795 ELECTRONIC COMMERCE

CHAPTER 14 795 ELECTRONIC COMMERCE

.:. CHAPTER HIGHLIGHTS

while purchasing, after purchasing, and during disposal of E-commerce can be conducted on the

It

Web, bye-mail, and on private

products.

networks. It has several major forms: •• The major B2B applications are selling from catalogs and business-to-consumer,

by forward auctions, buying in reverse auctions and in consumer-to-consumer, business-

group purchasing, and trading in exchanges. In addition, to-business, e-government,

most organizations employ collaborative commerce, collaborative commerce, and

usually along the supply chain.

intrabusiness. In each of these there are

e EC activities can be conducted inside several business models. E-commerce

organizations.

offers many benefits to organizations, Three types are recognized: between business and its consumers, and society, but it also has

employees, between units of the business, and among limitations (technical and

employees of the same organization. All of these utilize nontechnical). The current technical

many methods and tools.

E-government commerce can take place time.

limitations are expected to lessen with

It

between government and citizens or

It

The Internet provides an infrastructure between businesses and governments. It for executing auctions at lower cost,

makes government operations more and with many more involved sellers

effective and efficient. Using a wireless and buyers, including both individual

environment allows new mobile consumers and corporations. "forward

commerce applications as well as more auctions and reverse auctions are the

convenient access to the Internet. EC two major types.

can also be done between consumers

It

The major service application areas of (C2C), but should be undertaken with B2C commerce are in direct retailing,

caution. Auctions are the most popular banking, securities trading, job

C2C mechanism.

Traditional nonelectronic payment Several issues slow the growth of

markets, travel, and real estate.

It

systems are insufficient or inferior for B2C, notably channel conflict, order

doing business on the Internet, so fulfillment, and customer acquisition.

electronic payment systems are used . B2C e-tailing can be "pure play" (e.g.,

Electronic payments can be made Amazon.com) or part of a click-

bye-checks, e-credit cards, e-cash, and-mortar organization. Direct

smart cards, and EFf. Order fulfillment marketing is done via solo storefronts

is especially difficult in B2C. or in malls. Itcan be done by using

Protection of customers, sellers, and electronic catalogs or auctions.

It

intellectual property is a major concern, •• Understanding consumer behavior is critical to e-

but so are the value of contracts, domain commerce. Finding out what customers want can be

names, and how to handle legal issues determined by asking them in questionnaires or by

in a multicountry environment. observing what they do online. Other forms of market .:. KEY WORDS

Implementing e-commerce is not research can be conducted on the Internet by using

•• collaborative workflow simple, and multiple financial, intelligent agents. Like any commerce, EC requires •• electronic exchange •• auction advertising support, much of which can be done online by It management

organizational, technological, and •• electronic funds transfer (EFf) managerial issues must be addressed. •• electronic retailing (e-tailing)

methods such as banner advertisements and customized ads. autorespon •• customer-to-customer (C2C) •• electronic storefronts Permission marketing, interactive and viral marketing, pop der It " cyberbanking

•• e-government ups, using electronic catalogs, and online coupons offer banners •• desk-top purchasing

•• e-learning ways for vendors to reach more customers. Customer It brick-and-mortar •• domain names

service occurs before purchase, •• e-procurement

•• reh::ctronic

organization It

•• forward auction business-to-business

auctions •• electronic

•• group

(B2B)

banking •• electronic

intelligent agent business-to-consumer

It

electronic benefits

•• internet communities

PART V IMPLEMENTING MSS IN THE E-BuSINESS ERA

 micropayments

 mobile commerce (m-commerce)  sell-side marketplace  mobile portal

 pop-up ad

smart cards  order fulfillment

 private exchange

 public exchange

·spamming  permission marketing

 systematic sourcing  person-to-person (P2P)

 pure play companies

 viral marketing  pervasive computing

 random banner

 virtual banks  pop-under ad

 reverse auction

 search engine

 virtual organizations

 segmentation

.) QUESTIONS FOR REVIEW

1. Define e-commerce and distinguish it from e-business.

2. List the major types of EC (by type of transaction).

16. Briefly describe the sell-side marketplace.

17. Describe the various methods of e-procurement. to-business, and intrabusiness Ee.

3. Distinguish between business-to-consumer, business-

18. Describe how forward and reverse auctions are used

4. List some organizational, societal, and consumer ben-

in B2B commerce.

efits of EC (five each).

