CHAPTER 2. Presented By: Raghda Essam Dina El-Haddad Samar El-Haddad Menna Hatem. E-Marketplaces: Structures, Mechanisms and Impacts
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1 CHAPTER 2 Presented By: Raghda Essam Dina El-Haddad Samar El-Haddad Menna Hatem E-Marketplaces: Structures, Mechanisms and Impacts
2 Agenda Introduction E-Marketplaces and Its components Transaction, Electronic Catalogs in E-Commerce Online Auction, Bartering and Negotiating E-Commerce in wireless environment Competition in digital Economy and its impact on Industries and business organization
3 Introduction Electronic markets play a central role in the economy, facilitating the exchange of information, goods, services and payments. In the process, they create economic value for buyers, sellers, markets intermediaries, and for the society at large
4 What is Electronic Markets? E-Marketplace is a virtual marketplace in which sellers and buyers meet and conduct different types of transaction. E-Market functions are the same as that of a physical marketplace However computerized systems tend to make markets much more efficient by providing more updated information to buyers and sellers with your content.
5 E-Marketplace Components and participants The major components and players in market space are: Customers Sellers Product and services Physical products Digital products Infrastructure Front end Back end Intermediaries Other business partners and Support services
6 Types of E-Marketplaces: From Storefronts to Portals The major B2C e-marketplaces are storefronts and internet malls. Electronic storefronts An electronic store refers to a single company s Web site where products and services are sold, it may belong to a manufacturer, retailer, individuals selling from home or another type of business
7 Cont d Electronic Malls An online shopping center where many stores are located. Consumers can shop in electronic malls (e-malls) similar to malls in the physical world. When a consumer indicates the category he/she is interested in, the consumer is transferred to the appropriate independent storefront
8 Types of Stores and Malls General stores/ malls These are large market spaces that sell all types of products. Specialized stores/ malls These sell only one or few types of products. Regional versus global stores Some stores that serve customers that live nearby.
9 Transaction, Electronic Catalogs in E-Commerce What is going on in these markets?! The Major EC activity is Electronic Trading (A seller sells to customers, the sellers itself buys from suppliers) E-procurment Buys materials, products, and so on from suppliers, distributors(b2b),or from the government(g2b)
10 Intermediaries Roles Intermediaries play an important role in commerce by providing value-added activates and services There are many types of intermediaries, Most wellknown in physical world (Wholesalers, retailers) In Cyberspace, There are also electronic Intermediaries known as infomediaries Infomediaries Provieds and/or Control information flow in cyberspace (Aggregating information and selling it to others)
11 Brokers A broker is a company that facilitates transactions between buyers and sellers. Different types of brokers Buy/sell fulfillment Coporation that helps consumers place buy and sell on (etrade) Virtual mall Company that helps consumers buy from a variety of stores (Yahoo Stores)
12 Cont d Metamediary Firm that offers customers access to variety of stores with transaction services such as financial services (Amazon) Search Agent Company that help consumers compare different stores (shopping.com)
13 Intermediation Is Needed Producers and consumers may interact directly Direct interactions are sometimes undesirable or unfeasible Intermediaries whether human or electronic can address the following five important limitations Search cost Lack of privacy Incomplete information Contract risk Pricing inefficiencies
14 E-Distributor E-Distributor An e-commerce intermediary that connects manufacturers with business buyers by aggregating the catalogs of many manufacturers in one place Usually provide two types of services Relevant information about demand, supply,prices, and requirements Offer value-added services such as transfer of products, consulting,..
15 Market Mechanisms To enable selling online, a web site usually needs EC merchant server software, the basic functionality offered by such software includes electronic catalogs, search engines, and shopping carts Electronic Catalogs The Presentation of product in an electronic form; the backbone of most e-selling sites Electronic Catalogs can be classified according to three dimensions Dynamics of information Degree of customization Integration with business process
16 Cont d Search Engine A computer program that can access database of internet resources, search for specific information or key words, and report the result Software(Intelligent) agent Software that can perform routine tasks that requrie intelligence Electronic Shopping Cart An Order-Processing technology that allows customers to accumulate items they wish to buy while they continue to shop
17 Online Auction Auctions as EC market mechanisms What is auction? Auction is a market mechanisms where prices are determined dynamically by bids. Auctions can be done online or offline Actions can be conducted either in public auctions sites like ebay for example or done by invitations to private auctions.
