week 8 - electronic commerce

8/4/2019 Week 8 - Electronic Commerce

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Electronic Commerce Systems

Chapter

4.1 ( week 8)

McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights


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Identify the major categories and trends ofe-commerce applications

Identify the essential processes of an

e-commerce system, and give examples ofhow they are implemented in e-commerceapplications

Identify and give examples of several key factors

and Web store requirements need to succeed ine-commerce

Learning Objectives

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Learning Objectives

Identify and explain the businessvalue of several types of e-commerce marketplaces

Discuss the benefits and trade-offsof several

e-commerce clicks and bricksalternatives

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Case 1: KitchenAid and the Royal Bank ofCanada

Companies that do business online must policeunauthorized use of their brand names, logos andother trademarks to protect their investments.

Companies such as BrandProtect, MarkMonitor, andNameProtect are stepping in to offer companies some

artillery in the fight for control of their brands andreputations.

The challenge of brand protection, however, has grownexponentially for companies operating in the online

world. Other type of violation is using logos without

permission because it is so easy for someone to go toa companys web site and grab a logo and put itsomewhere else.

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Case Questions

1. Consider your own online shopping patterns. Howmuch weight do you place on the presence of aname or logo or other trademark (such as theKitchenAid silhouette) on a Web site whenpurchasing goods or services? Do you ever stopto consider whether you may have been misled?How could you tell the difference?

2. Brian Maynard of KitchenAid notes that thedevelopment of the Internet changed the problem

of brand policing. What are some of thesechanges? What new challenges can you think ofthat did not exist in the preonline world? Provideseveral examples.

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Case Questions

3. The companies mentioned in thecase (e.g., Kitchen-Aid, RBC, Disney,and Coke) were well established and

enjoyed strong brand recognition wellbefore the advent of the Internet. Doyou think online-only companies facethe same problems as they do? Whyor why not? Justify the rationale foryour answer.

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Introduction to e-Commerce

Electronic commerce encompasses the entireonline process of

Developing

Marketing

Selling

Delivering

Servicing

Paying for products and services

It relies on the Internet and other informationtechnologies to support every step of the process

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The Scope of e-Commerce

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E-Commerce Technologies

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Categories of e-Commerce

Business-to-Consumer

Virtual storefronts, multimedia catalogs, interactiveorder processing, electronic payment, onlinecustomer support

Business-to-Business

Electronic business marketplaces, direct linksbetween businesses, auctions and exchanges

Consumer-to-Consumer

Online auctions, posting to newspaper sites, personalwebsites, e-commerce portals

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Essential e-Commerce Architecture

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Access Control and Security

E-commerce processes must establish mutualtrust and secure access between parties

User names and passwords

Encryption key

Digital certificates and signatures

Restricted access areas

Other peoples accounts

Restricted company data Webmaster administration areas

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Profiling and Personalizing

Profiling gathers data on you and your websitebehavior and choices

User registration

Cookie files and tracking software

User feedback

Profiling is used for

Personalized (one-to-one) marketing

Authenticating identity

Customer relationship management

Marketing planning

Website management

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Search Management

Search processes help customers findthe specific product or service they want

E-commerce software packages often include

a website search engine

A customized search engine may be acquiredfrom companies like Google or Requisite

Technology Searches are often on content or by

parameters

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Content and Catalog Management

Content Management Software

Helps develop, generate, deliver, update, and archivetext and multimedia information ate-commerce websites

Catalog Management Software

Helps generate and manage catalog content

Catalog and content management softwareworks with profiling tools to personalize content Includes product configuration and

mass customization

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Workflow Management

E-business and e-commerce workflow manage-ment depends on a workflow software engine

Contains software model of business processes

Workflow models express predefined Sets of business rules

Roles of stakeholders

Authorization requirements

Routing alternative Databases used

Task sequences

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Example of Workflow Management

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Event Notification

Most e-commerce applications are eventdriven

Responds to such things as customers first

website visit and payments Monitors all e-commerce processes

Records all relevant events, including problemsituations

Notifies all involved stakeholders

Works in conjunction with user-profilingsoftware

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Collaboration and Trading

Processes that support vital collaborationarrangements and trading services

Needed by customers, suppliers, and other

stakeholders

Online communities of interest

E-mail, chat, discussion groups

Enhances customer service Builds loyalty

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Electronic Payment Processes

Complex processes

Near-anonymous and electronicnatureof transactions

Many security issues

Wide variety of debit and creditalternatives

Financial institutions may be part ofthe process

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Electronic Payment Processes

Web Payment Processes

Shopping cart process

Credit card payment process

Debit and other more complex processes

Electronic Funds Transfer (EFT)

Major payment system in banking, retail

Variety of information technologies captureand process money and credit card transfers

Most point-of-sale terminals in retail storesare networked to bank EFT systems

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Electronic Payment Example

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Securing Electronic Payments

Network sniffers easily recognizecredit card formats

Encrypt data between customer and

merchant

Encrypt data between customer andfinancial institution

Take sensitive information off-line

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E-Commerce Application Trends

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Case 2: Entellium, Digg, Peerflix,Zappos, and Jigsaw

For many internet companies, the second-mover advantage seems even moresubstantial.

Entellium is an example of a company that hassuccessfully implemented a second moverstrategy on the Web.

The second-movers can use the same

approach as first mover with better productsand services at much lower cost.

Another strategy is to use combinations of

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Case Study Questions

1. Is the second-mover advantage always a goodbusiness strategy? Defend your answer withexamples of the companies in this case.

