代写 Introduction to Electronic Commerce HC3152 Ebusiness A

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    • 代写 Introduction to Electronic Commerce HC3152 Ebusiness Applications
    Chapter 1 Introduction to Electronic Commerce
    HC3152 Ebusiness Applications Week 1
    Holmes 2011
    Learning Objectives
    In this chapter, you will learn about:
    What electronic commerce is and how it has evolved into a second wave of growth
    Why companies concentrate on revenue models and the analysis of business processes instead of business models when they undertake electronic commerce initiatives
    How economic forces have created a business environment that is fostering the second wave of electronic commerce
    Holmes 2011
    Learning Objectives (cont’d.)
    How businesses use value chains and SWOT analysis to identify electronic commerce opportunities
    The international nature of electronic commerce and the challenges that arise in engaging in electronic commerce on a global scale
    Holmes 2011
    Electronic Commerce: The Second Wave
    Electronic commerce history
    Mid-1990s to 2000: rapid growth
    “Dot-com boom” followed by “dot-com bust”
    2000 to 2003: overly gloomy news reports
    2003: signs of new life
    •Sales and profit growth return
    •Electronic commerce growing at a rapid pace
    •Electronic commerce becomes part of general economy
    2008 general recession
    •Electronic commerce hurt less than most of economy
    Second wave underway
    2
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    Electronic Commerce and Electronic Business
     Electronic commerce
     Shopping on the Web
     Businesses trading with other businesses
     Internal company processes
     Broader term: electronic business (e-business)
     Electronic commerce includes:
     All business activities using Internet technologies
    • Internet and World Wide Web (Web)
    • Wireless transmissions on mobile telephone
    networks
     Dot-com (pure dot-com)
     Businesses operating only online
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    Categories of Electronic Commerce
     Business-to-consumer (B2C)
    Consumer shopping on the Web
     Business-to-business (B2B): e-procurement
     Transactions conducted between Web businesses
     Supply management (procurement) departments
    • Negotiate purchase transactions with suppliers
     Business processes
    Using Internet technologies to support organisation
    selling and purchasing activities
     Consumer-to-consumer (C2C)
     Business-to-government (B2G)
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    FIGURE 1-1 Elements of electronic commerce
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    Categories of Electronic Commerce (cont’d.)
     Elements of electronic commerce
    Relative sizes of elements
    • Rough approximation
    Dollar volume and number of transactions
    • B2B much greater than B2C
    Number of transactions
    • Supporting business processes greater than B2C
    and B2B combined
    3
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    Categories of Electronic Commerce (cont’d.)
     Activity
     Task performed by a worker in the course of doing his
    or her job
    May or may not be related to a transaction
     Transaction: exchange of value
     Purchase, sale, or conversion of raw materials into
    finished product
     Involves at least one activity
     Business processes
    Group of logical, related, sequential activities and
    transactions
    Holmes 2011 10
    Categories of Electronic Commerce (cont’d.)
     Web helping people work more effectively
     Telecommuting (telework)
     Consumer-to-consumer (C2C)
     Individuals buying and selling among themselves
    • Web auction site
    C2C sales included in B2C category
    • Seller acts as a business (for transaction
    purposes)
     Business-to-government (B2G)
     Business transactions with government agencies
    • Paying taxes, filing required reports
     B2G transactions included in B2B discussions
    Holmes 2011 11
    FIGURE 1-2 Electronic commerce categories
    Holmes 2011 12
    The Development and Growth of Electronic Commerce
     People engaging in commerce:
     Adopt available tools and technologies
     Internet
    Changed way people buy, sell, hire, organise
    business activities
    • More rapidly than any other technology
     Electronic Funds Transfers (EFTs)
    Wire transfers
     Electronic transmissions of account exchange
    information
    • Uses private communications networks
    4
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    The Development and Growth of Electronic Commerce
    (cont’d.)
     Electronic Data Interchange (EDI)
     Business-to-business transmission
    • Computer-readable data in standard format
     Standard transmitting formats benefits
    • Reduces errors
    • Avoids printing and mailing costs
    • Eliminates need to reenter data
     Trading partners
     Businesses engaging in EDI with each other
     EDI pioneers (General Electric, Sears, Wal-Mart)
    • Improved purchasing processes and supplier
    relationships
    Holmes 2011 14
    The Development and Growth of Electronic Commerce
    (cont’d.)
