Assignment #1theory

Assignment#1

1. Short answer questions

a. For each of the e-commerce types: B2C, B2B, and C2C, give 3 examples websites and briefly describe their e-commerce business.

1. B2C websites:

berries.com

Diamond.com

buy.com

berries.com

The marketplace is a collection of branded websites each offering high quality, perishable products including flowers, premium meat and fresh fruit shipped fresh from the supplier to the consumer and designed specifically around the way consumer’s shop. The technology allows them to eliminate multiple intermediaries from the legacy supply chain, thereby realizing significant cost advantages and higher margins.

Diamond.com

They have been serving customers online since 1999 and are devoted to bringing a continuously evolving selection of fine diamond jewelry, loose diamonds and now, fancy color diamonds. Their diamond rings, earrings, necklaces, and bracelets are designed with an emphasis on both quality and enduring style.

buy.com

It is The Internet Superstore, where you'll always find the latest and greatest brands at prices you can afford. With millions of products in categories ranging from computer hardware and software to electronics, cellular, books, movies, music, sporting goods and more, they've got whatever it is we're craving 24/7, all year long.

2. B2B websites:

Alibaba.com

Made-in-China.com

Tyco.com

Alibaba.com:

As a listed company in Hong Kong Stock Exchange, Alibaba.com is marked as the largest online B2B e-commerce website in the world serving over 35 millions of users.  Alibaba.com offers a transaction-based wholesale platform, which serves smaller

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buyers seeking fast shipment of small quantities of goods. It provides agricultural, home appliance, electronic products, dresses etc. Alibaba.com also offers a range of business management software, Internet infrastructure services and export-related services, and provides educational services to incubate enterprise management and e-commerce professionals. Alibaba.com has offices in more than 70 cities across China, Taiwan, Hong Kong, India, Japan, Korea, Europe and the United States.

Made-in-China.com:

The world second largest manufacturer directory in the word, Made-in-China provides sell offers for buyers all around the world.  You can find agricultural, apparels, accessories, consumer electronic, bags, auto parts etc.

Tyco.com

Tyco International, which provides security products and services; fire protection and detection products and services; valves and controls; and other industrial products, has a variety of companies and "thousands of brands" that fall under its corporate banner. Providing site visitors a conduit to these properties is one of the challenges the corporate communications team faced during its recent website redesign .The site provides clarity and insight not just into the company's services but also highlights innovations in workplace safety, sustainability in manufacturing and access to all the financial statements in one consolidated Web portal.

3. C2C.com

sedo.de.com

ehotbid.com

Liquidation.com

sedo.de.com

With more than 1 million member accounts from around the world, and trading domains in more than 20 languages, Sedo stands alone as the world's only global domain marketplace. Sedo’s marketplace connects buyers and sellers making it simple for individuals and companies to acquire the domain names they need for their success and online presence. Sedo’s domain marketplace is the most active in the industry and offers the world's largest selection of premium domains with more than 15 million available for sale. Sedo offers all the tools needed to buy, sell, and monetize domains including domain appraisals, brokerage services, promotion and Sedo's popular domain parking program. Members use Sedo’s parking program to earn revenue on more than 5 million domains while promoting those domains for sale. 

ehotbid.com

It is a great place to find gems and jewelry at amazing price. There is gem and jewelry trading portal. Sellers are welcome to post items and buyers are welcome to buy.

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Liquidation.com

Liquidation.com is a Liquidity Services, Inc. marketplace where professional buyers can source commercial surplus inventory and government surplus assets in an online environment. Bulk lots are sold by the truckload, pallet, or small package, and conditions range from new in a box to customer returns and used. Our wide variety of product categories includes apparel, computers, electronics, house wares, industrial equipment, vehicles, and much more.

b. Define disintermediation and explain the benefits to internet users of such a phenomenon. How does disintermediation impact friction-free commerce?

Definition:

Disintermediation is displacement of market middleman who traditionally are intermediaries between producers and consumers by a new direct relationship between manufacturers and content originators with their customers. Such as: wholesalers and distributors.

Benefits of disintermediation:

Decline of prices for products and services

Intense competition

Lowered transaction costs

Eliminate product brands

Impact on friction-free commerce:

Friction-free commerce is a vision of commerce in which information is equally distributed, transaction costs bare low, price can be dynamically adjusted to reflect actual demand, intermediaries decline, and unfair competitive advantages are eliminate.

