electronic commerce dr. robert chi chair and professor, is department chief editor, journal of...

Electronic Commerce

Dr. Robert Chi

Chair and Professor, IS department

Chief editor, Journal of Electronic Commerce Research

Year 2000, The bubble burst?

• The party is over – the New York Post

• Next big thing? There never was; There never will be?

What is E-commerce

• Disintermediation• Examples

– Yahoo, myyahoo.com• Individualization

– Dell• Mass customization

– Fedex• Interactivity

– Walmart• Extranet

Origin of the Internet

• Innovation Phase (1961-1974)

• Institutional phase (1975-1995)

• Commercialization Phase (1995-present)

Impacts (1)

• Makes a massive quantitative of data more available and easier to access then ever before (information transparency)– Bring buyers and seller together

• Instantaneous and two way information exchange (Interactivity)– Efficiency, effectiveness and Better customer service

• Customization and individualization– Demand driven business model, Customer centered

approach

Impacts (2)

• Digitalization– Digital products– Digital transaction– Digital delivery

• Globalization– Offshore outsourcing– Globalized logistics

7 unique features of E-commerce Technology)

• Ubiquity

• Global reach

• Universal Standard

• Richness

• Interactivity

• Information Density

• Personalization/Customization

Types of E-commerce

• B2C (150 billion in 2005)

0

50

100

150

200

250

1997 1999 2001 2003 2005 2007

Revenue

• B2B (4000 billion in 2005)

0

1000

2000

3000

4000

5000

6000

1998 2000 2002 2004 2006

B2B (billion)

• C2C

• C2B

• M-commerce

E-commerce I and I

E-commerce I E-commerce II

Technology driven Business driven

Revenue growth emphasis Earning and profits emphasis

Venture capital financing Traditional financing

Ungoverned Strong regulation and governance

Entrepreneurial Large traditional firms

Dis-intermediation Strengthening intermediaries

Perfect markets Imperfect markets, brands and network effects

Pure online strategies Mixed clicks and bricks strategies

First move advantages Strategic follower strength; complimentary assets

E-commerce Business Models– Business models?

• A set of planned activities (business processes) designed to result in a profit in a marketplace.

– Key factors• Value proposition

– How a company’s product or services fulfill the needs of customers. Why should the customer buy from you?

• Revenue model– How the firm will earn revenue, generate profits.

• Market opportunity– What market space do you intend to serve and what is its size

• Competitive environment– What special advantages does your firm bring to the market space

• Market strategy– How do you plan to promote your products or services to attract your target audience

Continued..

• Organizational development– What types of organizational structures within the firm are

necessary to carry out the business plan

• Management team– What kinds of experience and background are important

for the company’s leaders to have

Major B2C Business Models (handout 1)

• Portal: yahoo.com

• Etailer: amazon.com

• Content provider: wsj.com

• Transaction broker: etrade.com

• Market creator: ebay.com

• Service provider: mycfo.com

• Community provider: about.com

Major B2B Business Models (handout 2)

• Net Marketplaces– E-distributor: staples.com

– E-purcurement: Ariba.com

– Exchanges: gepolymerland.com

– Industry consortia:

• Private Industrial Networks– Single firm networks

• Buyer, seller

– Industry-wide networks

Other Business Models (handout 2)

• C2C: ebay.com

• P2P” kazaa.com

• M-commerce:

Web design

• Static vs. dynamic web design– HTML, XML..– ASP, Coldfusion…

• Color Scheme

• Layout

• Domain Names

In class exercise

• Develop an e-commerce business model which is preferred to be unique and design the first page of its web site

• Teamwork, 20 minutes

Internet Marketing Strategy

• Strategy – What to do– How to do it– Led by a slogan

• Microsoft: anywhere anytime• What do you want to do today• Starbucks: a cup at a time• Disneyland: the happiest place on earth

– A company with a good strategy • Conscious • capable

Marketing strategy (handout 6)

• Pure Play– Segmentation

• Meaningful and actionable

– Target market selection• Segment size and growth• Structure attractiveness: porter’s 5 forces model• objectives and resources:

– Positioning: articulate what the brand stand for in the consumer’s mind

The future Infrastructure

• Current limitations– bandwidth, services, architecture, HTML, wired

• The Internet2 project (Next generation Internet project)– High speed network

– Including revolutionary internet applications

– Rapid transfer of new network services ands applications to the broader internet community

Fiber optics and wireless (handout 4,5)

• Fiber• Wireless

– Telephone wireless access• 460 million cell phones sold in 2003• 1G: analog transmission, circuit switch• 2G: digital transmission, circuit switch• 3G: digital transmission, packet switch• Global system for mobile communication (GSM) vs. Code

division multiple access(CDMA)

– Computer network wireless access• WiFi, WiFi5, WiMax, BlueTooth