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Title: ???? ? ????? ????? ????????? (EC)


1
????? ? ???? ????????? ????? ?????????
  • ???? ? ????? ????? ????????? (EC)

2
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3
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4
Qantas AirwaysA New Way to Compete
  • The Problem
  • Increased fuel costs placed pressure on the
    airline industry
  • Qantas faced two major competitors and higher
    fees at Sydney Airport
  • Air traffic dwindled after September 11th
  • Qantas needed to replace aircraft in order to
    stay competitive
  • Australian economy slowed down

5
Qantas Airways (cont.)
  • The Solution
  • Bought fuel contracts for future dates
    (traditional response)
  • Took major steps to implement e-commerce (EC)
    involving buying, selling, and exchanging goods,
    services, information, and payments electronically

6
Qantas Airways (cont.)
  • Business-to-business (B2B)
  • E-marketplace member
  • Joined Airnew Co.links major airlines with
    suppliers
  • Fuel
  • Fuel services
  • Light maintenance services
  • Catering
  • Joined Corporcure.com.au with 13 other large
    Australian corporations
  • Electronically purchase general goods and
    services
  • Office supplies
  • Light bulbs
  • Maintenance services

7
Qantas Airways (cont.)
  • Formed Pan-Pacific exchange
  • E-marketplace
  • Business-to-business-to-consumer (B2B2C)
  • Provides
  • Full spectrum travel services
  • Products and services to business partners
  • Travel agencies who can use this marketplace to
    sell directly to consumers

8
Qantas Airways (cont.)
  • Business-to-customer (B2C)
  • Online booking
  • E-mails to frequent-flyer members
  • Mileage bonuses and opportunities to win 10,000
    AU
  • Wireless communications
  • Business-to-employee (B2E)
  • Online training
  • Online banking

B2C B2E
9
Qantas Airways (cont.)
  • The Results
  • Qantas expects to see an estimated 85 million AU
    in cost reductions per year by 2003
  • Qantas expects to increase annual revenues by
    700 million AU from nontravel sales
  • Outlasted one competitor

10
EC Definitions Concepts

11
EC Definitions Concepts
  • Electronic Commerce (EC) is the process of
    buying, selling, or exchanging products,
    services, and information via computer networks
  • EC defined from these perspectives
  • Communications
  • Business process
  • Service
  • Online
  • Collaborations
  • Community

EC
12
EC Definitions Concepts (cont.)
  • E-business is a broader definition of EC that
    includes not just the buying and selling of goods
    and services, but also
  • Servicing customers
  • Collaborating with business partners
  • Conducting electronic transactions within an
    organization
  • Pure vs. Partial EC based on the degree of
    digitization of product, process, delivery agent

13
Exhibit 1.1The Dimensions of Electronic Commerce
14
EC Definitions Concepts (cont.)
  • Traditional commerce all dimensions are physical
  • Brick-and-mortar organizations
  • Old-economy organizations (corporations)
  • Perform all business off-line
  • Sell physical products by means of physical agents

15
EC Definitions Concepts (cont.)
  • Pure EC all dimensions are digital
  • Pure online (virtual) organizations
  • New-economy organization
  • Sell products or services only online
  • Partial EC a mix of digital and physical
    dimensions
  • Click-and-mortar organizations
  • Conduct EC activities
  • Do their primary business in the physical world

16
EC Definitions Concepts (cont.)
  • Internet vs. Non-Internet EC
  • VANsvalue-added networks
  • LANslocal area networks
  • Single computerized machines
  • Using a smart card in a vending machine
  • Using a cell phone to make an online purchase

17
Electronic Markets vs. Interorganizational
Systems
  • E-markets
  • Buyers and sellers meet to exchange
  • Goods
  • Services
  • Money
  • Information
  • Interorganizational Information Systems (IOS)
  • Between two or more organizations
  • Routine transaction processing
  • Information flow

18
Exhibit 1.2A Framework for EC
19
Classification of EC by the Nature of the
Transaction

20
Classification of EC by the Nature of the
Transaction
  • Business-to-business (B2B) EC model in which
    all of the participants are businesses or other
    organizations
  • Business-to-consumer (B2C) EC model in which
    businesses sell to individual shoppers
  • Business-to-business-to-consumer (B2B2C) EC
    model in which a business provides some product
    or service to a client business the client
    business maintains its own customers, to whom the
    product or service is provided

