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Electronic Commerce Overview

From the Old to the New World

[1990] Old World


New World


The transition from the OLD WORLD of business management to the NEW WORLD of eCustomers is unique. Before 2000, companies pushed products through the channel to waiting customers. After 2000, customers pull products and services through on demand. By 2010, most buyers will be connected, completing the customer-led revolution.

eCommerce Defined

It is the online digital business transactions such as buying and selling of information, products, and services. It is the business vehicle of the 21st century. It is the new societal evolution after agriculture, industrial and information technology. Electronic transactions involve the transfer of ownership or rights to use a good or service

eCommerce Defined

eCommerce is the exchange of digitalized information between parties technology-enabled technology-mediated a reflection of the intra and interorganizational activities

eCommerce is Interdisciplinary

Marketing Computer sciences Consumer behavior and psychology Finance Economics

Management information systems Accounting and auditing Management Business law and ethics Others

How eCommerce is different from Traditional Business





Core Strategic Decisions Are Technology-Based Digital businesses cannot separate technology choices from the strategic decision-making process Real-Time Competitive Responsiveness Speed is becoming increasingly important as a means to increase differentiation as well as to simulate competitors 24/7 Access Consumers expect to be able to constantly access a businesss online storefront, forcing businesses to adjust their level of responsiveness (both strategic and tactical) Technology-Based Consumer Interface Screen-to-face customer interaction has increased the importance of capturing and delivering a positive customer experience

How eCommerce is different from Traditional Business




Customer in Control of the Interaction Technology-based interfaces limit the companys influence on the buying process and give the customer more control of the interaction Increased Knowledge of Customer Behavior A technology-based interface, however, gives the company the opportunity to more accurately track consumer behavior Networked Economics and Positive Feedback Networked economics and positive feedback can allow increasing returns

eCommerce Models
Business originating from...
Business Consumers




And selling to...




eCommerce Models

Business-to-business (B2B)

Businesses make online transactions purchases with other business Includes B2G transactions such as paying/filing of taxes

Business-to-customer (B2C)

Online sales transactions between businesses and consumers

Exchange of products or services between customers and business Consumers trade with each other in e-bay, e-auction

Customer to Business (C2B)

Customer to customer (P2P)

Convergence of eCommerce Categories

Business originating from...
Business Publishers order paper from companies Amazon orders from publishers Consumers


And selling to...


Consumers aggregate to bulk purchase from Amazon

Consumers buy Harry Potter books from Amazon

Consumer resell copies on eBay

Consumer Behavior in Online Environment


Personalization of communications between users ad a website Two way communication between user and site. User to user and firm to user communication


Strategy Formulation Process

Framing the Market Opportunity

Business Model

Customer Interface

Market Communication and Branding

Impleme ntation


E-Commerce Framework
Media Infrastructure

Technology Infrastructure

e-Commerce Strategy

Capital Infrastructure

Public Policy

Context of Strategy Formulation: Technology Infrastructure

enablers and drivers of change Understanding technology infra is Knowing what technology is available Making appropriate choices

Context of Strategy Formulation: Capital Infrastructure

Funding source for new business Process Finding right managers to build the business Valuing the business

Context of Strategy Formulation: Media Infrastructure

Rationale Internet is a mass communication platform E-commerce managers must learn to manage staff on design interface, stylistic choices, editorial policies and content choices. E-commerce manager also a publisher of digital content on the Web

Context of Strategy Formulation: Public Policy Infrastructure

Laws and regulations that may hurt or help businesses

Key Challenges for Senior Management

Understanding Customer Evolution

Continuous innovation to stay abreast of changes in consumer tastes, desires and needs As new technologies come and go, challenge is to pick the right ones and invest ahead

Charting Changing Technology

Balancing Irrational Exuberance and Irrational Doom Integrating Offline and Online Activities Identifying Key Levers of Competitive Advantage

Realigning resources and capabilities