     EDI pioneers problem
    High implementation cost
    • Expensive computer hardware and software
    • Establishing direct network connections to trading
    partners or subscribing to value-added network
     Value-added network (VAN)
    • Independent firm offering EDI connection and
    transaction-forwarding services
    • Ensure transmitted data security
    • Charge fixed monthly fee plus per transaction
    charge
    Gradually moved EDI traffic to the Internet
    • Reduced EDI costs
    Holmes 2011 15
    The Dot-Com Boom, Bust, and Rebirth
     1997 to 2000 irrational exuberance
     12,000 Internet-related businesses started
     $100 billion of investors’ money
     5,000+ companies went out of business or acquired
     2000 to 2003
     $200 billion invested
     Fueled online business activity growth rebirth
    Online B2C sales growth continued more slowly
     2008-2009 recession
     B2C and B2B increasing growth rates continue
    Driving force: people with Internet access increasing
    Holmes 2011 16
    FIGURE 1-3 Actual and estimated online sales in B2C and B2B categories
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    The Second Wave of Electronic Commerce
    Four waves based on the Industrial Revolution
    First and second wave characteristics
    Regional scope
    •First wave: United States phenomenon
    •Second wave: international
    Start-up capital
    •First wave: easy to obtain
    •Second wave: companies using internal funds
    Internet technologies used
    •First wave: slow and inexpensive (especially B2C)
    •Second wave: broadband connections
    Holmes 2011
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    The Second Wave of Electronic Commerce (cont’d.)
    First and second wave characteristics (cont’d.)
    Internet technology integration
    •First wave: bar codes, scanners
    •Second wave: Radio Frequency Identification (RFID) devices, smart cards, biometric technologies
    Electronic mail (e-mail) use
    •First wave: unstructured communication
    •Second wave: integral part of marketing, customer contact strategies
    Revenue source
    •First wave: online advertising (failed)
    •Second wave: Internet advertising (more successful)
    Holmes 2011
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    The Second Wave of Electronic Commerce (cont’d.)
    First and second wave characteristics (cont’d.)
    Digital product sales
    •First wave: fraught with difficulties (music industry)
    •Second wave: fulfilling available technology promise
    •Mobile telephone based commerce (mobile commerce or m-commerce)
    •Smart phone technology enabling mobile commerce
    •Web 2.0: making new Web business possible
    Business online strategy
    •First wave: first-mover advantage
    •Second wave: businesses not relying on first-mover advantage
    Holmes 2011
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    FIGURE 1-4 Key characteristics of the first two waves of electronic commerce
    6
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    Business Models, Revenue Models, and Business Processes
    Business model
    Set of processes combined to achieve company goal of yielding profit
    Electronic commerce first wave
    Investors sought Internet-driven business models
    •Expectations of rapid sales growth, market dominance
    Saw copying of successful “dot-com” business models
    •Michael Porter argued business models did not exist
    Holmes 2011
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    Business Models, Revenue Models, and Business Processes (cont’d.)
    Instead of copying model, examine business elements
    Streamline, enhance, replace with Internet technology driven processes
    Revenue model used today
    Specific collection of business processes
    •Identify customers
    •Market to those customers
    •Generate sales
    Helpful for classifying revenue-generating activities
    •Communication and analysis purposes
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    Focus on Specific Business Processes
    Companies think in terms of business processes
    Purchasing raw materials or goods for resale
    Converting materials and labor into finished goods
    Managing transportation and logistics
    Hiring and training employees
    Managing business finances
    Identify processes benefiting from e-commerce technology
    Uses of Internet technologies
    Improve existing business processes, identify new business opportunities, adapt to change
    Holmes 2011
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    Role of Merchandising
    Merchandising
    Combination of store design, layout, product display knowledge
    Salespeople skills
    Identify customer needs
    •Find products or services meeting needs
    Merchandising and personal selling
    Difficult to practice remotely
    Web site success
    Transfer merchandising skills to the Web
    •Easier for some products than others
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    Product/Process Suitability to Electronic Commerce
    Classifications
    Depend on available technologies’ current state
    •Change as new e-commerce tools emerge
    FIGURE 1-5 Business process suitability to type of commerce
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    Product/Process Suitability to Electronic Commerce (cont’d.)