The impact of disintermediation on friction-free commerce is resulting intense competition, decline of intermediaries and lower transaction cost would eliminate product brands. Price for products and services would fall to the point where prices covered cost of production plus a fair market rate of return on capital, plus additional small payments for entrepreneurial effort. Unfair competitive advantages would be eliminated, as would extraordinary returns on invested capital.

c. What are five of the major differences between early years of e- commerce and today’s e-commerce?

The five major differences between the early years of e-commerce (the Innovation stage), the period from 2001-2006 (the Consolidation stage) and today's e-commerce (the Reinvention stage) are:

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During the Innovation stage, e-commerce was primarily technology-driven. During the Consolidation stage, it was primarily business-driven. Today's e-commerce, while still business-driven, is also audience, customer, and community-driven.

During the Innovation stage, firms placed an emphasis on revenue growth, quickly achieving high market visibility/market share. During the Consolidation stage, the emphasis was on building profitable firms. Today, audience and social network growth are being emphasized.

During the Innovation phase, e-commerce was, for the most part, ungoverned. In the Consolidation stage, there was a rise in the amount of regulation and governmental controls by governments worldwide. Today, there is extensive government regulation and surveillance.

The early years of e-commerce saw an infusion of pure online businesses that thought they could achieve unassailable first mover advantages. During the Consolidation period, successful firms used a mixed "bricks-and-clicks" strategy, combining traditional sales channels such as physical stores and printed catalogs with online efforts. Today, there is a return of pure online strategies in new markets, as well as continuing extension of the "bricks and clicks" strategy in traditional retail markets.

The early years of e-commerce were dominated by the first movers. In the Consolidation stage, e-commerce was dominated by the well-endowed and experienced Fortune 500 and other traditional firms. Today, first-mover advantages are returning in new markets as traditional Web players catch up.

d. Why is a multidisciplinary approach necessary if one hopes to understand e-commerce?

There are two major academic disciplines that contribute to e-commerce:  technical & behavioral. Understanding both allows an individual to have perspective on the technology possibilities aligned with how people wish to interact with the technology .A multi-disciplinary approach is necessary in order to understand e-commerce because no single academic discipline covers all facets of the e-commerce phenomenon.

On technical side:

E-commerce is primarily a technologically driven occurrence, including information technologies, and applications developed over the past fifty years, with the Internet and the Web at the core.

On management side:

However, beyond the infrastructure are the business purposes that drive the phenomenon: the changing business models and strategies that will transform old companies and spawn new ones, building mathematical models of business process.

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On information system side:

To understand e-commerce, one must understand some basic business concepts such as: industry structures, business models, firm and industry value chains, and consumer behavior. They must also comprehend the nature of electronic markets and information goods.

On behavioral side:

Finally, the impact on society must be considered: global e-commerce can have consequences for individuals concerning their intellectual property and privacy rights. Public policy issues such as equal access, equity, content control, and taxation will need to be addressed.

e. What are Amazon’s primary customer value propositions?

Amazon’s primary value propositions are unparalleled selection and convenience. Before Amazon existed, most customers personally travelled to book retailers to place an order. In some cases the desired book might not be available and customers have to wait several days or weeks and then return to bookstore to pick it up. Amazon makes it possible for customers to shop for virtually any book in print from the comfort of their home or office, 24 hours a day, and to know immediately whether a book is in stock. On 1995, Jeffrey Bezos, founded Amazon.com, since day one Amazon.com, management and employees are consistent with the execution of the company's value proposition. Amazon built a four-fold value proposition that indicated its priorities in the establishment of the online venture. The four dimensions it focused on were convenience, selection, price, and customer service.

Lower price:

This site provides low price books as compare to other sites.

Convenience (1-Click shopping)

The online venture was convenient as it was open for business all the time.

Faster search:

The site was so designed as to keep the download time at a minimum.

More reviews:

The site also offered its users various facilities such as reviews, e-mail notifications, reference from a previous search and product recommendations.

Wider selection:

It also provided the users with a wide range of product options, which they could select from. Amazon had an inventory consisting of millions of items which was roughly about 100 times that of a typical physical store.

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f. What is a vertical portal website? What is a horizontal portal website? Give an example website for each portal type.

