Lecture1

OverviewofElectronicCommerce
 SECURITY

CONTENT
Dr.ThomasTran
PRESENTATION
CSI5389(ECommerceTechnologies) 1
 TRANSACTION
PROCESSING

RECOMMENDER
SYSTEMS
Dr.ThomasTran CSI5389(ECommerceTechnologies) 2
 ELECTRONIC
COMMUNITY

Dr.ThomasTran CSI5389(ECommerceTechnologies) 3
Thetradecycle
Conductingacommercialtransactioninvolves
thefollowingsteps:
PreSale:
Search findingasupplier
Negotiate agreeingthetermsoftrade
Execution:
Order
Delivery
Settlement:
Invoice
Payment
Aftersales,e.g.warranteeandservice

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ElectronicCommerce:
DefinitionsandConcepts
electroniccommerce(EC)
Theprocessofbuying,selling,orexchangingproducts,
services,orinformationviacomputer

ebusiness
AbroaderdefinitionofECthatincludesnotjustthe
buyingandsellingofgoodsandservices,butalso
servicingcustomers,collaboratingwithbusiness
partners,andconductingelectronictransactionswithin
anorganization

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ElectronicCommerce:
DefinitionsandConcepts
MAJORECCONCEPTS
PureVersusPartialEC
ECOrganizations
brickandmortar(oldeconomy)organizations
Oldeconomyorganizations(corporations)thatperformtheir
primarybusinessoffline,sellingphysicalproductsbymeansof
physicalagents
virtual(pureplay)organizations
Organizationsthatconducttheirbusinessactivitiessolelyonline
clickandmortar(clickandbrick)organizations
Organizationsthatconductsomeecommerceactivities,usuallyasan
additionalmarketingchannel

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TheElectronicCommerceField:
Classification,Content,andaBriefHistory
ANECFRAMEWORK
ECapplicationsaresupportedbyinfrastructureandby
thefollowingfivesupportareas:
1. People
2. Publicpolicy
3. Marketingandadvertising
4. Supportservices
5. Businesspartnerships

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110
CategoriesofElectronicCommerce

businesstobusiness(B2B)
Ecommercemodelinwhichalloftheparticipantsare
businessesorotherorganizations
businesstoconsumer(B2C)
Ecommercemodelinwhichbusinessesselltoindividual
shoppers
etailing
Onlineretailing,usuallyB2C
consumertobusiness(C2B)
EcommercemodelinwhichindividualsusetheInternetto
sellproductsorservicestoorganizationsorindividualswho
seeksellerstobidonproductsorservicestheyneed
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TheElectronicCommerceField:
businesstobusinesstoconsumer(B2B2C)
Ecommercemodelinwhichabusinessprovidessome
productorservicetoaclientbusinessthatmaintainsits
owncustomers
intrabusiness EC
Ecommercecategorythatincludesallinternal
organizationalactivitiesthatinvolvetheexchangeof
goods,services,orinformationamongvariousunitsand
individualsinanorganization
businesstoemployees(B2E)
Ecommercemodelinwhichanorganizationdelivers
services,information,orproductstoitsindividual
employees
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TheElectronicCommerceField:
Classification,Content,andaBriefHistory
consumertoconsumer(C2C)
Ecommercemodelinwhichconsumersselldirectlytoother
consumers
collaborativecommerce(ccommerce)
Ecommercemodelinwhichindividualsorgroups
communicateorcollaborateonline
egovernment
Ecommercemodelinwhichagovernmententitybuysor
providesgoods,services,orinformationfromortobusinesses
orindividualcitizens
electronicmarket(emarketplace)
Anonlinemarketplacewherebuyersandsellersmeetto
exchangegoods,services,money,orinformation
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114
ECommerce2.0:
FromSocialCommercetoVirtualWorlds
socialcomputing
Anapproachaimedatmakingthehumancomputer
interfacemorenatural
Web2.0
ThesecondgenerationofInternetbasedservicesthatlets
peoplecollaborateandshareinformationonlineinnewways,
suchassocialnetworkingsites,wikis,communicationtools,
andfolksonomies
socialnetwork
AcategoryofInternetapplicationsthathelpconnectfriends,
businesspartners,orindividualswithspecificinterestsby
providingfreeservicessuchasphotopresentation,email,
blogging,andsoonusingavarietyoftools
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ECommerce2.0:
FromSocialCommercetoVirtualWorlds
socialnetworkingservice(SNS)
Aservicethatbuildsonlinecommunitiesbyproviding
anonlinespaceforpeopletobuildfreehomepagesand
thatprovidesbasiccommunicationandsupporttools
forconductingdifferentactivitiesinthesocialnetwork
ENTERPRISESOCIALNETWORKS
socialcommerce
Theecommerceactivitiesconductedinsocial
networksand/orbyusingsocialsoftware(i.e.,Web
2.0tools)

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ElectronicCommerceBusinessModels
businessmodel
Amethodofdoingbusinessbywhichacompanycan
generaterevenuetosustainitself

