ELC 200 Introduction to ECommerce Copyright Tony Gauvin

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ELC 200 Introduction to E-Commerce Copyright, Tony Gauvin, UMFK, 2006 1

ELC 200 Introduction to E-Commerce Copyright, Tony Gauvin, UMFK, 2006 1

Introduction n n n n Class roll call Instructor Introduction Instructor’s Educational Philosophy Black.

Introduction n n n n Class roll call Instructor Introduction Instructor’s Educational Philosophy Black. Board accounts Syllabus review General Information about class Classroom Contract Discussion The Revolution Is Just Beginning 2

Instructor n Tony Gauvin ¨ Associate Professor Of E-Commerce ¨ 216 Nadeau Hall ¨

Instructor n Tony Gauvin ¨ Associate Professor Of E-Commerce ¨ 216 Nadeau Hall ¨ (207) 834 -7519 or Extension 7519 ¨ Tony. G@maine. edu ¨ Black. Board ¨ Tony's Resume ¨ Web. Site (http: //tonyg. umfk. maine. edu) 3

Instructional Philosophy Out-Come based education n Would rather discuss than lecture n ¨ Requires

Instructional Philosophy Out-Come based education n Would rather discuss than lecture n ¨ Requires n student preparation Hate grading assignments ¨ Especially n LATE assignments Use class interaction, assignments, quizzes and projects to determine if outcomes are met. 4

ELC 200 Survival Primer n Read Material BEFORE the class discussion ¨ ¨ n

ELC 200 Survival Primer n Read Material BEFORE the class discussion ¨ ¨ n Use textbook’s website ¨ n n n n Summary & Key Concepts at EOC Projects and Questions in EOC http: //www. azimuth-interactive. com/ecommerce 6 e/ Check Black. Board Often Use the additional resources identified in syllabus & in Black. Board ASK questions about what you didn’t understand in readings DON’T do homework at last minute. REVEIW lectures and notes Seek HELP if you are having difficulties OFFER feedback and suggestions to the instructor in a constructive manner 5

ELC 200 Specifics n n Blackboard used to augment course Two Desired outcomes E-Commerce’s

ELC 200 Specifics n n Blackboard used to augment course Two Desired outcomes E-Commerce’s impact on Business, Global Economies and Society ¨ Entrepreneurship ¨ n n Students have the ability to create the framework for a viable ecommerce initiative Managerial Perspectives instead of technical ¨ ¨ Technical Portions will be covered in COS XXX classes Understanding “Why” instead of “How” 6

Blackboard n https: //www. courses. maine. edu n Login ¨ Your @maine. edu name

Blackboard n https: //www. courses. maine. edu n Login ¨ Your @maine. edu name and password Help with Blackboard is available from Blake Library staff n All quizzes and assignments will be administered from Black. Board n New version of Black. Board n 7

Computer Accounts n Computer login ¨ Sys n admin Pete Cyr (x 7547) or

Computer Accounts n Computer login ¨ Sys n admin Pete Cyr (x 7547) or Art Drolet (x 7809) ¨ Applications n MSDN Academic Alliance ¨ Free Stuff ¨ See Dr. Ray Albert n Access Cards ¨ $10 deposit ¨ See Lisa Fournier 8

Syllabus review Requirements n Grading n Course outline n Special Notes n Subject to

Syllabus review Requirements n Grading n Course outline n Special Notes n Subject to change n 9

Contract on Classroom Behavior A contract for students and Professor on what is expected

Contract on Classroom Behavior A contract for students and Professor on what is expected and encouraged behavior in the classroom n Created through a collaborative process n 10

Premise to Contract n n n The Business Management, e. Commerce and Computer Application

Premise to Contract n n n The Business Management, e. Commerce and Computer Application programs are preparing students for professional positions where professional behaviors will be expected of them. These behaviors will be reinforced by requiring the students to adopt the rules agreed to in this contract. Adherence to the rules in this contract will be part of the student’s grade in this class. Learning is a group activity, and the behavior of each person in class in some way or the other affects the learning outcomes of others. If we keep these thoughts and the following rules in mind, the classroom experience will be a better one for everyone involved. More serious breeches of student behavior in the classroom will be dealt with through the UMS Student Conduct Code procedures outlined in the conduct code booklet which can be found at the following link. ¨ http: //www. maine. edu/system/policy_manual/policy_section 501. php 11

