Running head: E-COMMERCE

Effect of E-Commerce on E-Business Jennifer Schmidt, William Smith, Lato a Stanford, !amera Ste"art, William Stingl, Ben#amin !ou$onen, and Christine %ahuranec Walden &ni'ersit

"""(Walden&)rou*E+S,S-..1/!-("ee0l (com

E-COMMERCE 10stract With the e2*losion of e-0usiness throughout the glo0e, more than -.3 of *eo*le in the

industriali4ed "orld consider mo0ile internet connecti'it crucial( +n the 5ar East, that *ercentage is closer to 6.3( E-0usinesses incor*orate /orter7s 5i'e 5orces Model to influence ho" the o*erate "ithin com*etiti'e s*aces( Com*anies can ca*itali4e on consumer 'alue through their mar$eting of *roducts and ser'ices( +n addition, "hen entering an mar$et com*anies "ill need to understand the im*ortance of consumer *a ment o*tions( With the threat of identit theft, e0usinesses should im*lement ste*s for *ro'iding *ri'ac and *rotecting the securit of user information( 1lso, e-0usinesses should consider the use of 8stic$ 9 "e0 sites to retain consumers(

E-COMMERCE Effect of E-Commerce on E-Business 1s "e mo'e into the :1st centur "e ta$e for granted the s*eed and con'enience of the internet( 5ast, efficient and immediate is "hat "e glo0all ha'e come to e2*ect from the internet( We use our mo0ile de'ices to *urchase a *roduct in an instant( We 0ecome mini-me 'ersions of oursel'es through a'atars( /ri'ac , our most 0asic right that "e do not often consider "hen "e sho* on the internet, is often at ris$ "hen "e share so much information during an e-commerce transaction( E-commerce 0usinesses are #ust as hungr to turn re'enue as 0ric$ and mortar 0usinesses( +nternet connecti'it in a mo0ile "orld is increasingl im*ortant glo0all ( Competitive Space !he com*etiti'e s*ace in "hich social net"or$ sites ;S<S= o*erate such as M S*ace and C "orld must recogni4e the com*etiti'e forces "ithin the industr ( &tili4ing Michael /orter7s

5i'e 5orces Model, "e can characteri4e the com*etiti'e s*ace of the S<S industr ( Bu ing *o"er is relati'el high 0ecause consumers ha'e a 'ariet of *ro'iders to choose from including M S*ace, C "orld, 5ace0oo$, 5riendster, and ,ahoo -6.( Since there is no charge to use the sites, it is ultimatel u* to the consumer and their *references( 1dditionall , "ith such a 'ariet of *ro'iders to choose from su**lier *o"er is 'er lo"( >o"e'er, C "orld does ha'e a higher su**lier *o"er "hen it comes to offering 'arious features on their "e0site( 8!he site is "ildl successful in ca*turing the hearts and minds of status-conscious ?oreans, and it ma$es mone , 0ut not "ith ad'ertising9 ;)reen0erg, :..6=( C "orld *ro'ides users the a0ilit to create li$enesses of themsel'es through mini a'atars and then generates re'enue through the sale of furnishings for their *ersonali4ed rooms( !he threat of su0stitute *roducts or ser'ices is high 0ased on the num0er of additional S<S that are a'aila0le to ne" and e2isting consumers( !he threat of ne" entrants into the

E-COMMERCE industr is e2tremel high( 1ccording to the Organi4ation for Economic Co-o*eration and @e'elo*ment ;OEC@= ;1AAB=, toda , for a fe" thousand dollars, an one can 0ecome a merchant

