SIMAD UNIVERSITY ‫جــامــعـــة ســـيــمــد‬

JAAMACADDA SIMAD

Name: Mohamed Khalif Farah

Faculty: Computing

Program: IT

Class: BIT27(A)

ID No. : IT20127080

Phone No. : 0617481829

Course : E-COMMERCE

Prepared by: [email protected] March 16, 2024 1

Learning Objectives
1.1 Understand why it is important to study e-commerce.
• 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

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.
 E-commerce is the process of buying and selling goods and services online.
 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
 Technological Building Blocks Underlying E-commerce : Internet, the Web, and
increasingly, the mobile platform.

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  Major Trends in E-commerce :
o Business trends include: All forms of e-commerce show very strong growth
o Technology trends include: Mobile platform has made mobile e-commerce reality
o Societal trends include: Increased online social interaction and sharing
1.3 Identify and describe the unique features of e-commerce technology and discuss their
business significance.
There are eight features of e-commerce technology that are unique to this medium:
1. Ubiquity—available just about everywhere, at all times, making it possible to shop from
your desktop, at home, at work, or even from your car.
2. Global reach—permits commercial transactions to cross cultural and national boundaries
far more conveniently and cost-effectively than is true in traditional commerce.
3. Universal standards—shared by all nations around the world, in contrast to most
traditional commerce technologies, which differ from one nation to the next.
4. Richness—enables an online merchant to deliver marketing messages in a way not
possible with traditional commerce technologies.
5. Interactivity—allows for two-way communication between merchant and consumer and
enables the merchant to engage a consumer in ways similar to a face-to-face experience,
but on a much more massive, global scale.
6. Information density—is the total amount and quality of information available to all
market participants.
7. Personalization and customization—the increase in information density allows
merchants to target their marketing messages to specific individuals and results in a level
of personalization and customization unthinkable with previously existing commerce
technologies.
8. Social technology—provides a many-to-many model of mass communications. Millions
of users are able to generate content consumed by millions of other users.
1.4 Describe the major types of e-commerce.
There are six major types of e-commerce:
1. B2C e-commerce involves businesses selling to consumers and is the type of e-
commerce that most consumers are likely to encounter.
2. B2B e-commerce involves businesses selling to other businesses and is the largest form
of e-commerce.
3. C2C e-commerce is a means for consumers to sell to each other.
4. Social e-commerce is e-commerce that is enabled by social networks and online social
relationships.
5. M-commerce involves the use of wireless digital devices to enable online transactions.
6. Local e-commerce is a form of e-commerce that is focused on engaging the consumer
based on his or her current geographic location.

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1.5 Understand the evolution of e-commerce from its early years to today.
 E-commerce has gone through three stages: innovation, consolidation, and reinvention.
 The early years of e-commerce were a technological success, with the digital
infrastructure created during the period solid enough to sustain significant growth in e-
commerce during the next decade, and a mixed business success, with significant revenue
growth and customer usage, but low profit margins.
 E-commerce entered a period of consolidation beginning in 2001 and extending into
2006.
 E-commerce entered a period of reinvention in 2007 with the emergence of the mobile
digital platform, social networks, and Web 2.0 applications that attracted huge audiences
in a very short time span.
1.6 Describe the major themes underlying the study of e-commerce.
E-commerce involves three broad interrelated themes:
1. Technology—To understand e-commerce, you need a basic understanding of the
information technologies upon which it is built, including the Internet, the Web, and
mobile platform, and a host of complementary technologies—cloud computing, desktop
computers, smartphones, tablet computers, local area networks, client/server computing,
packet-switched communications, protocols such as TCP/IP, web servers, HTML, and
relational and non-relational databases, among others.
2. Business—While technology provides the infrastructure, it is the business applications—
the potential for extraordinary returns on investment—that create the interest and
excitement in e-commerce.
3. Society—Understanding the pressures that global e-commerce places on contemporary
society is critical to being successful in the e-commerce marketplace.
The primary societal issues are intellectual property, individual privacy, and public
policy.
1.7 Identify the major academic disciplines contributing to e-commerce.
There are two primary approaches to e-commerce: technical and behavioral. Each of these
approaches is represented by several academic disciplines.
1. On the technical side, this includes computer science, operations management, and
information systems.
2. On the behavioral side, it includes information systems as well as sociology, economics,
finance and accounting, management, and marketing.

