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.