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Chapter 1: Introduction to Electronic Commerce
Electronic Commerce, Sixth Edition
Objectives
In this chapter, you will learn about: ? What electronic commerce is and how it is poised for a second wave of growth and a new focus on profitability ? Why business models have given way to revenue models and the analysis of business processes as key elements of electronic commerce initiatives
Electronic Commerce, Sixth Edition 2
Objectives (continued)
How economic forces have created a business environment that is fostering a rebirth of electronic commerce ? How businesses use value chains and SWOT analysis to identify electronic commerce opportunities ? Why electronic commerce is international by its very nature and what challenges arise in doing global electronic commerce
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Electronic Commerce: The Second Wave
Electronic commerce (e-commerce)
– Businesses trading with other businesses and internal processes
Electronic business (e-business)
– Term used interchangeably with e-commerce – The transformation of key business processes through the use of Internet technologies(IBM)
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Categories of Electronic Commerce
Five general e-commerce categories
– – – – – Business-to-consumer(B2C) Business-to-business(B2B) Business processes Consumer-to-consumer(C2C) Business-to-government(B2G)
Supply management or procurement（采购）
– Departments devoted to negotiating purchase transactions with suppliers
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Elements of Electronic Commerce
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Categories of Electronic Commerce (continued)
Transaction
– An exchange of value
Business processes
– The group of logical, related, and sequential activities and transactions in which businesses engage
Telecommuting or telework（远程办公或远程工作） 远程办公或远程工作）
– Employee logs in to a company computer through the Internet instead of traveling to the office
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Electronic Commerce Categories
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The Development and Growth of Electronic Commerce
Electronic funds transfers (EFTs，电子资金转帐 电子资金转帐) 电子资金转帐
– Also called wire transfers（电子转帐 电子转帐） 电子转帐 – Electronic transmissions of account exchange information over private communications networks
Electronic data interchange (EDI)
– Transmitting computer-readable data in a standard format to another business
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The Development and Growth of Electronic Commerce (continued
)
Trading partners
– Businesses that engage in EDI with each other
Value-added network (VAN，增值网 增值网) 增值网
– Independent firm – Offers connection and transaction-forwarding services to buyers and sellers engaged in EDI
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Actual and Estimated Online Sales in B2C and B2B Categories
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The Second Wave of Electronic Commerce
Defining characteristics of first wave
– Dominant influence of U.S. businesses – Extensive use of the English language – Low bandwidth data transmission technologies – Unstructured use of e-mail – Over-reliance on advertising as a revenue source – Widespread piracy（盗版）due to ineffective distribution（分销）of digital products
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The Second Wave of Electronic Commerce (continued)
As second wave begins
– Future of electronic commerce will be international in scope – Language translation and handling currency conversion problem will need to be solved – E-mail will be used as an integral part of marketing and customer contact strategies – More ,seeing figure 1-4 ,page 13 ……
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Business Models, Revenue Models, and Business Processes
（商业模式、盈利模式和业务流程） 商业模式、盈利模式和业务流程） ? Business model
– A set of processes that combine to yield a profit
Revenue model
– Used to
Identify customers ? Market to those customers ? Generate sales to those customers
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Focus on Specific Business Processes
Merchandising（零售推销）
– Combination of store（实体店面） design, layout, and product display knowledge
Commodity item （适合于电子商务的商品）
– Hard to distinguish from the same products or services provided by other sellers – Features have become standardized and well known
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Focus on Specific Business Processes (continued)
Shipping profile （适合于商品的运输规格） 适合于商品的运输规格）
– Collection of attributes that affect how easily a product can be packaged and delivered
High value-to-weight ratio （价值/重量比高的商品适合于电子商务）
– Can make overall shipping cost a small fraction of the selling price
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Advantages of Electronic Commerce
Electronic commerce can increase sales and decrease costs ? If advertising is done well on the Web, it can get a firm’s promotional message out to potential customers in every country ? Using e-commerce sales support and ordertaking processes, a business can
– Reduce costs of handling sales inquiries（询价） – Provide price quotes
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Advantages of Electronic Commerce (continued)
It increases purchasing opportunities for buyers ? Negotiating price and delivery terms is easier ? The following cost less to issue and arrive securely and quickly
– Electronic payments of tax refunds（税金） – Public retirement – Welfare support
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Disadvantages of Electronic Commerce
Perishable grocery products are much harder to sell online ? It is difficult to
– Calculate return-on-investment – Integrate existing databases and transactionprocessing software into software that enables ecommerce
