Management information technology lecture 5

continue series of MBA lectures of MIS InAAST

1. 5-1
Electronic Commerce
Chapter 5

2. 5-2
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 the visions and forces behind the E-
commerce
•Understand the limitations of E-commerce
•Identify the major academic disciplines contributing to e-
commerce research

3. 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
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4. 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
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5. Seven Unique Features of E-commerce
Technology and Their Significance
•Is ubiquitous (available everywhere, all the time)
•Offers global reach (across cultural/national boundaries)
•Operates according to universal standards (lowers market
entry for merchants and search costs for consumers)
•Provides information richness (more powerful selling
environment)
•Is interactive (can simulate face-to-face experience, but on
global scale)
•Increases information density (amount and quality of
information available to all market participants)
•Permits personalization/customization
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6. Slide 1-6
Seven Unique Features of E-commerce Technology
Table 1.2,
Page 12

7. Types of E-commerce
Classified by nature of market
relationship
•Business-to-Consumer (B2C)
•Business-to-Business (B2B)
•Consumer-to-Consumer (C2C)
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8. Business-to-Consumer (B2C)
E-commerce
•Involves online businesses attempting to
reach individual consumers
•In 2010, total B2C revenues were about
$255 billion
•Many types of business models within
this category including online retailers,
content providers, portals, transaction
brokers, service providers, market
creators and community providers
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9. Business-to-Business (B2B)
E-commerce
•Involves businesses focusing on selling to other
businesses
•Largest form of e-commerce ($3.6 trillion in
2010)
•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)
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10. Consumer-to-Consumer (C2C) E-
commerce
•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 $80 billion by 2010
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11. E-government
•Use of Internet technologies and e-commerce to
deliver information and services to citizens
–Gives citizens more access to information
–Allows for more feedback from citizens
–Facilitates fundamental changes in relationships between
citizen and government
•Types
–Government-to-citizens (G2C)
•Electronic benefits transfer, payment of taxes
–Government-to-business (G2B)
•RFQs, RFBs, reverse auctions
–Government-to-government (G2G)
•Sharing of databases, information
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12. E-learning
•Online delivery of information for educational or
training purposes
•Benefits
–Eliminates barriers of time, distance, socioeconomic
status
–Saves money, reduces travel time
–Increases access to experts
–Enables large numbers to take classes
–Provides on-demand, self-paced learning
•Limitations
–Special training for instructors and students
–Requires special equipment and support services
–Lack of face-to-face interaction
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13. Growth of the 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 1
billion 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 2010, there were 732 million Internet
hosts with domain names, up from 70 million in
2000
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14. Copyright © 2004 Pearson Education, Inc. Slide 1-14
The Growth of the Internet, Measured by Number of
Internet Hosts with Domain Names
Figure 1.3, Page 20

15. Growth of the 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 75-100 billion pages in 2010
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16. Copyright © 2004 Pearson Education, Inc. Slide 1-16
The Growth of Web Content
Figure 1.4, Page 21

17. Origins and Growth of E-commerce
•Precursors to e-commerce include
Baxter Healthcare (in 1970s, used telephone-based
modems to reorder supplies; in 1980s, became a PC-
based remote order entry system)
Electronic Data Interchange (EDI) standards
developed in 1980s; permitted firms to exchange
commercial documents and conduct digital
commercial transactions across private networks
French Minitel (1980s videotext system; still in use
today)
•None of these precursor system had functionality of
Internet
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18. Copyright © 2004 Pearson Education, Inc. Slide 1-18
The Growth of B2C E-commerce
Figure 1.5, Page 24

19. Copyright © 2004 Pearson Education, Inc. Slide 1-19
The Growth of B2B E-commerce
Figure 1.6, Page 25

20. Copyright © 2004 Pearson Education, Inc. Slide 1-20
Limitations on the Growth of B2C E-commerce
Table 1.4, Page 26

21. Growth Projections for Wireless Web Devices and Broadband Home
Connections in the United States
Figure 1.7, Page 27
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22. 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
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