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Prepared by: Jan Wong Management Information Systems in Organizations ELECTRONIC COMMERCE
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Page 1: MISO L004 E Commerce

Prepared by: Jan Wong

ManagementInformation

Systemsin Organizations

ELECTRONICCOMMERCE

Page 2: MISO L004 E Commerce

The Learning Outcomes

At the end of this session you should be able to:

E-Commerce, it’s scope, benefits, limitations and typesThe importance and activities of online advertising

DESCRIBE

DISCUSSB2B and emerging applications such as B2EDESCRIBE

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E-BUSINESS VS E-COMMERCE

E-Business

• Broader definition of e-commerce

• Beyond buying and selling of goods and services

• Includes servicing customers, collaborating with business partners, conducting e-learning, processing electronic transactions, and more

E-Commerce• Describes the process of buying,

selling, transferring, or exchanging products, services, and/or information via computer networks, including the Internet

• Can take several forms depending on the degree of digitization (the transformation from physical to digital).

• The degree of digitization relates to:• the product (service) sold• the process• the delivery agent (or intermediary).

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E-COMMERCE ORGANIZATIONS

• Brick-and-mortar (or old-economy)

Pure physical organizations / corporations

• Virtual (or pure-play)

Organizations that are engaged only in E-Commerce

• Click-and-mortar (or click-and-brick)

Conduct some e-commerce activities, yet their primary business is done in the physical world

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TRANSACTION MEDIUMS

• Most e-commerce is done over the Internet.

• Also be conducted on private networks, such as value-added networks (VANs, networks that add communication services to existing common carriers), on local area networks (LANs) or wide area networks (WANs)

• In other words: Intranet, Extranet and even the Enterprise Web

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TRANSAC-TION

TYPES

E-Commerce can happen between various parties

Business-to-business (B2B): Both the sellers and the buyers are

business organizations.

Collaborative commerce (c-commerce): In c-commerce, business partners

collaborate electronically. Usage of Extranets

Business-to-consumers (B2C): The sellers are organizations,

and the buyers are individuals.

Consumers-to-businesses (C2B): Consumers make known a

particular need for a product or service, and suppliers compete to provide it.

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TRANSAC-TION

TYPES

Consumer-to-consumer (C2C): Individuals sell products or

services to other individuals.

Intrabusiness (intraorganizational) commerce: An organization uses EC

internally to improve its operations. A special case is known as B2E (business to its employees)

Government-to-citizens (G2C): A government provides

services to its citizens

Mobile commerce (m-commerce): When e-commerce is done in a

wireless environment.

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COMPONENTS of E-COMMERCE

“The field of e-commerce is broad, and there are many of EC applications”

How can organizations support E-Commerce Applications? E-Commerce Framework

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COMPONENTS/

PILLARS of E-COMM

People: Sellers, buyers, intermediaries,

information systems specialists and other employees, and any other participants.

Public policy: Legal and other policy and regulating

issues, such as privacy protection and taxation.

Marketing and advertising: Like any other business, EC usually

requires the support of marketing and advertising.

Support services: Many services are needed to support

EC. They range from payments to order delivery and content creation.

Business partnerships: Joint ventures, e-marketplaces, and

partnerships are some of frequently occurring relationships in e-business

“To execute these applications, companies need the right information, infrastructure, and support services”

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TYPES OF E-COMMERCE :

AUCTIONS

Auctions are used in B2C, B2B, C2B, e-government, and C2C commerce

Forward auctions Sellers use as a selling

channel to many potential buyers. Items are placed at sites for auction and buyers bid continuously for the items.

2 types of forward auctions

Reverse auctions Have one buyer, usually an

organization, that wants to buy a product or a service. Suppliers are invited to submit bids.

“Electronic Auctions (e-Auctions): A market mechanism by which sellers place offers and buyers make sequential bids”

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TYPES OF E-COMMERCE :

B2B

Enables an enterprise to form electronic relationships with its distributors, resellers, suppliers, customers, and other partners

Sell-Side Marketplaces: Sell products or services to other

organizations electronically, from their own private e-marketplace

Similar to B2C E-Storefront / Market

Buy-Side Marketplaces: Buy products or services from

other organizations electronically, usually from their own private e-marketplace

One buy-side model is a reverse auction. Companies wanting to buy items

places a request for quotation (RFQ) on its Web site

“The buyers, sellers, and transactions involve only organizations”

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TYPES OF E-COMMERCE :

B2E

Examples: Allow employees to manage their

fringe benefits Take training classes electronically. Electronic corporate stores that

sell a company’s products to its employees, usually at a discount

Some other uses: Sales force automation

Order processing & tracking, contact management, information sharing, inventory monitoring and control, employee performance evaluation

E-Commerce Between strategic business units (SBUs) Buy / sell / trade between BUs E.g. Group of companies

E-Commerce Between and Among Employees Classified Ads E.g. Universities

“Companies are finding many ways to do business electronically with their own employees by disseminating information over the Intranet”

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TYPES OF E-COMMERCE :

E-GOVERNMENT

Government-to-Citizens (G2C) Paying of bills Renewal of licenses Information Funding

Government-to-Business (G2B) Company registration Project tenders

Government-to-Government (G2G) Online non-commercial

interaction between Government organizations, departments, and authorities

“Use of Internet technology in general and e-commerce in particular to deliver information and public services to citizens, business partners and suppliers, and those working in the public sector”

