MGT 3225 EBusiness Lecture 1 Introduction to ECommerce

MGT 3225: E-Business Lecture 1: Introduction to E-Commerce Md. Mahbubul Alam, Ph. D

Intended Learning Outcomes • • Define e-commerce and describe how it differs from e-business. Identify and describe features of e-commerce technology. Describe the major types of e-commerce. Identify major academic disciplines contributing e-commerce. 2

E-commerce infrastructure: The Internet • Worldwide network of computer networks built on common standards • Created in late 1960 s • Services include the Web, e-mail, file transfers, etc. • Can measure growth by looking at number of Internet hosts with domain names

E-commerce infrastructure: The Web • Most popular Internet service that runs on the Internet infrastructure. • Developed in early 1990 s • Provides access to Web pages v HTML documents that may include text, graphics, animations, music, videos • Web content has grown exponentially v 2 billion Web pages in 2000 v At least 40– 50 billion pages today

E-commerce infrastructure: The Mobile Platform • The ‘newest, latest and greatest’ development in Internet infrastructure. • Provides ability to access the Internet from a variety of mobile devices. • e. g. , smartphones, tablets, ultra-light laptops. • As of December, 2014 – 120. 35 million Mobile phone subscribers – 43. 64 million Internet subscribers – 42. 17 million Mobile Internet subscribers

E-commerce Trends 2009– 2010 • New business models based on social technologies, consumer-generated content, and services • 2009 a flat year, but growth expected to resume in 2010 • Broadband wireless access continue to grow • Mobile e-commerce begins to take off • Traditional media losing subscribers

The First 30 Seconds • First 15 years of e-commerce ü Just the beginning ü Rapid growth and change • Technologies continue to evolve at exponential rates ü Disruptive business change ü New opportunities

What is e-Commerce? • All electronically mediated information exchanges between an organization & its external stakeholders. • Roughly, refers to buying and selling using the Internet, however it is much more than electronically mediated financial transaction between organizations and customers. • Non-financial transactions like customer requests for further information would also be considered to be part of e-commerce. • Therefore, electronically transactions at any stage in supply chain, pre-&-post sales should be considered as e-commerce. • Types: • Buy-side e-commerce: transactions between a purchasing organizations & its suppliers; Procurement of resources from suppliers. • Sell-side e-commerce: E-commerce transactions between a supplier organization & its customers; Selling products to an organization’s customers.

Buy-side Vs. Sell-side e-Commerce

Sell-side e-Commerce: Types 1. Transactional e-commerce site ü Sales products. ü Also, provide product information to the customer. ü e. g. , retail sites, travel sites, online banking. 2. Services-oriented relationship-building web sites ü Provide detailed information to stimulate purchase and build relationship through website or e-newsletters. 3. Brand-building sites ü Support the brand by developing an online experience of the brand. ü e. g. , Low-value, high-volume fast-moving consumer goods (FMCG brands). 4. Portal, publisher or media sites ü Provide information, news or entertainment about a range of topics. ü e. g. , “Portals” and SNS-> gateway of information. ü Hybrid revenue model from advertising, commission-based sales, sale of customer data.

What is e-Business? ü All electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business processes. ü The transformation of key business processes through the use of Internet Technologies. ü “when a business has fully integrated Information & Communication Technologies (ICTs) into its operations, potentially redesigning its business processes around ICT or completely reinventing its business model…. e-business, is understood to be the integration of all these activities with the internal processes of a business through ICT”. ü Information & Communication Technology (ICT) Ø The software applications, computer hardware and networks used to create e-business systems.

e-Commerce Vs. e-Business is ew ? i v tic ich Wh realis e mor

Why Study E-commerce? • E-commerce technology ü different ü more powerful than previous technologies • E-commerce bringing fundamental changes to commerce • Traditional commerce ü Passive consumer ü Sales force driven ü Fixed prices ü Information asymmetry

Features of E-commerce

Unique Features of E-commerce Technology • • Ubiquity, available everywhere: at work, at home; reduces transaction costs, saves time & energy. Global reach, reaches across cultural, regional & national boundaries conveniently & cost-effectively. Universal standards, one set of technology standards, Information richness, audio, video and text messages are possible. Interactivity, two-way communication; merchant to consumer, among consumers. Information density, quality & quantity of information; reduces information cost. Personalization/customization, personalized advertisements, customized products/service. Social technology, user generated content, C 2 C, blogging, SNS.

Origins & Growth of E-commerce • Precursors üBaxter Healthcare’s remote order entry system. A telephone-based modem that permitted hospitals to reorder supplies from Baxter. üElectronic Data Interchange (EDI), allows to exchange commercial documents & conduct digital commercial transactions across private networks. üFrench Minitel (1981), videotext system; telephone with 8 -inch screen, used at ticket agencies, travel services, retail products & online banking. v None had functionality of Internet • E-commerce: üBegan in 1995 üFirst sales of banner advertisements üSince then, e-commerce fastest growing form of commerce in the United States (155 million consumers spend about $419 billion dollars, plus businesses more than $4. 8 trillion dollars).

Evolution of E-commerce 1995 -2000 Invention 2001 -2006 Consolidation 2007 -present Re-invention Key concepts Emphasis on developed, technology business-driven approach Extension of technologies, such as, mobile technologies enable social, local and mobile commerce. Ungoverned Stronger regulation and governance Extensive government surveillance Entrepreneurial Large traditional firms Entrepreneurial social & local firms Disintermediation Strengthening intermediaries Proliferation of small online intermediaries renting business processes of larger firms Pure online strategies Mixed ‘bricks-andclicks strategies Return of pure online, extension of ‘brick-and -clicks in traditional retail markets. Low-complexity retail products High-complexity retail products Retail, services, and content.

Development of E-commerce

How to Evaluate Your Company’s e-Business Capabilities? • Stage Model: • Review how advanced a company is in its use of ICT to support different business processes. • Brochureware: • Websites or web pages invented by converting all paper-based printed promotional/advertising materials into an Internet format. • Site Optimization: • Process of maximizing the number of visitors to a website by ensuring that intended visitors conveniently find the site by a search engine.

Mc. Kinsey 7 s Framework

Strategies of e-Business and e-Commerce Management Element Capability Key Issue Strategy Contribution of EB & EC in influencing & • supporting org’s strategy. • Gaining appropriate budget and demonstrating value & ROI from budget. Techniques for aligning EC strategy with organizational and marketing strategy. Structure Modification of organizational structure to support EB. • • Integration of EC teams with other teams. Insourcing Vs. Outsourcing. Systems Development of specific processes, procedures and Information Systems to support EB. • • Managing/sharing customer & supply chain information. Integration of the web into marketing campaign planning. Staff Categorizing of the staffs based on experience and expertise. • • Staff recruitment and retention. Staff development, training and virtual working. Style Integration of supervisor’s roles in achieving org’s goals, and values, culture and norms of the organization. • Role of EB team in influencing strategy- (dynamic, influential or conservative). Skills Distinctive capabilities of key staffs plus specific skill-sets of team members. • Staff skills in specific areas of EB. Superordinate goals Guiding concepts of the organization • which are also part of shared values and culture. Improving the perception of the importance and effectiveness of the digital marketing team amongst senior managers and staff it works with (marketing generalists and IT).

Academic Disciplines Concerned with E-commerce • Technical approach – Computer science – Management science – Information systems • Behavioral approach – Information systems – Economics – Marketing – Management – Finance/accounting – Sociology

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