

Business

Whichcustomers

should I target?

What uniquebenefits should I

provide?

How do Icommunicate

with customers?

How can Iprovide a

compellingonline

experience?

How should Istructure theorganization?

Who should bemy partners?

What metricsshould be used to

trackperformance?

How will the

business createshareholder

value?


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What is to come?

Conclusion


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Exhibit 1 3: Framework for E-Commerce

The E-commerce framework helps managers develop a sound E-commerce strategy

Frame the MarketFrame the Market

OpportunityOpportunitySelect theSelect the

Business ModelBusiness ModelDesign CustomerDesign Customer

InterfaceInterface

Develop MarketingDevelop Marketing

CommunicationCommunication

StrategiesStrategies

Implement theImplement the

StrategyStrategyDefineDefine

MetricsMetricsEstimateEstimate

Market ValueMarket Value

Where will I play? The emphasis ismore on potentialbusinesspartnerships

What is the value proposition? What products/services shouldbe offered? What resources are necessary? What financial model should beused?

What should the onlineinterface look like? Look and feel Content Transaction capabilities Community building

How do I attract andretain customers? Includes all offline andonline methods to reachcustomers

How do we go tomarket?

How are we doing? What metrics should beused to track thebusiness performance?

What value are wecreating forshareholders?


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FulfillmentSystems

Customer

Interface

Online Offline

Yahoo!

Amazon.com

BN.com

Mc

Dona

lds

Egg

he

ad

Exhibit 1 4: Where to Play Online and Offline

Many companies are combining both online and offline capabilities to serve customers. Thereare different positions a company can hold when deciding where to play.

Yahoo only plays online; it onlycommunicates with its customersonline

Egghead also plays online only,but the Internet is used for bothcustomer interface and back-office systems

Amazon employs both onlineand offline back-office resources,but interacts with customers onlyonline

McDonalds interacts withcustomers offline (mainly) andonline, but only uses offline back-office systems

BN.com plays in all fourquadrants


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Exhibit 1 5: Market Infrastructure

Underlying each e-commerce decision is the industry environment or market infrastructure,which is generally outside the companys control and presents both opportunities and

constraints. This environment can be divided into two broad categories:

Network Infrastructure Media Infrastructure

Basic, underlying group of electronic

devices and connecting circuitrydesigned as a system to shareinformation

Devices: telephone, radio, cable TV,computer, satellite, etc.

Companies: ISPs, hardware providers,software companies etc.

All the various communication

companies and their channel ofcommunication

Media infrastructure refers to thecontent of communication


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Telephone/DSL

Cable

Broadcast Radio & TV

Satellite

Wireless

Print(Newspapers and Magazines)

Television

Radio

Music

Motion Pictures

DigitalConvergence

DigitalConvergence

Network

Infrastructure

Network

InfrastructureMedia

Infrastructure

Media

Infrastructure

Network and media infrastructure are independently converging due to the digitalization ofinformation, causing competition in the market to increase

The network to deliver digitizedcontent has converged, leading tocross-industry competition

The major content players arenow competing to deliver contentto the same target segments

Exhibit 1 6: Media Convergence to a Digital Platform


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What is to come?

Conclusion


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Exhibit 1 7: A Framework for E-Commerce

There are six interrelated, sequential decisions to make to implement an e-commercestrategy. These decisions are made in the context of a changing market-level infrastructure

Vertical boxes are analyses and decisions that are controllable by the firm Horizontal boxes represent forces that are non-controllable by the firm

Framing theMarket

Opportunity

Implemen-tation

MarketCommunica-

tions and

Branding

Evaluation:Metrics and

Valuation

BusinessModel

CustomerInterface

Network Infrastructure

Media Infrastructure

Publics and Politics

E-Commerce

Strategy

Market

Infrastructure


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What is to come?

Conclusion


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E-Commerce Framework Overview Conclusion

After todays lesson, you should be able to answer the following questions:

1. What is the definition of e-commerce?

2. What are the distinct categories of e-commerce?

3. What are the key characteristics of e-commerce that make it different from

traditional commerce?

4. Why is understanding e-commerce so critical?

5. What is the e-commerce framework? What are its main components?Which of them are controllable and which are non-controllable?

e-commerce chapter 01

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