My thoughts n Most students exhibit appropriate behavior in class, but there is some

My thoughts n Most students exhibit appropriate behavior in class, but there is some disagreement what “appropriate” behavior is. At times, a consumer culture creeps into the classroom, with students sometimes perceiving faculty as employees hired to serve them. This is not the appropriate comparison – a professor is not here to give you what you want, but rather to help you obtain what you need. A professor is more like a physician. Just as any doctor who tells you “everything is fine” so that you’ll be happy (when everything isn’t fine) should be sued for malpractice, any faculty member who gives you an “A” regardless of your performance or allows anything to happen primarily because that is what will make you happy is doing you and other students a disservice. 12

Suggested rules (Professor) n This professor ¨ ¨ ¨ ¨ ¨ Will be knowledgeable

Suggested rules (Professor) n This professor ¨ ¨ ¨ ¨ ¨ Will be knowledgeable and current on the topics Will be a role model of a professional in the discipline Will provide prompt feedback on assignments and quizzes (within one week) Will not cancel classes without a good reasons and will inform students promptly of his absence Will make time available outside of classes for student professor meetings Will be fair and impartial in student assessments Will follow published UMFK policy Will be sensitive to issues of gender, diversity, disability and student privacy Will “stick” to the syllabus and will not make any unnecessary changes to the class that adversely effects student learning outcomes ? ? ? 13

Bribe List (2010) n n n 1947 HD FLH “knucklehead” 2010 Audi R 8

Bribe List (2010) n n n 1947 HD FLH “knucklehead” 2010 Audi R 8 1950 Buick Road. Master ¨ n n n Convertible or Sedanette 1972 SS 402 El Camino 1970 Oldsmobile 442 (W-30 option) 1965 Shelby Cobra S/C 427 1995 Ferrari 348 Spyder 2006 Dodge Viper SRT 10 Copyright 2005 Prentice Hall Ch 1 -14

UMFK’s Definition of E-Commerce n An attempt to achieve transactional efficiency in all aspects

UMFK’s Definition of E-Commerce n An attempt to achieve transactional efficiency in all aspects of the design, production, marketing and sales of products or services for existing and developing marketplaces through the utilization of current and emerging electronic technologies n E-Commerce IS NOT ¨ ¨ ¨ E-Business DOT-COMS (or Dot-Bombs) E-Marketing Easy or Cheap NEW 15

E-Commerce Degree Program Combination of Technical Skills and Management know-how n Prepares students for

E-Commerce Degree Program Combination of Technical Skills and Management know-how n Prepares students for Leadership Roles n ¨ Cadre (team) building ¨ Broad-based technical underpinnings with one or two specialist areas ¨ Understanding of implications of E-Commerce within an organizational context and within broader social issues 16

E-commerce business. technology. society. Sixth Edition Kenneth C. Laudon Carol Guercio Traver Copyright ©

E-commerce business. technology. society. Sixth Edition Kenneth C. Laudon Carol Guercio Traver Copyright © 2010 Pearson Education, Inc.

Chapter 1 The Revolution Is Just Beginning Copyright © 2010 Pearson Education, Copyright ©

Chapter 1 The Revolution Is Just Beginning Copyright © 2010 Pearson Education, Copyright © 2007 Pearson Education, Inc. Slide 1 -18

Objectives n n n n n Define e-commerce and describe how it differs from

Objectives n n n n n Define e-commerce and describe how it differs from e-business. Identify and describe the unique features of e-commerce technology and discuss their business significance. Recognize and describe Web 2. 0 applications. Describe the major types of e-commerce. Discuss the origins and growth of e-commerce. Understand the evolution of e-commerce from its early years to today. Identify the factors that will define the future of e-commerce. Describe the major themes underlying the study of e-commerce. Identify the major academic disciplines contributing to e-commerce. 19