    Commodity item: well suited to e-commerce selling
    Product or service hard to distinguish from same products or services provided by other sellers
    Features: standardised and well known
    Price: distinguishing factor
    Consider product’s shipping profile
    Collection of attributes affecting how easily that product can be packaged and delivered
    Note value-to-weight ratio
    •DVD: good example
    •Expensive jewelry: high value-to-weight ratio
    Holmes 2011
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    Product/Process Suitability to Electronic Commerce (cont’d.)
    Easier-to-sell products have:
    Strong brand reputation (Kodak camera)
    Appeal to small but geographically diverse groups
    Traditional commerce
    Better for products relying on personal selling skills
    Combination of electronic and traditional commerce
    Business process includes both commodity and personal inspection items
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    Advantages and Disadvantages of Electronic Commerce
    E-commerce increases sales and decreases costs
    Virtual community: gathering of people online
    Using Web 2.0 technologies
    E-commerce buyer opportunities
    Increases purchasing opportunities
    Identifies new suppliers and business partners
    Efficiently obtains competitive bid information
    •Easier to negotiate price and delivery terms
    Increases speed, information exchange accuracy
    Wider range of choices available 24 hours a day
    •Immediate access to prospective purchase information
    8
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    Advantages and Disadvantages of Electronic Commerce (cont’d.)
    Benefits extend to general society welfare
    Lower costs to issue and secure:
    •Electronic payments of tax refunds
    •Public retirement
    •Welfare support
    Provides faster transmission
    Provides fraud, theft loss protection
    •Electronic payments easier to audit and monitor
    Reduces commuter-caused traffic, pollution
    •Due to telecommuting
    Products and services available in remote areas
    Holmes 2011
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    Disadvantages of Electronic Commerce
    Poor choices for electronic commerce
    Perishable foods and high-cost, unique items
    Disadvantages will disappear when:
    E-commerce matures
    •Becomes more available to and accepted by general population
    Critical masses of buyers become equipped, willing to buy through Internet
    •Online grocery industry example
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    Disadvantages of Electronic Commerce (cont’d.)
    Additional problems
    Calculating return on investment
    Recruiting and retaining employees
    Technology and software issues
    Cultural differences
    Consumers resistant to change
    Conflicting laws
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    Economic Forces and Electronic Commerce
    Economics
    Study how people allocate scarce resources
    •Through commerce and government actions
    Commerce organisations participate in markets
    Potential sellers come into contact with buyers
    Medium of exchange available (currency or barter)
    Organisation hierarchy (flat or many levels)
    Bottom level includes largest number of employees
    Pyramid structure
    Transaction costs
    Motivation for moving to hierarchically structured firms
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    Transaction Costs
     Total costs a buyer and seller incur
    While gathering information and negotiating
    purchase-and-sale transaction
     Includes:
    • Brokerage fees and sales commissions
    • Cost of information search and acquisition
     Sweater dealer example (Figure 1-6)
    Holmes 2011 34
    FIGURE 1-6 Market form of economic organisation
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    Markets and Hierarchies
     Coase’s analysis of high transaction costs
    Hierarchical organisations formed
    • Replace market-negotiated transactions
    • Strong supervision and worker-monitoring
    elements
     Sweater example (Figure 1-7)
     Oliver Williamson (extended Coase’s analysis)
    Complex manufacturing, assembly operations
    • Hierarchically organised, vertically integrated
    Manufacturing innovations increased monitoring
    activities’ efficiency and effectiveness
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     Strategic business unit (business unit)
    One particular combination of product, distribution
    channel, and customer type
     Exception to hierarchy trend
    Commodities
    FIGURE 1-7 Hierarchical form of economic organisation
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    Using Electronic Commerce to Reduce Transaction Costs
    Electronic commerce
    Change vertical integration attractiveness
    Change transaction costs’ level and nature
    Example: employment transaction
    Telecommuting
    •May reduce or eliminate transaction costs
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    Network Economic Structures
    Neither market nor hierarchy
    Strategic alliances (strategic partnerships)
    Coordinate strategies, resources, skill sets
    Form long-term, stable relationships with other companies and individuals
    •Based on shared purposes
    Strategic partners
    Come together for specific project or activity
    Form many intercompany teams
    •Undertake variety of ongoing activities
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    Network Economic Structures (cont’d.)
