Ecommerce. E-commerce Defined. E-commerce Developments and Themes 2006

Transcription

1 Ecommerce Copyright 2007 Pearson Education, Inc. Slide 1-1 E-commerce Developments and Themes 2006 More and more people and businesses are using the Internet to conduct commerce The e-commerce channel is deepening as more products and services come online Broadband and wireless Internet access are growing E-commerce business models are being refined to achieve higher levels of profitability At societal level, there is continued conflict over copyrights, content regulation, taxation, privacy, and Internet fraud and abuse. Copyright 2007 Pearson Education, Inc. Slide 1-2 E-commerce Defined E-commerce involves digitally enabled commercial transactions between and among organizations and individuals Digitally enabled transactions include all transactions mediated by digital technology Commercial transactions involve the exchange of value across organizational or individual boundaries in return for products or services Copyright 2007 Pearson Education, Inc. Slide 1-3 1

2 Understanding E-commerce: Organizing Themes Technology: Development and mastery of digital computing and communications technology Business: New technologies present businesses and entrepreneurs with new ways of organizing production and transacting business Society: Intellectual property, individual privacy, and public policy Copyright 2007 Pearson Education, Inc. Slide 1-4 Origins and Growth of E-commerce Precursors to e-commerce include Baxter Healthcare Electronic Data Interchange (EDI) French Minitel (1980s videotext system; still in use today) None of these precursor systems had the functionality of the Internet For our purposes, we date the beginning of e- commerce to 1995 Since then, has been fastest growing form of commerce in United States Copyright 2007 Pearson Education, Inc. Slide 1-5 Why Study E-commerce? E-commerce technology is different and more powerful than any of the other technologies that we have seen in the past century. E-commerce has challenged much traditional business thinking E-commerce (technology) has a number of unique features that help explain why we have so much interest in e-commerce Copyright 2007 Pearson Education, Inc. Slide 1-6 2

3 Seven Unique Features of E-commerce Technology and Their Significance Is ubiquitous (available everywhere, all the time) Offers global reach (across cultural/national boundaries) Operates according to universal standards (lowers market entry for merchants and search costs for consumers) Provides information richness (more powerful selling environment) Is interactive (can simulate face-to-face experience, but on a global scale) Increases information density (amount and quality of information available to all market participants) Permits personalization/customization Copyright 2007 Pearson Education, Inc. Slide 1-7 Types of E-commerce Classified by nature of market relationship Business-to-Consumer (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C) Classified by type of technology used Peer-to-Peer (P2P) Mobile commerce (M-commerce) Copyright 2007 Pearson Education, Inc. Slide 1-8 The Growth of B2C E-commerce SOURCE: Based on data from emarketer, Inc., 2005a; Shop.org and Forrester Research, 2005; Forrester Research, Copyright 2007 Pearson Education, Inc. Slide 1-9 3

4 The Growth of B2B E-commerce Figure 1.6, Page 25 SOURCE: Based on data from e-marketer, Inc., 2005; U.S. Department of Commerce, 2005; authors estimates. Copyright 2007 Pearson Education, Inc. Slide 1-10 Technology and E-commerce in Perspective The Internet and Web are just two of a long list of technologies, such as automobiles and radio, that have followed a similar historical path. Although e-commerce has grown explosively, eventually its growth will cap as it confronts its own fundamental limitations. Copyright 2007 Pearson Education, Inc. Slide 1-11 Potential Limitations on the Growth of B2C E-commerce Expensive technology Complex software interface Sophisticated skill set Persistent cultural attraction of physical markets and traditional shopping experiences Persistent global inequality limiting access to telephones and computers Copyright 2007 Pearson Education, Inc. Slide

5 Predictions for the Future Technology of e-commerce will continue to propagate through all commercial activity E-commerce prices will rise to cover the real cost of doing business on the Web and pay investors reasonable rate of return E-commerce margins and profits will rise to levels more typical of all retailers In B2C and B2B, traditional Fortune 500 companies will play growing and dominant role Number of successful pure online companies will decline and most successful e-commerce firms will adopt mixed clicks and bricks strategies Growth of regulatory activity worldwide Copyright 2007 Pearson Education, Inc. Slide 1-13 E-commerce Business Models Definitions Business model: set of planned activities designed to result in a profit in a marketplace Business plan: document that describes a firm s business model E-commerce business model: aims to use and leverage the unique qualities of Internet and Web Copyright 2007 Pearson Education, Inc. Slide 2-14 Key Ingredients of a Business Model Table 2.1, Page 59 Copyright 2007 Pearson Education, Inc. Slide

