Transcript Chapter 7: E-commerce for Consumers and Organizations

Introduction to Business
Information Systems
by
Mark Huber, Craig Piercy, Patrick McKeown,
and James Norrie
Chapter 7
E-Commerce for Consumers and
Organizations
What Is E-Commerce?
 E-commerce is the use of _________
_________ , _________ , and
_________ networks to carry out
transactions in order to create or support
the creation of _________ _________
 E-Commerce includes all types of
computer networks and all types of
transactions, including electronic funds
transfers and _________ over private
networks as well as retail sales and
wholesale exchanges over public
networks like the Internet
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E-Commerce Defined


Most people think of e-commerce as
electronic shopping over the WWW or
_____________ to _______________ ecommerce (transactions in hundreds of
millions of dollars)
However, _________ to _________ ecommerce transactions are valued in trillions
of dollars!
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Types of E-Commerce Transactions
Transaction
Description
Example Web sites
Online equivalent of retail
store as well as other services
www.chapters.indigo.com
www.telus.com
www.amazon.com
Electronic exchanges between
companies
www.manheim.com,
www.boeing.com
Online sales to government
agencies
www.ppitpb.go.on.ca for
businesses to provide
goods or services to the
Ontario Government
Electronic payment of taxes
www.netfile.gc.can to
electronically file and pay
taxes in Canada
Use of online auctions like
eBay or Yahoo! Auctions
www.ebay.com,
auctions.yahoo.com
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E-Commerce and Products: Physical
and Electronic



Products can be divided into two primary
categories: _________ and _________
_________ products include anything that
requires an actual shipment of a package to
the buyer, e.g., computer hardware
_________ products can be received
directly over the Internet or other computer
network, eg, computer software
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The E-Commerce Advantage
 The use of computer networks, especially the
Internet, to carry out transactions between a
variety of buyers and sellers is creating a
tangible “e-commerce advantage” in our
economy, especially with regard to
 _________
 _________
 _________
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E-Commerce Advantage


Innovative uses of the Internet have
produced global _____________ with
sellers being able to reach any potential
buyer in the world
Technology has increased _________
_________ - quality and quantity of
information about products and services
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Mass Customization and
Personalization
One response to
_________________________ is to create
business value based on a customizationoriented approach to e-commerce
 There are two approaches to customization
 _________ _________ is the ability to
create custom products or services on-demand,
e.g., Dell customers can customize their PCs
 _________ is a marketing message that a
business personalizes for each potential
customer’s interests based on searching,
browsing, or buying habits, e.g., Amazon.ca

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Business and E-Commerce Strategy



A _________ is a broad-based formula
for how a business is going to compete,
what its goals should be, and what plans
and policies will be needed
An ____________________________ is a
general formula for how a business is
going to use computer networks and
information systems to compete in a global
marketplace
One strategy being used by many
companies is _________ _________
management which enables them to create
one-to-one marketing experiences for their
customers
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E-Commerce Business Models


