Chapter 2 E-Commerce: Mechanisms, Infrastructures, and Tools 2-0

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1 Chapter 2 E-Cmmerce: Mechanisms, Infrastructures, and Tls 2-0

2 Learning Objectives 1. Describe the majr electrnic cmmerce (EC) activities and prcesses and the mechanisms that supprt them. 2. Define e-marketplaces and list their cmpnents. 3. List the majr types f e-marketplaces and describe their features. 4. Describe electrnic catalgs, search engines, and shpping carts. 5. Describe the majr types f auctins and list their characteristics. 2-1

3 Learning Objectives 6. Discuss the benefits and limitatins f e-auctins. 7. Describe bartering and negtiating nline. 8. Describe virtual cmmunities. 9. List the majr Web 2.0 tls and their use in EC. 10. Describe scial netwrks as an EC mechanism. 11. Understand virtual wrlds and their use in EC. 12. Describe Web 3.0 and define Web

4 Electrnic Cmmerce Mechanisms: An Overview EC ACTIVITIES AND SUPPORT MECHANISMS SELLERS, BUYERS, AND TRANSACTIONS The Purchasing Prcess 2-3

5 2-4

6 2-5

7 2-6

8 e-marketplace E-Marketplaces An nline market, usually B2B, in which buyers and sellers exchange gds r services; the three types f e-marketplaces are private, public, and cnsrtia COMPONENTS OF AND THE PARTICIPANTS IN E- MARKETPLACES marketspace A marketplace in which sellers and buyers exchange gds and services fr mney (r fr ther gds and services), but d s electrnically 2-7

9 E-Marketplaces The majr cmpnents and players in a marketspace are: Custmers Sellers Prducts and services digital prducts Gds that can be transfrmed t digital frmat and delivered ver the Internet Infrastructure 2-8

10 E-Marketplaces frnt end The prtin f an e-seller s business prcesses thrugh which custmers interact, including the seller s prtal, electrnic catalgs, a shpping cart, a search engine, and a payment gateway back end The activities that supprt nline rder fulfillment, inventry management, purchasing frm suppliers, payment prcessing, packaging, and delivery intermediary A third party that perates between sellers and buyers 2-9

11 E-Marketplaces DISINTERMEDIATION AND REINTERMEDIATION disintermediatin Eliminatin f intermediaries between sellers and buyers 2-10

12 E-Marketplaces TYPES OF E-MARKETPLACES sell-side e-marketplace A private e-marketplace in which ne cmpany sells either standard and/r custmized prducts t qualified cmpanies buy-side e-marketplace A private e-marketplace in which ne cmpany makes purchases frm invited suppliers 2-11

13 Custmer Shpping Mechanisms: Strefrnts, Malls, and Prtals Webstre (strefrnt) A single cmpany s website where prducts r services are sld; usually has an nline shpping cart assciated with it Many Webstres target a specific industry and find their wn unique crner f the market. Micrsites 2-12

14 Custmer Shpping Mechanisms: Strefrnts, Malls, and Prtals e-mall (nline mall) An nline shpping center where many nline stres are lcated TYPES OF STORES AND MALLS General stres/malls Specialized stres/malls Reginal versus glbal stres Pure-play versus click-and-mrtar stres 2-13

15 Custmer Shpping Mechanisms: Strefrnts, Malls, and Prtals Web (infrmatin) prtal A single pint f access, thrugh a Web brwser, t critical business infrmatin lcated inside and utside (via Internet) an rganizatin Types f Prtals Cmmercial (public) prtals Crprate prtals Publishing prtals Persnal prtals mbile prtal A prtal accessible via a mbile device. vice prtal A prtal accessed by telephne r cell phne. 2-14

16 2-15

17 Custmer Shpping Mechanisms: Strefrnts, Malls, and Prtals THE ROLES AND VALUE OF INTERMEDIARIES IN E- MARKETPLACES Brkers infmediaries Electrnic intermediaries that prvide and/r cntrl infrmatin flw in cyberspace, ften aggregating infrmatin and selling it t thers e-distributr An e-cmmerce intermediary that cnnects manufacturers with business buyers (custmers) by aggregating the catalgs f many manufacturers in ne place the intermediary s website 2-16

18 Merchant Slutins: Electrnic Catalgs, Search Engines, and Shpping Carts electrnic catalgs (e-catalgs) The presentatin f prduct infrmatin in an electrnic frm; the backbne f mst e-selling sites Online Catalgs Versus Paper Catalgs 2-17

19 Merchant Slutins: Electrnic Catalgs, Search Engines, and Shpping Carts EC SEARCH ACTIVITIES, TYPES, AND ENGINES Types f EC Searches Internet/Web Search enterprise search The practice f identifying and enabling specific cntent acrss the enterprise t be indexed, searched, and displayed t authrized users 2-18

