This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
E-MARKETPLACES: MECHANISMS, TOOLS, AND IMPACTS OF E-COMMERCEThe major electronic commerce (EC) activities, processes and the mechanisms.E-marketplaces, their components and the major types.Electronic catalogs, search engines, and shopping carts.The major types of auctions and their characteristics.The benefits, limitations, and impacts of auctions.Competition in the digital economy.The impact of e-marketplaces on organizations, intermediation, and industries.
•Easy to create without high technology•Reader is able to look at the catalog without computer system
•More portable than electronic
•Difficult to update changed product information promptly
•Display a limited number of products
•Limited information through photographs & textual description is available
•No possibility for advanced multimedia.
Online catalogs
•Easy to update product information•Can integrate with the purchasing process
•Good search & comparison capabilities•Provide timely, up-to-date product information
•Provide globally broad range of product information
•Can add voice & animated pictures•Long-term cost savings•Easy to customize•More comparative shopping•Ease of connecting order processing, inventory processing, payment processing to the system
•Difficult to develop catalogs, large fixed cost
•Need for customer skill to deal with computers & browsers.
Auctions• “A competitive process in which a seller solicits
consecutive bids from buyers (forward auctions) or a buyer solicits bids from sellers (backward auctions). Prices are determined dynamically by the bids.”
• Limitations of traditional offline auctions
18
Bidder Seller• Last only a few minutes/seconds,
for each item sold ➡ May not get what they really want, pay too much for the item.
• Do not have much time to examine the goods.
• Difficult to know about auctions, cannot compare what is offered at each location.
• Must physically present at auctions.
• Last only a few minutes/seconds, for each item sold ➡ May not get the highest possible price.
• Difficult to move goods to an auction site.
• Commissions are high (rent, advertising, labor).
★ E.g. JetBlue airlines started to auction flights in September 2008 on eBay. ✴ Initial offer: 300 flights + 6 vacation packages, with
opening bids set (5₵ - 10₵).✴ The 3-, 5-, and 7-day auctions included 1- and 2-
person roundtrip, weekend flights in September from cities including Boston, Chicago, New York, Orlando, and Southern California.
✴ Although no one was lucky enough to get a flight for 5/10 cents, many auctions gave the winners a flight that was 10% to 20% cheaper than regular prices.
• Dynamic pricing★ “Prices that change based on supply and demand
1. One buyer, one seller✴ Use negotiation, bargaining, bartering.✴ The resulting price: determined by each party’s bargaining
power, supply & demand in the item’s market, business environment factors.
2. One seller, many potential buyers✴ Forward auction
✦ “An auction in which a seller entertains bids from buyers. Bidders increase price sequentially.”
3. One buyer, many potential sellers✦ Reverse auction (bidding/tendering system)
✤ “Auction in which the buyer places an item for bid (tender) on a request for quote (RFQ) system, potential suppliers bid on the job, with the price reducing sequentially, and the lowest bid wins; primarily a B2B or G2B mechanism.”
Auctions4. Many sellers, many buyers (Double auction)
✴ “An auction in which multiple buyers and their bidding prices are matched with multiple sellers and their marking price, based on the quantities on both sides.”
Sellers Buyers E-Auctioneers•Increased revenues: broader bidder base, shorter cycle time, sell globally.•Opportunity to bargain: sell any time, conduct frequent auctions.•Optimal price setting determined by the market.•Gain more customer dollars by offering items directly (no intermediaries).•Liquidate large quantities quickly.•Improved customer relationship & loyalty.
•Opportunities to find unique items & collectibles.•Entertainment.•Convenience: buyers bid anywhere; do not have to travel to an auction place.•Anonymity.•Possibility of finding bargains.
•Higher repeat purchases.•Higher “stickiness” to the Web site.•Easy expansion of the auction business.
Competition in the Internet Ecosystem• Competitiveness factors
★ EC competition is very intense because online transactions enable:
31
Lower search costs for buyers
Customers can find less expensive products ➡ Sellers reduce prices, improve customer service.
Speedy comparisons
Customers can find products quickly.
Lower prices Low costs of operation (e.g. no physical facilities, minimum inventories, etc.)
Customer service Amazon.com provides superior customer service.Barriers to entry are reduced
Setting up a Web site is easy, fast, inexpensive ➡ Don’t need sales force & brick-and-mortar stores.
Virtual partnerships multiply
Easy access to the Web + Share production & sales information easily ➡ Creation of virtual partnership increases dramatically.
Market niches abound
No limits imposed by the physical storefronts ➡ No. of business opportunities is as large as the Web.
Differentiation To provide a product/service that is not available elsewhere.E.g. Amazon.com provides customers with information such as communication with authors, almost real-time book review, and book recommendations.