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Chapter 1 - The revolution is just beginning. After studying this chapter, you will know: Facebook - The new face of E-commerce? E-commerce trends 2010-2011, the first 30 seconds, What is E-commerce? E-commerce vs. E-business, why Study E-commerce?...
Ecommerce: business. technology. society Ecommerce business. technology. society seventh edition Kenneth C Laudon Carol Guercio Traver Copyright © 2011 Pearson Education, Inc Chapter 1: The Revolution Is Just Beginning Chapter 1 The Revolution Is Just Beginning Copyright © 2011 Pearson Education, Inc Copyright © 2007 Pearson Education, Inc Slide 12 Facebook: The New Face of ECommerce? Class Discussion Do you use Facebook, and if so, how often? What has the experience been like? Have you purchased anything based on an advertisement on Facebook or by using a link provided by a friend? Are you concerned about the privacy of the information you have posted on Facebook? Copyright © 2011 Pearson Education, Inc Slide 13 Ecommerce Trends 20102011 Social networking continues to grow Social e-commerce platform emerges Online consumer sales return to growth Mobile computing begins to rival PC Explosive Continued growth in online video viewing privacy and security concerns Copyright © 2011 Pearson Education, Inc Slide 14 The First 30 Seconds First 16 years of e-commerce Just the beginning Rapid growth and change Technologies continue to evolve at exponential rates Disruptive business change New opportunities Copyright © 2011 Pearson Education, Inc Slide 15 What is Ecommerce? Use of Internet and Web to transact business More formally: Digitally enabled commercial transactions between and among organizations and individuals Copyright © 2011 Pearson Education, Inc Slide 16 Ecommerce vs. Ebusiness E-business: Digital enablement 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 Copyright © 2011 Pearson Education, Inc Slide 17 Why Study Ecommerce? E-commerce technology is different, more powerful than previous technologies E-commerce bringing fundamental changes to commerce Traditional commerce: Passive consumer Sales-force driven Fixed prices Information asymmetry Copyright © 2011 Pearson Education, Inc Slide 18 Unique Features of Ecommerce Technology Ubiquity Global reach Universal standards Information richness Interactivity Information density Personalization/customization Social technology Copyright © 2011 Pearson Education, Inc Slide 19 Web 2.0 Technologies that allow users to: Create and share content, preferences, bookmarks, and online personas Participate Build in virtual lives online communities E.g Twitter, YouTube, Facebook, Second Life, Wikipedia, Digg Copyright © 2011 Pearson Education, Inc Slide 110 Origins & Growth of Ecommerce Precursors: Baxter Healthcare Electronic French None 1995: First Data Interchange (EDI) Minitel (1980s videotex system) had functionality of Internet Beginning of e-commerce sales of banner advertisements E-commerce fastest growing form of commerce in United States Copyright © 2011 Pearson Education, Inc Slide 116 The Growth of B2C Ecommerce Figure 1.4, Page 25 Copyright © 2011 Pearson Education, Inc SOURCES: Based on data from eMarketer, Inc., 2010; authors’ estimates Slide 117 The Growth of B2B Ecommerce Figure 1.5, Page 28 SOURCES: Based on data from U.S Census Bureau, 2010; authors’ estimates Copyright © 2011 Pearson Education, Inc Slide 118 Technology and Ecommerce in Perspective The Internet and Web: Just two of a long list of technologies that have greatly changed commerce Automobiles Radio E-commerce growth will eventually cap as it confronts its own fundamental limitations Copyright © 2011 Pearson Education, Inc Slide 119 Potential Limitations on the Growth of B2C Ecommerce Expensive technology Sophisticated skill set Persistent cultural attraction of physical markets and traditional shopping experiences Persistent global inequality limiting access to telephones and computers Copyright © 2011 Pearson Education, Inc Saturation and ceiling effects Slide 120 Ecommerce: A Brief History 1995-2000: Innovation Key concepts developed Dot-coms; heavy venture capital investment 2001-2006: Emphasis Consolidation on business-driven approach 2006-Present: Reinvention Extension of technologies New models based on user-generated content, social networks, services Copyright © 2011 Pearson Education, Inc Slide 121 Early Visions of Ecommerce Computer scientists: Inexpensive, universal communications and computing environment accessible by all Economists: Nearly perfect competitive market and friction-free commerce Lowered search costs, disintermediation, price transparency, elimination of unfair competitive advantage Entrepreneurs: Copyright © 2011 Extraordinary opportunity to earn far above normal Pearson Education, Inc returns on investment – first mover advantage Slide 122 Insight on Business “Noodlenomics” Guides Internet Investment in 2010 Class Discussion What explains the rapid growth in private investment in e-commerce firms in the period 1998–2000? Was this investment irrational? What was the effect of the big bust of March 2000 on e-commerce investment? What is the value to investors of a company such as YouTube which has yet to show profitability? Why you think investors today would be interested in investing in or purchasing e-commerce companies? Would you invest in an e-commerce Copyright © 2011 company today? Pearson Education, Inc Slide 123 Assessing Ecommerce Many early visions not fulfilled Friction-free commerce Consumers less price sensitive Considerable price dispersion Perfect competition Information asymmetries persist Disintermediation First mover advantage Fast-followers often overtake first movers Copyright © 2011 Pearson Education, Inc Slide 124 Predictions for the Future Technology will propagate through all commercial activity Prices will rise to cover the real cost of doing business E-commerce margins and profits will rise to levels more typical of all retailers Cast of players will change Traditional Fortune 500 companies will play dominant role New startup ventures will emerge with new products, services Number of successful pure online stores will remain smaller than integrated offline/online stores Regulatory activity worldwide will grow Copyright © 2011 Cost of energy will have an influence Pearson Education, Inc Slide 125 Understanding Ecommerce: Organizing Themes Technology: Development and mastery of digital computing and communications technology Business: New technologies present businesses with new ways of organizing production and transacting business Society: Intellectual property, individual privacy, public welfare policy Copyright © 2011 Pearson Education, Inc Slide 126 The Internet and the Evolution of Corporate Computing Figure 1.9, Page 44 Copyright © 2011 Pearson Education, Inc Slide 127 Insight on Society Who Really Cares About Online Privacy? Class Discussion What techniques of privacy invasion are described in the case? Which of these techniques is the most privacyinvading? Why? Is e-commerce any different than traditional markets with respect to privacy? Don’t merchants always want to know their customer? How you protect your privacy on the Web? Copyright © 2011 Pearson Education, Inc Slide 128 Academic Disciplines Concerned with Ecommerce Technical approach Computer science Management science Information systems Behavioral approach Information systems Economics Marketing Management Finance/accounting Sociology Copyright © 2011 Pearson Education, Inc Slide 129 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher Printed in the United States of America Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc ... Copyright © 2 011 Pearson Education, Inc Slide 1 10 Types of Ecommerce Classified by market relationship Business-to-Consumer Business-to-Business (B2C) (B2B) Consumer-to-Consumer Classified... Copyright © 2 011 Pearson Education, Inc Slide 1 16 The Growth of B2C Ecommerce Figure 1. 4, Page 25 Copyright © 2 011 Pearson Education, Inc SOURCES: Based on data from eMarketer, Inc., 2 010 ; authors’... Consumer-to-Consumer Classified by technology used Peer-to-Peer Mobile (C2C) (P2P) commerce (M-commerce) Copyright © 2 011 Pearson Education, Inc Slide 1 11 The Internet Worldwide network of computer