Facebook and My. Space: It’s All About You n How is Facebook different from

Facebook and My. Space: It’s All About You n How is Facebook different from My. Space? n Have you used Facebook or My. Space, and if so, how often? What was your experience? n Why do you think Facebook has overtaken My. Space as the most popular social networking site? Copyright © 2010 Pearson Education, Inc. Slide 1 -20

E-commerce Trends 2009– 2010 n New business models based on social technologies, consumer-generated content,

E-commerce Trends 2009– 2010 n New business models based on social technologies, consumer-generated content, and services n 2009 a flat year, but growth expected to resume in 2010 n Broadband wireless access continue to grow n Mobile e-commerce begins to take off n Traditional media losing subscribers Copyright © 2010 Pearson Education, Inc. Slide 1 -21

Retail E-Commerce (Non-Travel) Growth Rates Excludes Auctions, Autos and Large Corporate Purchases Total U.

Retail E-Commerce (Non-Travel) Growth Rates Excludes Auctions, Autos and Large Corporate Purchases Total U. S. – Home/Work/University Locations Source: com. Score, Inc. Quarter Q 1 2007 Q 2 2007 Q 3 2007 Q 4 2007 Q 1 2008 Q 2 2008 Q 3 2008 Q 4 2008 Q 1 2009 Q 2 2009 Q 3 2009 Q 4 2009 E-Commerce Spending ($ Millions) $27, 970 $27, 176 $28, 441 $39, 132 $31, 178 $30, 581 $30, 274 $38, 071 $31, 031 $30, 169 $29, 552 $39, 045 Y/Y Percent Change 17% 23% 19% 11% 13% 6% -3% 0% -1% -2% 3% US Census Bereau 2008 e-Stats report 22

The First 30 Seconds n First 15 years of e-commerce ¨ Just the beginning

The First 30 Seconds n First 15 years of e-commerce ¨ Just the beginning ¨ Rapid growth and change n Technologies continue to evolve at exponential rates ¨ Disruptive business change ¨ New opportunities Copyright © 2010 Pearson Education, Inc. Slide 1 -23

What is E-commerce? n Use of Internet and Web to transact business n More

What is E-commerce? n Use of Internet and Web to transact business n More formally: ¨ Digitally enabled commercial transactions between and among organizations and individuals Copyright © 2010 Pearson Education, Inc. Slide 1 -24

E-commerce vs. E-business n E-business: ¨ Digital enablement of transactions and processes within a

E-commerce vs. E-business n E-business: ¨ Digital enablement of transactions and processes within a firm, involving information systems under firm’s control ¨ Does not include commercial transactions involving an exchange of value across organizational boundaries Copyright © 2010 Pearson Education, Inc. Slide 1 -25

Why Study E-commerce? n E-commerce technology is different, more powerful than previous technologies n

Why Study E-commerce? n E-commerce technology is different, more powerful than previous technologies n E-commerce bringing fundamental changes to commerce n Traditional commerce: ¨ Passive consumer ¨ Sales-force driven ¨ Fixed prices ¨ Information asymmetry Copyright © 2010 Pearson Education, Inc. Slide 1 -26

Unique Features of E-commerce Technology 1. 2. 3. 4. 5. 6. 7. 8. Ubiquity

Unique Features of E-commerce Technology 1. 2. 3. 4. 5. 6. 7. 8. Ubiquity Global reach Universal standards Information richness Interactivity Information density Personalization/customization Social technology Copyright © 2010 Pearson Education, Inc. Slide 1 -27

Web 2. 0 n Applications, technologies that allow users to: ¨ Create and share

Web 2. 0 n Applications, technologies that allow users to: ¨ Create and share content, preferences, bookmarks, and online personas ¨ Participate in virtual lives ¨ Build online communities n Examples ¨ You. Tube, Photobucket, Flickr, Google, i. Phone ¨ My. Space, Facebook, Linked. In ¨ Second Life ¨ Wikipedia Copyright © 2010 Pearson Education, Inc. Slide 1 -28

Types of E-commerce n Classified by market relationship ¨ Business-to-Consumer ¨ Business-to-Business (B 2

