Podcast
Questions and Answers
Which activity is central to the function of market transactions?
Which activity is central to the function of market transactions?
- Establishing long-term contracts between businesses.
- Creating complex financial instruments.
- Matching buyers and sellers efficiently. (correct)
- Enforcing strict regulatory compliance.
What primarily enables the smooth operation of market transactions?
What primarily enables the smooth operation of market transactions?
- Limitations on consumer choice to streamline demand.
- Strict government oversight of pricing.
- Facilitation of exchanging information, goods, services, and payments. (correct)
- Technological barriers to entry for new competitors.
In a market transaction, what role does information play beyond simply informing about product availability?
In a market transaction, what role does information play beyond simply informing about product availability?
- It primarily benefits sellers by obscuring potential product flaws.
- It solely dictates the final price of goods without negotiation.
- It helps reduce uncertainties and enables informed decision-making for all parties. (correct)
- It serves only to promote products irrespective of their actual value.
What is the relationship between market transactions and the flow of goods and services?
What is the relationship between market transactions and the flow of goods and services?
Why is the efficient handling of payments crucial in market transactions?
Why is the efficient handling of payments crucial in market transactions?
Which activity is most clearly classified as e-business rather than merely e-commerce?
Which activity is most clearly classified as e-business rather than merely e-commerce?
A small business wants to expand its market reach by using e-commerce. Which of the following categories of e-commerce would directly involve interactions with government agencies for permits and compliance?
A small business wants to expand its market reach by using e-commerce. Which of the following categories of e-commerce would directly involve interactions with government agencies for permits and compliance?
In the context of e-commerce, what is the primary function of Electronic Funds Transfer (EFT)?
In the context of e-commerce, what is the primary function of Electronic Funds Transfer (EFT)?
Compared to Electronic Funds Transfer(EFT), what additional capability does Electronic Data Interchange (EDI) provide to businesses?
Compared to Electronic Funds Transfer(EFT), what additional capability does Electronic Data Interchange (EDI) provide to businesses?
How did Value-Added Networks (VANs) primarily support the growth of early e-commerce?
How did Value-Added Networks (VANs) primarily support the growth of early e-commerce?
If a company implements a system where employees can log into the company's network and perform their duties from home, this will be considered:
If a company implements a system where employees can log into the company's network and perform their duties from home, this will be considered:
Which of the following best describes a 'business process' in the context of e-commerce operations?
Which of the following best describes a 'business process' in the context of e-commerce operations?
What was a defining characteristic of the first wave of e-commerce?
What was a defining characteristic of the first wave of e-commerce?
Which of the following best describes the role of institutional infrastructure in enabling efficient market functioning?
Which of the following best describes the role of institutional infrastructure in enabling efficient market functioning?
How does electronic commerce primarily contribute to the reduction of transaction costs for businesses and individuals?
How does electronic commerce primarily contribute to the reduction of transaction costs for businesses and individuals?
Which of the following is a significant component of transaction costs before the adoption of electronic commerce?
Which of the following is a significant component of transaction costs before the adoption of electronic commerce?
What is the defining characteristic of network economic structures?
What is the defining characteristic of network economic structures?
How does the value of a network typically change as more participants join?
How does the value of a network typically change as more participants join?
What is the key distinction between a 'firm' and an 'industry' in the context of electronic commerce opportunities?
What is the key distinction between a 'firm' and an 'industry' in the context of electronic commerce opportunities?
In the context of strategic business units, which activities are considered 'primary' within a value chain?
In the context of strategic business units, which activities are considered 'primary' within a value chain?
What is the 'value system' in the context of industry value chains?
What is the 'value system' in the context of industry value chains?
In a SWOT analysis, what is the primary focus of the initial internal review conducted by an analyst?
In a SWOT analysis, what is the primary focus of the initial internal review conducted by an analyst?
What is 'localization' in the context of international electronic commerce?
What is 'localization' in the context of international electronic commerce?
In the context of the second wave of electronic commerce, how do established companies typically fund their e-commerce initiatives?
In the context of the second wave of electronic commerce, how do established companies typically fund their e-commerce initiatives?
Which of the following best describes a 'revenue model' in the context of electronic commerce?
Which of the following best describes a 'revenue model' in the context of electronic commerce?
