CHAPTER 6: E-Business & E-Commerce

CHAPTER 6: E-Business & E-Commerce

Overview of E-Business & E-Commerce

Business-to-Consumer (B2C) E-Commerce

Business-to-Business (B2B) E-Commerce

Ethical and Legal Issues in E-Business

E-Commerce Business Strategies

Differentiated based on levels of physical / virtual presence

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Types of E-Commerce

Business-to-Consumer (B2C)

Business-to-Business (B2B)

Consumer-to-Consumer (C2C)

Business-to-Employee (B2E)

E-Government

Mobile Commerce (m-commerce)

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Ingredients of an E-Business Model

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Common Revenue Models for EC

Most important ingredient of a business model How will the firm earn revenue?

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Benefits of E-Commerce To Organizations

Expanding markets and product offerings Lowering costs of transactions

To Customers Access a vast number of products and

services around the clock (24/7) Mass customization (made-to-order) Disintermediation

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Business-to-Consumer E-Commerce

a.k.a. Electronic Retailing or E-tailing Allow price comparisons Challenges:

Order fulfillment and Time lags Lack of sensory experience Lack of social contact Concerns about fraud and security

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8

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B2C: Search Engine Advertising

Problem: Getting listed in search engine results

Solution: Sponsored

search (Paid inclusion)

Search engine optimization to influence order

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Search Engine Optimization

Position within search results based on complex formula

Site owner has no control over the position of the ad

Optimization based on Web site updates Use of key terms Unethical “tricks”

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Business-to-Business E-Commerce

Started as early as 1960’s with EDI – Electronic Data Interchange transmission of electronic business forms between

organizations via private, value-added networks (VANs)

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Business-to-Business E- Commerce

The Internet has changed everythingPrimarily three models

Sell-side Marketplace Buy-side Marketplace Electronic Exchanges

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Trading Mechanisms in E-Commerce

Bid price

Time

Bid price

Time

Forward Auction

Reverse Auction

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B2B Sell-Side Marketplace

Key mechanisms: electronic catalogs and forward auctions

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B2B Buy-Side Marketplace

Key mechanism: reverse auctions

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Electronic Exchanges

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E-Exchange Example: VertMarkets (Vertical Exchange)

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E-Exchange Example: Alibaba.com (Horizontal Exchange)

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Ethical and Legal Issues in Electronic Commerce

Privacy Cybersquatting Internet Taxation

No sales taxes paid in states where the company has no presence

Net Neutrality Data sent over the Internet is handled in a

neutral manner20