Summary Electronic Commerce PDF

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Komplette Zusammenfassung des Moduls E Commerce - Studiengang BWL...

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Electronic Commerce Session 1 – Introduction to E-Commerce 1. Definitions and Distinctions E-Commerce: is the exchange of information, products, services or payment, and any stage in the supply chain, whether between businesses / businesses & consumers / public & private sector, whether paid or unpaid  4 perspectives: communication, business process, service, online Electronic Business: when business has fully integrated information and communication technologies (ICTs) into its operations, potentially redesigning its business process around ICT or completely reinventing its business model. E-Business is understood to be the integration of all these activities with the internal process of a business through ICT. Difference between E-Commerce & E-Business: E-Commerce includes online display of information, goods, services/ selling, ordering, billing / handling of payments and transactions

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E-Business embraces CRM, Knowledge Management Types of E-Commerce C2C: Consumer interacting with consumer (peer2peer)  blogs & communities, product recommendations, social networks  ebay, craiglist C2B: Consumer selling to businesses  consumer feedback, “name your own price”, vendors bit on a job  Priceline, Dell Ideastrom

SPM,

ERP,

B2C: Businesses selling to consumer  transactional: Amazon / brand-building: Unilever / Media owner: News corp / comparison intermediary: check24.de B2B: businesses selling to businesses  Alibaba, Euroffice, go2paper.com, salesforce.com

8 unique features of E-Commerce Features Description Ubiquity Internet/ web technology is available everywhere (at home, work, …) anytime

Subsets of E-Commerce classes: - Mobile E-Commerce: refers to the use of mobile devices - Social E-Commerce: is a form of ECommerce which is enabled by social networks and online social relationships  Drivers: social sign-on, network notification, online collaborative shopping tools, social search etc. - Local E-Commerce: is focused on engaging the consumer based on his/ her current geographic location by online marketing techniques.

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Global reach

The technology reaches across national borders

Business significance Marketplace: - Extended beyond traditional boundaries - Removed from temporal and geographic location Customer: - Convenience is enhanced - Shopping costs are reduced Commerce is enabled across national/ cultural borders seamlessly without modification. “Marketplace” includes billions of costumers and millions of businesses One set of technical media standard around the world

One set of technology standards (internet) Video, audio, and text Video, audio, and text marketing messages are integrated into a messages possible single marketing message and consuming experience. Consumers are engaged in a dialog that dynamically adjusts the Interactivity The technology works experience to the individual, and makes the consumer a cothrough interaction with participant in the process of delivering goods to the marketing. the user Information The technology reduces Information processing, storage and communication costs drop density dramatically, while accuracy and timeliness improve greatly. information costs and Information becomes cheap, plentiful and accurate raises quality Personalization of marketing messages and customization of Personalization/ The technology allows personalized messages products and services are based on individual characteristics. Customization to be delivered to individuals as well as groups Social network User content generation Enable user content creation, and distribution. Creates substitute, and social networking user created, entertainment products technology 2. History of E-Commerce 3. E-Commerce from different perspectives Technology perspective: E-Commerce needs technology as infrastructure  it contributes to the development and mastery of digital computing and communications technology Business perspective: business applications & challenging business (change of strategies and plans) Society perspective: 3bn people using internet, many for E-Commerce purposes Academic perspective: technical approaches (computer scientists, mgmt. scientists) & behavioral approaches (information systems scientists, marketing scientists, mgmt. scholar, sociologists, psychologists) Universal Standards Richness

Session 2 – E-Commerce infrastructure 1. Fundamentals of the internet The internet is an interconnected network of thousands of networks important concepts: Packet switching: slices digital messages into packets  sends packets along different communication paths as they become available  reassembles packet once they arrive the destination  uses routers TCP/IP: Transmission controlled protocol (establishes connections among sending and receiving web computers  handles assembly of packets at point of transmission, and reassembly at receiving end) & Internet Protocol (provides the internet’s addressing scheme)  layers: Network interface layer, internet layer, transport layer, application layer 2. 10 Popular features and services of the internet E-Mail: Instant messaging: Search engine:  uses series of displays words typed identify web pages protocols for transon a computer that match queries almost instantly based on one or ferring messages  recipients can more techniques with text and  include keyword respond attachments from indexes, page immediately in the one internet user to ranking  also: same way another shopping tools, Wikis: Allows users to Streaming media: easily add and edit Enables music, video advertising vehicles (SEM), tool within Econtent on a web and other large files Commerce sites page to be sent to users in Online social chunks to that when audio received and networks: services Podcasting: presentation stored played, file comes that support as an audio file and through communication available for uninterrupted  among networks of download from web allows users to begin friends, peers playing media files before file is fully downloaded 3. -

Internet governance and net neutrality Different bodies governing the internet Entity Federal Office of Information Security (BSI) Internet Architecture Board (IAB) Internet Cooperation for Assigned Names and Numbers (ICANN) Internet Engineering Steering Group (IESG) Internet Engineering Task Force (IETF) Internet Society (ISOC)