Types of E-commerce n Classified by market relationship ¨ Business-to-Consumer ¨ Business-to-Business (B 2 C) (B 2 B) ¨ Consumer-to-Consumer n (C 2 C) Classified by technology used ¨ Peer-to-Peer ¨ Mobile (P 2 P) commerce (M-commerce) Copyright © 2010 Pearson Education, Inc. Slide 1 -29

The Internet n Worldwide network of computer networks built on common standards n Created

The Internet n Worldwide network of computer networks built on common standards n Created in late 1960 s n Services include the Web, e-mail, file transfers, etc. n Can measure growth by looking at number of Internet hosts with domain names Copyright © 2010 Pearson Education, Inc. Slide 1 -30

The Growth of the Internet, Measured by Number of Internet Hosts with Domain Names

The Growth of the Internet, Measured by Number of Internet Hosts with Domain Names Figure 1. 3, Page 23 SOURCE: Internet Systems Consortium, Inc. , 2009. Copyright © 2010 Pearson Education, Inc. Slide 1 -31

The Web Most popular Internet service n Developed in early 1990 s n Provides

The Web Most popular Internet service n Developed in early 1990 s n Provides access to Web pages n ¨ HTML documents that may include text, graphics, animations, music, videos n Web content has grown exponentially ¨ 2 billion Web pages in 2000 ¨ At least 40– 50 billion pages today Copyright © 2010 Pearson Education, Inc. Slide 1 -32

Insight on Technology: Spider Webs, Bow Ties, Scale-Free Networks, and the Deep Web Class

Insight on Technology: Spider Webs, Bow Ties, Scale-Free Networks, and the Deep Web Class Discussion n What is the “small world” theory of the Web? n What is the significance of the “bow-tie” form of the Web? n Why does Barabasi call the Web a “scalefree network” with “very connected super nodes”? Copyright © 2010 Pearson Education, Inc. Slide 1 -33

Origins & Growth of E-commerce n Precursors: ¨ Baxter Healthcare ¨ Electronic ¨ French

Origins & Growth of E-commerce n Precursors: ¨ Baxter Healthcare ¨ Electronic ¨ French ¨ None n Minitel (1980 s videotext system) had functionality of Internet 1995: Beginning of e-commerce ¨ First n Data Interchange (EDI) sales of banner advertisements Since then, e-commerce fastest growing form of commerce in the United States Copyright © 2010 Pearson Education, Inc. Slide 1 -34

The Growth of B 2 C E-commerce Figure 1. 4, Page 25 SOURCES: e.

The Growth of B 2 C E-commerce Figure 1. 4, Page 25 SOURCES: e. Marketer, Inc. , 2009 a; U. S. Census Bureau, 2009 b; authors’ estimates. Copyright © 2010 Pearson Education, Inc. Slide 1 -35

The Growth of B 2 B E-commerce Figure 1. 5, Page 28 SOURCES: U.

The Growth of B 2 B E-commerce Figure 1. 5, Page 28 SOURCES: U. S. Census Bureau, 2009 a; authors’ estimates. Copyright © 2010 Pearson Education, Inc. Slide 1 -36

Technology and E-commerce in Perspective n The Internet and Web: Just two of a

Technology and E-commerce in Perspective n The Internet and Web: Just two of a long list of technologies that have greatly changed commerce ¨ Automobiles ¨ Radio n E-commerce growth will eventually cap as it confronts its own fundamental limitations. Copyright © 2010 Pearson Education, Inc. Slide 1 -37

Potential Limitations on the Growth of B 2 C E-commerce n Expensive technology n

Potential Limitations on the Growth of B 2 C E-commerce n Expensive technology n Sophisticated skill set n Persistent cultural attraction of physical markets and traditional shopping experiences n Persistent global inequality limiting access to telephones and computers n Copyright © 2010 Pearson Education, Inc. Saturation and ceiling effects Slide 1 -38

E-commerce: A Brief History n 1995– 2000: Innovation ¨ Key concepts developed ¨ Dot-coms;

