Objective #1: Explain the term "electronic commerce" and the second wave of ecommerce growth.
Definition of electronic commerce: ???
Categories of electronic commerce
B2B - supply management, e-procurement, EFT (electronic funds transfer) & EDI (electronic data interchange)
other transactions, etc. that support selling & purchasing activities - hiring employees, training, logistics, manufacturing , advertising, communication, telecommuting, etc.
C2C? - eBay, swapagift, etc. This can be considered part of B2C.
see Figure 1-1 for relative size of these 3 categories
Second Wave of ecommerce growth
see Figure 1-4 on p. 13 for some differences between first and second waves.
Objective #2: Define various terms related to ecommerce.
Dot-Com Boom (i.e. Bubble) - 1997-2000, easy venture capital, technology means not mature and too expensive
Dot-Com Bust - 2000-2003 - copyright/intellectual property issues, online advertising didn't support business models
Objective #3: Explain various business models used in ecommerce.
How do businesses make money on the Internet?
How do individuals make money on the Internet?
revenue model - collection of business processes used to identify customers, market to those customers, & generate sales to those customers
other processes besides the 3 listed in the revenue model above include purchasing raw materials, converting materials & labor to finished goods, logistics, hiring & training employees, managing finances, etc.
Some of these business processes can be done more effectively with electronic commerce and some cannot. Electronic commerce can increase sales and decrease costs.
Advantages of ecommerce :
identify new suppliers
negotiate more effectively & competitively
quicker transactions, easier exchange of info especially digital goods
more choices for buyers, markets open 24 x 7
Disadvantages of ecommerce:
inability to present some goods over the Web (smell, fitting sizes, etc)
inability to get a critical mass of potential buyers (WebVan & HomeGrocer though some online grocers have been moderately successful including Peapod, Grocery Gateway in Toronto, Disco Virtual in Buenos Aires, Tesco in UK, FreshDirect in NY)
difficult to tie existing databases & transaction-processing software with the available online ecommerce packages
Objective #4: List and explain several notable failures in ecommerce.
Pets.com - low value-to-weight ratio for pet food
Search for more.
Objective #5: Explain the growth of Amazon.com and its successful revenue model
books are easy to sell online
located in Seattle
no publisher controls supply of all books
customers review books at Amazon
customers are paid for referrals
Amazon developed successful online sales service that it sells to Toys R Us, Borders, CDNow, Target & other companies