19. Describe the role of exchanges in B2B.

20. Describe c-commerce and its various activities. of EC (three each).

5. List the major technical and nontechnical limitations

21. Describe e-government and its benefits.

6. Describe electronic storefronts and malls.

22. What makes m-commerce so appealing?

7. List the benefits of cyberbanking.

23. Describe some C2C activities.

8. Describe electronic securities trading.

24. Describe intrabusiness and B2E commerce.

9. Describe the online job market.

25. List the various electronic payment mechanisms.

10. Explain hQ-w-e.le~tronic auctions work and list their

26. List the security requirements for Ee. benefits.

27. Describe customization in Ee.

11. Describe the EC consumer-behavior model.

28. Describe the issues in BC order fulfillment.

12. Describe EC market research and its tools.

29. Describe some of the potential frauds on the

13. Describe the major support areas of intelligent agents inEe.

Internet.

30. Describe buyer protection in Ee.

14. Describe online advertising, its methods, and benefits.

31. List some ethical issues in Ee.

15. Describe pop-up and pop-under ads and the issues surrounding them.

32. List the major legal issues of Ee.

-:- DISCUSSION QUESTIONS

1. Discuss the major limitations of e-commerce. Which of them are likely to disappear? Why?

8. Why are online auctions becoming popular?

9. Discuss the contribution DSS can make to an online the high-tech professions?

2. Why is the electronic job market popular, especially in

storefront and to an electronic mall.

10. Discuss the online consumer-behavior model and auctions and buyers' bids for RFQs.

3. Distinguish between business-to-business forward

explain why is it needed.

4. Some say that the major benefit of EC occurs in c-

11. Discuss the contribution that EC can make in decision support and analysis.

commerce. Why?

12. Relate, e-learning to decision Support.

5. Discuss the benefits to sellers and buyers of a B2B exchange.

13. Distinguish between value-added cards and smart cards.

6. What are the major benefits of e-government?

CHAPTER 14 ELECTRONIC COMMERCE

.:. EXERCISES

1. Assume you're interested in buying a car. You can find turer's Web site. Finally, try to find the car from information about cars at autos.msn.com. Go to

autobytel.com. What information is most supportive of autoweb.com or autobytel.com for information about

your decision-making process? Write a report about financing and insurance. Decide what car you want to

your experience.

buy. Configure your car by going to the car manufac-

-:. INTERNET EXERCIES

1. Access etrade.com and register for the Internet shopping. com and amazon. com, for example. stock-simulation game. You will be bankrolled with

Describe your experience with such a site. $100,000 in a trading account every month. Play the

6. Enter campusfood.com. Explore the site; Why is it so game and relate your experiences to DSS.

successful? Could you start a competing one? Why or

2. Access hsbc.com.hk/hk/hexagon.default.htm and

why not?

us.hsbc.com/corporate/cashmgmt/hexagon/payments,

7. Enter dell.com, go to "desktops" and configure a sys- and find information about Hexagon. What are its

tem. Register to "my cart" (no obligation). What cal- advantages to the bank? To the customers?

culators are used there? What are the advantages of this

3. Access realtor.com. Prepare a list of services available process as compared to buying a computer in a physical on this site. Then prepare a list of advantages for users

store? What are the disadvantages? and for realtors. Are there any disadvantages? For

8. Enter bizrate.com and fill out one of the question- whom?

naires that entitles you to participate in the site's

4. Enter alibaba.com. Identify the site's capabilities. rewards and receive information. What data are col- Look at the site's private trading rooms. Write a

lected? Why?

report. How can such a site help a purchasing deci-

9. Enter microstrategy.com and look for the ECIDSS (or sion-maker?

ECIBI) products like BPM. Prepare a report on such

5. Try to find a unique gift on the Internet for a friend.

products.

Several sites help you do it. You might try

.:. GROUP ASSIGNMENTS AND ROLE-PLAYING

2. Assign each team to one industry. Each team will find EC strategy. For example, Wells Fargo Bank is well on

1. Have each team study a major bank with an extensive

five real-world e-DSS-related applications of the major its way to being a cyberbank. Hundreds of

business-to-business models listed in the chapter. (Try brick-and-mortar branch offices are being closed. In

success stories about vendors in EC-related magazines.) late 2003 the bank served more than 1.3 million

Examine the problems they solve or the opportunities cyberaccounts (see wellsfargo.com). Other banks are

they exploit.

Citicorp, Netbank, and HSBC (Hong Kong). Each team should attempt to convince the class that its ebank is the best.