Week 2 - E-Commerce PDF

MIS, 11e Module 8: E-Commerce Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part....

MIS, 11e Module 8: E-Commerce Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1  Module Objectives By the end of this module, you should be able to: 8.1 Define e-commerce and its advantages, disadvantages, and business models. 8.2 Explain the major categories of e-commerce. 8.3 Describe the five major activities of the business-to-consumer e- commerce cycle. 8.4 Summarize the four major models of business-to-business e- commerce Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2  Module Objectives 8.5 Describe mobile-based and voice-based e-commerce. 8.6 Explain four supporting technologies for e-commerce. 8.7 Explain social commerce and the reasons for its popularity. 8.8 Explain hypersocial organizations and their growing popularity. 8.9 Explain social media information systems. Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Defining E-Commerce and E-Business E-business is all the activities a company performs in buying and selling products and services using computers and communication technologies. ○ Can include activities like online shopping, sales force automation, supply chain management, e-procurement, electronic payment systems, web advertising, and order management E-commerce is buying and selling goods and services over the Internet. ○ Focuses on the buying and selling goods and services over the Internet Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4  Value Chain and E-Commerce The value chain is a series of activities designed to meet business needs by adding value or cost in each phase The top four components of the value chain 1. Organization infrastructure 2. Human resource management 3. Technological development 4. Procurement E-commerce can enhance a value chain by offering new ways to reduce costs or improve operations. Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5  Michael Porter’s Value Chain The margin represents the value added by supporting the primary activities which consists of the following: ○ Inbound logistics ○ Operations ○ Outbound logistics ○ Marketing and sales ○ Service Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6 E-Commerce vs Traditional Commerce Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7  E-Commerce Advantages Disadvantages Creating price transparency Limited bandwidth in certain Ability to operate globally areas of the world Gather information about Security and privacy issues customers Accessibility to the Internet Improve customer service Acceptance to use the Internet Offer personalized services for transactions Reduce administration and transaction costs Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8  E-Commerce Business Models Focus on different parts of the value chain Traditional e-commerce models are an extension of a traditional business model Types of e-commerce business models include ○ Merchant model: transfers old retail model to e-commerce ○ Brokerage model: brings sellers and buyers together on the Web ○ Advertising model: extension of traditional advertising ○ Mixed model: generating revenue from more than one source ○ Infomediary: collect information on consumers or businesses and sell it to other companies ○ Subscription: sell digital products or services to customers Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9  Major Categories of E-Commerce E-commerce transactions can occur among consumers, businesses, and governmental organizations. Nine major e-commerce categories ○ Business-to-consumer (B2C) ○ Business-to-business (B2B) ○ Consumer-to-consumer (C2C) ○ Consumer-to-Business (C2B) ○ Government-to-citizen (G2C) ○ Government-to-business (G2B) ○ Government-to-government (G2G) ○ Government-to-employee (G2E) Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10  Business and Consumer E-Commerce Business-to-Consumer (B2C) Consumer-to-Consumer (C2C) Sell directly to consumers Involves business transactions Can be used with or without a between users physical store space Consumer-to-Business (C2B) Business-to-Business (B2B) Selling products or services to Transactions between businesses businesses Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11  Government and Nonbusiness E- Commerce E-government are the e-commerce applications used by government and nonbusiness organizations Four categories ○ Government-to-citizen (G2C) ○ Government-to-business (G2B) ○ Government-to-government (G2G) ○ Government-to-employee (G2E) Increased efforts to ensure that user focused e-gov Web sites are more user friendly and ADA compliant. Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 Major E-Commerce Categories Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13  Intrabusiness E-Commerce E-commerce activities that take place inside an organization Not part of the nine major categories Can include exchange of goods, services, or information among employees Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14  B2C E-Commerce Cycle Five major activities involved in conducting B2C e-commerce ○ Information sharing ○ Ordering ○ Payment ○ Fulfillment ○ Service and support Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15  B2C E-Commerce Evolution Increasing competition is resulting in deployment of multiple sales channels to reach target customers With multichannel strategy the channels are not connected to each other. Channels can include the following: ○ In-store purchase ○ Cell phone purchases ○ Purchases on website ○ Purchases using social media channels ○ Comparison shopping engines Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16  B2C E-Commerce Evolution Increasing competition is resulting in deployment of multiple sales channels to reach target customers With the multichannel strategy the channels are not connected to each