BTE Chapter 7 Notes
BTE Chapter 7 Notes BTE 210
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This 6 page Class Notes was uploaded by Dalia Szkolnik on Friday February 12, 2016. The Class Notes belongs to BTE 210 at University of Miami taught by Geraldine Perez in Winter 2016. Since its upload, it has received 51 views. For similar materials see Fundamentals of Business Technology & Innovation in Information System at University of Miami.
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Date Created: 02/12/16
Chapter 7 E-Business and E-Commerce Electronic commerce • Process of buying, selling, transferring, or exchanging products, services, or information via computer networks (includes the Internet) Electronic Business (e-business) • A much broader concept than e-commerce • Buying and selling of goods and services • Servicing customers • Collaborating with business partners • Conducting e-learning (training) • Conduction electronic transactions within an organization o Example: loading cane card with money to use in the food court) Types of organizations • Brick-and-Mortar organizations o Purely physical organizations • Clicks-and-Mortar organizations o Mix of physical and digital dimensions in terms of products, payment, process, delivery o Conducts e-commerce activities Example: UM bookstore • Virtual organizations (pure play) o All dimensions are digital o No physical presence Example: Spotify Types of E-Commerce • Business-to-consumer (B2C) o Sellers are organizations and buyers are individuals (Amazon) • Business-to-business (B2B) o Both the sellers and buyers are business organizations (CISCO youtube) o Larger than B2C by volume o Largest amount of transactions • Consumer-to-consumer (C2C) o An individual who sells products or services to other individuals (craigslist) • Business-to-employee (B2E) o Organization uses e-commerce internally to provide information and services to its employees (conduct training, buy discounted tickets) Example: Buying insurance benefits from University of Miami health network • E-Government (City of Miami) o Government-to-citizen (G2C) and government-to-business (G2B) o Use of internet technology and e-commerce to deliver information about public services to citizens, business partners, and suppliers Example: paying for parking tickets, social security • Mobile Commerce (mCommerce) o E-commerce conducted in a wireless environment (iTunes) E-Commerce Business Models • Online direct marketing selling directly to customers, efficient for digital products and services • Electronic tendering system businesses request quotes from suppliers (B2B) • Name-your-own-price customers decide how much they are willing to pay, matching the customer with a provider (priceline) • Find-the-best-price customer specify a need, intermediary compares providers and shows the lowest price, customers have to accept in order to not loose the deal (hotwire) • Affiliate marketing vendors ask partners to place logos on partner’s site, vendor pays commissions to partners if the customer clicks on that logo to buy a product • Viral marketing receivers send information about your product to their friends • Online auctions companies run auctions (popular in C2C) • Membership only members can use services provided Major E-Commerce Mechanisms • Mechanism through which businesses and customers can buy and sell on the Internet • Electronic catalogs o Backbone of most e-commerce sites o Include product database, directory, search, and presentation capabilities • Electronic auctions o Auctions conducted from seller’s site, the buyer’s site, or third party’s site Forward auctions sellers place items at sites for auction and buyers bid continuously for them (eBay) Reverse auctions buyer posts a request for a quotation (RFQ) suppliers study the RFQ and submit bids electronically • E-storefronts o Web site that represents a single store • E-malls (cyber mall) o Collection of individual shops under one Internet address o Associated with B2C E-Commerce • E-Marketplaces o Central, virtual market space on the web where many buyers and sellers conduct e-commerce and e-business activities o Associated with B2B E-commerce Example: Amazon Electronic payment mechanisms • Enable buyers to pay for goods and services electronically o Electronic checks (e-checks) o Electronic cards Electronic credit cards Virtual credit cards Purchasing cards Stored-value money cards Smart cards o Digital wallets o Person-to-person payments (PayPal, Venmo) Benefits of E-Commerce • National and international markets have become more accessible • Lowest costs of processing, distribution, and retrieving information • Provides access to a wide number of products and services • Delivers information, services, and products to rural areas, cities, and developing countries Limitations of E-Commerce • Lack of universally accepted security standards • Telecommunications bandwidth in less-developed countries is insufficient • Web access in less-developed countries is expensive • Perceptions of insecurity • Unresolved legal issues such as taxation • Lacks a mass number of buyers and sellers • You typically cannot access additional information Business-to-Consumer • Online Services Industry o Disintermediation process whereby intermediaries are eliminated (Amazon) o Cyberbanking conducting banking activities from home, place of business, or road instead of physically going to a bank (direct deposit from banks to teacher’s bank accounts) o Online securities trading use of computers to trade stocks, bonds, and other financial instruments (cheaper than a full-service or discount broker) o Online Job Market companies advertising available positions, accept resumes, and take applications via the Internet o Travel Services using the Internet and WWW to plan and arrange any trip economically (Trip Advisor, Kayak) o Online Advertising using the Internet and WWW to provide information in order to influence buyer-seller transaction • Advertising methods o Banners electronic billboards o Pop-up ad appears as the front of the current browser window o Pop-under ad appears underneath active window and shown when the active window is closed o Spamming indiscriminate distribution of electronic ads without the receiver’s permission o Permission marketing asks consumers for permission to accept online advertising/email Opt-in: subscribing Opt-out: in a contract, click here if you don’t want to receive marketing, unsubscribing from e-mails (unsubscribe) • Issues in E-Tailing o Channel Conflict click and mortar companies face conflict with regular distributors when they begin selling directly to customers online (errors in pricing and resource location) o Multichanneling (omni-chanelling) process in which companies integrate online and offline channels to create the opportunity for showrooming o Showrooming shoppers visit brick and mortar stores to examine product in person and then conduct research in their smartphones about the product o Order Fulfillment company sells directly to customers, it has to find the products that need to be shipped quickly, pack orders, arrange the packages, collect the money from the customer and handle returns Business to Business • Largest volume of online transactions • Issues are business related Sell-Side Marketplace - Organizations sell their products or services to other organizations electronically either from their own or a third-party website (company goes to amazon to choose what company they want to buy from) - Key Mechanisms o Forwards auctions, electronic catalogs, third party auction sites (eBay) Buy-Side Marketplace - Organizations attempt to acquire needed products or services from other organizations electronically - Uses technology to streamline the procurement process in order to reduce both the costs of the items and the administrative expenses o E-Procurement (ariba.com) UM uses it Uses reverse auctions, particularly group purchasing • Group purchasing: multiple buyers combine orders so that they constitute a large volume and therefore attract more seller attention • When buyers place their combines orders on a reserve auction, they can negotiate a volume discount Electronic Exchanges - Public exchanges o Vertical exchanges exchange specialized from selling every single thing (disposal of medical waste) (something that has only to do with one industry and not the other) o Horizontal exchanges across many industries mainly for MRO materials (paper, pen) o Functional exchanges needed services such as temporary help or extra office space are traded on an “as-needed” basis Temporary employees for a business Ethical issues - Threats to piracy - Potential job losses Ethical Issues in E-Commerce - Fraud on the internet o Stocks, investments, business opportunities, auctions - Domain name’s conflicts o Considered legal when the person or business who owns the name has operated a legitimate business under that name for some time - Cybersquatting o Practice of registering domain names solely for the purpose of selling them later at a higher price - Taxes and other fees o Whether, when, and where electronic sellers and/or buyers should pay business licenses taxes, franchise fees, excise taxes, gross-receipt taxes o Right now, taxes apply to the product where it is sold - Copyright o Enforcing copyright laws is extremely difficult
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