Lecture1 is441-(intro toe-commerce)

Abdisalam Issa-Salwe
Taibah University
College of Computer Science & Engineering
Information Systems Department
Introduction to e-Commerce
(e-Commerce IS441)
Lecture 1
Kenneth C. Lauden and Carol Guercio Traver, 2002 E-Commerce: Business, Technology and Society. Pearson Education, Inc.
2
Abdisalam Issa-Salwe, College of Computer Science & Engineering, Taibah University
Learning Objectives
Define e-commerce and describe how it differs
from e-business
Identify the unique features of e-commerce
technology and their business significance
Describe the major types of e-commerce
Understand the visions and forces behind the
E-Commerce I era

3
Learning Objectives
Understand the successes and failures of E-
Commerce I
Identify several factors that will define the E-
commerce II era
Describe the major themes underlying the study of e-
commerce
Identify the major academic disciplines contributing to
e-commerce research
4
Amazon.com: Before and After

5
E-commerce vs. E-business
E-business involves
Digital enablement of transactions and
processes within a firm, involving information
systems under the control of the firm
E-business does not involve commercial
transactions across organizational boundaries
where value is exchanged
6
The Difference Between E-commerce and
E-Business
Page 8, Figure 1.1

7
Seven Unique Features of E-commerce
Technology and Their Business Significance
Page 9, Table 1.1
8
Page 11, Figure 1.2
Changing Trade-Off Between Richness and
Reach

9
Major Types of E-Commerce
Market relationships
Business-to-Consumers (B2C)
Business-to-Business (B2B)
Consumer-to-Consumer (C2C)
Technology-based
Peer-to-Peer (P2P)
Mobile Commerce (M-commerce)
10
Major Types of E-Commerce
Page 14, Table 1.2

11
Business-to-Consumer E-commerce
Most commonly discussed type
Online businesses attempt to reach individual
consumers
Consumers will spend $65 billion in 2001.
12
Business-to-Business E-commerce
Businesses focus on sell to other businesses
Largest form of e-commerce
$700 billion in transactions in 2001
Primarily involved inter-business exchanges at
first
Other models have developed
e-distributors
infomediaries
B2B service providers

13
Consumer-to-Consumer E-commerce
Provide a way for consumers to sell to each
other
Estimated $5 billion market
Consumer:
prepares the product for market
places the product for auction or sale
relies on market maker to provide catalog,
search engine, and transaction clearing
capabilities
14
Peer-to-Peer E-commerce
Enables Internet users to share files and
computer resources
Napster

15
Mobile E-commerce
Wireless digital devices enable
transactions on the Web
Uses personal digital assistants (PDAs)
to connect
Used most widely in Japan and Europe
16
Growth of the Internet and the Web
Created in the late 1960s
After 1990s, About 350 million computers
worldwide to date
Links businesses, educational institutions,
government agencies, and individuals
Provides services such as e-mail, document
transfer, newsgroups, shopping, research,
instant messaging, music, video, and news

17
Growth of the Internet and the Web
Internet hosts are growing at a rate of 45% per
year
Extraordinary growth -- time to reach 30% US
households
Radio - 38 years
Television - 17 years
Internet/Web - 8 years (1993)
18
The Growth of the Internet
Page 16, Figure 1.3

19
The Growth of Web Content
Page 17, Figure 1.4
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The Growth of B2C E-Commerce
Page 20, Figure 1.5

21
The Growth of B2B E-Commerce
Page 21, Figure 1.6
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Origins and Growth of E-Commerce
Electronic Data Interchange (EDI)
standards developed that permitted firms
to exchange commercial documents and
conduct digital commercial transactions
across private networks (1980s)

23
Technology and E-Commerce in Perspective
Internet and the Web are just two of a long list of
technologies that have greatly change commerce
Other technologies spawned business
models and strategies
Explosive early growth followed by
retrenchment and then long-term
successful exploitation of the technology
24
Technology and E-Commerce in Perspective
Although e-commerce has grown explosively,
there is no guarantee it will continue to grow
Confront own fundamental limitations
B2C only about 1% of overall retail market
With current growth rates, B2C will roughly
equal the annual revenue of Wal-Mart in
2005

25
Limitations of the Growth of B2C E-Commerce
Page 23, Table 1.3
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E-Commerce I and II
E-Commerce I
Explosive growth starting in 1995
Widespread of Web to advertise products
Ended in 2000 when dot.com began to
collapse
E-Commerce II
Began in January 2001
Reassessment of e-commerce companies

27
E-Commerce I 1995-2000
For computer scientist and information
technologists
Vindication of a set of information
technologies developed over 40 years
Extending from the early Internet to the PC
and local area networks
The vision of universal communications
28
For economists
Raised realistic prospect of perfect
Bertrand Market
where price, cost, and quality
information is equally distributed
where a nearly infinite set of suppliers
compete against one another
where customers have access to all
revelant market information worldwide
Merchants have equal direct access to
hundreds of millions of customers

29
Disintermediation
displacement of market middlemen who
traditionally are intermediaries between
producers and consumers by a new direct
relationship between manufacturers and
content originators with their customers
30
Friction-free commerce
a vision of commerce in which
information is equally distributed
transaction costs are low
prices can be dynamically adjusted to
reflect actual demand
intermediaries decline
unfair competitive advantages are
eliminated

31
First mover
a firm that is first to market in a particular
area and that moves quickly to gather
market share
Network effect
occurs where users receive value from the
fact that everyone else uses the same tool
or product
32
Amounts Raised by Venture-Backed Internet
Companies in 1996-2000
Page 25, Table 1.4

33
E-Commerce II 2001-2006
Crash in stock market values of E-commerce
I companies throughout 2000 is an end to E-
commerce I
Led to a sobering reassessment of the
prospects of e-commerce and the methods of
achieving business success.
E-commerce II begins in 2001 and ends five
year later -- the limit for making technology
and business projections
34
E-Commerce II 2001-2006
Reasons for the end of E-Commerce I
run-up in technology stocks due to enormous information
technology capital expenditure of firms rebuilding their
internal business systems to withstand Y2K
telecommunications industry had built excess capacity in
high-speed fiber optic networks
1999 e-commerce Christmas season provided less sales
growth that anticipated and demonstrated e-commerce
was not easy (eToys.com)
valuations of dot.com and technology companies had
risen so high supporters were questioning whether
earnings could justify the prices of the shares.

35
E-Commerce I and E-Commerce II Compared
Page 32, Table 1.5
36
April 2001 NRF/Forrester Online Retail
Index
Page 33, Table 1.6

37
Understanding E-Commerce: Organizing Themes
Technology: Infrastructure
development and mastery of digital computing
and communications technology
Business: Basic Concepts
new technologies present businesses and
entrepreneurs with new ways of organizing
production and transacting business
Society: Taming the Juggernaught
global nature of e-commerce poses public policy
issues of equity, equal access, content
regulation, and taxation
38
The Internet and the Evolution of Corporate
Computing
Page 37,
Figure 1.8

39
Disciplines Concerned with E-Commerce
Page 39, Figure 1.9
References
Kenneth C. Lauden and Carol Guercio Traver,
E-Commerce: Business, Technology and
Society. Pearson Education, Inc. 2002.
Abdisalam Issa-Salwe, Lecture Notes: E-
Business and E-Commerce, Arab Open
Univeristy Notes, 2012.
40

Lecture1 is441-(intro toe-commerce)

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Lecture1 is441-(intro toe-commerce)