Electronic Commerce

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Electronic Commerce (????)
TSL School of Business and Technology Information
(TSBIT) ?????????????

• Lecture 1 Introduction to Electronic Commerce

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• CASE US buyers experience for purchasing a car
• From this CASE, we learn the impact of Internet
  on Car Biz
• About 70 of car buyers do research on the
  internet before buying their cars
• Autobytel processes 800,000 trans. worth 21
  billion per year
• Autobytel sales accounted 5 of all US new
  vehicle sales in 2002
• Car buyer benefits 2-4 less via Autobytel
• Car dealers reduce selling cost from 420 to 150
  per car via Autobytel

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Electronic commercethe send wave(cont)

• No standard definition is given
• In Broadest sense for this book,including
• All business activities that use Internet
  technology

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• The useful types of electronic commerce
• Business-to-consumer (or B2C)
• Business-to-business (or B2B)
• The transactions biz processes of government
  other org. invoked the Internet
• Consumer-to-consumer (or C2C)
• Business-to-government (or B2G)
• Telecommuting or telework
• Before Web, electronic funds transfers (or EFT,
  wire transfers) and electronic data interchange
  (EDI) occurs

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• Elements of ec
• 1 B2C
• 2 B2B
• 3 Transactions and biz processes for supporting
  selling and purchasing activities

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• Bef ec
• EFTs(electronic funds transfers)
• EDI(Electronic data interchange)
• The Dot-Com Boom,Bust and Rebirth
• Diff between two waves of ec

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Biz models,revenue model,and biz processes(cont)

• Biz modela set of processes that combine to
  yield a profit
• Identify biz that can be accomplished more
  effectively by using ec

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• Activities, Transactions, and Business Processes
• Activity a task performed by a business worker
• Transaction the records of business activities
  are performing
• Business Processes the group of logical,
  related, and sequential activities and
  transactions

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• Traditional Commerce and Electronic Commerce
  (Cont)
• Electronic Commerce
• Business Processes in Commerce

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• Electronic Commerce
• Advantage of Electronic Commerce
• EC can increase sales decrease costs
• Cisco 72 of its 1998 sales -gt 97 of its 2003
  sales, it avoided handling 500,000 calls monthly
  and saved 500 million in that year alone
• EC can help general welfare of society tax
  refunds, public retirement
• EC has accomplished remote education, remote
  medicare, etc
• Disadvantage of Electronic Commerce
• Some goods could not be delivered or inspected
  remotely (perishable foods, custom-designed
  jewelry, etc)
• Cultural and legal obstacles (fearful of sending
  credit card numbers over the Internet, privacy
  issues, etc)
• International Commerce
• 60 of all EC sites on the Web are in English
  while 75 of world population is non-English
  speaking
• Currency conversions, tariffs, import and export
  restrictions, local business customs, and laws of
  each country in which a trading partner resides
  can make intl e-Commerce difficult

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Learning from failures

• PETS.COM
• Why it failed?
• What can we learn from its failure?

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• Economic Forces and Electronic Commerce(cont)
• Economics study of how people allocate scarce
  resources
• 1st way people allocate scarce resources
  commerce
• 2nd way people allocate scarce resources
  government tax
• Market how people organize their commerce
  activities
• Sellers and buyers of a good
• A medium of exchange
• Hierarchical business organizations
  firms/companies
• Hierarchical organization has a pyramid-shaped
  structure (President, CEO, Managers)
• The transaction costs is the main motivation for
  moving economic activity from markets to
  hierarchical firms
• Transaction Costs
• The total costs of seller/buyers activities on
  the s/b transaction of a good info, negotiation,
  investment, equipment, post-s/b support, and
  hiring employees for the good

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• Markets and Hierarchies
• Before Industry Revolution The transaction costs
  and the economic needs are the forces for moving
  market-negotiated transaction to forming
  hierarchical organizations we learn this from
  EC4es sweater case
• From Industry Revolution to middle 20 century
  the size and level of vertical integration of
  firms have increased
• From later 20 century to present the
  decentralization approaches seems back to the
  world because more customized needs force firms
  to re-organize their structures
• Why changes were happened? Answer for low
  transaction costs
• The Role of Electronic Commerce
• Benefits of EC improving the flow of information
  and increasing the coordination of actions -gt
  reduce transaction costs

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• Economic Forces and Electronic Commerce (cont)
• Network Economic Structure
• Network economic structure -gt strategic alliance
  / strategic partnerships -gt virtual companies
• Strategic partners or sector associations share
  technological standards, information, resources,
  etc
• Network Effects
• Law of diminishing returns
• Network effects

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Identifying ec opportunities(cont))

• One way is to break the biz down into a series of
  value-adding activities

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• Value Chains in Electronic Commerce
• Strategic Business Units Value Chains

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• Value Chains in Electronic Commerce (cont)
• Industry Value Chains

Cotton
Global logistics
Orders from retailers
Manufactures fabric
Apparel manufacturing
Consumer purchasing
Supply chain management
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• SWOT Analysis Evaluating Business Unit
  Opportunities

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• Dells SWOT Analysis

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• SWOT Analysis Evaluating Business Unit
  Opportunities
• The Role of Electronic Commerce (EC)
• SWOT Analysis identifies that
• EC can reduce costs
• EC can improve product quality
• EC can reach new customers or suppliers
• EC can create new ways of selling existing
  products.
• The value chain concept lets EC become a business
  solution for many firms.
• Next lecture, we will learn how the Internet and
  the Web came to exist and grow to its current
  state.

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International nature of ec

• Trust Issue
• EC quickly generate the trust in days vs.
  traditional businesses took years to develop
• Web interface must be friendly
• Culture language customs

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• Language Issues
• 370 million vs. 6 billion
• 70 content is in English
• In US Firms Spanish, German, Japanese, and
  Chinese
• On Internet Chinese 9.8, Japanese 9.2,
  Spanish 7.2, German 6.8

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• Culture Issues
• Adapt useful sign as the icons US -gt shopping
  cart, EU -gt shopping baskets
• Avoid errors Muslin countries do not want to
  see an image shows human arms or legs uncovered
  India use image of a cow in a cartoon White is
  associated with death and mourning in Asia.

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Culture and gov

• Prevention VS Regulation

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Infrastructure issue

• high rate access VS flate rate access
• Paperwork involved in international transaction