Horizontal Portal:

Horizontal portals target the entire Internet community. These sites, often referred to as "megaportals", usually contain search engines and provide the ability for user to personalize the page by offering various channels (i.e. access to other information such as regional weather, stock quotes or news updates).

Examples:

Yahoo! and Lycos constitute megaportals. These portals are also gateways to contents and services of other offerors. Other examples are AltaVista.com, Earthlink.net, and About.com.

Vertical Portal:

According to Gartner Group, vertical portals differ only in their more specific objects and contents from horizontal portals; the technology employed remains the same.Most of the times, vertical portals offer information and services customized to niche audiences about a particular area of interest. Vertical industry portals, known as vortals, are sites that provide a gateway to information related to a particular industry, such as, insurance, automobiles, etc.

Examples:

ESPNSport.com, WFN.com (women’s financial network), iVillage.com, guru.com

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g. What are the major differences between virtual storefronts and bricks-and-clicks operations? Give a Pakistani website of each.     What are the advantages and disadvantages of each?

Major difference:

The major difference between virtual storefronts and clicks and bricks operations is that virtual storefronts do not have any tie to a physical location.

Advantages of virtual storefronts:

The major advantages of the virtual storefronts are that;

They have low barriers to entry into the Web e-tail market.

They do not bear the costs associated with building and maintaining physical stores.

Products can be shipped directly from wholesale to consumer

Customers can purchase products across geographical barriers

Purchases can be made any time anywhere

Disadvantages of virtual storefronts:

The disadvantages are that;

They must build a brand name from scratch, quickly, and become profitable with no prior brand name or experience, which can be very difficult.

Customer service can be difficult and impersonal

Shipping items across geographical barriers brings new challenges with laws and local customs requirements

Possibility of increased fraud

Returns and warranty assistance for the consumer is often far more difficult

Example:

http://www.muamat.com

This website contain buying and selling of post housing and contain real estate add, Rawalpindi.

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Advantages of clicks and bricks operations:

The major advantages of the clicks and bricks operations are that:

They have an already established brand name, an established customer base, an established sales force, and the resources to operate on the very thin margins associated with the retail industry.

It is also much less expensive for them to acquire new customers than it is for the virtual storefronts.

Personalized Service

Visit in store and purchase online

Purchase online and pick up in person

Provides a wider customer base to sell too

Disadvantages of clicks and bricks operations:

The major disadvantages of the bricks and clicks firms are that;

They face new competition in an extremely competitive environment from new firms who may have more expertise at building credible Web sites, and who can focus exclusively on building rapid response order systems.

Business still requires large amounts of stock on hand

Additional Staff required for increased sales however may not see benefits in short term

Dealing with customers online can be very different and may provide a less personalized service

Example:

http://www.rozee.pk

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Following a Click-N-Brick Business Model, Sufi Group USA, Inc is also engaged in manufacturing and marketing of Latest South Asian Designer Dresses through its subsidiary Zoya's Collection.com Dresses are made in its manufacturing facility in Karachi and marketed and shipped globally. A Physical (Brick) boutique, named Zoya's Collection is in operation in DHA, Karachi and is supported by e-tail (Click) website Zoya's Collection.com

h. How have the unique features of e-commerce technologies changes industry structure in the travel business?

E-Commerce has played a central role in the growth and improvement of the travel industry. The lasting effects of technology are improved information accessibility, a higher level of competition, and a larger market of consumers and businesses around the globe.The unique features of e-commerce technology have changed industry structure first of all, because

The ubiquity of e-commerce traveling became more prevalent and encompassed a wider range of hospitality products and services, to become global distribution service.

The global reach of e-commerce has changed industry structure by lowering barriers to entry, many traveling firms such as airline, car on rents changed and enters in online traveling industry.

The universal standards of e-commerce have also lowered barriers to entry and intensified competition.

The richness of e-commerce such as regarding travel, destination, bookings, payments, hotels, attractions, and the quality of maps are areas for improvement reduces the strength of distribution channels, which in returns reduce traveling fares.

Firms can use the interactive properties of e-commerce to access the direct reservation system to multiple services in real time, allowing individual and corporate customers to directly coordinate flight, car rental, hotel and other services, 

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Furthermore, because they can use personalization and customization techniques, many businesses have developed websites which, offer planning, booking and payment services online for added consumer convenience. Travel agents were able to provide value-added services like negotiation of bulk fares and arranging complex itineraries.