other. With the cross-channel strategy allows customers to use several channels to buy an item. With the omnichannel strategy integrates physical stores, the Internet and mobile technologies Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17  Multichannel Strategy Advantages Disadvantages Targets consumers at different Selling on the wrong channel stages of activities Infrastructure required to Leverages the power of maintain the multichannel marketplace and search strategy engines Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18  Cross-Channel Strategy Advantages Disadvantages Caters to customers’ buying Limited resources habits Integration of various channels More personal customer service Attracts new customers Improves a company’s brand image Provides a unique view of business’s customers Increases sales opportunities Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19  B2B E-Commerce Includes activities in the B2C model Uses additional technologies like intranet, extranet, virtual private networks, electronic data interchange (EDI) and electronic funds transfer (EFT) Lowers production costs and improves accuracy of business supporting tasks Three major models for B2B ○ Seller-side marketplace ○ Buyer-side marketplace ○ Exchange marketplace Trading partner agreements is a model that is gaining popularity Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20  B2B Marketplaces Seller-side Buyer-side Sellers cater to specialized Buyer opens an electronic markets marketplace and invites sellers E-procurement enables to place bids employees to order and receive supplies from the supplier Provide cost savings to organization Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21  B2B Marketplaces Third-party exchange Trading-partner agreements Not controlled by sellers or Automate negotiating buyers processes and enforce Revenue is generated from the contracts between participating fees charged for matching businesses buyers and sellers Allows business partners to Vertical market concentrates send and receive information on specific industry or market Horizontal market concentrates on specific function or business processes Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22  Mobile and Voice-Based E-Commerce Mobile commerce Based on the Wireless Application Protocol (WAP) Users use handheld devices to conduct business transactions Voice-based Relies on voice recognition and text-to-speech technologies Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23 E-Commerce Supporting Technologies Electronic Payment System Electronic payment is a transaction in which money is exchanged electronically Uses the Internet, other computer networks and digitally stored value systems Payment cards are the most popular instrument for electronic payment transactions Micropayments Web transactions that involve a very small amount of money Payment mounds are accumulated for customers until they are large enough to offset the transaction fee Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24  Digital Marketing Digital Marketing Any form of marketing deployed on digital channels, devices or platforms Web Marketing Uses the Web and supporting technologies to promote goods and services Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25  Mobile Marketing Online businesses should have a mobile marketing strategy to stay competitive Popular strategies include: ○ App-based marketing ○ In-game mobile marketing ○ Location-based marketing ○ QR codes ○ Mobile search ads ○ Mobile image ads ○ SMS Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 26  Search Engine Optimization SEO is method for improving the volume or quality of traffic to a Web site Can generate more revenue for the Web site Focuses on improving results in a free fashion Ways to optimize web traffic include the following: ○ Keywords ○ Page title ○ Inbound links ○ Content ○ Links to others Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27  Social Commerce Social networks influence purchasing decisions Can provide links to enable customers to buy products Social commerce is a subset of e-commerce that is influenced by social networks and other online media Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 28  Hypersocial Organizations Hypersocial organizations are companies that leverage social media to better connect with customers and increase sales Share information through different avenues Leverage the power of online communities Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 29  Social Media Information Systems Social media information systems includes all the components found in other information systems and includes the additional three: ○ Application providers ○ User communities ○ Sponsors Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 30  Discussion Activity 1-1 E-commerce is becoming more normalized and many students may not remember a time where e-commerce was not available for making purchases. One of the first C2C platforms was eBay and it started in 1995. Despite this, there are still some disadvantages of e-commerce marketplace. What are the disadvantages of e-commerce? Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 31  Summary Now that the lesson has ended, you should be able to: Define e-commerce and its advantages Explain the major categories of e-commerce Describe the five major activities of the B2C e-commerce cycle Summarize the four major models of B2B e-commerce Describe mobile-based and voice-based e-commerce Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 32  Summary Explain four supporting technologies for e-commerce Explain social commerce and the reasons for its popularity Explain hypersocial organizations and their growing popularity Explain social media information systems Bidgoli, MIS, 11th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 33