ecommerce

Welcome to TEC2441 E-Commerce Technology : Welcome to TEC2441 E-Commerce Technology Ms. Angeline Room: FIT BR 1020 angeline@mmu.edu.my

Outline : TEC2441 2 Outline Part I: Introduction to E-Commerce L1 - The Revolution is Just Beginning L2 - E-Commerce Business Models and Concepts Part II: Technology Infrastructure for E-Commerce L3 & L4 - Internet and WWW: E-Commerce Infrastructure L5 - Building an E-Commerce Website L6 - Security and Encryption L8 - E-Commerce Payment Systems

Outline : TEC2441 3 Outline Part III: Business Concepts L9 - E-Commerce Marketing Concepts L10 - E-Commerce Marketing Communications Part IV: E-Commerce in Action L11 - Retailing on the Web & Online Service Industries L12 - B2B E-Commerce: Supply Chain Management and Collaborative Commerce

Grading Criteria : TEC2441 4 Grading Criteria Coursework 40% Research Project 10% E-Commerce Website Development 15% Mid-term Test 15% Final Exam 60%

Textbook : TEC2441 5 Textbook Kenneth C. Laudon, Carol Guercio Traver, Carol G. Traver E-Commerce: Business, Technology, Society, 2nd Edition, Addison-Wesley, 2004 (ISBN: 032120056X)

Introduction to E-Commerce: The Revolution Is Just Beginning : Introduction to E-Commerce: The Revolution Is Just Beginning Lecture 1

Learning Objectives : TEC2441 7 Learning Objectives Define e-commerce and describe how it differs from e-business Identify the unique features of e-commerce technology and discuss their business significance Describe the major types of e-commerce Understand and compare E-commerce I and E-commerce II era Identify the major themes underlying the study of e-commerce Identify the major academic disciplines contributing to e-commerce research

Amazon.com: Tuned-Up and Profitable : TEC2441 8 Amazon.com: Tuned-Up and Profitable http://www.amazon.com

Amazon.com: Tuned-Up and Profitable : TEC2441 9 Amazon.com: Tuned-Up and Profitable Story of Amazon in many ways mirrors story of e-commerce itself Amazon offers consumers four compelling reasons to shop: selection, convenience, price and service Founded in 1995, went public in 1997 From 1997-2000, revenues increased from $148 million to $2.7 billion but so did losses, to $1.4 billion In 2001-2002, new focus on cost-cutting and achieving profitability leads to first quarterly profits ever in 2002

E-commerce Defined : TEC2441 10 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

E-commerce vs. E-business : TEC2441 11 E-commerce vs. E-business Debate among consultants and academics about meanings and limitations of terms e-commerce and e-business We use the term e-business to refer primarily to the digital enablement of transactions and processes within a firm, involving information systems under the control of the firm E-business does not include commercial transactions involving an exchange of value across organizational boundaries

The Difference between E-commerce and E-business : TEC2441 12 The Difference between E-commerce and E-business

Why Study E-commerce? : TEC2441 13 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 has a number of unique features that help explain why we have so much interest in e-commerce

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Types of E-commerce : TEC2441 16 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)

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B2C : TEC2441 18 B2C Involves online businesses attempting to reach individual consumers In 2002, total B2C revenues were about $72-$78 billion Many types of business models within this category including online retailers, content providers, portals, transaction brokers, service providers, market creators and community providers

B2B : TEC2441 19 B2B Involves businesses focusing on selling to other businesses Largest form of e-commerce ($800 billion in 2002) Two primary business models within B2B: Net marketplaces (includes e-distributors, e-procurement companies, exchanges and industry consortia) Private industrial networks (includes single firm networks and industry-wide networks)

C2C : TEC2441 20 C2C Provides a way for consumers to sell to each other, with the help of an online market maker eBay most well-known example Estimated that size of C2C commerce will reach $15 billion by 2004

P2P : TEC2441 21 P2P Uses peer-to-peer technology, which enables Internet users to share files and computer resources without having to go through a central Web server Napster most well-known example until put out of business for copyright infringement Today, Kazaa is the leading P2P software network, although also under attack for copyright infringement

M-Commerce : TEC2441 22 M-Commerce Use of wireless digital devices such as cell phones and handheld devices to enable transactions on the Web Most widely used in Japan and Europe (especially Finland) Expected to grow rapidly in U.S. over the next five years.