21
Classification of EC by the Nature of the
Transaction (cont.)
  • Consumer-to-business(C2B) individuals who use
    the Internet to sell products or services to
    organizations and /or seek sellers to bid on
    products or services they need
  • Consumer-to-consumer (C2C) consumers sell
    directly to other consumers

22
Classification of EC by the Nature of the
Transaction (cont.)
  • Mobile commerce (m-commerce)EC transactions and
    activities conducted in a wireless environment
  • Location-commerce(l-commerce)
  • m-commerce transactions targeted to individuals
    in specific locations, at specific times

23
Classification of EC by the Nature of the
Transaction (cont.)
  • Intrabusiness (organizational) EC EC category
    that includes all internal organizational
    activities that involve the exchange of goods,
    services, or information among various units and
    individuals in an organization

24
Classification of EC by the Nature of the
Transaction (cont.)
  • Business-to-employee (B2E) EC model in which an
    organization delivers services, information, or
    products to its individual employees
  • Collaborative commerce (c-commerce) EC model in
    which individual or groups communicate or
    collaborate online
  • E-government Government-to-citizens (G2C) EC
    model in which a government entity buys or
    provides good, services, or information to
    businesses or individual citizens

25
Classification of EC by the Nature of the
Transaction (cont.)
  • Exchange (electronic) a public e-market with
    many buyers and sellers
  • Exchange-to-exchange (E2E) EC model in which
    electronic exchanges formally connect to one
    another for the purpose of exchanging information

26
Interdisciplinary Nature of EC
  • Management information systems
  • Accounting and auditing
  • Management
  • Business law and ethics
  • Others
  • Marketing
  • Computer sciences
  • Consumer behavior and psychology
  • Finance
  • Economics

27
Business Models

28
Business Models
  • A method of doing business by which a company can
    generate revenue to sustain itself
  • Spells out where the company is positioned in the
    value chain
  • Business models are a component of a business
    plan or a business case

29
Business Plans Business Cases
  • Business plan
  • A written document that identifies the business
    goals and outlines the plan of how to achieve them
  • Business case
  • A written document that is used by managers to
    garner funding for specific applications or
    projects its major emphasis is the justification
    for a specific investment

30
The Content of a Business Plan
  • Marketing and sales plan
  • Operations plan
  • Financial projections and plans
  • Risk analysis
  • Technology analysis
  • Mission statement and company description
  • The management team
  • The market and the customers
  • The industry and competition
  • The specifics of the products and/or services

31
Structure of Business Models
  • All business models must specify their revenue
    model (the description of how the company or an
    EC project will earn revenue)
  • Revenue sources are
  • Transaction fees
  • Subscription fees
  • Advertisement fees
  • Affiliate fees
  • Sales
  • Other models
  • Value proposition is the description of the
    benefits a company can derive from using EC

32
Typical Business Models in EC
  • Online, direct marketing
  • Electronic tendering systems
  • Reverse auction is a tendering system sellers are
    invited to bid on the fulfillment of an order to
    produce a product or provide a service the
    lowest bid wins
  • Name your own price
  • Find the best price

33
Typical Business Models in EC (cont.)
  • Affiliate marketing is an arrangement whereby a
    marketing partner (business, organization or
    individual) refers consumers to the selling
    companys Web site
  • Viral marketing is word-or-mouth marketing in
    which customers promote a product or service to
    friends or other people by using the Internet

34
Typical Business Models in EC (cont.)
  • Group purchasing is getting many small buyers
    together to by in large quantities
  • Online auctions
  • Product and service customization
  • Customization is the creation of a product or
    service according to the buyers specifications
  • Electronic marketplaces and exchanges
  • Vertical marketplace is a marketplace that
    concentrates on one industry also called
    vertical portals or vortals
  • Supply chain improvers

35
Exhibit 1.3The Business Model of 7dream.com
36
The Limitations of EC
  • Technical limitations
  • There is a lack of universally accepted standards
    for quality, security, and reliability
  • The telecommunications bandwidth is insufficient
  • Software development tools are still evolving
  • There are difficulties in integrating the
    Internet and EC software with some existing
    (especially legacy) applications and databases.
  • Special Web servers in addition to the network
    servers are needed (added cost).
  • Internet accessibility is still expensive and/or
    inconvenient

37
Electronic Marketplaces

38
Electronic Marketplaces
  • Markets facilitate exchange of
  • Information
  • Goods
  • Services
  • Payments
  • Markets create economic value for
  • Buyers
  • Sellers
  • Market intermediaries
  • Society at large