Cultural and legal obstacles also exist
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Economic Forces and Electronic Commerce（经济因素和电子商务） 经济因素和电子商务）
Economics
– Study of how people allocate scarce resources
Two conditions of a market
– Potential sellers of a good come into contact with potential buyers – A medium of exchange is available
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Transaction Costs
Total costs that a buyer and seller incur ? Significant components of transaction costs
– Cost of information search and acquisition – Investment of the seller in equipment or in the hiring of skilled employees to supply products or services to the buyer
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Using Electronic Commerce to Reduce Transaction Costs
Businesses and individuals
– Can use electronic commerce to reduce transaction costs by
Improving flow of information ? Increasing coordination of actions
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Network Economic Structures
Network economic structures
– Companies coordinate their strategies, resources, and skill sets
Strategic alliances (strategic partnerships)
– Relationships created within the network economic structure
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Network Economic Structures (continued)
Virtual companies
– Strategic alliances that occur between or among companies operating on the Internet
Strategic partners
– Come together as a team for a specific project or activity
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Network Effects
Law of diminishing returns（边际效益递减）
– Generally, most activities yield less value as the amount of consumption increases
Network effect（网络效应）
– In networks, an interesting exception to the law of diminishing returns occurs – As more people or organizations participate in a network, the value of the network to each participant increases
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Identifying Electronic Commerce Opportunities
Firm（公司）
– Multiple business units owned by a common set of shareholders（股东）
Industry（行业）
– Multiple firms th
at sell similar products to similar customers
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Strategic Business Unit Value Chains（战略业务单位的价值链） 战略业务单位的价值链）
Value chain
– A way of organizing the activities that each strategic business unit undertakes
Primary activities（基本活动）
– Design, produce, promote, market, deliver, and support the products or services it sells
Supporting activities（辅助活动）
– Human resource management and purchasing
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Value Chain for a Strategic Business Unit
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Industry Value Chains
Value system
– Larger stream of activities into which a particular business unit’s value chain is embedded – Also referred to as industry value chain
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Industry Value Chain for a Wooden Chair
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SWOT Analysis: Evaluating Business Unit Opportunities
SWOT analysis
– An analyst first looks into the business unit to identify its strengths and weaknesses – The analyst then reviews the operating environment and identifies opportunities and threats
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SWOT Analysis Questions
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Results of Dell’s SWOT Analysis
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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
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This Cartoon from The New Yorker Illustrates Anonymity on the Web
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Language Issues
To do business effectively in other cultures
– Must adapt to those cultures
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 the local environment
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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
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Infrastructure Issues
Internet infrastructure includes
– Computers and software connected to the 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
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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
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Parties Involved in a Typical International Trade Transaction
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电子商务系统架构
顶层 各类电子商务 业务(应用 应用)系统 业务 应用 系统 包括支付型业务系统和非支付型业务系统。 包括支付型业务系统和非支付型业务系统。电子商务业 务系统中主要是支付型业务系统
中间层
电子商务基础平台
(1)基本加密算法层 基本加密算法层 (2)基本安全技术层 基本安全技术层 (3)安全协议层 安全协议层
底层
网络基础平台
是信息传送的载体和用户接入手段， 是信息传送的载体和用户接入手段，它包括各种各样的 网络传输平台、网络传输设备和网络接入方式等 网络传输平台、
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相 关 政 策 法 律 法 规
远 程 教 育
股 票 交 易
网 上 订 票
网 上 商 店
网 上 交 税
远 程 医 疗
网 上 银 行
… …
认证中心CA 、支付网关、社会配送体系 支付网关、 认证中心 等基础平台
技 术 标 准 安 全 协 议
网络基础设施
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Summary
Commerce
– Negotiated exchange of goods or services
Electronic commerce
– Application of new technologies to conduct business more effectively
First wave of electronic commerce
– Ended in 2000
Second wave of electronic commerce
– New approaches to integrating Internet technologies into business processes
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Summary (continued)
Using electronic commerce, businesses have
– Created new products and services – Improved promotion, marketing, and delivery of existing offerings
The global nature of electronic commerce leads to many opportunities and few challenges ? To conduct electronic commerce across international borders, you must understand the trust, cultural, and language legal issues
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