2. What can a front-runner business do to foil theassaults of second movers? Defend your answerusing the examples of the front-runnercompanies in the case.

3. Do second movers always have the advantage inWeb based business success? Why or why not?

Evaluate the five strategies given in the case andthe companies that used them to help defendyour answer.

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E-Commerce Success Factors

Some of the success factors in e-commerce

Selection and value

Performance and service

Look and feel

Advertising and incentives

Personal attention (one-to-one marketing)

Community relationships

Security and reliability

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Differences in Marketing

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Web Store Requirements

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Developing a Web Store

Build a website

Choose or set up web hosting

Use simple design tools and templates

Include a shopping cart and payment support

Market the website

Include Web page and e-mail advertising

and promotions Exchange advertising with other Web stores

Register with search engines and directories

Sign up for affiliate programs9-30


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Serving Your Customers

Convert visitors into loyal customers

Develop one-to-one relationship with customers

Create incentives to encourage registration

Use Web cookies to identify visitors

Use tracking services to record and analyze websitebehavior and customer preferences

Create an attractive, friendly, efficient store

Offer fast order processing and payment

Notify when orders are processed and shipped

Provide links to related websites

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Managing a Web Store

Manage both the business and the website

Record and analyze traffic, inventory, sales

Use CRM features to help retain customers

Link sales, inventory data to accounting systems

Operate 24 hours a day, seven day a week

Protect transactions and customer records

Use security monitors and firewalls

Use redundant systems and power sources

Employ passwords and encryption

Offer 24-hour tech support

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B2B E-Commerce

B2B is the wholesale and supply side ofthe commercial process Businesses buy, sell, or trade with other

businesses Relies on multiple electronic information

technologies Catalog systems

Trading systems Data interchange

Electronic funds transfers

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E-Commerce Marketplaces

One to Many

Sell-side marketplaces

One supplier dictates product offerings and prices

Many to One Buy-side marketplaces

Many suppliers bid for the business of a buyer

Some to Many

Distribution marketplaces Unites suppliers who combine their product catalogs

to attract a larger audience

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E-Commerce Marketplaces

Many to Some

Procurement marketplaces

Unites major buyers who combine

purchasing catalogs

Attracts more competition and thuslower prices

Many to ManyAuction marketplaces

Dynamically optimizes prices

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E-Commerce Portals

B2B e-commerce portals offer multiplemarketplaces Catalogs

ExchangesAuctions

Often developed and hosted by third-party market-maker companies Infomediaries serve as intermediaries in

e-business and e-commerce transactions

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B2B E-Commerce Web Portal

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Clicks and Bricks

Success will go to those who canintegrate Internet initiatives withtraditional operations

Merging operations has trade-offs

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E-Commerce Integration

The business case for merging e-commercewith traditional business operations

Move strategic capabilities in traditionaloperations to the e-commerce business

Integrate e-commerce into the traditionalbusiness

Sharing of established brands

Sharing of key business information

Joint buying power and distribution efficiencies

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Other Clicks and Bricks Strategies

Partial e-commerce integration Joint ventures and strategic partnerships

Complete separation Spin-off of an independent e-commerce company

Barnes and Nobles experience Spun off independent e-commerce company

Gained venture capital, entrepreneurial culture, andflexibility

Attracted quality management

Accelerated decision making

Failed to gain market share

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E-Commerce Channel Choices

An e-commerce channel is the marketingor sales channel created by a companyfor its

e-commerce activities There is no universal strategy or e-commercechannel choice

Both e-commerce integration and separation

have major business benefits andshortcoming

Most businesses are implementing somemeasure of clicks and bricks integration

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E-Commerce Strategy Checklist

Questions to ask and answer

What audiences are we attempting to reach?

What action do we want those audiences to take?

Who owns the e-commerce channel within the

organization?

Is the e-commerce channel planned alongside otherchannels?

Is there a process for generating, approving,

releasing, and withdrawing content? Will our brand translate to the new channel?

How will we market the channel itself?

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Case 3: eBay versus Google and Microsoft:

eBay enjoyed virtual monopoly in online auction foralmost a decade.

Now it is facing competition from Google &Microsoft.

Analysts think that search and advertising will

define the future of e-Commerce. Windows Live Expo is Microsofts competitive

weapon in its battle with eBay and Google for theonline classifieds market.

eBay is addressing these challenges by acquiringcompanies like Skype, Shopping.com, and otherinternational classified sites.

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1. Do you agree with Google and Microsoftthat eBay is now vulnerable to theirassaults via Google Base and WindowsLive Expo? Why or why not?

2. What are the major advantages andlimitations of Google Base and WindowsLive Expo? Which do you prefer, or wouldyou use both? Why? Go to their InternetWeb sites and read reviews at other sitesto help you answer.

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3. Are eBays development of Kijiji,acquisition of Skype, alliance withYahoo, and other acquisitions as

noted in this case enough to wardoff the competitive assaults ofGoogle and Microsoft? Defend

your position.

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Case 4: eBay, Running the Right Play

eBay is one of the fastest-growing companiesin history, and business is surging

31 sites around the world

$1.1 billion in international sales in 2004, and growing

twice as fast as the domestic market

Half of their 125 million registered users are outside ofthe United States

eBay keeps a playbook

Several hundred pages of wisdom collectedfrom worldwide managers

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1. Why has eBay become such asuccessful and diverse onlinemarketplace?

2. What do you think of eBays playbookconcept? Why do they call it aplaybook?

3. Is eBays move into the internationalarena a good long-term strategy?

week 8 - electronic commerce

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