20 Merchant Slutins: Electrnic Catalgs, Search Engines, and Shpping Carts desktp search Search tls that search the cntents f a user s r rganizatin s cmputer files, rather than searching the Internet The emphasis is n finding all the infrmatin that is available n the user s PC, including Web brwser histries, archives, and wrd-prcessed dcuments, as well as in all internal files and databases. 2-19

21 Merchant Slutins: Electrnic Catalgs, Search Engines, and Shpping Carts search engine A cmputer prgram that can access databases f Internet resurces, search fr specific infrmatin r key wrds, and reprt the results Sftware (Intelligent) Agents Questins and Answers Online Vice-Pwered Search Visual Shpping Search Engine 2-20

22 Merchant Slutins: Electrnic Catalgs, Search Engines, and Shpping Carts electrnic shpping cart An rder-prcessing technlgy that allws custmers t accumulate items they wish t buy while they cntinue t shp OTHER MECHANISMS IN MERCHANT SOFTWARE Other Shpping Engines Prduct Cnfiguratin 2-21

23 Auctins, Bartering, and Negtiating Online auctin A cmpetitive prcess in which a seller slicits cnsecutive bids frm buyers (frward auctins) r a buyer slicits bids frm sellers (backward auctins); prices are determined dynamically by the bids dynamic pricing Prices that change based n supply and demand relatinships at any given time 2-22

24 Auctins, Bartering, and Negtiating Online TRADITIONAL AUCTIONS VERSUS E-AUCTIONS Limitatins f Traditinal Offline Auctins electrnic auctins (e-auctins) Auctins cnducted nline INNOVATIVE AUCTIONS 2-23

25 Auctins, Bartering, and Negtiating Online TYPES OF AUCTIONS One Buyer, One Seller One Seller, Many Ptential Buyers frward auctin An auctin in which a seller entertains bids frm buyers; bidders increase price sequentially 2-24

26 Auctins, Bartering, and Negtiating Online One Buyer, Many Ptential Sellers reverse auctin (bidding r tendering system) Auctin in which the buyer places an item fr bid (tender) n a request fr qute (RFQ) system, ptential suppliers bid n the jb, with the price reducing sequentially, and the lwest bid wins; primarily a B2B r G2B mechanism name-yur-wn-price mdel Auctin mdel in which a wuld-be buyer specifies the price (and ther terms) he r she is willing t pay t any willing and able seller; a C2B mdel that was pineered by Priceline.cm. 2-25

27 2-26

28 Auctins, Bartering, and Negtiating Online Many Sellers, Many Buyers duble auctin An auctin in which multiple buyers and their bidding prices are matched with multiple sellers and their asking prices, cnsidering the quantities n bth sides penny auctin A frmal auctin in which participants pay a nnrefundable small fee fr each bid; bid level changes by small increments 2-27

29 2-28

30 Auctins, Bartering, and Negtiating Online Limitatins f E-Auctins Minimal Security Pssibility f Fraud Limited Participatin 2-29

31 Auctins, Bartering, and Negtiating Online IMPACTS OF AUCTIONS Auctins as a Scial Mechanism t Determine a Price Auctins as a Highly Visible Distributin Mechanism Auctins as an EC Cmpnent in a Business Mdel Auctins fr Prfit fr Individuals 2-30

32 Auctins, Bartering, and Negtiating Online ONLINE BARTERING bartering The exchange f gds and services e-bartering (electrnic bartering) Bartering cnducted nline, usually in a bartering exchange bartering exchange A marketplace in which an intermediary arranges barter transactins ONLINE NEGOTIATING 2-31

33 Scial Sftware Tls: Frm Blgs t Wikis t Twitter scial sftware A sftware prduct that enables peple t rendezvus, cnnect, and cllabrate thrugh cmputer-mediated cmmunicatin blg A persnal website that is pen t the public t read and t interact with; dedicated t specific tpics r issues vlg (r vide blg) A blg with vide cntent 2-32

34 Scial Sftware Tls: Frm Blgs t Wikis t Twitter Building Effective Blgs Cmmercial Uses f Blgs Ptential Risks f Crprate Blgs micrblgging A frm f blgging that allws users t write messages (usually up t 140 characters) and publish them, either t be viewed by anyne r by a restricted grup that can be chsen by the user; these messages can be submitted by a variety f means, including text messaging, instant messaging, , MP3, r just n the Web 2-33

35 Scial Sftware Tls: Frm Blgs t Wikis t Twitter Twitter A free micrblgging service that allws its users t send and read ther users updates tweets Text-based psts up t 140 characters in length psted t Twitter The Essentials f Twitter fr Business The Majr Benefits f Twitter Examples f Twitter as Enterprise Tls 2-34

36 Scial Sftware Tls: Frm Blgs t Wikis t Twitter wiki (wikilg) A blg that allws everyne t participate as a peer; anyne may add, delete, r change cntent Business Applicatins f Wikis 2-35