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Music and Video Services: Online video vewieing, digital video on demand, internet telephony (voice over internet protocol (VOIP) uses internet to transmit voice communication), internet television (PTV), video conferencing and telepresence, online software and web services (web apps, widgets, & gadgets)

Blogs Online forums and chats: Forum: “message boards, bulletin board, discussion board, discussion group, board of forum”  web app. that enable internet users to communicate with each other, although not in real time Chat: similar to IM, but for multiple users  typically, users log into chatroom

Task Independent and neutral institution for questions in terms of ITsecurity in the information society Helps define the overall structure of the internet Assigns IP addresses and manages the top-level domain name system (de, .com…) Oversees the setting of standards with respect to the internet A private-sector group that forecasts the next step in growth of the internet, keeps watch over its evolution and operation Consortium of corporations, government agencies, and nonprofit organizations that monitors internet policies and practices

Forces threatening net neutrality Net neutrality prohibits internet service providers from speed up, slowing down or blocking internet traffic based on its source, ownership or destination. Forces:  Telecommunication companies and ISPs desire to offer tiered access to particular internet services, i.e. to offer different quality of service (e.g. speed) to consumers based on a free paid by the consumer or by the upstream content provider.  Governments or other bodies blocking access to certain services or content (e.g. China, Turkey)

Session 3 – Building an E-Commerce Presence 1. Entrepreneurial idea Where is the money? Business model: portal, e-tailer, content provider, transaction broker, market creator, service provider, community provider -

Revenue model: advertising, subscriptions, transaction fees, sales, and affiliate revenue 3 Analysis tools: SWOT (know yourself)

Porter’s five forces (know competition)

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SLEPT Analysis (Know your environment)  Social factors: include the influence of consumer perceptions in determining usage of the internet for different activities  Legal and ethical factors: determine the method by which products can be promoted and sold online. Governments, on behalf of society, seek to safeguard individual’s rights to privacy  Environmental factors: variations in economic performance in different countries and regions affect spending patterns and international trade  Political factors: national governments and transnational organizations have an important role in determining the future adoption and control of the internet and the rules by which it is governed  Technological factors: changes in technology offer new opportunities to the way products can be marketed The system development cycle 1. System Analysis & planning: Business objectives: List of capabilities you want your site to have System functionalities: List of information system capabilities needed to achieve business objectives Information requirements: information elements that system must produce in order to achieve business objectives  System analysis for a typical E-Commerce Site

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System design: hardware and software platforms: System design specification: description of main components of a system and their relationship to another 2 components: Logical design (data flow diagrams, processing functions, databases) & physical design (specifies physical, software components, models etc.)

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Building the system: in- vs. outsourcing: Outsourcing: hiring vendors to provide services involved in building site Build own vs. outsourcing: own  requires team with diverse skill sets / choice of software tools / both risks and possible benefits

Host own vs. outsourcing: hosting  hosting company responsible for ensuring site is accessible 24/7 for monthly fee / Co-Location: firm purchases or leases web server (with control over its operation), but servers is located at vendor’s facility 4. Testing implementation and maintenance Testing: unit testing, system testing, acceptance testing Implementation & maintenance: Maintenance is ongoing / maintenance costs similar to development costs / benchmarking 5. Managing and optimizing an E-Commerce Site Web site features that annoy customers

8 most important factors in successful site design

Session 4 – Business models for E-Commerce 1. Digital business model Intermediary between a company’s strategy and its business processes Shows logic of value creation and coordination of resources BM Design Process: Mobilize (Setting the scene)  Understand (Immersion)  Design (Inquiry)  Implement (Execution)  Manage (Evolution) 2. The business model canvas tool (Design stage) A strategic management. template for developing new or documenting existing business processes Consists of 9 building blocks, based on extended BM components 1. Customer segments Defines the groups of people or organization which the company aims to target In order to increase customer satisfaction, customer can be classified into segments with common needs, behavior patterns or other characteristics Company has to develop a profound understanding of special customer demands Examples: mass market, niche market, segmented, diversified, multisided markets 2. Value propositions Describes the goods and services creating value for specific customer segments Solves a customer problem or fulfills a customer need Package of benefits offered to customers Value can be quantitative or qualitative Value propositions can be e.g. be innovative (mostly linked with technologies)), be in terms of service improvements, be in terms of adaption to customer wishes, mean workload reduction, mean risk mitigation 3. Channels Describes how the company reaches its outcomes in order to communicate a value proposition Communication, distribution and sales channels serve as interfaces between company and customers Main functions: draw customer’s attention to the company, support the evaluation of the company’s value proposition, enable customers to buy specific goods and services, offer a value proposition to customers, enable customer support after the purchase 4. Customer relationships Describes the types of relationships between a company and its customer segments Motivations for relationships: customer acquisition, customer care, increase in sales Examples of categories of customer relationships: (individual) personal support, selfservice, automatic services, communities, co-partnership 5. Revenue streams Consists of the revenue a company receives from all customer segments 2 types of revenue sources: transactional revenue from single customer payments & recurring revenue from ongoing payments Examples of possibilities for creating revenue sources: purchase of goods, usage fee, membership fee, licenses, advertising 6. Key resources Describe the main good which are necessary for a working BM Enable a company to create a value proposition, to serve markets, to maintain customer relationships and to create revenues Are dependent on the type of BM Can be physical, financial, intellectual or human 7. Key activities Describe the most important things a company must do in order to maintain a working BM Are the most important activities for being successful Can be categorized into: Production, problem solving, and platform/ network 8. Key partnerships Describe the network of suppliers and partners contributing to the BM success Different types of partnerships: strategic alliances between non-competitors, strategic partnership between competitors, joint ventures for development of new businesses, relationship between customers and providers in order to ensure dependable supply 3 Motivations: optimization & economies of scale, mitigation of risk & uncertainties, acquisition of specific resources & activities 9. Cost structure