and reach consumers throughout the "orld( Ri'alr among e2isting com*etitors such as M s*ace, C "orld, 5ace0oo$, 5riendster, ,ahoo -6., !"itter, and 5lic$er is *articularl high( 8!he creators of C "orld are not content "ith o"ning the South ?orean social net"or$ing mar$et9 ;>aag C Cummings, :..A, *( 1DE=( With the o**ortunit to gra0 mar$et share from other com*anies C "orld has entered ne" mar$ets including Ja*an, China, and the &nited States( Product Convienence and Specialty +n the Business to Consumer ;B:C= e-commerce "orld, eBa has 0oth con'enience and s*ecialt merchandise a'aila0le( Con'enience merchandise includes *roducts that are 8t *icall lo"er *riced 0ut something consumers often need and use freFuentl , and include non*erisha0le food items such as 0rea$fast cereals are a good e2am*le9 ;>aag C Cummings, :..A, *( 1-E=( eBa has sections in its "e0site for *et su**lies, health C 0eaut and food C 0e'erages( !he con'enience merchandise field is not, ho"e'er, eBa 7s greatest source of re'enue( S*ecialt merchandise ma$es u* the ma#orit of items a'aila0le on eBa ( 85or s*ecialt merchandise, consumers "ill s*end more time 8sho**ing around,9 G to find the 0est deal in terms of *rice9 ;>aag C Cummings, :..A, *( 1-D=( !hings such as home electronics, clothing, home furnishings and dHcor, collecti0les and to and ho00 items ma$eu* the ma#orit of the *roducts a'aila0le on the site( eBa offers the *erfect *latform to com*are *rices on a *articular item( B t *ing in s*ecific search criteria, ou can get u* to thousands of li$e-items to com*are for the consumer to chose from( !ao0ao and eBa offer a com0ination of con'enience goods, sho**ing goods, and s*ecialt *roducts( !he con'enience goods are 8groceries and home and office su**lies that are

E-COMMERCE used freFuentl , sho**ing goods include read -to-"ear a**arel for men - "omen, and children -

and s*ecialt goods include items such as des$to* and note0oo$ com*uters and "edding go"ns9 ;!hirumalai C Sinha, :..A, *( B=( !hese online auction com*anies *ro'ide a 'ariet of goods( >o"e'er, the goods and ser'ices are 0etter grou*ed as a com0ination of con'enience and s*ecialt ( Consumers 'alue the con'enience of online ser'ices, and 8high consumer con'enience leads to greater consumer satisfaction9 ;!hirumalai C Sinha, :..A, *( A=( 1s a result, consumers find 'alue in sho**ing on online due to the con'enience of *urchasing goods at their leisure( 1nother 0enefit of offering con'enience and s*ecialt goods through online e-commerce is that !ao0ao and eBa can customi4e the sho**ing e2*erience for consumers( !herefore, consumers find 'alue in the con'enience of 0u ing s*ecialt goods through online retailers( Online Revenue Collection !here are man *a ment o*tions a'aila0le on eBa ( 1cce*ted methods of *a ment include /a /al, /ro/a , S$rill, Merchant Credit Card, and e'en *a ment u*on *ic$u*( !ao0ao acce*ts /a /al, Iisa, MasterCard and other credit and de0it card *a ments ;tao0aofocus(com, n(d(=( !he also acce*t We0mone , RB? Mone , Contact, Western &nion and China local 0an$ "ire transfer ;tao0aofocus(com, n(d(=( /a ment o*tions can 0e a 0arrier to entr ( >aag and Cummings define an entr 0arrier as a 8*roduct or ser'ice feature that customers ha'e come to e2*ect from organi4ations in a *articular industr and that must 0e offered 0 an entering organi4ation to com*ete and sur'i'e9 ;*(E.-=( +n com*aring eBa and !ao0ao7s acce*ted method of *a ment, it a**ears that 0oth offer a large 'ariet of o*tions, man of them 0eing the same, and !ao0ao gi'es the same feeling and loo$ as com*ared to eBa ( !here "ould 0e little to no entr 0arrier( !here is still room for one of these com*anies to gain a com*etiti'e ad'antage through inno'ation in the online *a ment s*ace( <ear 5ield Communication ;<5C= *a ments such as