Prepared by: [email protected] March 16, 2024 4

Q U E S T I O N S and Answers
Q1) What is e-commerce? How does it differ from e-business? Where does it intersect with
e-business?
A1) E-commerce involves digitally enabled commercial transactions between and among
organizations and individuals.
E- commerce differs from e-business in that no commercial transaction, an exchange of value
across organizational or individual boundaries, takes place in e-business.
E-business is the digital enablement of transactions and processes within a firm and therefore does
not include any exchange in value.
E-commerce and e-business intersect at the business firm boundary at the point where internal
business systems link up with suppliers. For instance, e-business turns into e-commerce when an
exchange of value occurs across firm boundaries.
Q2) What is information asymmetry?
A2) Information asymmetry refers to any disparity in relevant market information among the
parties involved in a transaction. It generally applies to information about price, cost, and hidden
fees.
Q3) What is a marketspace?
A3) A marketplace is any location, whether in person or online, that facilitates the exchange of
goods between buyers and sellers.
Q4) What are three benefits of universal standards?
A4) 1. reduced search costs for consumers

2. becomes simpler, faster, with more accurate price discovery

3. lower market entry costs for merchants
Q5) Compare online and traditional transactions in terms of richness.
A5) Traditional transactions can provide more richness in terms of face-to-face service including
visual and aural cues.
However, traditional transactions are limited in terms of how many people can be reached at a
single time.
Online transactions, which can be global in reach, can provide content that is both complex and
rich, overcoming the traditional trade-off between reach and richness.

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Q6) Name three of the business consequences that can result from growth in information
density.
A6) Growth in information density could result in:
 Greater price transparency: Consumers can easily find out the variety of prices in a
market.
 Greater cost transparency: Consumers can discover the actual costs merchants pay for
products.
 Greater opportunities for marketers to practice price discrimination: since marketers
are able to gather much more information about their customers, they can segment the
market into groups based on willingness to pay different prices for the same or nearly the
same goods.
Q7) What is Web 2.0? Give examples of Web 2.0 websites or apps and explain why you
included them in your list.
A7) Web 2.0 is a set of applications and technologies that allows users to create, edit, and
distribute content; share preferences, bookmarks, and online personas; participate in virtual lives;
and build online communities.
In other words, Web 2.0 is the set of new, advanced applications that have evolved along with
the Web’s ability to support larger audiences and more involved content.
Students may list Facebook, MySpace, YouTube, Photobucket, Google, Wikipedia, Second Life,
Digg, and WordPress, among others, as example sites.
Q8) Give examples of B2C, B2B, C2C, and social, mobile, and local e-commerce besides
those listed in the chapter materials.
A8) The answers to this question will vary. Possible examples include:
B2C: E-tailers: B2B:
 Bluefly  Grainger.com
 BarnesandNoble.com  Ariba
 1800Flowers.com  PerfectCommerce
 Godiva.com  Quadram
 Wine.com C2C:
 REI.com  Half.com
B2C: Service Providers:  Velvetbazaar
 Expedia  Ubid
 Travelocity  Oldandsold
B2C: Portals:  Ewanted
 Yahoo P2P:
B2C: Content Providers:  Streamcast Networks
 WSJonline.com  eMule-Project.net
 Consumerreports.com  Frostwire

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Q9) What are some of the major advantages and disadvantages of being a first mover?
A9) The major advantages of being a first mover are the ability to build a brand name early on
and establish a large customer base before followers enter the market, and the ability to build
switching costs into the technology or services offered so that customers will find it discomfiting
to change to a late entering competitor.
The major disadvantage is that historically, many first movers have not succeeded and are
instead replaced by the fast follower, larger firms with the financial, marketing, legal, and
production assets necessary to develop mature markets.
Generally, only a handful of first mover firms become successful long-term businesses as the
start-up costs and time it takes to build a profitable business are often underestimated.

Prepared by: [email protected] March 16, 2024 7