39
Electronic Marketplaces (cont.)
  • 3 main functions of markets
  • Matching buyers and sellers
  • Facilitating the exchange of information, goods,
    services, and payments associated with market
    transactions
  • Providing an institutional infrastructure

40
Market space Components
  • Market space
  • a marketplace in which sellers and buyers
    exchange goods and services for money (or for
    other goods and services), but do so
    electronically
  • Market Space Components
  • Customers
  • Sellers
  • Goods (physical or digital)

41
Market space Components
  • Infrastructure
  • Front-end
  • Back-end
  • Intermediaries/business partners
  • Support services

42
Market space Components (cont.)
  • Customers
  • Web surfers looking for
  • Bargains
  • customized items
  • Collectors items
  • entertainment etc.
  • Organizations account for over 85 percent of EC
    activities
  • Sellers
  • Hundreds of thousands of storefronts are on the
    Web
  • Advertising and offering millions of Web sites
  • Sellers can sell
  • Direct from their Web site
  • E-marketplaces

43
Market space Components (cont.)
  • Products
  • Physical products
  • Digital productsgoods that can be transformed to
    digital format and delivered over the Internet
  • Infrastructure
  • Hardware
  • Software
  • Networks

44
Market space Components (cont.)
  • Front-end business processes include
  • Sellers portal
  • Electronic catalogs
  • shopping cart
  • Search engine
  • Payment gateway
  • Back-end activities are related to
  • Order aggregation and fulfillment
  • Inventory management
  • Purchasing from suppliers
  • Payment processing
  • Packaging and delivery

45
Market space Components (cont.)
  • Intermediary
  • a third party that operates between sellers and
    buyers
  • Other business partners
  • collaborate on the Internet, mostly along the
    supply chain
  • Support services such as
  • Certification and trust services
  • Knowledge providers

46
Types of Electronic Markets

47
Types of Electronic Markets
  • Electronic storefronts
  • a single companys Web site where products and
    services are sold
  • Mechanisms for conducting sales
  • Electronic catalogs
  • Payment gateway
  • Search engine
  • Shipment court
  • Customer services
  • Electronic cart
  • E-auction facilities
  • Electronic malls (e-malls)an online shopping
    center where many stores are located

48
Types of Electronic Markets (cont.)
  • Types of stores and malls
  • General stores/malls
  • large market spaces that sell all types of
    products
  • Public portals
  • Specialized stores/malls
  • sell only one or a few types of products
  • Regional vs. global stores
  • Pure online organizations vs. click-and-mortar
    stores

49
E-Marketplaces
  • E-marketplaces
  • online market, usually B2B, in which buyers and
    sellers negotiate
  • Types of e-marketplaces
  • private
  • public
  • consortia

50
E-Marketplaces
  • Private e-marketplaces
  • online markets owned by a single company
  • Sell-side
  • company sells either standard or customized
    products to qualified companies
  • Buy-side marketplaces
  • company makes purchases from invited suppliers
  • Public e-marketplaces
  • B2B markets, usually owned and/or managed by an
    independent third party, that include many
    sellers and many buyers (exchanges)

51
Intermediation in E-Commerce
  • Intermediaries provide value-added activities and
    services to buyers and sellers wholesalers,
    retailers, infomediaries
  • Roles of intermediaries
  • Search costs databases on customer preferences
  • Lack of privacy anonymity of sellers and buyers
  • Incomplete information gather product
    information
  • Contract risk protect sellers against
    non-payment
  • Pricing inefficiencies induce appropriate trades

52
E-Distributors on B2B
  • E-distributor
  • an e-commerce intermediary that connects
    manufacturers (suppliers) with buyers by
    aggregating the catalogs of many suppliers in one
    place (the intermediarys Web site)
  • E-distributors also provide support services
  • Payments
  • Deliveries
  • Escrow services
  • Aggregate buyers and or sellers orders

53
Syndication as an EC Mechanism
  • Syndication
  • the sale of the same good (e.g., digital content)
    to many customers, who then integrate it with
    other offerings and resell it or give it away
    free

54
Competition in the Internet Ecosystem
  • Competition in the Internet ecosystem (business
    model of the online economy)
  • Inclusive with low barriers to entry
  • Self-organizing
  • Old rules may no longer apply
  • Competition is tense
  • Lower buyers search cost
  • Speedy comparisons
  • Differentiation and personalization