A company wants to implement a business model that allows customers to specify the price they are willing to pay for a product or service. Which of the following EC models aligns with this?
A company wants to implement a business model that allows customers to specify the price they are willing to pay for a product or service. Which of the following EC models aligns with this?
Which characteristic defines a commodity product in the context of electronic commerce?
Which characteristic defines a commodity product in the context of electronic commerce?
How does a high value-to-weight ratio impact a product's suitability for electronic commerce?
How does a high value-to-weight ratio impact a product's suitability for electronic commerce?
What is a key advantage of using e-commerce for sales support and order taking?
What is a key advantage of using e-commerce for sales support and order taking?
What is a primary benefit that e-commerce provides to buyers?
What is a primary benefit that e-commerce provides to buyers?
Why are perishable products often considered challenging to sell through electronic commerce?
Why are perishable products often considered challenging to sell through electronic commerce?
What is a significant challenge when implementing e-commerce solutions?
What is a significant challenge when implementing e-commerce solutions?
Which of the following exemplifies unstructured use of e-mail, as might be found in businesses in the early stages of e-commerce?
Which of the following exemplifies unstructured use of e-mail, as might be found in businesses in the early stages of e-commerce?
Flashcards
Electronic Commerce (E-commerce)
Electronic Commerce (E-commerce)
Using technology, especially the Internet, to conduct business.
Electronic Business (E-business)
Electronic Business (E-business)
Conducting business activities, including B2B, using electronic communication.
Business-to-Consumer (B2C)
Business-to-Consumer (B2C)
Selling goods/services directly to consumers via the internet.
Business-to-Business (B2B)
Business-to-Business (B2B)
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Consumer-to-Consumer (C2C)
Consumer-to-Consumer (C2C)
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Transaction
Transaction
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Business processes
Business processes
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Telecommuting/Telework
Telecommuting/Telework
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Matching buyers and sellers
Matching buyers and sellers
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Facilitating exchanges
Facilitating exchanges
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Market transactions
Market transactions
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Exchange of goods
Exchange of goods
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Exchange of services
Exchange of services
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Business Model
Business Model
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Revenue Model
Revenue Model
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Online Direct Marketing
Online Direct Marketing
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Electronic Tendering Systems
Electronic Tendering Systems
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Electronic Marketplaces
Electronic Marketplaces
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Name Your Own Price
Name Your Own Price
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Affiliate Marketing
Affiliate Marketing
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Viral Marketing
Viral Marketing
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Group Purchasing
Group Purchasing
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Commodity Product
Commodity Product
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Institutional infrastructure
Institutional infrastructure
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EC Reduces Transaction Costs
EC Reduces Transaction Costs
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Transaction Costs
Transaction Costs
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Network Economic Structures
Network Economic Structures
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Network Effects
Network Effects
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Industry
Industry
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Value Chain
Value Chain
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Value System
Value System
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SWOT Analysis
SWOT Analysis
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Localization
Localization
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Study Notes
- Electronic commerce is the use of technology, particularly the Internet, to conduct business
- E-commerce generally refers to buying or selling electronically, often interactively
- E-business refers to conducting business activities, including business-to-business activities, using electronic communication
Categories of Electronic Commerce
- Business-to-consumer (B2C) involves businesses selling products or services to individual consumers (e.g., Walmart.com)
- Business-to-business (B2B) consists of businesses selling products or services to other businesses (e.g., Grainger.com)
- Business processes support buying and selling activities, where organizations maintain and use information to identify and evaluate customers, suppliers, and employees (e.g., Dell Computer)
- Consumer-to-consumer (C2C) allows participants in an online marketplace to buy and sell goods to each other (e.g., eBay.com)
- Business-to-government (B2G) includes businesses selling goods or services to government agencies (e.g., CAL-Buy portal)
Electronic Commerce Terminology
- Transaction involves an exchange of value
- Business processes are logical, related, and sequential activities and transactions that businesses engage in
