1 / 73

Introduction to E-Commerce

Introduction to E-Commerce. Internet Technology Provides the Vehicle for E-Commerce. Electronic Commerce is the buying, selling, and trading of goods on the Internet. Introduction to E-Commerce. Benefits of E-Commerce. Introduction to E-Commerce. Shop-at-home convenience

geraldob
Download Presentation

Introduction to E-Commerce

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Introduction to E-Commerce Internet Technology Provides the Vehicle for E-Commerce Electronic Commerce is the buying, selling, and trading of goods on the Internet.

  2. Introduction to E-Commerce Benefits of E-Commerce

  3. Introduction to E-Commerce Shop-at-home convenience Detailed product information Customer controls transaction Simplified ordering Open 24/7/365 Improved Customer Service

  4. Introduction to E-Commerce Elimination of Boundaries Direct to customer (no middleman) Expanded Markets

  5. Introduction to E-Commerce Streamlined order processing Fewer errors in order entry Increased speed Lower marketing costs Cost Cutting

  6. Introduction to E-Commerce Additional sales channel User fee income Advertising Income Lower marketing costs Higher Profits

  7. Introduction to E-Commerce Security & privacy Scams & Fraud Down time & poor service Awkward design & functionality Lack of retail experience E-Commerce Challenges

  8. Introduction to E-Commerce Where to Use E-Commerce • Value Chain Analysis • SWOT Analysis

  9. Value Chain Analysis

  10. Chapter 2 Technology Infrastructure: The Internet and the World Wide Web

  11. Technology Overview • Computer networks and the Internet form the basic technology structure for electronic commerce. • The computers in these networks run such software as: • Operating systems, database managers, encryption software, multimedia creation and viewing software, and the graphical user interface

  12. Packet-Switched Networks • A local area network (LAN) is a network of computers close together. • A wide area network (WAN) is a network of computers connected over a great distance. • Circuit switching is used in telephone communication. • The Internet uses packet switching • Files are broken down into small pieces (called packets) that are labeled with their origin, sequence, and destination addresses.

  13. Routing Packets • The computers that decide how best to forward each packet in a packet-switched network are called ‘routers’. • The programs on these routers use ‘routing algorithms’ that call upon their ‘routing tables’ to determine the best path to send each packet. • When packets leave a network to travel on the Internet, they are translated into a standard format by the router. • These routers and the telecommunication lines connecting them are referred to as ‘the Internet backbone’.

  14. Routing Packets

  15. Internet Protocols • A protocol is a collection of rules for formatting, ordering, and error-checking data sent across a network.

  16. Internet Protocols • The open architecture has four key rules that have contributed to the success of the Internet. • Independent networks should not require any internal changes to be connected to the network. • Packets that do not arrive at their destinations must be retransmitted from their source network. • Router computers act as receive-and-forward devices; they do not retain information about the packets that they handle. • No global control exists over the network.

  17. Internet Protocols • The Transmission Control Protocol (TCP) and the Internet Protocol (IP) are the two protocols that support the Internet operation (commonly referred to as TCP/IP). • The TCP controls the disassembly of a message into packets before it is transmitted over the Internet and the reassembly of those packets when they reach their destination. • The IP specifies the addressing details for each packet being transmitted.

  18. IP Addresses • IP addresses are based on a 32-bit binary number that allows over 4 billion unique addresses for computers to connect to the Internet. • IP addresses appear in ‘dotted decimal’ notation (four numbers separated by periods).

  19. Domain Names • To make the numbering system easier to use, an alternative addressing method that uses words was created. • An address, such as www.course.com, is called a domain name. • The last part of a domain name (i.e., ‘.com’) is the most general identifier in the name and is called a ‘top-level domain’ (TLD).

  20. Top-level Domain Names

  21. Web Page Delivery • Hypertext Transfer Protocol (HTTP) is the set of rules for delivering Web pages over the Internet. • HTTP uses the client/server model • A user’s Web browser opens an HTTP session and sends a request for a Web page to a remote server. • In response, the server creates an HTTP response message that is sent back to the client’s Web browser. • The combination of the protocol name and the domain name is called a uniform resource locator (URL).

  22. Hypertext Markup Language • HTML is a simplified programming language that includes tags defining the format and style of text elements in a document.

  23. HTML Tags • An HTML document contains both document text and elements. • Tags are codes that are used to define where an HTML element starts and (if necessary) where it ends. • In an HTML document, each tag is enclosed in brackets (<>). • A two-sided tag set has an opening tag and a closing tag.

  24. HTML Links • Hyperlinks are bits of text that connect the current document to: • another location in the same document • another document on the same host machine • another document on the Internet • Hyperlinks are created using the HTML anchor tag.

  25. HTML Editors • HTML documents can be created in any general-purpose text editor or word processor. • Sophisticated editors can create full-scale, commercial-grade Web sites with database access, graphics, fill-in forms, and display the Web page along with the HTML code. • Microsoft FrontPage and Macromedia Dreamweaver are examples of Web site builders.