55
Competition in the Internet Ecosystem
  • Differentiation
  • providing a product or service that is unique
  • Personalization
  • the ability to tailor a product, service, or Web
    content to specific user preferences
  • Lower prices

56
Competition in the Internet Ecosystem
  • Customer service is an extremely important
    competitive factor
  • Some competitive factors are less important as a
    result of EC
  • Size of company is no longer significant
  • Geographical location is insignificant
  • Language barriers are being removed
  • Digital products do not have normal wear and tear

57
Competition in the Internet Ecosystem
  • EC supports efficient markets and could result
    in almost perfect competition with these
    characteristics
  • Many buyers and sellers must be able to enter the
    market at no entry cost
  • Large buyers or sellers are not able to
    individually influence the market
  • The products must be homogeneous
  • Buyers and sellers must have comprehensive
    information about the products and about the
    market participants demands, supplies, and
    conditions

58
E-Market Success Factors
  • Contributors to e-market success
  • Product characteristics
  • Type
  • Price
  • Availability of standards and product information
  • Industry characteristics
  • Brokers currently necessary
  • Intelligent systems may replace brokers
  • Seller characteristics
  • Consumers find sellers with the lowest prices
  • Low-volume, higher-profit-margin transactions
  • Consumer characteristics
  • Impulse buyers
  • Patient buyers
  • Analytical buyers

59
Electronic Catalogs
  • Electronic catalogs
  • the presentation of product information in an
    electronic form
  • the backbone of most e-selling sites
  • Evolution of electronic catalogs
  • Merchants advertise and promote
  • Customers source of information and price
    comparisons
  • Consist of product database, directory and search
    capability and presentation function
  • Replication of text that appears in paper
    catalogs
  • More dynamic, customized, and integrated

60
Classifications of Electronic Catalogs
  • Dynamics of information presentation
  • static or dynamic
  • Degree of customization ready-made or customized
  • Electronic catalogs allow integration of
  • Order taking and fulfillment
  • Electronic payment
  • Intranet workflow
  • Inventory and accounting system
  • Suppliers extranet
  • Relationship to paper catalogs

61
Customized Catalogs
  • Assembled specifically for
  • A company
  • An individual shopper
  • Customization systems can
  • Create branded, value-added capabilities
  • Allows user to compose order
  • May include individualized prices, products, and
    display formats
  • Automatically identify the characteristics of
    customers based on the transaction records

62
Electronic Catalogs at Boise Cascade

63
Search Engines, Intelligent Agentsand Shopping
Carts
  • E-commerce users use both search engines and
    intelligent agents
  • Search engines find products or services
  • Software agents conduct other tasks (comparisons)
  • Electronic shopping cart
  • an order-processing technology that allows
    customers to accumulate items they wish to buy
    while they continue to shop

64
Search Engines, Intelligent Agentsand Shopping
Carts
  • Search engine
  • a computer program that can access a database of
    Internet resources, search for specific
    information or keywords, and report the results
  • Software (intelligent) agent
  • software that can perform routine tasks that
    require intelligence

65
Auctions
  • Auction
  • a market mechanism by which a seller places an
    offer to sell a product and buyers make bids
    sequentially and competitively until a final
    price is reached
  • Auctions deal with products and services for
    which conventional marketing channels are
    ineffective or inefficient

66
Auctions
  • Limitations of Traditional Auctions
  • Traditional auctions are generally a rapid
    process
  • It may be difficult for sellers to move goods to
    the auction site
  • Commissions are fairly high

67
Electronic Auctions
  • Electronic auctions (e-auctions)
  • Auctions conducted online
  • Host sites on the Internet serve as brokers
    offering
  • Services for sellers to post their goods for sale
  • Allowing buyers to bid on those items
  • Many sites have certain etiquette rules that must
    be adhered to in order to conduct fair business

68
Electronic Auctions
  • Major online auctions offer
  • Consumer products
  • Electronic parts
  • Artwork
  • Vacation packages
  • Airline tickets
  • Collectibles
  • Excess supplies and inventories being auctioned
    off by B2B marketers

69
Dynamic Pricing
  • Dynamic pricing
  • prices that change based on supply and demand
    relationships at any given time
  • The four major categories of dynamic pricing are
    based on the number of buyers and sellers
    involved
  • One buyer, one seller
  • One seller, many potential buyers
  • One buyer, many potential sellers
  • Many sellers, many buyers

