Introduction to e-Commerce
Week of May 31 – June 9
▪ Categories of e-Commerce:
o Electronic commerce includes shopping on the World Wide Web as well as activities such as businesses trading with other businesses or the government, etc., and is broken down by the authors into five categories (p. 5): 1. Business-to-consumer (B2C) occurs when businesses sell finished products or services to individual consumers (pp. 5,7). 2. Business-to-business (B2B) occurs when businesses sell unfinished materials, products, or services to other businesses (pp. 5,7). 3. Business processes that support buying and selling activities includes the maintenance and sharing of information with their customers, suppliers, employees, and partners. These are processes that help organizations work more efficiently (pp. 5-7). ▪ A transaction is an exchange of value, such as a purchase, a sale, or the conversion of raw materials into a finished product. ▪ Business processes are the group of logical, related, and sequential activities and transactions in which businesses engage. 4. Consumer-to-consumer (C2C) occurs when individuals buy and sell items among themselves. Online auctions such as eBay would be perfect examples (pp. 7-8). 5. Business-to-government (B2G) includes business transactions with government agencies. Businesses pay taxes, file reports, or sell goods and services to government agencies (pp. 7-8). 6. Instructors note: The authors fail to mention a sixth category of e-Commerce, government-to-government (G2G). This includes transactions between one government agency and another.
▪ Older e-Commerce Technologies:
o It is important to note that commerce was conducted online before the popularity of the World Wide Web through technologies such as EFT and EDI. o Electronic Funds Transfers (EFT) are electronic transmissions of account information over private communications networks (p. 8). o Electronic data interchange (EDI) occurs when one business transmits computer-readable data in a standard format to another business. An example might be when Wal-Mart sends an online purchase order to a vendor. The vendor receives the order online and ships the product to Wal-Mart. Notice how in this process no paper ever changes hands (pp. 8-9).
▪ History of e-Commerce:
o First Wave:
▪ Between the mid-1990s and 2000, e-Commerce grew rapidly. In this period, 12000 e-Commerce sites were started and $100 billion was invested (p. 9). ▪ In this first wave, most of the sites were based on bad ideas (p. 9). ▪ In the first wave, most of these businesses were dependent on online advertising (p. 12). ▪ In the first wave, many companies and investors were particularly interested in establishing the first-mover advantage. Often, these companies jumped into volatile markets trying to establish first-mover advantage (p. 12). ▪ In the first wave, the technologies being used were slow and inexpensive, such as dial-up modems (p. 11).
o Dot-com Bust:
▪ Between 2000 and 2003, more than 5000 of these companies went out of business (p. 9).
o Second Wave:
▪ The second wave of e-Commerce began in 2003 (p. 4). ▪ The second wave is more international in scope (p. 11). ▪ The second wave of e-Commerce has seen established companies (instead of new ones) look to e-Commerce to carefully and steadily grow their company (p. 11). ▪ The second wave of e-Commerce is more dependent on companies taking advantage of the number of consumers with broadband connections (p. 11). ▪ The second wave of e-Commerce has seen companies take advantage of new technologies (such as RFID, smart cards, biometrics) to better manage inventory, share...