E-COMMERCE )oogle Wallet 8use radio freFuencies to communicate and transmit information 0et"een

consumers and retailers9 ;Bro"n, :.1:=( Some sites also allo" for direct de0it from a chec$ing or sa'ings account 0 entering routing and account num0ers into *a ment fields( Bitcoin is another emerging *a ment o*tion( !he *a ment ecos stem is so com*le2 and full of inno'ation, it e'en has its o"n conference, !he Consumer /a ments Summit, held in London ;Mar$etforce=( Information Privacy and Security /ri'ac is a *rimar concern on the internet( Social media sites are a $e entr *oint for hi#ac$ers, scammers, c 0er stal$ers, and *er'erts( >aag ;:..A=, e2*lains privacy as, 8the right to 0e left alone "hen ou "ant to 0e, to ha'e control o'er our o"n *ersonal *ossessions, and not to 0e o0ser'ed "ithout our consent9 ;*( ::B=( >aag ;:..A=, also defines a social networking site as a *lace to *ost information a0out ourself, "here one can net"or$ "ith their friends, sharing *hotos and 'ideos, and communicating "ith others ;*( ::B=( +n general, it must 0e understood that "hen "e ma$e the choice to engage in social media, "e are in turn gi'ing u* some control of our *ri'ac ( !he e2tent to "hich "e relinFuish that the *ri'ac is dri'en 0 the terms and *ri'ac *olic for each site "e choose to 'isit( !he /ri'ac Clearinghouse states this, 8Man *eo*le s$i* o'er the *ri'ac *olic "hen #oining a social net"or$( >o"e'er, users can glean a lot of useful information 0 re'ie"ing a *ri'ac *olic 0efore signing u* for ser'ice9 ;/ri'ac Rights Clearinghouse, :.1E, /ara( 1.=( Ethicall , social net"or$ing sites should not 0e res*onsi0le for all the information, indi'iduals should 0e accounta0le for "hat the *ost( !here is an e2ce*tion for minors( !he sites do reFuire the consent of an adult, 0ut there are no chec$s and 0alances and it is 'er eas for a child to onl lie a0out their age(

E-COMMERCE

!he social net"or$ ser'ices are reFuired to ha'e *ros*ecti'e su0scri0ers to sign off on the terms and *ri'ac *olicies( !he *ro0lem arises 0ecause most *eo*le don7t read them( !he are length and most often confusing( E'en if the are read, the sites ma change them regularl ( !he are reFuired to inform their su0scri0ers( Be ond 0etter *arental control and the su0scri0er7s use of common sense, enhancements 0 the ser'ices can 0etter *rotect the su0scri0ers( Constant im*ro'ements, to securit s stems, "ill *rotect against *hishing attac$s, mal"are, and hi#ac$ing of accounts( !his is the res*onsi0ilit of the ser'ice *ro'ider, "ithin the reFuirements of the terms and *ri'ac *olic ( !here is also the res*onsi0ilit for the user( !here is a 'ulnera0ilit on the user7s side 0ecause hac$ers also attac$ the user( 1 la" reFuiring *ri'ac *olic 0e more clearl summari4ed and stated, as "ell as real chec$s and 0alances regarding the age reFuirement during enrollment, "ould significantl hel* to reduce *rotection of *ersonal information( Consumer Retention !he *rimar goal of e'er social net"or$ing site is to $ee* the lo alt of its customers( Long term customers are an e2*ression of success and 'alue( +n re'ie"ing the 'irtual en'ironments, it "as a sur*rise to see C "orld closed its international ser'ice on Januar 1-, :.1E, 0ut "ill continue to offer C "orld7s domestic ser'ice ;!elecom*a*er, :.1E=( C "orld lost international su0scri0ers after a ma#or securit 0reach and lac$ of mo0ile connecti'it ( M s*ace has continued to 0e a leading social net"or$ing site throughout the last se'eral ears( M s*ace has continued to im*ro'e features and o*tions for its customers that sustain customer satisfaction( Offering customers free music streaming, 'ideo sharing, ne"s, and messaging created a 8stic$ 9 "e0 site( 8Stic$ 8 is the a0ilit to retain customers 0 offering continued im*ro'ements, *ersonal information securit , and leading technolog ( >aag and Cummings state that a 8stic$ 9 "e0 site 8not onl attracts customers 0ut also encourages them to

