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Case

E-Business Transformation At Me-Online

E-Business and E-Commerce

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E-commerce

Describes the process of buying, selling, transferring,

or exchanging products, services, and/or information

via computer networks, including the Internet.

E-business

Refers to a broader definition of e-commerce, not just

the buying and selling of goods and services, but also

servicing customers, collaborating with business

partners, conducting e-learning, and processing

electronic transactions.

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Internet Technology

� Internet Technology- A commodity

� Economic Impact? Internet

Economics: Transaction cost

Theory, Agency Theory & Network

Economics Theory

� How it helps to Industry?

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• Direct communication between trading partners:

Disintermediation removes intermediate layers and

streamlines processes.

• Round the clock service: Web sites

• Extended distribution channels: Outlets created

for attracting customers who otherwise would not

patronize a firm

How Internet Helps?

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How Internet Helps?

Reduced transaction costs: Costs of

searching for buyers declines

� Changing Economics of Info: Decreases

Information asymmetry, Increases

richness: Depth, detail, and scope of

information, Increases reach

� New Business Models and Value

Propositions

� What is a business model?

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• Defines an enterprise

• Describes how the enterprise delivers a product

or service

• Shows how the enterprise creates wealth

Business Model

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• Virtual storefront: Sells goods or services online

(Amazon.com)

• Information broker: Provides information on

products or services (Edmunds.com)

• Transaction broker: Provides online transaction

facility (eTrade.com, Expedia.com)

• Online marketplace: Provides a trading platform

for individuals and firms (eBay.com)

Internet Business Models

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• Content provider: Creates revenue by providing content (WSJ.com, TheStreet.com)

• Online service provider: Provides online services, including search service. (Google.com, Xdrive.com)

• Virtual community: Provides an online community to focused groups (Friendster.com, iVillage.com)

• Portal: Provides initial point of entry to Web, specialized content, services (Yahoo.com, MSN.com)

Internet Business Models

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� Syndicator: Online content provider that aggregates information from several sources sold to other companies

� Auction/Reverse Auction: Products, prices, change in response to demand. Used in online marketplaces

� Dynamic pricing: real-time interactions between buyers and sellers determine worth of items

� Banner ad: Graphic display used for advertising, linked to the advertiser’s Web site

Internet Business Models

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Auctions and Bartering

The major mechanism for buying and selling on the Internet

is the electronic catalog. There are two common mechanisms

used in its implementation: electronic auctions and

bartering online.

Electronic Auctions (e-Auctions): A market mechanism

by which sellers place offers and buyers make sequential

bids.

Reverse auctions, have one buyer, usually an organization,

that wants to buy a product or a service. Suppliers are

invited to submit bids.

Auctions are used in B2C, B2B, C2B, e-government, and C2C commerce

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Auctions and Bartering (Continued)

Electronic bartering, the exchange of goods or

services without a monetary transaction.

Individual-to-individual bartering

Corporate e-bartering (e.g., barterbrokers.com)

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• Key concepts in E-Commerce

: Digital markets and digital goods

• Internet business models

• Communication and community

• Digital content, entertainment, and services

Internet Business Models

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E-Commerce

� EC can take several forms depending on the

degree of digitization

� Degree of digitization: Transformation from

physical to digital

� The degree of digitization relates to:

– the product (service) sold

– the process

– the delivery agent (or intermediary).

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E-Business – EC Organizations

� Brick-and-mortar (or old-economy) refer to pure

physical organizations (corporations).

� Virtual (or pure-play) organizations are

companies that are engaged only in EC .

� Click-and-mortar (or click-and-brick)

organizations are those that conduct some e-

commerce activities, yet their primary business is

done in the physical world.

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E-Business – Transaction Medium

Most e-commerce is done over the Internet.

But EC can also be conducted on private

networks, such as

-- value-added networks (VANs,

networks that add communication services to

existing common carriers),

-- on local area networks (LANs) or

-- wide area networks (WANs)

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Categories of Electronic Commerce

• Business-to-customer (B2C): Retailing of products and

services directly to individual customers (Wal-Mart.com)

• Business-to-business (B2B): Sales of goods and services to

other businesses (Grainger.com, Ariba.com)

• Consumer-to-consumer (C2C): Individuals using the Web for

private sales or exchange (eBay.com )

� Consumers-to-businesses (C2B): Consumers make known a

particular need for a product or service, and suppliers compete

to provide it.

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Consumer-to-consumer (C2C): Individuals sell products or

services to other individuals.

Intrabusiness (intraorganizational) commerce: An

organization uses EC internally to improve its operations. A

special case is known as B2E (business to its employees)

Government-to-citizens (G2C): A government provides

services to its citizens via EC technologies.

Mobile commerce (m-commerce): When e-commerce is

done in a wireless environment.

Categories of Electronic Commerce

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• M-Commerce services and applications

• Content and location-based services

• Banking and financial services

• Wireless advertising

• Games and entertainment

• Accessing information from the wireless Web

• M-Commerce challenges: Digital payment systems for m-commerce

M-Commerce

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� Electronic cash (e-cash) appears in three major forms:

stored-value cards, smart cards, and person-to-person

payments.

� Electronic Bill Presentment and Payments allow

customers to pay their recurring monthly bills, such as

telephone, utilities, credit cards, etc. online.

� E-wallets are mechanisms that provide security measures

to EC purchasing. The wallet stores the financial

information of the buyer, including credit card number,

shipping information, and more.

� Virtual credit cards are a service that allow you to shop

with an ID number and a password instead of with a credit

card number.

E-Commerce Support Services

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The Structure of E-Commerce