Growth of Internet : TEC2441 23 Growth of Internet The Internet is a worldwide network of computer networks built on common standards Internet was first created in 1960s Today is world’s largest network, connecting over 500 million computers worldwide Services include the Web, e-mail, file transfers, etc. Can measure growth of Internet by looking at number of Internet hosts with domain names: In January 2003, there were 170 million Internet hosts with domain names, up from 70 million in 2000 Growing at about 50% a year

The Growth of the Internet, Measured by Number of Internet Hosts with Domain Names : TEC2441 24 The Growth of the Internet, Measured by Number of Internet Hosts with Domain Names

Growth of Web : TEC2441 25 Growth of Web Web is the most popular service on the Internet Developed in early 1990s Provides access to Web pages -- documents created with HTML Can include text, graphics, animations, music, videos Web content in form of Web pages has grown exponentially, from over 2 billion pages in 2000 to over 6 billion pages in 2003

The Growth of Web Content : TEC2441 26 The Growth of Web Content

The Growth of B2C E-commerce : TEC2441 27 The Growth of B2C E-commerce

The Growth of B2B E-commerce : TEC2441 28 The Growth of B2B E-commerce

Potential Limitations on the Growth of B2C E-commerce : TEC2441 29 Potential Limitations on the Growth of B2C E-commerce Expensive technology – Although currently a limitation, may become less so as prices of entry-level PCs fall Complex software interface – Integration with television may reduce this limitation Sophisticated skill set – This limitation may recede as PC operating system evolves, becomes more simple Persistent cultural attraction of physical markets and traditional shopping experiences – unlikely to change Persistent global inequality limiting access to telephones and computers – unlikely to change

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E-commerce I and E-commerce II : TEC2441 31 E-commerce I and E-commerce II E-commerce I: A period of explosive growth and extraordinary innovation; key concepts developed and explored Begins in 1995, ends in March 2000 when stock market valuations for dot.com companies begin to collapse Thousands of dot.com companies formed, backed by over $125 billion in financial capital E-commerce II: Characterized by a reassessment of e-commerce companies and their value Begins in January 2001; ongoing

E-commerce II: 2001-2007 : TEC2441 32 E-commerce II: 2001-2007 Crash in stock market values for e-commerce companies throughout 2000 marks end of E-commerce I period Reasons for crash: Run-up in technology stocks due to enormous information technology capital expenditure of firms rebuilding their internal business systems to withstand Y2K Telecommunications industry had built excess capacity in high-speed fiber optic networks 1999 Christmas season provided less sales growth that anticipated and demonstrated e-commerce was not easy (eToys.com) Valuations of dot.com and technology companies had risen so high supporters were questioning whether earnings could justify the prices of the shares.

E-commerce Today: Successes and Failures : TEC2441 33 E-commerce Today: Successes and Failures E-commerce I is a stunning technological success E-commerce I is a mixed success from a business perspective Many visions developed during E-commerce I not fulfilled Economists’ visions of “friction-free” commerce and Bertrand model of extreme market efficiency not entirely realized Entrepreneurs and venture capitalists’ visions have not materialized exactly as predicted either

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Predictions for the Future : TEC2441 35 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 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

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Understanding E-commerce: Organizing Themes : TEC2441 38 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

The Internet and the Evolution of Corporate Computing : TEC2441 39 The Internet and the Evolution of Corporate Computing

Academic Disciplines Concerned with E-commerce : TEC2441 40 Academic Disciplines Concerned with E-commerce Technical Approaches Computer scientists and information system researchers Management scientists Behavioral Approaches Information system researchers Economists Marketing Management Finance and accounting Sociologists Legal scholars

Disciplines Concerned with E-commerce : TEC2441 41 Disciplines Concerned with E-commerce

Case Study: Kazaa Is Rockin’ and Rappin’ But for How Long? : TEC2441 42 Case Study: Kazaa Is Rockin’ and Rappin’ But for How Long? Kazaa’s Media Desktop – largest and most successful free music file-swapping site; 65 million users worldwide; 3 million downloads per week; 1 billion tracks available Relies on a software program known as Fast Track; claims there is no central index, control, or administration Makes money by acting as an advertising network; has also developed parallel network called Altnet that uses a pay-for-download business model Currently being sued by RIAA and MPIA for copyright infringement (Metro Goldwyn Mayer Studios v. Grokster et al.) April 2003, court ruled defendants not liable; case is being appealed

Kazaa’s Home Page : TEC2441 43 Kazaa’s Home Page

Music Swapping Software : TEC2441 44 Music Swapping Software

Review of Learning Objectives : TEC2441 45 Review of Learning Objectives Define e-commerce and describe how it differs from e-business Identify the unique features of e-commerce technology and discuss their business significance Describe the major types of e-commerce Understand and compare E-commerce I and E-commerce II era Identify the major themes underlying the study of e-commerce Identify the major academic disciplines contributing to e-commerce research

Acknowledgements and References : TEC2441 46 Acknowledgements and References Images on title page are adopted and amended from http://www2.automation.siemens.com/ www.worldexposure.com/v3/webdesign/ http://www.tigerwebsolutions.com/ecommerce.php Kenneth C. Laudon, Carol Guercio Traver, “E-Commerce: Business. Technology. Society - 2nd Edition”, Addison Wesley, 2004 (ISBN: 032120056X)