E-Business for Hospitality

Chapter 1
Introduction
 Class Discussion

Pinterest: A Picture Is Worth a

Thousand Words
n Have you used Pinterest or any other content
curation sites? What are your main interests?
n Have you purchased anything based on a pin
or board on Pinterest or any other curation
site?
n Why do Pinterest links drive more purchasing
than Facebook links?

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 Trends 2014–2015
n Retail e-commerce grows over 15%
n Continued expansion of mobile, social, and
local e-commerce
n Mobile platform rivals PC platform
n Continued growth of cloud computing
n Explosive growth in Big Data
n Continued growth of user-generated
content on social networks, blogs, wikis

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 The First 30 Seconds
n First 20 years of e-commerce
• Just the beginning
• Rapid growth and change

n Technologies continue to evolve at

exponential rates
• Disruptive business change
• New opportunities

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 What Is E-commerce?
n Use of Internet and Web to transact
business
n More formally:
• Digitally enabled commercial transactions
between and among organizations and
individuals

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 E-commerce vs. E-business
n E-business:

• Digital enabling of transactions and

processes within a firm, involving
information systems under firm’s control

• Does not include commercial transactions

involving an exchange of value across
organizational boundaries

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Slide 1-8
 Why Study E-commerce?
n E-commerce technology is different, more
powerful than previous technologies
n E-commerce brings fundamental changes to
commerce
n Traditional commerce:
• Consumer as passive targets
• Mass-marketing driven
• Sales-force driven
• Fixed prices
• Information asymmetry

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 Eight Unique Features of
E-commerce Technology
1. Ubiquity
2. Global reach
3. Universal standards
4. Information richness
5. Interactivity
6. Information density
7. Personalization/customization
8. Social technology

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 Web 2.0
n User-centered applications and social
media technologies
v User-generated content and communication
v Highly interactive, social communities
v Large audiences; yet mostly unproven business
models
v Examples: Twitter, YouTube, Instagram,
Wikipedia, Tumblr, Uber

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 Types of E-commerce
n May be classified by market relationship or technology

n Business-to-Consumer (B2C)
n Business-to-Business (B2B)
n Consumer-to-Consumer (C2C)
n Mobile e-commerce (M-commerce)
n Social e-commerce
n Local e-commerce

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Slide 1-14
 The Growth of B2C E-commerce in the U.S.
Figure 1.3, Page 59

SOURCE: Based on data from eMarketer, Inc., 2014b; authors’ estimates.

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 The Growth of B2B E-commerce in the U.S.
Figure 1.4, Page 60

SOURCE: Based on data from U.S. Census Bureau, 2014; authors’ estimates.

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 The Internet
n Worldwide network of computer
networks built on common standards
n Created in late 1960s
n Services include the Web, e-mail, file
transfers, and so on
n Can measure growth by number of
Internet hosts with domain names

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 The Web
n Most popular Internet service
n Developed in early 1990s
n Provides access to Web pages
• HTML documents that may include text,
graphics, animations, music, videos
n Web content has grown exponentially
• Google reports 60 trillion unique URLs

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 The Mobile Platform
n Most recent development in Internet
infrastructure
n Enables access to the Internet via
wireless networks or cell-phone service
n Mobile devices include
• Tablets
• Smartphones
• Ultra-lightweight laptops

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Slide 1-21
 Insight on Technology: Class Discussion

Will Apps Make the Web Irrelevant?

n What are the advantages and

disadvantages of apps, compared
with Web sites, for mobile users?
n What are the benefits of apps for
content owners and creators?
n Will apps eventually make the Web
irrelevant? Why or why not?
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 Origins and Growth of E-commerce
n Precursors:
• Baxter Healthcare
• Electronic Data Interchange (EDI)
• French Minitel (1980s videotex system)
• None had functionality of Internet

n 1995: Beginning of e-commerce

• First sales of banner advertisements

n E-commerce fastest growing form of

commerce in United States
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 E-commerce: A Brief History
n 1995–2000: Invention
• Key concepts developed
• Limited bandwidth and media
• Euphoric visions of
n Friction-free commerce
• Lowered search costs, disintermediation, price
transparency, elimination of unfair competitive advantage
n First-mover advantages
• Network profits

• Dot-com crash of 2000

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 E-commerce: A Brief History (cont.)
n 2001–2006: Consolidation
• Emphasis on business-driven approach
• Traditional large firms expand presence
• Start-up financing shrinks up
• More complex products and services sold
• Growth of search engine advertising
• Business Web presences expand to include
e-mail, display and search advertising, and
limited community feedback features

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 E-commerce: A Brief History (cont.)
n 2007–Present: Reinvention
• Rapid growth of:
n Online social networks
n Mobile platform
n Local commerce

• Entertainment content develops as source of

revenues
• Transformation of marketing
n Coordinated marketing on social, mobile, local platforms
n Analytic technologies

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 Insight on Business: Class Discussion

Start-up Boot Camp

n Why do you think investors today are still
interested in investing in start-ups?
n What are the benefits of investing in a company
that is a graduate of a Y Combinator boot camp?
n Is an incubator the best solution for start-ups to
find funding? Why or why not?

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 Assessing E-commerce
n Many early visions not fulfilled
• Friction-free commerce
n Consumers less price sensitive
n Considerable price dispersion

• Perfect competition
n Information asymmetries persist

• Intermediaries have not disappeared

• First mover advantages
n Fast-followers often overtake first movers

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 Predictions for the Future
n Technology will propagate through all commercial
activity
n Large, traditional companies will continue to play
dominant role, consolidating audiences
• Start-up ventures can still attract large audiences in non-
dominated arenas
n Integrated online/offline companies will experience
more growth than purely online companies
n Additional factors:
• Increased regulation and control
• Cost of energy

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 Understanding E-commerce:
Organizing Themes
n Technology:
• Development and mastery of digital computing and
communications technology
n Business:
• New technologies present businesses with new ways of
organizing production and transacting business
n Society:
• Intellectual property, individual privacy, public welfare
policy

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The Internet and
the Evolution
of Corporate
Computing
Figure 1.11, Page 81

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 Insight on Society: Class Discussion

Facebook and the Age of Privacy

n Why are social network sites interested in collecting
user information?
n What types of privacy invasion are described in the
case? Which is the most privacy-invading, and why?
n Is e-commerce any different than traditional
markets with respect to privacy? Don’t merchants
always want to know their customer?
n How do you protect your privacy on the Web?

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 Academic Disciplines
Concerned with E-commerce
n Technical approach n Behavioral approach
v Computer science v Information systems
v Management science v Economics
v Information systems v Marketing
v Management
v Finance/accounting
v Sociology

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