- Telecommuting/telework means employees log in to company computers through the Internet instead of traveling to the office
History of Electronic Commerce
- Electronic funds transfers (EFTs), also called wire transfers, are electronic transmissions of account exchange information over private communication networks
- Electronic data interchange (EDI) involves transmitting computer-readable data in a standard format to another business
- A value-added network (VAN) is an independent firm that offers connection and transaction-forwarding services to buyers and sellers
Internet Technology Innovations for E-Commerce
- 1994: Browser
- 1995: Web content (without interactivity)
- 1996: Search engines and agents
- 1997: Push technology and Java applets
- 1998: Portals and credit card processing
- 1999: Customization and tracking
- 2000: XML, digital signatures, and peer-to-peer technologies
- 2001: Broadband, DSL, and cable modems
- 2002: Wireless applications for handhelds
First Wave of Electronic Commerce Characteristics
- Dominant influence of U.S. businesses
- Extensive use of the English language
- Many new companies started with outside investor money
- Unstructured use of e-mail
- Over-reliance on advertising as a revenue source
Second Wave of Electronic Commerce Characteristics
- Global enterprises in many countries participating in electronic commerce
- Established companies fund electronic commerce initiatives with their own capital
- Customized e-mail strategies are now integral to customer contact
Business and Revenue Models
- A business model is a set of processes that combine to yield a profit
- A revenue model is a specific collection of business processes used to identify customers, market to those customers, and generate sales
Typical Business Models in EC
- Online direct marketing
- Electronic tendering systems (reverse auction)
- Name your own price
- Affiliate marketing
- Viral marketing
- Group purchasing
- Online auctions
- Product and service customization
- Electronic marketplaces and exchanges
- Value-chain integrators and service providers
- Information brokers
- Bartering
- Deep discounting
- Membership
- Supply chain improvers
Product/Process Suitability to Electronic Commerce
- A commodity is hard to distinguish from similar products and includes features that have become standardized
- Shipping profile is a collection of attributes affecting how easily a product can be packaged and delivered
- High value-to-weight ratio can make overall shipping cost a small fraction of the selling price
Advantages of Electronic Commerce
- Can increase sales and decrease costs
- Effective advertising on the Web can reach potential customers in every country
- E-commerce sales support and order-taking processes can reduce costs of handling sales inquiries and providing price quotes
- Increases purchasing opportunities for buyers
- Makes it easier to negotiate price and delivery terms
Disadvantages of Electronic Commerce
- Perishable products are difficult to sell online
- It is difficult to calculate return on investment and integrate existing databases
Functions of Markets
- Matching buyers and sellers
- Facilitating the exchange of information, goods, services, and payments
- Providing an institutional infrastructure, such as a legal and regulatory framework
Using Electronic Commerce to Reduce Transaction Costs
- Improving the flow of information
- Increasing coordination of actions
Transaction Costs (Before EC)
- Are the total costs that a buyer and seller incur
- Significant components include the cost of information search, and the seller's investment in equipment
Network Economic Structures
- Involve companies coordinating strategies, skill sets by forming stable, long-term relationships with other companies and individuals based on shared purposes
- Strategic alliances are relationships created within the network economic structure
- Virtual companies/organizations: Are strategic alliances that occur between or among companies operating on the internet
- Strategic partners: Are entities that come together as a team for a specific project or activity
Network Effects
- Activities yield less value as the amount of consumption increases
- As more organizations participate in a network, the value of the network to each participant increases
Firm
- Multiple business units owned by a common set of shareholders
Industry
- Multiple firms that sell different products to similar customers
Strategic Business Unit Value Chains
- Value chain: A way of organizing the activities that each strategic business unit undertakes
- Primary activities: Designing, producing, marketing, delivering, and supporting products or services
- Supporting activities: Human resource management and purchasing
Industry Value Chains
- A value system is larger stream of activities into which a particular business unit's value chain is embedded
SWOT Analysis
- The analyst first looks into the business unit to identify its strengths and weaknesses
- The analyst then reviews the operating environment and identifies opportunities and threats
International Nature of Electronic Commerce
- Companies with established reputations create trust by ensuring that customers know who they are
- They can rely on their brands to create trust on the Web
- Customers' inherent lack of trust in “strangers” on the Web is logical and to be expected
Language and Cultural Issues
- To do business effectively in other cultures a business must adapt to those cultures
- Researchers have found that customers are more likely to buy products and services from Web sites in their own language
- Localization is translation that considers multiple elements of the local environment
- Culture: Combination of language and customs and it varies across national boundaries and within regions
Infrastructure Issues
- Internet infrastructure includes: Computers and software connected to the Internet, and communications networks
- Flat-rate access system: Consumer or business pays one monthly fee for unlimited telephone line usage
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