70
Dynamic Pricing
71
Dynamic Pricing
  • One buyer, one seller uses
  • Negotiation
  • Bargaining
  • Bartering
  • Price will be determined by
  • Each partys bargaining power
  • Supply and demand in the items market
  • Possibly business environment factors

72
Dynamic Pricing
  • One seller, many potential buyers
  • Forward auction
  • an auction in which a seller entertains bids from
    buyers
  • English auction
  • an auction in buyers bid on an item in sequence
    and the price increases with time
  • Yankee auction
  • auction of multiple identical items in which
    bidders can bid for any number of the items
    offered, and the highest bid wins

73
Dynamic Pricing
  • Dutch auction
  • auction of multiple identical items, with prices
    starting at a very high level and declining as
    the auction time passes
  • Free-fall (declining price) auction
  • a variation of the Dutch auction in which only
    one item is auctioned at a time
  • the price starts at a very high level and
    declines at fixed time intervals, the winning bid
    is the lowest one when the time expires

74
English Auction, Ascending Price

75
Dynamic Pricing (cont.)
  • One buyer, many potential sellers
  • Reverse auction (bidding, or tendering system)
  • auction in which the buyer places an item for bid
    (tender) on a request for quote (RFQ) system,
    potential suppliers bid on the job, with price
    reducing sequentially, and the lowest bid wins
  • primarily a B2B or G2B mechanism

76
The Reverse Auction Process

77
Dynamic Pricing (cont.)
  • One buyer, many potential sellers (cont.)
  • Name-your-own-price model
  • Consumer-to-business (C2B) model
  • Many sellers, many buyers
  • Double Auction
  • buyers and their bidding prices and sellers and
    their asking prices are matched, considering the
    quantities on both sides

78
Limitations of Electronic Auctions
  • Possibility of frauddefective goods or receive
    goods/services without paying
  • Limited participationinvitation only or Open to
    dealers only
  • Lack of securityC2C auctions sometimes not done
    in an unencrypted environment
  • Limited softwareonly a few completeor
    off-the-shelf market-enabling solutions

79
Impacts of Auctions
  • Auctions as a coordination mechanism
  • Auctions as a social mechanism to determine a
    price
  • Auctions as a highly visible distribution
    mechanism
  • Auctions as a component in e-commerce

80
Online Negotiating
  • Online negotiation
  • electronic negotiation, usually done by software
    (intelligent) agents that perform searches and
    comparisons improves bundling and customization
    of products and services
  • Dynamic prices can be determined by negotiation
  • Negotiated prices result from interactions and
    bargaining among sellers and buyers
  • Expensive items like cars and real estate
  • Deal with non pricing terms like payment method
    and credit

81
Online Negotiating (cont.)
  • Three factors that facilitate negotiated prices
  • Intelligent agents that perform searches and
    comparisons
  • Computer technology that facilitates negotiation
    process
  • Products and services that are bundled and
    customized

82
Retailing in E-CommerceProducts and Services

83
Amazon.com King of E-Tailing
  • The Problem
  • Amazon.com has recognized that it must
    continually enhance its electronic store by
    expanding product selection and improving the
    customer experience
  • The Solution
  • Amazon.com now offers specialty stores
  • Professional and technical store
  • Expanded book editorial content
  • Increased product selection

84
Amazon.com (cont.)
  • Some key features of the Amazon.com are
  • Easy browsing and searching
  • Useful product information
  • Low prices
  • One-Click order technology
  • Features that make the online shopping
    experience more enjoyable
  • Gift ideas
  • E-cards

85
Amazon.com (cont.)
  • Various marketplace services
  • Amazon Auctions
  • zShops service hosts electronic storefronts for a
    monthly fee
  • Customer relationship management
  • Creates interesting and informative front-end
  • Highly automated and efficient back-end support
  • Personalized service
  • Diversification through business alliances

86
Amazon.com (cont.)
  • The Results
  • Financial performance
  • annual sales for Amazon.com have trended upward,
    from 15.7 million in 1996 to 4 billion in 2002
  • Offers several features for international
    customers
  • Declared its first profit for the 2001 first
    quarter
  • Yet the companys financial success is by no
    means assured

