ECommerce Chapter 1 Review

Ihab M.
February 10, 2018

Definitions

ECommerce The process of buying, selling and exchanging

products, services and information via computers.
E-Business A broader term of EC, that doesn’t only include
buying and selling, but also extends to include
servicing customers, collaborating with business
partners, and conducting transactions within an
organizations
E-Market An online market place where buyers and sellers meet
to exchange goods, services, money and information.
Social Network A category of internet-based applications that connect
friends, business partners, and people with specific
interests by providing free services such as photo
presentations, emails and so on using a variety of tools
Social Networking An internet service that provides online spaces for
Service people to create their own homepages, and provides
basic communication and support services for people
to conduct their activities.
Social Networking The creation or sponsoring of a social networking
service, or any other activity such as blogging, done
on a social network externally or internally.
Social Commerce ECommerce done on a social network by using a
social network service (i.e: Web 2.0 applications)
Web 2.0 The second generation of web appliactions that let
people collaborate, and share content in new ways
such as social networks, wikis, communication tools
and folksonomies.
Business Model A method in which a company conducts business to
generate revenue in order to sustain itself. It is a
written document that describes business goals and
outlines how to achieve them.
Business Case A written document used by managers to collect
funds for specific applications or projects. Its main
emphasis is justifications for specific investments.
Revenue Model A description of how the company or EC application
going to make money.
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Value Proposition The benefits the project will derive from using an EC
application.
Pure Play EC organizations that conduct business solely online.
Brick-and-Mortar Old businesses that conduct their primary business
offline; selling physical products by means of physical
agents.
Click-and-Brick (or Organizations that conduct some EC activities, usually
Click-and-Mortar) as an additional marketting channel.
Digital Revolution The change in the way individuals communicate and
do business based on advances in technology.
Wiki A blog that allows multiple users to add, edit and
delete content.
Twitter A microblogging service that allows users to send and
reach eachother’s updates (or tweets).
Blog A personal website, open to the public to read and
interact with; dedicated to specific topics.
Virtual World A user-generated world in which users interact,
communicate, play, buy and sell products [and
services].
Digital Economy An economy that relies on digital technologies such as
digital communication networks. AKA: The new
economy, Internet Economy, and Web Economy.
Digital Enterprise A new business model that uses IT in a major way to
achieve one or more of three basic objectives, which
are a) reaching and engaging customers more
efficiently. b) boosting employees productivity and
imporve operation efficiency. c) using converging
communication technologies to improve business
processes.
Entreprise Social Like normal social networks, except their main
Network purpose is to fulfill business needs.
Sharing Economy An economic system constructed around the concept
of sharing goods and services among the participating
people. Example: Uber, Airbnb.
Intranet An internal corporation or government network that
uses Internet services such as browsers, and Internet
protocols.
Extranet A network using the Internet connects multiple
intranets.
Direct Marketing Advertising to individuals in hope that they will buy a
product or service
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Tendering System Collecting a fee by providing the means for others to

conduct transactions online
Electornic Collecting a use fee by providing the means for others
Exchanges to find buyers online within a community.
Viral marketing Word of mouth marketing
Affiliate marketing Individual or firms are paid based on the amount of
additional business they can send to the selling firm.
RSS Rich Site Summary

Essay Questions.

1. What do EC applications rely on? [Also: Describe the framework

of an EC application.]
An EC application relies on its infrastructure, and 5 main areas of
support:

(a) People.
(b) Public policy.
(c) Marketting and advertising.
(d) Support services.
(e) Business partnerships.

2. List the major transactional types of EC.

(a) B2B: business to business.

(b) B2B2C: Business to Business to Consumer.
(c) B2C: Business to Consumer.
(d) E-Government.
(e) E-tailing.
(f) Collaborative Commerce.
(g) C2B: Consumer to business
(h) C2C: Consumer to Consumer.

3. List some EC failures and successes.

(a) Sucesses: Successful ECommerce companies such as EBay,

Amazon, Yahoo!, Facebook, Google+, Pandora, Zillow, Paypal,
Pinterest, Linkedin, VeriSign. Click-and-mortar companies such
as IBM, Target, Cisco, General Electric, Intel and Schwab. Also,
startups like: Alloy, Blue Nile, Net-a-Porter, Yelp, TripAdvisor,
and CampusFood.
(b) Failures: Drkoop, MatchFirst, eToys, Boo, WebVan, Chemdex,
Ventro, and VerticalNet.
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4. What are the characteristics of Social Computing? [Refer to the

definitions section for the definition of Social Computing]

(a) In contrast with traditional computing systems which con-

centrate on business processes particulary cost reduction and
increases in productivity, social computing concentrates on
improving collaboration and interaction among people and
user-generated content.
(b) It is performed with a set of tools including blogs, wikis, social
networks, and other social software tools.