  26. International Nature of Electronic Commerce • Companies with established reputations • Often create trust by ensuring that customers know who they are • Can rely on their established brand names to create trust on the Web • Customers’ inherent lack of trust in “strangers” on the Web • Logical and to be expected

  27. This Cartoon from The New Yorker Illustrates Anonymity on the Web

  28. Language Issues • To do business effectively in other cultures • Must adapt to culture • Researchers have found that • Customers are more likely to buy products and services from Web sites in their own language • Localization • Translation that considers multiple elements of local environment

  29. Culture Issues • Important element of business trust • Anticipate how the other party to a transaction will act in specific circumstances • Culture • Combination of language and customs • Varies across national boundaries • Varies across regions within nations

  30. Infrastructure Issues • Internet infrastructure includes • Computers and software connected to Internet • Communications networks over which message packets travel • Organization for Economic Cooperation and Development’s (OECD) • Statements on Information and Communications Policy • Deal with telecommunications infrastructure development issues

  31. Infrastructure Issues (Continued) • Flat-rate access system • Consumer or business pays one monthly fee for unlimited telephone line usage • Contributed to rapid rise of U.S. electronic commerce • Targets for technological solutions • Paperwork and processes that accompany international transactions

  32. Revenue Models

  33. Revenue Models • Revenue model of selling goods and services on the Web • Based on mail order catalog revenue model that predates the Web Spiegel • Mail order or catalog model • Proven to be successful for wide variety of consumer items • Web catalog revenue model • Taking the catalog model to the Web

  34. Computers and Consumer Electronics • Apple, Dell, Gateway, and Sun Microsystems • Have had great success selling on the Web • Dell • Created value by designing entire business around offering high degree of configuration flexibility to its customers

  35. Books, Music, and Videos • Retailers using the Web catalog model to sell books, music, and videos • Among the most visible examples of electronic commerce • Jeff Bezos • Formed Amazon.com • Jason and Matthew Olim • Formed online music store they called CDnow • Used the Web catalog revenue model

  36. Luxury Goods • People are still reluctant to buy through a Web site • Web sites of Vera Wang and Versace • Constructed to provide information to shoppers, not to generate revenue • Web site of Evian • Designed for a select, affluent group of customers

  37. Clothing Retailers • Lands’ End • Pioneered idea of online Web shopping assistance with its Lands’ End Live feature in 1999 • Personal shopper • Intelligent agent program that learns customer’s preferences and makes suggestions • Virtual model • Graphic image built from customer measurements

  38. Flowers and Gifts • 1-800-Flowers • Created online extension to its telephone order business • Chocolatier Godiva • Offers business gift plans on its site

  39. Digital Content Revenue Models • Firms that own intellectual property • Have embraced the Web as a new and highly efficient distribution mechanism • Lexis.com • Provides full-text search of court cases, laws, patent databases, and tax regulations • ProQuest • Sells digital copies of published documents

  40. Advertising-Supported Revenue Models • Broadcasters provide free programming to an audience along with advertising messages KOMOKING • Success of Web advertising hampered by • No consensus has emerged on how to measure and charge for site visitor views • Stickiness of a Web site: ability to keep visitors and attract repeat visitors • Very few Web sites have sufficient visitors to interest large advertisers

  41. Web Portals • Web directory • A listing of hyperlinks to Web Pages • Portal or Web portal • Site used as a launching point to enter the Web • Almost always includes a Web directory and search engine • Example: Yahoo, AOL, Altavista

  42. Advertising-Subscription Mixed Revenue Models • Subscribers • Pay a fee and accept some level of advertising • Typically subjected to much less advertising • Used by • The New York Times and The Wall Street Journal

  43. Advertising-Subscription Mixed Revenue Models (continued) • Business Week • Offers some free content at its Business Week onlinesite • Requires visitors to buy subscription to Business Week print magazine

  44. Fee-for-Transaction Revenue Models • Businesses offer services and charge a fee based on number or size of transactions processed PayPal • Disintermediation • Removal of an intermediary from value chain • Reintermediation • Introduction of a new intermediary

  45. Fee-for-Service Revenue Models • Fee based on value of service provided • Services • Range from games and entertainment to financial advice • Online games • Growing number of sites include premium games in their offerings • Site visitors must pay to play these premium games

  46. Fee-for-Service Revenue Models (Continued) • Concerts and films • As more households obtain broadband access to the Internet • Companies are providing streaming video of concerts and films to paying subscribers • Professional Services • State laws • One of the main forces preventing U.S. professionals from extending their practices to the Web

  47. Revenue Models in Transition • Subscription to Advertising-Supported Model • Microsoft founded its Slate magazineWeb site • An upscale news and current events publication • Charged annual subscription fee after a limited free introductory period • Was unable to draw sufficient number of paid subscribers • Now operated as an advertising-supported site

  48. Advertising-Supported to Advertising-Subscription Mixed Model • Salon.com • Operated for several years as an advertising-supported site • Now offers optional subscription version of its site • Subscription offering • Motivated by company’s inability to raise additional money from investors

  49. Advertising-Supported to Fee-for-Services Model • Xdrive Technologies • Opened its original advertising-supported Web site in 1999 • Offered free disk storage space online to users • After two years, was unable to pay costs of providing the service with the advertising revenue generated • Later switched to a subscription-supported model

  50. Advertising-Supported to Subscription Model • Northern Light • Founded in August 1997 as a search engine with a twist • Revenue model • Combination of advertising-supported model plus a fee-based information access service • January 2002 • Converted to a new revenue model that was primarily subscription supported

More Related