E-COMMERCE return to our site again and again9 ;*( 1-D=( Social net"or$ing sites must stri'e to 0e the 0est and offer the most to remain 8stic$ 9( +f customers start s"itching to other sites, ou ha'e lost their lo alt and that is also lost re'enue( Summary and Conclusion

1s technolog continues to e'ol'e so "ill our desire to 0e connected at the s*eed of light( With the continued gro"th of e-commerce, e-0usinesses "ill need to utili4e com*etiti'e forces to differentiate themsel'es "ithin the com*etiti'e s*ace of e-commerce( One such com*an , eBa , differentiated itself 0 offering 0oth con'enience goods and s*ecialt merchandise( B offering multi*le "a s that consumers can *a for *roducts, e-0usinesses can create a more *leasant sho**ing e2*erience( +t is u* to the consumer to sho* "isel , *rotect their *ri'ac and $no" ho" much of their information ma not 0e *rotected( !o remain com*etiti'e, e-0usinesses must *ro'ide consumers "ith a *leasant and en#o a0le sho**ing e2*erience to retain them in the future( !he more our technolog e2*ands glo0all the greater our ca*acit "ill 0e to *urchase more, *la more and share more(

E-COMMERCE References Bro"n, M( ;:.1:, .- 11=( <e" +nno'ations in Online /a ments( Retrie'ed from /5S"e0: htt*:KK"""(*fs"e0(comK0logKne"-inno'ations-in-online-*a mentsK

)reen0erg, /( ;:..6=( !r to @ig What We 1ll Sa ( CRM Magazine, 10;11=, 1J( Retrie'ed from: htt*:KK"e0(0(e0scohost(com(e4*("aldenuli0rar (orgKehostK*df'ie"erK*df'ie"erL 'idM1ACsidM1:Ad:ceD-d:e1-EeJD-0eBJ--::EcAcAJfE:3E.sessionmgr11-ChidM1:6 >aag, S( C Cummings, M( ;:..A=( Information Systems Essentials (3rd ed.). <e" ,or$: Mc)ra"->illK+r"in( Mar$etforce( ;n(d(=( +nno'ation in /a ments( Retrie'ed from Mar$etforce: htt*:KKmar$etforce(eu(comKe'entsKcards-*a mentsKinno'ation-in-*a ments /ri'ac Rights Clearinghouse, ;:.1E=( Social <et"or$ing /ri'ac : How to be Safe Se!"re and So!ial /ri'ac Rights Clearinghouse( Retrie'ed from: htt*s:KK"""(*ri'ac rights(orgKsocial-net"or$ing-*ri'ac -ho"-0e-safe-secure-and-social !ao0aofocus(com ;n(d(= !utorial: >o" to Order from !ao0ao-/a ment and shi**ing( Retrie'ed on March 1J, :.1E from: htt*:KKtao0aofocus(comKa0outK*a ment-shi**ing !elecom*a*er( ;:.1E=( C "orld to close international ser'ice( Retrie'ed from: htt*:KK"""(telecom*a*er(comKne"sKc "orld-to-close-international-ser'ice--AJAB.!he Organi4ation for Economic Co-o*eration and @e'elo*ment ;OEC@=( ;1AAB=( @ismantling the 0arriers to glo0al electronic commerce( ;n(d(=( Retrie'ed from: htt*:KK"""(oecd(orgKstiKieconom Kdismantlingthe0arrierstoglo0alelectroniccommerce(htm !hirumalai, S(, C Sinha, ?( ?( ;:..A=( Customi4ation Strategies in Electronic Retailing: +m*lications of Customer /urchase Beha'ior( @ecision Sciences, E.;1=, D--6