87
E-Tailing and B2C Market Growth
  • A retailer is a sales intermediary, a seller that
    operates between manufacturers and customers
  • Electronic retailing (e-tailing)retailing
    conducted online, over the Internet
  • Catalog sales free a retailer from the need for a
    physical store
  • Manufacturer sells directly to the customer,
    cutting out the intermediary

88
What Sells Well on the Internet?
  • Health and beauty
  • Entertainment
  • Apparel
  • Cars
  • Services
  • Others
  • Computers and electronics
  • Sporting goods
  • Office supplies
  • Books and music
  • Toys

89
Characteristics of Successful E-Tailing
  • Brand recognition and guarantees
  • Guarantee provided by highly reliable or
    well-known vendors
  • Digitized products
  • Inexpensive items
  • Frequently purchased
  • Commodities with standard specifications
  • Well-known packaged items that cannot be opened
    even in a traditional store

90
E-Tailing Business Models
  • E-tailing business models can be classified in
    several ways
  • By the scope of items handled
  • General-purpose
  • Specialty e-tailing
  • By scope of the sales region covered
  • Global
  • Regional
  • Two main models
  • Direct selling model
  • Distribution channel

91
Classification by Revenue Model
  • Product sales models
  • Charge customers directly for products or
    services
  • Subscription models
  • Charge monthly or annual subscription fee for
    service
  • Transaction-fee models
  • Charge service fee based on the level of
    transaction offered
  • Advertising-supported models
  • Charge fee to advertisers instead of customers
  • Sponsorship models
  • Companies sponsor the business through donations
    (usually supplemental income)

92
Classification by Distribution Channel
  • Direct marketing
  • manufacturers sell directly from company sites to
    individual customers
  • Pure-play e-tailers
  • have no physical stores, only an online sales
    presence
  • Click-and-mortar retailers
  • traditional retailers with a supplementary Web
    site

93
Direct Marketing by Manufacturers or Mail-Order
Companies
  • Direct marketing
  • broadly, marketing that takes place without
    intermediaries between manufacturers and buyers
  • marketing done online between the seller and the
    buyer
  • Disintermediation
  • removal of organizations or business process
    layers responsible for certain intermediary steps
    in a given supply chain

94
Exhibit 3.1 Disintermediation in the B2C Supply
Chain

95
Direct Marketing by Manufacturers or Mail-Order
Companies
  • Parties in direct marketing have a greater
    opportunity to influence each other
  • Make-to-order online
  • direct sales by manufacturers are gaining
    popularity due to the ability to customize
    products or services

96
Virtual (Pure-Play) E-Tailers
  • Virtual e-tailers sell over the Internet without
    a physical sales channel
  • General purpose e-tailers (Amazon.com)
  • Broad range of products
  • Large number of consumers
  • Specialty or niche e-tailers (CatToys.com)
  • One specific product area
  • High demand items in the area
  • Effective practices for customer appeal

97
Buying Cars Online Build to Order
  • Traditional systembuild-to-stock
  • Manufacturers conduct market research to estimate
    which features and options will sell well
  • Make the cars they wish to sell
  • Cars are sold from stock at a loss when there is
    insufficient demand for a particular vehicle
  • Auto giants intend to transform themselves from
    build-to-stock to build-to-order companies
  • Cutting inventory requirements in half
  • Giving customers exactly what they want

98
Buying Cars Online Build to Order
  • Using a virtual car at jaguar.com
  • Consumers custom configure their cars features
    and components, see it online, price it, have it
    delivered to a nearby dealer
  • Web site helps with the research process
  • The configuration is transmitted to the
    production floor
  • Reducing delivery time
  • Contributing to increased customer satisfaction

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Click-and-Mortar Retailers
  • Brick-and-mortar retailers
  • retailers who do business in the non-Internet,
    physical world in traditional brick-and-mortar
    stores
  • Click-and-mortar retailers
  • brick-and-mortar retailers with a transactional
    Web site from which to conduct business
  • Traditional retailing frequently involves a
    single distribution channel, the physical store
  • may also operate a mail-order business
  • Multichannel store
  • firm that operates both physical stores and an
    online e-tail site

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E-Tailers Working Backgrounds
  • Travel and Tourism Services Online
  • Corporate Travel
  • Intelligent Agents in Travel Services
  • The Employment Placement and the Job Market
  • The Internet Job Market
  • Matching Workers with Jobs in the Philippines
  • Intelligent Agents in the Electronic Job Market
  • Insurance Online
  • Online Stock Trading
  • Investment Information

