E-commerce 2019: Business. Technology.

Society.
Fifteenth Edition, Global Edition

Chapter 1

Introduction to
E-commerce

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 2

What is Strategy ?

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 3

From Oxford Dictionary

Source:
http://www.oxforddictionaries.com/definition/english/strategy
What is Strategic Management?

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What is Strategic Management?

• Strategic management involves the

formulation and implementation of the
major goals and initiatives based on
consideration of resources and an
assessment of the internal and external
environments in which the organization
competes

Nag, R., Hambrick, D. C. and Chen, M.-J. (2007), What is strategic management, really? Inductive
derivation of a consensus definition of the field. Strat. Mgmt. J., 28: 935–955. doi: 10.1002/smj.615
Definition of E-Business

•e-Business is the business use of

the Internet.

•The “use” results in a “business

benefit” such as higher revenues,
reduced costs or reaching an
underserved market
Source:
http://www.cioindex.com/article/articleid/3/what-is-estrategy
Definition of e-Strategy

• E-strategy is an iterative process to

create and/or modify an organization's
business model for e-business.

• The key is the formulation and

implementation of the sustainable and
financially viable business model not just
designing websites to address business
requirements Source:
http://www.cioindex.com/article/articleid/3/what-is-estrategy
Learning Objectives
1.1 Understand why it is important to study e-commerce.
1.2 Define e-commerce, understand how e-commerce differs
from e-business, identify the primary technological building
blocks underlying e-commerce, and recognize major current
themes in e-commerce.
1.3 Identify and describe the unique features of e-commerce
technology and discuss their business significance.
1.4 Describe the major types of e-commerce.
1.5 Understand the evolution of e-commerce from its early
years to today.
1.6 Describe the major themes underlying the study of e-
commerce.
1.7 Identify the major academic disciplines contributing to e-
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Everything On Demand: The
“Uberization” of E-commerce
• Class Discussion
– Have you used Uber or any other on-demand
service companies?
– What is the appeal of these companies for users
and providers?
– Are there any negative consequences to the
increased use of on-demand services like Uber
and Airbnb?

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The First Thirty Seconds
• First two decades of e-commerce
– Just the beginning
– Rapid growth and change
• Technologies evolve at exponential rates
– Disruptive business change
– New opportunities
• Why study e-commerce
– Understand opportunities and risks
– Analyze e-commerce ideas, models, issues

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Introduction to E-commerce
• Use of Internet to transact business
– Includes Web, mobile browsers and apps
• More formally:
– Digitally enabled commercial transactions
between and among organizations and
individuals

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The Difference between E-commerce
and E-business
• E-business:
– Digital enabling of transactions and processes within a
firm, involving information systems under firm’s control
– Does not include commercial transactions involving an
exchange of value across organizational boundaries

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Technological Building Blocks
Underlying E-commerce
• Internet
• World Wide Web
– HTML
– Deep Web v s “surface” Web
ersu

• Mobile platform
– Mobile apps

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Insight on Technology: Will Apps Make
the Web Irrelevant?
• Class Discussion
– What are the advantages and disadvantages of
apps, compared with websites, for mobile users?
– What are the benefits of apps for content
owners and creators?
– Will apps eventually make the Web irrelevant?
Why or why not?

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Major Trends in E-commerce
• Business trends include:
– All forms of e-commerce show very strong
growth
• Technology trends include:
– Mobile platform has made mobile e-commerce
reality
• Societal trends include:
– Increased online social interaction and sharing

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Unique Features of E-commerce
Technology (1 of 2)
1. Ubiquity
2. Global reach
3. Universal standards
4. Information richness

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Unique Features of E-commerce
Technology (2 of 2)
5. Interactivity
6. Information density
7. Personalization/customization
8. Social technology

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Types of E-commerce
• Business-to-Consumer (B2C)
• Business-to-Business (B2B)
• Consumer-to-Consumer (C2C)
• Mobile e-commerce (M-commerce)
• Social e-commerce
• Local e-commerce

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Figure 1.5 The Growth of B2C E-
commerce in the United States

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Figure 1.7 The Growth of B2B E-
commerce in the United States

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Figure 1.8 The Growth of M-commerce
in the United States

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E-commerce: A Brief History (1 of 4)
• Precursors
– Baxter Healthcare modem-based system
– Order entry systems
– Electronic Data Interchange (EDI) standards
– French Minitel

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E-commerce: A Brief History (2 of 4)
• 1995–2000: Invention
– Sale of simple retail goods
– Limited bandwidth and media
– Euphoric visions of
▪ Friction-free commerce
▪ First-mover advantages
– Dot-com crash of 2000

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E-commerce: A Brief History (3 of 4)
• 2001–2006: Consolidation
– Emphasis on business-driven approach
– Traditional large firms expand presence
– Start-up financing shrinks
– More complex products and services sold
– Growth of search engine advertising
– Business web presences expand

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E-commerce: A Brief History (4 of 4)
• 2007–Present: Reinvention
– Rapid growth of:
▪ Web 2.0, including online social networks
▪ Mobile platform
▪ Local commerce
▪ On-demand service economy
– Entertainment content develops as source of
revenues
– Transformation of marketing

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Figure 1.10 Periods in the Development
of E-commerce

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Insight on Business: Rocket Internet
• Class Discussion
– What are the benefits of investing in a company
that Rocket Internet has launched?
– Is an incubator the best solution for start-ups to
find funding? Why or why not?
– Why is Rocket Internet controversial?

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Assessing E-commerce (1 of 2)
• Stunning technological success
• Early years a mixed business success
– Few early dot-coms have survived
– Online sales growing rapidly
• Many early visions not fulfilled
– Price dispersion
– Information asymmetry
– New intermediaries

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Assessing E-commerce (2 of 2)
• Other surprises
– Fast-follower advantages
– Start-up costs
– Impact of mobile platform
– Emergence of on-demand e-commerce

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Understanding E-commerce:
Organizing Themes
• Technology:
– Development and mastery of digital computing
and communications technology
• Business:
– New technologies present businesses with new
ways of organizing production and transacting
business
• Society:
– Intellectual property, individual privacy, public
welfare policy

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Figure 1.11 The Internet and the
Evolution of Corporate Computing

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Insight on Society: Facebook and the
Age of Privacy
• Class discussion:
– Why are social networks interested in collecting
user information?
– What types of privacy invasion are described in
the case? Which is the most privacy-invading,
and why?
– How is e-commerce different from traditional
markets with respect to privacy? Don’t
merchants always want to know their customer?
– How do you protect your privacy online?

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Academic Disciplines Concerned with
Technology
• Technical
– Computer science, management science,
information systems
• Behavioral
– Information systems research, economics,
marketing, management, finance/accounting,
sociology

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Careers in E-commerce
• Position: Category specialist in E-commerce Retail
Program
• Qualification/Skills
• Preparing for the Interview
• Possible Interview Questions

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Copyright

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