5. What are the characterists of digital economies?

Globalization Global communication and

collaboration; global electronic
marketplaces and competition
Digitalization Music, books, pictures, software,
videos, and more are digitized for
fast and inexpensive storage and
distribution
Speed A move to real-time transactions,
thanks to digitized documents,
products, and services. Many
business processes are expedited
by 90% or more
Information Although the amount of
overload and information generated is
intelligent searching accelerating, intelligent search
tools can help users fi nd what
people need
Markets Markets are moving online.
Physical marketplaces are being
replaced or supplemented by
electronic markets; new markets
are being created, increasing
competition
Business models New and improved business
and processes models and processes provide
opportunities to new companies
and industries
Innovation Digital and Internet-based
innovations continue at a rapid
pace. More patents are being
granted than ever before
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Obsolescence The fast pace of innovation

creates a high rate of obsolescence
Fraud Opportunities abound in almost
all aspects of life and operations
Opportunities Criminals employ a slew of
innovative schemes on the
Internet. Cybercons are
everywhere
Wars Conventional wars are changing
to cyberwars or are
complemented by them
Organizations Organizations are moving to
digital enterprises and social
businesses

6. Mention the capabilities of EC.

(a) Efficient transactions.

(b) Anywhere, anytime convenience.
(c) Productivity booster.
(d) Knowledge, advice, collaboration.
(e) Easy to find product/vendor information.
(f) Personalization/Customization.
(g) Price comparison for consumers.
(h) Global reach.
(i) Rich media, entertainment, social networking.

7. What is the function of a business model?

It describes the business goals of a project or organization and
outlines how to achieve them.

8. How are revenue models and value propositions related? [Check

definitions section first]
They describe the attributes of a business that help it succeed.

9. What are the limitations of EC?

The major limitations of EC are the resistance to new tech- nology,
fear from fraud, integration with other IT systems may be diffi
cult, costly order fulfi llment, privacy issue, unclear regu- latory
issues, lack of trust in computers, and unknown business partners,
difficulties to justify EC initiatives, and lack of EC skilled employ-
ees.
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10. Describe the benefits of EC.

(a) For consumers, they provide convenience, reduced costs,

customization, personalization, speed and communities.
(b) For organizations, they expand marketplaces, improve busi-
ness processes, boost interactivity, and create cost savings.
(c) For society, they help raise the standard of living and delivery
of public services.

11. Contrast pure and partial ECs.

Pure EC, or pure play organizations, conduct their business solely
online, while partial EC, or click-and-brick [or click-and-mortar]
ogranizations conduct some EC activities, usually as an additional
marketing channel.

12. What are the major drivers of EC?

(a) Benefits to consumers.

(b) Innovative business models.
(c) Competition, business environment
(d) Benefits to Organizations and Vendors.
(e) Benefits to society.
(f) Help by government.
(g) Technological developments.
(h) Capabilities of EC.
(i) Expansion to Service Industries and Global Reach.
(j) Emergence of Social Business and Economy.

13. List some major revenue models.

(a) Sales: companies generate revenue from selling products or

services on their websites. An example is when Net-a- Porter,
Starbucks, Amazon.com, or Godiva sells a product online.
(b) Transaction Fees: Commissions are based on the volume of
transactions made.
(c) Subscription Fees: Customers pay a fixed amount, usually
monthly, to get some type of service. An example would be
the fee you pay to an Internet access provider (fixed monthly
payments).
(d) Advertising Fees: companies charge others for allowing them
to place a banner on their sites.
(e) Affiliate Fees: Companies receive commissions for referring
customers to certain websites. A good program is available at
Amazon.com.
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(f) Licensing Fees.

14. List typical EC business models.

(a) Online direct marketing.

(b) Electronic tendering marketing.
(c) Viral marketing.
(d) Group purchasing.
(e) Electornic marketplaces.

15. Why is B2B e-commerce so essential and successful?

EC is essential for several reasons . First, some B2B models are
easier to implement than B2C models. The volume and value of
transactions is larger in B2B than in B2C, and the potential sav-
ings are larger and easier to justify in contrast to B2C, which has
several major problems, ranging from channel confl ict with ex-
isting distributors to fraud to a lack of a critical mass of buyers.
Many com- panies can start B2B by simply buying from existing
online stores and B2B exchanges or selling electronically by join-
ing existing mar- ketplaces or an auction house. The problem is
determining what and where to buy or sell.

16. Which EC business model should I choose?

Industry consolidation often occurs after a “gold rush.” About
100 years ago, hundreds of companies tried to manufacture cars,
following Ford’s success in the United States; only three survived.
The important thing is to learn from the successes and failures of
others, and discover the right business model for each endeavor.

17. How can we exploit social commerce?

There are major possibilities here. Some companies even open
their own social networks. Advertising is probably the first thing
to consider. Recruiting can be a promising avenue as well. Offer-
ing discounted products and services should also be considered.
Providing customer services and conducting market research can
be a useful activity as well. Finally, the ultimate goal is associating
the social network with commerce so that revenue is created.

18. What are the elements of the digital world?

The major elements of the digital world are the digital economy,
digital enterprises, and dig- ital society. They are diversifi ed and
expand- ing rapidly. The digital world is accompanied by social
businesses and social customers.

19. What are some business pressures?

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The major pressures include: market and economic factors (e.g.,

competition, globalization, product innova- tion), societal pres-
sures (e.g., regulations, social customers, social responsibility), and
technological pressures (e.g., new products, obsolescence, cheaper
technologies). Organizational responses can be traditional (e.g.,
niche market, cost reduction, CRM) and technology based (innova-
tions, automation, e-commerce).