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E-commerce essentials1. What is e-commerce?

2. How is e-commerce different from traditional commerce?

3. What are the driving forces behind e-commerce?

4. What are the key technology concepts behind the Internet?

5. What are the key e-commerce questions for management?

WHAT IS E-COMMERCE?

1.1 Terminology

E-commerce

E-business

E-markets

Internet business

Teleshopping EFT (70s) EDI (80s) e-shopping e-commerce I (95-00) e-commerce II (01-06)

1.2 Definition (Figure 1.1)

The use of the Internet and the Web to conduct commercial transactions that involve

an exchange of value across organizational or individual boundaries in return for

products and services

vs

the use of the Internet and the Web to conduct business activities

1.3 Types (Table 1.2)1. Relationship-based (Rayport and Jaworksi, 2001)

Business originating from

Business Consumers

B2BPurchasing & ProcurementSupplier Management

Inventory Management

C2BDemand aggregatorCause-related advocacy group

B2CSales

Consumer search

FAQs

Service & support

C2CAuction

Classified ads

Games

Jobs

2. Technology-based

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P2P

M-commerce

E-COMMERCE vs TRADITIONAL COMMERCE

2.1 7 features of e-commerce technology (Table 1.1)1. Ubiquity

2. Global reach

3. Universal standards

4. Richness

5. Interactivity

6. Information density

7. Personalization

e-commerce vs traditional commerceKey elements E-commerce Traditional commerce

Technology Enabler Facilitator

Competitive edge Speed Differentiation

Accessibility 24 x 7 Limited time

Customer interface Screen-to-face Face-to-face

Customer interaction Self-service Seller influenced

Customization One-to-one customization Mass customization

Product promotion Word of mouth Merchandising & personal selling

Product characteristic Commodity Perishables, feel and touch

2.2 E-Commerce I vs E-Commerce II (Table 1.5)

DRIVING FORCES

3.1 Economics1. Lowering of costs

2. Increasing competition

3. Increasing consumer power: demand for speed, convenience, instant satisfaction,

....

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3.2 Technology1. Growth of the Internet (INTERconnected NETworks)

2. Emergence of the WWW

3. Ongoing advancement of IT

Internet II & Next Generation Internet Projects GigaPOP, IPv6

Photonics (Table 3.5)

Wireless web

Internet telephony

Digital libraries

Distributed storage

Distance learning

Digital video

Video teleconferencing

Tele-immersion

M-commerce

3.2.1 Internet3.2.1.1 History of the Internet (Figure 3.2) ARPANET (1969-1990)

the U.S. Defense Departments Advanced Research Projects Agency (ARPA) networkfor data sharing

NSFNET (1986-1995) theNational Science Foundations (NSF) national network for university communications

Internet (1990) (Figure 3.3)

Business use of the Internet promotes the development of World Wide Web

KEY TECHNOLOGY CONCEPTS OF THE INTERNET1. Packet switching (Figure 3.4)

2. TCP/IP (Figure 3.5)

3. Client/Server computing (Figure 3.7)

4.1 Internet architectureLevel Example

End user You and meLocal access providers Verizon, InsightCommunication

Internet access providers AOL, MSN, CompuServe (Table 3.3)

Network access providers MCI, Sprint, AT&T (Table 3.2)

Backbone Fiber optics, routers, switches

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Internet connection options1. Dial-up

2. Digital Subscriber Line (DSL)

3. Integrated Services Digital Network (ISDN)

4. Cable

5. T16. T3

7. Wireless

4.2 Internet protocola set of rules for formatting, ordering, and error-checking data sent across a network

TCP/IP(Transmission control protocol/Internet protocol) (Figure 3.6)

Layer Specific Protocol

Application HTTP, SMTP, FTP

Transport TCP

Internet/Network IP, Routing

Network Interface/Link PPP (Point-to-Point IP),

SLIP (Serial-Line IP)

TCP controls the assembly and reassembly of packets as they are transmitted

over the Internet

IP handles the addressing details of each packet (IP address/URL)

IP address: 32-bit numeric address in dotted quad addressing format

Universal Resource Locator: hhhh://www.xxx.yyy

where hhhh: how to access a resource, e.g., http, ftp,

telnet

www: name of a specific computer

xxx: subdomain

yyy: top-level domain

Application Layer Protocols:

HTTP (hyper text transfer protocol): transfers and displays Web pages

SMTP (simple mail transfer protocol): requests mail delivery from a mail server,

specifies the exact format of a mail message and how it should be administered

POP (post office protocol): retrieves and/or deletes e-mails from a mail server,

provides support for multipurpose Internet mail extensions (MIME) which allows

attachments of binary files to e-mails IMAP (interactive mail access protocol): downloads, filters, organizes, deletes e-

mails

FTP (file transfer protocol): transfers files between TCP/IP-connected computers

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4.3 World wide webA client/server system and a set of standards (markup languages) for storing, retrieving,

formatting, and displaying information in a networked environment using graphical userinterfaces and dynamic links to documents. Global hypertext publishing

Universal readership

Web technology Client ware

Browser, viewer, player, client computing

Server ware

Web server, scripting, page construction, image manipulation,

transaction protection

Network ware

Router, gateway, hub, firewall, leased lines

Middle ware Database, data warehouse

4.3.1 Web serverWeb server Originator

Apache: a patchy system NCSA (National Center for Super ComputingApplications), 1994

IIS (Internet Information Server) Microsoft

NES (Netscape Enterprise Server) Netscape

Web server functionalities HTTP services

Security & authentication (SSL protocol)

FTP services

Searching (search engine vs intelligent agent)

Search engine comparison

Data analysis (access log analysis)

WebTrends log analyser

Site management (authoring, publishing, link checking)

NetMechanics site management tool

Application construction (HTML, CGI, API) Content management (ODBC, ASP)

Site development

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4.3.2 WWW standards: markup languages

SGML (Standard generalized markup language): a meta language used for

defining other markup languages to describe and format electronic documents that

are independent of software applications, devices, and machines.

HTML (Hyper text markup language): a document production language that uses a

set of tags to define the format and style (headings, title bars, bullets, lines, ordered

lists, graphics, tables, frames, ) of a document, i.e., how a page is displayed on

the web.

XML (extensible Markup Language): a document definition language that uses

paired start and stop tags to define the structure of the data to be displayed

KEY QUESTIONS FOR MANAGEMENT

Is your business right for e-commerce?Business Plans(Table 2.1)1. Why will customers buy from you?

2. How will you make money?

3. What is your market niche?

4. Who are your competitors?

5. What is your competitive advantage?

6. How do you promote your products or services?

7. What types of organizational structures are necessary?

8. What kinds of managerial experiences and background are necessary?

B2C business models (Table 2.3)1. Portal

2. E-tailer

3. Content Provider

4. Transaction broker

5. Market creator

6. Service provider

7. Community provider

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