6 Revenue Model Describes how the firm will earn revenue, generate profits, and produce a superior return on invested capital Major types: Advertising revenue model Subscription revenue model Transaction fee revenue model Sales revenue model Affiliate revenue model Copyright 2007 Pearson Education, Inc. Slide 2-16 Categorizing E-commerce Business Models: Some Difficulties No one correct way We categorize business models according to e-commerce sector (B2C, B2B, C2C) Type of e-commerce technology used can also affect classification of a business model Some companies use multiple business models Copyright 2007 Pearson Education, Inc. Slide 2-17 B2C Business Models: Portal Offers powerful search tools plus an integrated package of content and services Typically utilizes a combined subscription/ advertising revenues/transaction fee model May be general or specialized (vortal) Copyright 2007 Pearson Education, Inc. Slide

7 B2C Business Models: E-tailer Online version of traditional retailer Types include: Virtual merchants Bricks-and-clicks Catalog merchants Manufacturer-direct Copyright 2007 Pearson Education, Inc. Slide 2-19 B2C Business Models: Content Provider Information and entertainment companies that provide digital content over the Web Typically utilizes a subscription, pay for download, or advertising revenue model Syndication a variation of standard content provider model Copyright 2007 Pearson Education, Inc. Slide 2-20 B2C Business Models: Transaction Broker Processes online transactions for consumers Primary value proposition saving of time and money Typical revenue model transaction fee Industries using this model include: Financial services Travel services Job placement services Copyright 2007 Pearson Education, Inc. Slide

8 B2C Business Models: Market Creator Uses Internet technology to create markets that bring buyers and sellers together Examples: Priceline.com ebay.com Typically uses a transaction fee revenue model Copyright 2007 Pearson Education, Inc. Slide 2-22 B2C Business Models: Service Provider Offers services online Value proposition: valuable, convenient, timesaving, low-cost alternatives to traditional service providers Revenue models: subscription fees or onetime payment Copyright 2007 Pearson Education, Inc. Slide 2-23 B2C Business Models: Community Provider Sites that create a digital online environment where people with similar interests can transact, communicate, and receive interestrelated information. Typically rely on a hybrid revenue model Examples: ivillage.com Friendster.com About.com Copyright 2007 Pearson Education, Inc. Slide

9 B2B Business Models: E-distributor Company that supplies products and services directly to individual businesses Owned by one company seeking to serve many customers Example: Grainger.com Copyright 2007 Pearson Education, Inc. Slide 2-25 B2B Business Models: E-procurement Companies Create and sell access to digital electronic markets B2B service provider is one type: offer purchasing firms sophisticated set of sourcing and supply chain management tools Application service providers: a subset of B2B service providers Example: Ariba Copyright 2007 Pearson Education, Inc. Slide 2-26 B2B Business Models: Exchanges An electronic digital marketplace where suppliers and commercial purchasers can conduct transactions Usually owned by independent firms whose business is making a market Generate revenue by charging transaction fees Usually serve a single vertical industry Number of exchanges has fallen to around 200 in 2005 Copyright 2007 Pearson Education, Inc. Slide

10 B2B Business Models: Industry Consortia Industry-owned vertical marketplaces that serve specific industries Horizontal marketplaces, in contrast, sell specific products and services to a wide range of industries Example: Exostar Copyright 2007 Pearson Education, Inc. Slide 2-28 B2B Business Models: Private Industrial Networks Digital networks (usually, but not always Internet-based) designed to coordinate the flow of communications among firms engaged in business together Single firm network: the most common form (Example: Walmart) Industry-wide networks: often evolve out of industry associations (Example: Agentrics) Copyright 2007 Pearson Education, Inc. Slide 2-29 Business Models in Emerging E-commerce Areas Consumer to Consumer (C2C): Provides a way for consumers to sell to each other, with the help of an online marketmaker such as ebay.com Peer-to-Peer (P2P): Links users, enabling them to share files and common resources without a common server M-commerce: Takes traditional e-commerce business models and leverages emerging new wireless technologies To date, a disappointment in the United States; however, technology platform continues to evolve Copyright 2007 Pearson Education, Inc. Slide

11 E-commerce Enablers Internet infrastructure companies: Companies whose business model is focused on providing infrastructure necessary for e- commerce companies to exist, grow, and prosper Provide hardware, software, networking, security, e-commerce software systems, payment systems, databases, hosting services, etc. Copyright 2007 Pearson Education, Inc. Slide