E-commerce: A Brief History n 1995– 2000: Innovation ¨ Key concepts developed ¨ Dot-coms; heavy venture capital investment n 2001– 2006: Consolidation ¨ Emphasis n on business-driven approach 2006–Present: Reinvention ¨ Extension of technologies ¨ New models based on user-generated content, social networking, services Copyright © 2010 Pearson Education, Inc. Slide 1 -39

Early Visions of E-commerce n Computer scientists: ¨ Inexpensive, universal communications and computing environment

Early Visions of E-commerce n Computer scientists: ¨ Inexpensive, universal communications and computing environment accessible by all n Economists: ¨ Nearly perfect competitive market and friction-free commerce ¨ Lowered search costs, disintermediation, price transparency, elimination of unfair competitive advantage n Entrepreneurs: ¨ Extraordinary opportunity to earn far above normal Copyright © 2010 Pearson Education, Slide 1 -40 Inc. returns on investment—first mover advantage

Insight on Business The Internet Investment Rollercoaster Class Discussion n What explains the rapid

Insight on Business The Internet Investment Rollercoaster Class Discussion n What explains the rapid growth in private investment in e-commerce firms in the period 1998– 2000? Was this investment irrational? n What was the effect of the big bust of March 2000 on e-commerce investment? n What is the value to investors of a company such as You. Tube which has yet to show profitability? n Why do you think investors today would be interested in investing in or purchasing e-commerce companies? Would you invest in an e-commerce company today? Copyright © 2010 Pearson Education, Slide 1 -41 Inc.

Assessing E-commerce n Many early visions not fulfilled ¨ Friction-free commerce Consumers less price

Assessing E-commerce n Many early visions not fulfilled ¨ Friction-free commerce Consumers less price sensitive n Considerable price dispersion n ¨ Perfect n competition Information asymmetries persist ¨ Disintermediation ¨ First n mover advantage Fast-followers often overtake first movers Copyright © 2010 Pearson Education, Inc. Slide 1 -42

Predictions for the Future n Technology will propagate through all commercial activity n Prices

Predictions for the Future n Technology will propagate through all commercial activity n Prices will rise to cover the real cost of doing business n E-commerce margins and profits will rise to levels more typical of all retailers n Cast of players will change Traditional Fortune 500 companies will play dominant role ¨ New startup ventures will emerge with new products, services ¨ n Number of successful pure online stores will remain smaller than integrated offline/online stores n Growth of regulatory activity worldwide n Influence of cost of energy Copyright © 2010 Pearson Education, Inc. Slide 1 -43

Understanding E-commerce: Organizing Themes n Technology: ¨ Development and mastery of digital computing and

Understanding E-commerce: Organizing Themes n Technology: ¨ Development and mastery of digital computing and communications technology n Business: ¨ New technologies present businesses with new ways of organizing production and transacting business n Society: ¨ Intellectual property, individual privacy, public welfare policy Copyright © 2010 Pearson Education, Inc. Slide 1 -44

The Internet and the Evolution of Corporate Computing Figure 1. 9, Page 44 Copyright

The Internet and the Evolution of Corporate Computing Figure 1. 9, Page 44 Copyright © 2010 Pearson Education, Inc. Slide 1 -45

Insight on Society Privacy Online: Does Anybody Care? Class Discussion n What techniques of

Insight on Society Privacy Online: Does Anybody Care? Class Discussion n What techniques of privacy invasion are described in the case? n Which of these techniques is the most privacyinvading? Why? n Is e-commerce any different than traditional markets with respect to privacy? Don’t merchants always want to know their customer? n How do you protect your privacy on the Web? Copyright © 2010 Pearson Education, Inc. Slide 1 -46

Academic Disciplines Concerned with E-commerce n Technical approach ¨ Computer science ¨ Management science

Academic Disciplines Concerned with E-commerce n Technical approach ¨ Computer science ¨ Management science ¨ Information systems n Behavioral approach ¨ Information systems ¨ Economics ¨ Marketing ¨ Management ¨ Finance/accounting ¨ Sociology Copyright © 2010 Pearson Education, Inc. Slide 1 -47