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E-Tailers Working Backgrounds
  • Banking Personal Finance Online
  • Capabilities of Home Banking
  • International and Multiple-Currency Banking
  • Personal Finance Online
  • Online Billing and Bill Paying
  • On-Demand Delivery Service (ODDS)
  • Digital Delivery
  • Business Rating Sites Trust Verification Sites

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Exhibit 3.5Virtual Job Employment Agent

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Exhibit 3.6Online Electronic Stock Trading

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Capabilities of Home Banking
  • Get current account balances any time
  • Obtain charge and credit card statements
  • Pay bills
  • Download account transactions
  • Transfer money between accounts
  • Balance accounts
  • Send e-mail to the bank
  • Expand the meaning of bankers hours
  • Handle finances when traveling
  • Additional services
  • Free phone banking
  • Waive checking fees

105
Implementation Issues in Online Financial
Transactions
  • Using bank intranets
  • Banks provide large business customers with
    personalized service by allowing them access to
    the banks intranet to access accounts,
    historical transactions, intranet-based
    decision-support applications
  • Imaging systems
  • allow customers to view images of all
  • Incoming checks
  • Invoices
  • Other related online correspondence

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Personal Finance Online
  • Bill paying and e-checks
  • Tracking bank accounts etc.
  • Portfolio management
  • Investment tracking
  • Stock quotes and prices (past and current)
  • Budget organization
  • Record keeping
  • Tax computations
  • Retirement goals, planning and budgeting

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Personal Finance Online
  • Automatic transfer of mortgages
  • This method has existed for several years
  • The payer authorizes its bank to pay the
    mortgage, including tax escrow payments
  • Automatic transfer of funds to pay monthly
    utility bills
  • Paying bills from online banking account

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Personal Finance Online
  • A merchant-to-customer direct billing
  • A merchant posts bills on its Web site
  • Customers can view and pay their bill
  • Using an intermediary
  • A third party consolidates all bills related to
    each customer in one site in a standard format
  • Collects a certain commission
  • Makes it convenient to complete transactions

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Personal Finance Online
  • Person-to-person direct payment
  • Paypal.com (now an eBay company)enables you to
    send funds to another individual over the
    Internet
  • Online billing and bill-paying can be classified
    into B2C, B2B, or C2C.
  • Opportunities exist in B2B services
  • can save businesses about 50 percent of billing
    costs

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On-Demand Delivery Service (ODDS)
  • On-demand delivery service (ODDS)
  • express delivery made fairly quickly after an
    online order is received
  • On-Demand Delivery Services (ODDS)
  • May own a fleet of delivery vehicles for regular
    deliveries and delivery within short time period

111
Exhibit 3.7On-Demand Delivery Services Model

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Digital Delivery
  • Digital (soft) goods
  • Music, movies, videos, software, newspapers,
    magazines, graphics, etc.
  • Can be delivered in hard or soft form
  • Computer program on CD-ROM with owners manual
    and warranty card
  • Download from Web site after payment

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Problems with E-Tailing Lessons Learned
  • Profitability
  • Lose money on every sale as they try to grow to a
    profitable size and scale
  • Underlying cost and revenue models were not sound
  • Long-run success requires financial viability
  • Manage new risk exposure
  • Local companies contend with local customers and
    local regulations
  • National firms have more constituents
  • Global firms deal with numerous cultural
    perspectives

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Problems with E-Tailing Lessons Learned
  • Branding
  • drive to establish brand can lead to excessive
    spending
  • Starting with insufficient funds
  • Keep it interesting
  • Static design is a turn-off
  • Dynamic sites with rich databases of information
    appeal most to customers

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Disintermediation Reintermediaries
  • Disintermediation
  • manufacturer sells directly to consumer
  • Reintermediearies
  • new intermediary roles in the digital environment
    offer new ways to
  • Reach new customers
  • Bring value to customers
  • Generate revenues

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Intermediarys New Role
  • Role will shift to one that emphasizes
    value-added services such as
  • Assisting customers in comparison shopping from
    multiple sources
  • Providing total solutions by combining services
    from several vendors
  • Providing certifications and trusted third-party
    control and evaluation systems

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Cybermediation and Hypermediation
  • Cybermediation (electronic intermediation)
  • use of software (intelligent) agents to
    facilitate intermediation
  • Hypermediation
  • extensive use of both human and electronic
    intermediation to provide assistance in all
    phases of an e-commerce venture

118
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