CHAPTER 6 EBusiness ECommerce Overview of EBusiness ECommerce

CHAPTER 6: E-Business & ECommerce Overview of E-Business & ECommerce Business-to-Consumer (B 2 C) ECommerce Business-to-Business (B 2 B) ECommerce Ethical and Legal Issues in EBusiness

E-Commerce Business Strategies § Differentiated based on levels of physical / virtual presence 2

Types of E-Commerce n Business-to-Consumer (B 2 C) n Business-to-Business (B 2 B) n Consumer-to-Consumer (C 2 C) n Business-to-Employee (B 2 E) n E-Government n Mobile Commerce (m-commerce) 3

Ingredients of an E-Business Model 4

Common Revenue Models for EC § Most important ingredient of a business model § How will the firm earn revenue? 5

Benefits of E-Commerce n To Organizations n Expanding markets and product offerings n Lowering costs of transactions n To Customers n Access a vast number of products and services around the clock (24/7) Mass customization (made-to-order) n Disintermediation n 6

Business-to-Consumer ECommerce n a. k. a. Electronic Retailing or E-tailing n Allow price comparisons n Challenges: n Order fulfillment and Time lags n Lack of sensory experience n Lack of social contact n Concerns about fraud and security 7

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B 2 C: Search Engine Advertising n Problem: Getting listed in search engine results n Solution: n Sponsored search (Paid inclusion) n Search engine optimization to 10

Search Engine Optimization n Position within search results based on complex formula n Site owner has no control over the position of the ad n Optimization based on n Web site updates Use of key terms Unethical “tricks” 11

Business-to-Business ECommerce n Started as early as 1960’s with EDI – Electronic Data Interchange n transmission of electronic business forms between organizations via private, valueadded networks (VANs) 12

Business-to-Business ECommerce n The Internet has changed everything n Primarily three models n Sell-side Marketplace n Buy-side Marketplace n Electronic Exchanges 13

Trading Mechanisms in ECommerce Forward Auction Bid price Time Reverse Auction Bid price Time 14

B 2 B Sell-Side Marketplace Key mechanisms: electronic catalogs and forward auctions 15

B 2 B Buy-Side Marketplace Key mechanism: reverse auctions 16

Electronic Exchanges 17

E-Exchange Example: Vert. Markets (Vertical Exchange) 18

E-Exchange Example: Alibaba. com (Horizontal Exchange) 19

Ethical and Legal Issues in Electronic Commerce § Privacy § Cybersquatting § Internet Taxation § No sales taxes paid in states where the company has no presence § Net Neutrality § Data sent over the Internet is handled in a neutral manner 20