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Describes all costs involved in a BM 2 different cost structures of BM: cost-oriented / value-based Characteristics of cost structures: fixed costs, variable costs, economies of scale, economies of scope B2B business models Main types: net marketplace (E-Distributor, E-Procurement, Exchanges) & Private Industrial networks  see 9.3. Business Models and IS Research 

Session 5 – Products and Services in E-Commerce 1. E-Commerce retailing The retail sector and its segments Most important theme in online retailing is effort to integrate online and offline operations Personal consumption expenditures (USA 2015): Services: 65% (biggest component were housing and healthcare services) / Goods: 35% (nondurable: 22% (e.g. food, clothing), durable: 13% (e.g. car))

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Goods vs. services ambiguity 7 segments (clothing, durable goods etc.)  for each, uses of internet may differ  information vs. direct purchasing E-Commerce retail: its early visions 1. Reduced search and transaction costs; outcomes able to find lowest prices 2. Lowered market entry costs, lower operating costs, higher efficiency 3. Traditional physical store merchants forced out of business 4. some industries would be disintermediated  few of these assumptions were correct  instead, structure of retail marketplace has not been revolutionized  internet has created new venues for multichannel firms and supported a few pure-play merchants E-Commerce Services Services in general

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Largest and most rapidly expanding part of economies of advanced industrial nations Concerned with performing task in and around households, business firms, and institutions Includes doctors, lawyers, accountants, business consultants etc. Why service industries are uniquely suited for E-Commerce

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Service industries are knowledge- and information-intense, which makes them uniquely suited to ECommerce applications -

Personalization and customization, but level differs depending on type of service, e.g. medical vs. financial Examples of successful online services: online financial services: E-Commerce success story but different from what had been predicted  Brokerage industry transformed

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online travel services  one of the most successful B2C E-Commerce segments  For Consumers: More convenience than traditional travel agents  For suppliers: a singular, focused customer pool that can be efficiently reached through onsite advertising  An ideal service / product for internet: information-intensive product / electronic product / does not require inventory, physical offices with multiple employees, multi-channel presence  Industry dynamics: intense competition among online providers / price competition difficult / industry consolidation / mobile apps are transforming industry / social media contents & reviews have an increasing influence on travel purchases Online Media Trends in online content Vertical videos, virtual reality (VR), app-based SEO, augmented reality experience (e.g. QR-Codes), extreme automation of marketing tools, data visualization

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Netflix: used to be an online video store  now video-on-demand business  contents are made available via streaming  members can watch as much as they want, anytime, anywhere, on nearly any internet-connected screen  can play, pause, resume watching all without commercials & commitments Internet and Traditional Media: Cannibalization vs. complementarity Does time on interne reduce time spent with other media? (books, newspaper, magazines, phone, radio) Internet users: spend relatively less time in traditional media  consume more media of all types than noninternet users  often “multitask” with media consumption  multimedia reduces cannibalization impact for some visual, aural media Media convergence (e.g. online newspapers, e-books) Technological convergence: hybrid devices Content convergence: 3 aspects  design, production, distribution  new tools for digital editing and processing Industry convergence: merger of media enterprises into firms that create and cross-market content of different platforms Examples:  Online newspapers: Newspapers have gone through 3 different BMS as the adapt to the internet  Initially fee-based, then free, and now beginning a return to fee-based Newspaper headlines are primary content on google news, yahoo news New York times now charging for premium access New reader devices with reader apps  E-Books and online publishing: Challenges of E-Book platforms: cannibalization (fewer physical sales, more e-book sales, more purchases of readers) / finding the right BM (wholesale model: retailers pay wholesale price and establish retail price  vs. agency model: distributor as agent must charge publishers retail price) / converging technologies (interactive books, iBook author, iBook Textbooks)

Session 6 – Pricing Strategies in E-Commerce 1. Fixed vs. dynamic pricing Fixed Pricing Has always been the integral part of Description marketing strategy Traditionally based on fixed costs – variable costs – demand curve Resulting in a fixed price, i.e. one (national) price, everywhere, everyone

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Examples

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Freemium: - Cross-subsidy online marketing strategy where users are offered a basic service for free, but must pay for premium or ad-on services - People who pay for premium service subsidize the free riders - Risks: distinction between paid and free offerings have to be clear - Examples: Dropbox, Linked in, Spotify Bundling - Offering consumers two...