18 Online Auction traditional versus E-auction Traditional auction E-auction Traditional or physical auctions are still very popular although E-auction have increase rabidly. Traditional offline auction have a lot of limitations like they last only few minutes or even seconds, the rapid process may give buyer little time to took decision either to bid or not and so the sellers may loss a chance of getting the highs price, bidder may not get what the really want(cant examine), bidder have difficulty of knowing the locations and timing of auctions and also sellers sometimes have difficulty moving goods and commissions are so high because of renting places and advertising. E-auction : an auction conducted online It provide the services in low costs and with wide array, every one can join individuals and corporations it started over the LAN in 1980s and over the internet in Normally consumer goods are not suitable for E-auctions
19 Online Auction Dynamic Pricing dynamic pricing is the change in the price depending on the supply and demand relationships at any given time. The main major characteristic of an auction is that they are based on dynamic pricing. Prices keep fluctuate basing on the supply and demand processed unlike catalog prices which is fixed like in stores and supermarkets
20 Online Auction Type of auctions One buyer, One seller Negations can be done and the resulting price is determined by both of seller and buyer. One Seller, Many Potential buyers The seller uses the forward auction in which the seller entertains bid for buyers bidders increase price sequentially.
21 Online Auction Type of auctions One buyer, Many potential sellers Two types of auctions can be done in such case: Reverse auction(bidding or tendering system) in which the buyer place an item for bid and sellers bid on the job in which the price keep reducing and the lowest bid win. name-your-own-price model in which a buyer specifies the price and other terms that he is willing to pay and any willing seller could accept it. Many sellers, Many buyers When there are many sellers and buyers so buyers and their bidding prices are matched with sellers and their asking prices and this case is could double auctions
22 Online Auction benefits and limitations of E-auctions Benefits of E-auctions Opportunity of getting higher prices for a seller Ruther than fixed one s Can liquidate large quantities quickly Opportunity to find unique items for a buyer Increase customer relationship and loyalty (in case of specialist B2B auctions sites) Limitations of E-auctions Minimal of security: some websites are not secured enough. Possibility of fraud: auctions items in many cases are uniqe and here buyers can t see or examine items. Limited participation: some auctions are by invations only and so a lot of dealers don t have the same opportunity of large pool of buyers
23 Bartering and Negotiating Online Online Bartering Bartering is the process of exchange goods and services. The problem with bartering is that it is difficult of find trading partner, and that s why they use classified ads to advertise what they need and what they offer and intermediary helps but they take almost % commission. E-bartering is the bartering conducted online usually in a bartering exchange. Bartering exchange is a marketplace in which an intermediary arranges barter transactions.
24 Bartering and Negotiating Online Online Negotiation Dynamic prices can also determined by negotiations. its interaction between seller and buyer Negations pricing are commonly used for expensive and specialized products and large quantities. its well known in offline world (e.g. in real estate, automobile purchases and contract work) According to choi and whinston (2000) that online negotiation is easier than offline one. Three factors facilitate the online negotiations : The products and services that are customized Computers technology that facilitates the negotiation process soft wares that search and match needs and provides quality customer serves and base where prices can be negotiate
25 E-Commerce in Wireless Environment Due to widespread adoption of wireless and mobile networks, mobile computing became more possible. We have: - Mobile Commerce (m-commerce/m-business): refers to conduct of e-commerce via wireless device. - Location-based Commerce (L-commerce): is m- commerce targeted to customer whose preference and needs and location (using GPS) are known.
26 Mobile Portals DoCoMo s i-mode: world s largest mobile portal, users can conduct large variety of m-commerce applications: a) Shopping guides: number of phones and addresses b) Maps & Transportation: digital maps for routes c) Ticketing: airline tickets d) News & exports: fast access to global news
27 Competition in digital Economy Competitive factors: a) Lower search costs for buyers b) Speedy comparisons c) Lower prices d) Customer service e) Differentiation & Personalization Porter s competitive analysis in industry
28 Impact of EC on Business Process Web technologies are offering organizations to rethink strategic business models, processes, relationships (called e-opportunities ) consists of: a) E-Marketing: Improve marketing of existing products b) E- Operations: Improve marketing of existing products c) E- Services: Improve marketing of existing products
29 Questions
30 Thank you
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