The information density of e-commerce weakens powerful sales channels, many intermediaries were eliminated and firms make sale on direct contact with customers.

2. Select an e-commerce company and visit its website.

a. Assess the website in terms of the 8 unique features of the commerce technology: ubiquity, global reach, universal standards, information richness, interactivity, information density, personalization/customization, and social technology.     Which of the features does the site implement well, and which features poorly, in your opinion? Detail your findings and give your suggestions for improvement.

Woolworths Pty Ltd

The Fresh Food People

It is the largest player and has largest market share in the supermarket industry. It is started in 1924. Its stores spread across all over Australia, at least one store in major suburban areas. In 1998 it extended its services to online internet grocery shopping.

Unique Features Implemented Well

Ubiquity / Global Reach / Universal Standards:

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It is Combination of online order and shipping/ pickup, at local stores for consumers’ convenience.

Globally expansion: United States, Canada, Europe, China, Vietnam, etc.

Consumers have the same access to technology, products provided in the website.

Richness:

It contains images, brief description and features of products.

There are consumers’ ratings and reviews of products.

Interactivity:

Order support area: there are clear instructions for ordering.

Product support area; there is availability of check.

Free phone for immediate assistance; E-mails, Ask & Answer (ex. televisions), consulting (ex. cell phones)

Information Density:

Prices are ranged; it saves consumers’ time when they look for products that suit their pockets.

Discounted prices are shown for consumers to compare.

Social Technology:

Forum: consumers discuss the quality of products, how to use them, etc. with others.

Unique Features Implemented   Poorly

Personalization/Customization:

My Account helps consumer control their Order status, Wish List, etc. but it doesn’t help consumers personally select their favorite types of products or given an idea to make little change in product.

Suggestion for Improvement

Personalization/Customization:

Consumers are given the ability to select their favorite types of products by changing some ingredients like chili, salt etc.

Consumers are alerted when there are new products of their favorite types.

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Videos should be added to increase the richness

Create confidence in consumers when they have the thought that they are carefully instructed to use products.

Some consumers may not want the staff to listen to their voices or they may be dumb, Online Chatting can be added to improve interactivity.

b. Describe the company’s business model based on the information you find in the website. Identify its customer value proposition, its revenue model, the marketplace it operates in, who its main competitors are, any comparative advantages you believe the company possesses, and what its market strategy appear to be.

Business Model

A set of planned activities designed to result in a profit in a marketplace

Business-to-Consumer (B2C)

E-tailer business model – online retail store

Bricks-and-clicks - the company also has physical stores apart from the online version

Customer Value Proposition

Defines how a company’s product or service fulfills the needs of customers.

Provides the widest range of quality products at affordable prices

‘The Fresh Food People’ - they select food with finest quality of freshness

providing their customers with the ‘most enjoyable, quality shopping experience possible’

all of these features accessible even in online shopping

Revenue Model

Describes how the firm will earn revenue and generate profits

Sales revenue model: it generates profits through the sale of goods and products

Market Space

The area of actual or potential commercial value where the firm intends to operate in

Household consumer market

Main budgeter or grocery-shopper in the family usually women

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Online shopping: busy people, who unable to physically go to the shops, or geographically far from shops

Competitors

Can either be direct (operating in the same industry and offering same products) or indirect (different industries offering alternative products)

Direct: Coles, Aldi, Franklins, other supermarkets and their online versions

Convenient shops: 7-Eleven

Indirect: restaurants, fast food chains, take away shops

Comparative Advantage

When they can produce a superior product or same product at a lower price to the market

Asymmetry Advantage: it has more resources than others

First-mover Advantage; one of the first to implement online grocery shopping 1998

Unfair Competitive Advantage: its brand name, reputation and things that cannot be purchased

Leverage: it uses other advantages to enter new markets, e.g. using reputation and client-base to enter online shopping e-commerce

Market Strategy

Plan that details how you intend to enter a new market and attract new customers

Enter new industries by affiliating to the supermarket brand, eg. Petrol vouchers

Weekly catalogues of ‘specials’ and discounts

Slogan ‘The Fresh Food People’ is marketing catch-phrase that stands for its specialty and identity

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