A ____________________ defines how a
company will meet the needs of its
customers while making a profit
An _______________________ is a
business model appropriate for
conducting business via electronic
networks
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E-commerce Business Models
Business
Model
Description
Examples
Comments
Brokers bring
buyers and sellers
together for a fee.
eBay, Priceline,
PayPal
There are many types
of brokerage models in
all types of ecommerce.
An extension of
the traditional
media
broadcasting
model in which
ads appear on
Web sites.
Yahoo!, Netscape,
CNN.com, Google
There are many
different types of
advertising, but all
depend on a large
volume of viewer traffic.
Sell products, both
physical and
electronic, to
consumers
Amazon.com,
CanadianTire.com,
Walmart.com,
iTunes, and many
others
Commonly referred to
as e-tailers, merchants
can use pure ecommerce or a
combination (click and
mortar).
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E-commerce Business Models
Business
Model
Description
Examples
Comments
Make and sell
products directly
to customer
Dell, IBM,
Microsoft, McAfee
(anti-virus
products)
Products can be
purchased (PCs), leased
(servers), or licensed
(software).
Affiliate Web sites
are paid a fee
when purchases
come through
them.
Amazon.com fees
to affiliate Web
sites
Can also include banner
ad exchange between
affiliated sites as well as
revenue-sharing.
Based on user
loyalty because of
high investment of
time and emotion.
Myspace
Evite
Revenue is generated
through sale of ancillary
products or voluntary
contributions
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E-commerce Business Models
Business Model
Description
Examples
Comments
Users are
charged fee to
subscribe to
service to service
or information
source
Classmates,
globeandmail.com
Subscription may be for
premium services;
advertising model may
be combined with this
model
Provides data on
consumers and
consumption
habits
DoubleClick,
NetRatings,
Edmunds
Usually aimed at
helping businesses
rather than consumers
Enable
competitors to
cooperate on a
Web site
AutoTrader.com,
VRBO.com,
craigslist
Usually aimed at
individuals or small
businesses that cannot
attract customers to
their own Web site.
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Web Sites Classified By Purpose
Web Site
Type
Purpose
Example
Business
Model
A gateway to
many other Web
sites
Netscape.com,
Yahoo!, MSN
Advertising,
Affiliate
Finds Web sites
that contain a
word or phrase
Google, Yahoo,
MSN, DogPile
Advertising,
Affiliate,
Infomediary
Sell goods and
services
Dell, LandsEnd,
iTunes
Merchant,
Infomediary,
Manufacturer
Direct,
Coopetitive
To provide
information on a
product before or
after the sale
Microsoft, BMW, Community,
McAfee, Cingular Infomediary
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Web Sites Classified By Purpose
Web Site
Type
Purpose
Example
Business
Model
To provide news,
information,
commentary, etc.
National Post,
TSN, Economist
Subscription,
Community,
Affiliate
Facilitate sales between eBay, Priceline,
third parties
PayPal
Brokerage
Sell travel tickets and
tours
Delta,
Travelocity,
Orbitz, HotWire
Merchant,
Brokerage,
Coopetitive
Provide information,
product sales and
support, and contacts
between visitors
Lavalife
Microsoft
support groups,
Google Groups
Community,
Merchant,
Affiliate,
Infomediary,
Advertising
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B2B E-Commerce: E-Commerce
Between Organizations
Doing business with other organizations
(B2B) is by far larger than with consumers
(B2C)
 It is also quite different in terms of the scope
of the purchases and the complexity
involved in them—especially in the decision
making required to make a purchase
 For example, while you buy one PC, a
company may buy thousands
 _________ systems (IOS) are the
information systems that handle the
information flow between trading partners

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B2B Transactions


In ______________, purchases are made
at market prices from an unknown seller
In ________________________, prices
are set through negotiation in a long-term
relationship with a company known to the
buyer
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B2B Business Models



In the _______________ business model,
two companies form a trading relationship
with neither company dominating the
relationship
In the _______________ business model, a
company is either a seller to many
companies (one-to-many) or a buyer from
many companies (many-to-one)
___________________ is often the name
for B2B e-commerce in the many-to-one
business model
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Types of Exchanges

_________ can be co-operative
ventures among the companies or it can
be run by a larger company that profits
from the transactions
 _________ can be classified as vertical
or horizontal
 From an e-commerce point-of-view,
________________ are often Web sites
that buyers and sellers post their needs
and offerings
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Using B2B E-Commerce and IOS
to Improve Supply Chain Efficiency


A _________ _________ is a network of
facilities and distribution options that
performs the functions of procurement of
materials, transformation of these materials
into intermediate and finished products, and
the distribution of these finished products to
customers.
_________________is a big part of the
supply chain and using e-commerce for eprocurement has resulted in money savings
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Interorganizational Systems (IOS)

An ____________________________ is
a networked information system used by
two or more separate organizations to
perform a joint business function.
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Extranets
•Extranets are _________________________
that use Internet technology to link
businesses with their customers.
•Security measures keep data secure and
___________ is used to transfer the data.
•An extranet can be thought of as two
connected ____________.
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Copyright
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programs or from the use of the information contained
herein.
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