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TYPES OF E-COMMERCE :

C2C

C2C Auctions

Classified Ads

Personal Services Dating services, online

coaches, clubs, etc

Support Services to C2C Paypal, ToCheckOut, iPay88

“E-commerce in which both the buyer and the seller are individuals (not businesses)”

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TYPES OF E-COMMERCE :

E-TAILING(e-storefronts / marketplaces)

Mostly B2C

In the past: Home catalogs TV shopping channels Problems faced:

Expensive upkeep / production Printed catalogs not up-to-date TV shopping is limited to time

Solution: E-Tailing. Why? Delivery of services (buying an

airline ticket or stocks) can be done 100 percent electronically (convenience)

Cost reduction potential

“Exchange of goods or services without a monetary transaction”

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TYPES OF E-COMMERCE:

E-TAILING(e-storefronts / marketplaces)

Seen also in B2C Service Industries Electronic banking International and Multiple-

Currency Banking Online Securities Trading Online Job Market Travel Services Real Estate

However, also face major issues: Resolving channel conflict Resolving conflicts within

click-and-mortar organizations Organizing order fulfillment

and logistics Determining viability and risk

of online e-tailers Identifying appropriate revenue

models

“Exchange of goods or services without a monetary transaction”

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E-COMMERCE SUPPORT SERVICES

• B2B and B2C applications require payments and order fulfillment. Portals require content, etc

• These services include: e-infrastructure (mostly technology consultants,

system developers and integrators, hosting, security, and networks)

e-process (mainly payments and logistics) e-markets (mostly marketing and advertising) e-communities (different audiences and business

partners) e-services (CRM, PRM, and directory services) e-content (supplied by content providers)

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WH

Y D

O W

E N

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E-C

OM

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SU

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E-COMMERCE SUPPORT SERVICES

• Electronic Payments are an integral part of doing business, whether in the traditional way or online. In most cases traditional payment systems are not

effective for EC, especially for B2B

• Types of E-Payments Electronic checks (e-checks) Electronic credit cards Purchasing cards, Electronic cash (e-cash) Electronic Bill Presentment and Payments E-wallets Virtual credit cards

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E-COMMERCE ALSO REQUIRES:

MARKET RESEARCH & ONLINE ADVERTISING / MARKETING

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MARKET RESEARCH

• For successful e-commerce (especially B2C) Important to find out who are the actual and potential

customers and what motivates them to buy

• How?1. Asking Customers What They Want

2. Observing Customer Behavior on the Web: Brand- and Vendor-Finding Agents and Price Comparisons Search Agents Collaborative Filtering Agents Other Agents (e.g. Social Media Networks)

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MARKET RESEARCH:CONSUMER BEHAVIOR

MODEL

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MARKET RESEARCH

• Several models have been developed in an effort to describe the details of the decision-making process that leads up to and culminates in a purchase

• Generic Purchasing-Decision Model1. Need identification

2. Information search

3. Evaluation of alternatives

4. Purchase and delivery

5. After-Purchase Evaluation

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ONLINE ADVERTISING / MARKETING

• Advertisement is an attempt to disseminate information in order to influence a buyer–seller transaction

• Traditional advertising media Impersonal, one-way mass communications TV, Newspapers, Magazines, etc

• Internet advertising media Media-rich, dynamic, and interactive

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ONLINE ADVERTISING / MARKETING

• Methods: Banners

Electronic billboards and is the most commonly used form of advertising on the Internet

Pop-Up, Pop-Under, and Similar Ads E-Mail Advertising Electronic Catalogs and Brochures Other Forms of Internet Advertising

Pay-Per-Click (Google Adwords) Sponsored search results

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ONLINE ADVERTISING / MARKETING

• Online advertising issues & approaches: Unsolicited Advertising

Spamming Permission Marketing

Also known as: Opt-In marketing Viral Marketing Interactive Advertising and Marketing Online Promotions

Coupons, events, attractions Search engine optimization

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ONLINE ADVERTISING / MARKETING…

CAN ALSO DRAW OFFLINE EXPOSURE & SALES

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THINGS TO TAKE NOTE OFF

• Difference between E-Commerce and E-Business

• Brick-and-Mortar, Virtual & Click-and-Mortar

• 8 Transaction types in E-Commerce

• How organizations can sustain it’s E-Commerce Applications (5 Components / Pillars)

• The types Online Advertising

• Why Market Research?

• What are E-Commerce Support Services

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E L E C T R O N I C C O M M E R C E

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C o m i n g s o o n … n e x t c l a s sManagementInformation

Systemsin Organizations

ENTERPRISE SYS.:S.C. to ERP to CRMUnderstanding ERP and why organizations are moving

to CRM

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IT’S TIME FOR SOME DISCUSSIONS!

• Differentiate the following terms: E-Commerce and E-Business Forward and Reverse Auctions Spamming and Permission Marketing

• What are: E-Bartering, E-Storefronts, E-Malls / Marketplace?

• What is Online Advertising? What are it’s benefits?

• List 5 reasons for E-Commerce failures and 5 suggestions for it’s success

• Discuss the major limitations of E-Commerce. Which of them are likely to disappear? Why?

• Discuss the benefits to both sellers and buyers of B2B

• What are the benefits of E-Government?