     Network organisations
    Well suited to information-intensive technology industries
    Sweater example
    •Knitters organise into networks of smaller organisations
    •Specialise in styles or designs
    Electronic commerce makes such networks easier to construct and maintain
    •Will be predominant in the near future
    Manuel Castells predicts economic networks will become the organising structure for all social interactions
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    FIGURE 1-8 Network form of economic organisation
    11
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    Network Effects
    Activities yield less value as consumption amount increases
    Law of diminishing returns
    •Example: hamburger consumption
    Networks (network effect)
    Exception to law of diminishing returns
    •More people or organisations participate in network
    •Value of network to each participant increases
    Example: telephone
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    Using Electronic Commerce to Create Network Effects
    E-mail account example
    Provides access to network of people with e-mail accounts
    If e-mail account is part of smaller network
    •E-mail generally less valuable
    Internet e-mail accounts
    Far more valuable than single-organisation e-mail
    •Due to network effect
    Need way to identify business processes
    Evaluate electronic commerce suitability
    •For each process
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    Identifying Electronic Commerce Opportunities
    Focus on specific business processes
    Break business down
    Series of value-adding activities
    •Combine to generate profits, meet firm’s goal
    Commerce conducted by firms of all sizes
    Firm
    Multiple business units owned by a common set of shareholders or company
    Industry
    Multiple firms selling similar products to similar customers
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    Strategic Business Unit Value Chains
    Value chain
    Organising strategic business unit activities to design, produce, promote, market, deliver, and support the products or services
    Michael Porter includes supporting activities
    •Human resource management and purchasing
    Strategic business unit primary activities
    Identify customers, design, purchase materials and supplies, manufacture product or create service, market and sell, deliver, provide after-sale service and support
    12
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    Strategic Business Unit Value Chains (cont’d.)
     Strategic business unit primary activities
    (cont’d.)
     Importance depends on:
    • Product or service business unit provides
    • Customers
     Central corporate organisation support activities
     Finance and administration
    Human resource
     Technology development
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     Left-to-right flow
    Does not imply strict time sequence
    FIGURE 1-9 Value chain for a strategic business unit
    Holmes 2011 47
    Industry Value Chains
     Examine where strategic business unit fits within
    industry
     Porter’s value system
    Describes larger activities stream into which particular
    business unit’s value chain is embedded
     Industry value chain refers to value systems
     Delivery of product to customer
    Use as purchased materials in its value chain
     Awareness of businesses value chain activities
     Allows identification of new opportunities
    Useful way to think about general business strategy
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    FIGURE 1-9 Value chain for a
    strategic business unit
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    SWOT Analysis: Evaluating Business Unit
    Opportunities
     SWOT analysis
     Strengths, weaknesses, opportunities, and threats
     Consider all issues systematically
     First: look into business unit
    • Identify strengths and weaknesses
     Then: review operating environment
    • Identify opportunities and threats presented
     Take advantage of opportunities
     Build on strengths
     Avoid threats
    Compensate for weaknesses
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    FIGURE 1-11 SWOT analysis questions
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    FIGURE 1-12 Results of Dell’s SWOT analysis
    Holmes 2011 52
    International Nature of Electronic Commerce
     Internet connects computers worldwide
     When companies use Web to improve business
    process:
     They automatically operate in global environment
     Key international commerce issues
     Trust
    Culture
     Language
    Government
     Infrastructure
    14
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    Trust Issues on the Web
    Important to establish trusting relationships with customers
    Rely on established brand names
    Difficult for online businesses
    Anonymity exists in Web presence
    Banking example: browsing site’s pages
    •Difficult to determine bank size or how well established
    Business must overcome distrust in Web “strangers”
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    FIGURE 1-13 This classic cartoon from The New Yorker illustrates anonymity on the Web
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    Language Issues
    Business must adapt to local cultures
    “Think globally, act locally”
    Provide local language versions of Web site
    Customers more likely to buy from sites translated into own language
    50 percent of Internet content in English
    Half of current Internet users do not read English
    •By 2015: 70% of e-commerce transaction will involve at least one party outside of the United States
    Languages may require multiple translations
    Separate dialects
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    Language Issues (cont’d.)