37 Scial Sftware Tls: Frm Blgs t Wikis t Twitter MECHANISM AIDS FOR WEB 2.0 TOOLS: TAGS, FOLKSONOMY, MASHUPS, AND SOCIAL BOOKMARKS tag A nnhierarchical key wrd r term assigned t a piece f infrmatin (such as an Internet bkmark, digital image, vide clip, r any cmputer dcument) flksnmy (cllabrative tagging, scial tagging) The practice and methd f cllabratively creating, classifying, and managing tags t anntate and categrize cntent 2-36

38 Scial Sftware Tls: Frm Blgs t Wikis t Twitter mashup Cmbinatin f tw r mre websites int a single website that prvides the cntent f bth sites (whle r partial) t deliver a nvel prduct t cnsumers scial bkmarking Web service fr sharing Internet bkmarks; the sites are a ppular way t stre, classify, share, and search links thrugh the practice f flksnmy techniques n the Internet and intranets 2-37

39 Virtual Cmmunities and Scial virtual cmmunity Netwrks A grup f peple with similar interests wh interact with ne anther using the Internet 2-38

40 Virtual Cmmunities and Scial Netwrks CHARACTERISTICS OF TRADITIONAL ONLINE COMMUNITIES AND THEIR CLASSIFICATION Types f Cmmunities Assciatins Affinity prtals Ethnic cmmunities Gender cmmunities Catering t yung peple Cmmunities f practice Neighbrhd cmmunities Scial netwrks sites Virtual wrlds 2-39

41 Virtual Cmmunities and Scial Netwrks Other Classificatins f Virtual Cmmunities Public Versus Private Cmmunities Classificatin Categries ONLINE SOCIAL NETWORKS A Definitin and Basic Infrmatin The Size f Scial Netwrk Sites A Glbal Phenmenn Representative Capabilities and Services Prvided by Scial Netwrk Sites 2-40

42 Virtual Cmmunities and Scial Netwrks business-riented scial netwrks A scial netwrk whse majr interest is business tpics and whse members are prfessinal peple; such netwrks are used mstly fr creating cntacts, prviding requirements, and enlisting members supprt fr prblem slving and knwledge sharing 2-41

43 Virtual Cmmunities and Scial Netwrks Example f a Business-Oriented Scial Netwrk Sme Capabilities f Business-Oriented Netwrks Business Mdels and Services Related t Scial Netwrking Scial Netwrk Analysis Sftware Xanga Digg mbile scial netwrking Members cnverse and cnnect with ne anther using cell phnes r ther mbile devices. Mbile Cmmunity Activities SOCIAL NETWORK SERVICES 2-42

44 Virtual Wrlds as an Electrnic Cmmerce Mechanism virtual wrld A user-defined wrld in which peple can interact, play, and d business; the mst publicized virtual wrld is Secnd Life avatars Animated cmputer characters that exhibit humanlike mvements and behavirs 2-43

45 Virtual Wrlds as an Electrnic Cmmerce Mechanism BUSINESS ACTIVITIES AND VALUE IN VIRTUAL WORLDS Cllabratin Research and Marketing Virtual Shpping Trading Virtual Prperties 2-44

46 The Future: Web 3.0 and Web Web A term used t describe the future f the Wrld Wide Web; it cnsists f the creatin f high-quality cntent and services prduced by gifted individuals using Web 2.0 technlgy as an enabling platfrm Semantic Web An evlving extensin f the Web in which Web cntent can be expressed nt nly in natural language, but als in a frm that can be understd, interpreted, and used by intelligent cmputer sftware agents, permitting them t find, share, and integrate infrmatin mre easily 2-45

47 The Future: Web 3.0 and Web Web The Web generatin after Web 3.0 that is still an unknwn entity; hwever, it is envisined as being based n islands f intelligence and as being ubiquitus THE TECHNOLOGICAL ENVIRONMENT McKinsey & Cmpany s Predictin Nichlas Carr s & Cmpany s Predictin 2-46

48 2-47

49 Managerial Issues 1. Shuld we use auctins fr selling? 2. Shuld we barter? 3. Hw d we select merchant sftware? 4. Hw can we use Facebk and ther scial netwrks in ur business? 5. Hw shall we start using Web 2.0 tls? 6. Shall we take part in virtual wrlds? 7. Hw shuld we deal with Web 2.0 risks? 2-48

50 Summary 1. Activities and mechanisms 2. E-marketplaces and their cmpnents 3. The majr types f e-marketplaces 4. Electrnic catalgs, search engines, and shpping carts 5. Types f auctins and their characteristics 6. The benefits and limitatins f auctins 2-49

51 Summary 7. Bartering and negtiating 8. The structure and rle f virtual cmmunities 9. Web 2.0 tls 10. Scial netwrks as an EC mechanism 11. Virtual wrlds 12. Web 3.0 and Web

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