TYPICALECBUSINESSMODELS
1. Onlinedirectmarketing
2. tendering(bidding)system
Modelinwhichabuyerrequestswouldbesellersto
submitbids;thelowestbidderwins.
3. Electronicmarketplacesandexchanges
4. Viralmarketing
5. Grouppurchasing
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Product/ProcessSuitabilityto
ElectronicCommerce
Commodityitem
Hardtodistinguishfromthesameproductsorservices
providedbyothersellers
Featureshavebecomestandardizedandwellknown

Shippingprofile
Collectionofattributesthataffecthoweasilyaproduct
canbepackagedanddelivered

Highvaluetoweightratio
Canmakeoverallshippingcostasmallfractionofthe
sellingprice
TransactionCosts
Transactioncostsarethetotalcoststhatabuyerandsellerincur

Significantcomponentsoftransactioncosts:

Costofinformationsearchandacquisition

Investmentofthesellerinequipmentorinthehiringofskilled
employeestosupplyproductsorservicestothebuyer

UsingElectronicCommercetoReduceTransactionCosts

Businessesandindividualscanuseelectroniccommercetoreduce
transactioncostsby:

Improvingtheflowofinformation

Increasingcoordinationofactions
AdvantagesofElectronicCommerce
Electroniccommercecanincreasesalesanddecreasecosts
IfadvertisingisdonewellontheWeb,itcangetafirms
promotionalmessageouttopotentialcustomersineverycountry
Usingecommercesalessupportandordertakingprocesses,a
businesscan:
Reducecostsofhandlingsalesinquiries
Providepricequotes
Itincreasespurchasingopportunitiesforbuyers
Negotiatingpriceanddeliverytermsiseasier
Thefollowingcostlesstoissueandarrivesecurelyandquickly:
Electronicpaymentsoftaxrefunds
Publicretirement
Welfaresupport
DisadvantagesofElectronic
Commerce
Perishablegroceryproductsaremuchhardertosell
online
Itisdifficultto:
Calculatereturnoninvestment
Integrateexistingdatabasesandtransactionprocessing
softwareintosoftwarethatenablesecommerce
Culturalandlegalobstaclesalsoexist
TransactionCosts
Transactioncostsarethetotalcoststhatabuyerandsellerincur

Significantcomponentsoftransactioncosts:

Costofinformationsearchandacquisition

Investmentofthesellerinequipmentorinthehiringofskilled
employeestosupplyproductsorservicestothebuyer

UsingElectronicCommercetoReduceTransactionCosts
Businessesandindividualscanuseelectroniccommercetoreduce
transactioncostsby:

Improvingtheflowofinformation

Increasingcoordinationofactions
IdentifyingElectronicCommerce
Opportunities
Firm
Multiplebusinessunitsownedbyacommonsetofshareholders
Industry
Multiplefirmsthatsellsimilarproductstosimilarcustomers
Valuechain
Awayoforganizingtheactivitiesthateachstrategicbusinessunit
undertakes
Primaryactivitiesinclude:
Designing,producing,promoting,marketing,delivering,and
supportingtheproductsorservicesitsells
Supportingactivitiesinclude:
Humanresourcemanagementandpurchasing
IndustryValueChains
Valuesystem

Largerstreamofactivitiesinto
whichaparticularbusiness
unitsvaluechainisembedded

Alsoreferredtoasindustry
valuechain
SWOTAnalysis:Evaluating
BusinessUnitOpportunities
InSWOTanalysis:

Ananalystfirstlooksintothebusinessunittoidentify
itsstrengthsandweaknesses

Theanalystthenreviewstheoperatingenvironment
andidentifiesopportunitiesandthreats
InternationalNatureof
ElectronicCommerce
Companieswithestablishedreputations:
Oftencreatetrustbyensuringthatcustomersknow
whotheyare
Canrelyontheirestablishedbrandnamestocreate
trustontheWeb
Customers inherentlackoftrustinstrangers onthe
Webislogicalandtobeexpected
LanguageIssues
Todobusinesseffectivelyinotherculturesabusiness
mustadapttothosecultures
Researchershavefoundthatcustomersaremore
likelytobuyproductsandservicesfromWebsitesin
theirownlanguage
Localization
Translationthatconsidersmultipleelementsofthe
localenvironment
CultureIssues

Animportantelementofbusinesstrustisanticipating
howtheotherpartytoatransactionwillactin
specificcircumstances
Culture:
Combinationoflanguageandcustoms
Variesacrossnationalboundaries
Variesacrossregionswithinnations
InfrastructureIssues
Internetinfrastructureincludes:
ComputersandsoftwareconnectedtotheInternet
Communicationsnetworksoverwhichmessage
packetstravel
OrganizationforEconomicCooperationand
Developments(OECD)Statementson
InformationandCommunicationsPolicydealwith
telecommunicationsinfrastructuredevelopment
issues