    Large site translation may be prohibitive
    Decided by corporate department responsible for page content
    Mandatory translation into all supported languages
    Home page
    All first-level links to home page
    High priority pages to translate
    Marketing, product information, establishing brand
    Use translation services and software
    Human translation: key marketing messages
    Software: routine transaction processing functions
    15
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    Cultural Issues
    Important element of business trust
    Anticipating how the other party to a transaction will act in specific circumstances
    Culture
    Combination of language and customs
    Varies across national boundaries, regions within nations
    Personal property concept
    •Valued in North America and Europe (not Asia)
    Cultural issue example
    Virtual Vineyards (now Wine.com)
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    Cultural Issues (cont’d.)
    Subtle language and cultural standard errors
    General Motors’ Chevrolet Nova automobile
    Baby food in jars in Africa
    Select icons carefully
    Shopping cart versus shopping baskets, trolleys
    Hand signal for “OK”: obscene gesture in Brazil
    Dramatic cultural overtones
    India: inappropriate to use cow image in cartoon
    Muslim countries: offended by human arms or legs uncovered
    White color (purity versus death)
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    Cultural Issues (cont’d.)
    Online business apprehension
    Japanese shoppers’ unwillingness to pay by credit
    Softbank
    Devised a way to introduce electronic commerce to a reluctant Japanese population
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    Culture and Government
    Online discussion inhospitable to cultural environments
    Government controls in some cultures
    Unfettered communication not desired
    Unfettered communication not considered acceptable
    •Denounced Internet material content
    Unrestricted Internet access forbidden
    •Filter Web content
    Regularly reviews ISPs and their records
    Impose language requirements
    16
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    Culture and Government (cont’d.)
    Internet censorship
    Restricts electronic commerce
    Reduces online participant interest levels
    China
    Wrestling with issues presented by the growth of the Internet as a vehicle for doing business
    Created complex set of registration requirements and regulations governing any business engaging in electronic commerce
    Regularly conducts reviews of ISPs and their records
    Strong cultural requirements finding their way into the legal codes that govern business conduct
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    Infrastructure Issues
    Internet infrastructure
    Computers and software connected to Internet
    Communications networks’ message packets travel
    Infrastructure variations and inadequacies exist
    Outside United States
    Government-owned industry
    •Heavily regulated
    High local telephone connection costs
    •Affect buying online behavior
    International orders: global problem
    No process to handle order and paperwork
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    Infrastructure Issues (cont’d.)
    Business face challenges posed by variations and inadequacies in the infrastructure supporting the Internet throughout the world
    Local connection costs
    Inability to handle order
    Freight forwarder
    Arranges international transactions’ shipping and insurance
    Customs broker
    Arranges tariff payment and compliance
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    Infrastructure Issues (cont’d.)
    Bonded warehouse
    Secure location
    Holds international shipments until customs requirements or payments satisfied
    Handling international transactions paperwork
    Annual cost: $800 billion
    Software automates some paperwork
    •Countries have own paper-based forms, procedures
    •Countries have incompatible computer systems
    See Figure 1-14: complex information flows
    代写 Introduction to Electronic Commerce HC3152 Ebusiness Applications
    Holmes 2011 65
    FIGURE 1-14 Parties involved in a typical international trade transaction
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    Summary
     Electronic commerce
     Application of new Internet and Web technologies
    • Helps individuals, businesses, other organisations
    conduct effective business
     Adopted in waves of change
    • First wave ended in 2000
    • Second wave focuses on improving specific
    business processes
     Technology improvements
    Create new products and services
     Improved promotion, marketing, delivery of existing
    offerings
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    Summary (cont’d.)
     Technology improvements (cont’d.)
     Improve purchasing and supply activities
     Identify new customers
    Operate finance, administration, human resource
    management activities more efficiently
    Reduce transaction costs
    Create network economic effects
    • Leads to greater revenue opportunities
     Electronic commerce
     Fits into markets, hierarchies, networks
    Holmes 2011 68
    Summary (cont’d.)
     Value chains
    Occur at business unit, industry levels
     Value chains and SWOT analysis
     Tools to understand business processes
    • Analyse suitability for electronic commerce
    implementation
     Key international commerce issues
     Trust
    Culture and language
    Government
     Infrastructure
    代写 Introduction to Electronic Commerce HC3152 Ebusiness Applications