e- commerce: the use of the internet, the web, and mobile apps - Richness: enhances marketing by integrating video,

video, audio,
and browsers running on mobile devices to transact business, and text into a single, immersive consumer experience.
digitally enabled commercial transactions between and among - Interactivity: enables two-way communication, allowing
organizations and individuals consumers to engage dynamically and participate in the
shopping experience.
E-business: the digital enabling of transactions and processes
- Information density: E-commerce technologies enhance
within a firm involving information systems under the control of
information density by increasing availability, accuracy, and
the firm. Overlaps with e-commerce at the firm’s boundary,
timeliness while reducing collection and communication
connecting internal systems with suppliers and customers.
costs.
World Wide Web: an information system running on Internet - Personalization and customization: tailoring marketing
infrastructure that provides access to billions of webpages. It messages to individuals and customization by adapting
introduced far more powerful and commercially interesting products or services to user preferences.
capabilities of direct relevance to commerce. - Social technology: empowers users to create, share, and
control content while supporting social networks and new
Mobile Platform: Enables Internet access from mobile devices
business models.
like smartphones, tablets, and lightweight laptops.
Types of E-commerce: B2C, B2B, C2C
Major Trends in E-commerce:
- Ubiquity: allows consumers to shop anytime and anywhere, - Mobile E-commerce: enables online transactions through
extending the market beyond physical locations into a digital mobile devices using wireless networks, allowing consumers
marketspace. to shop via smartphones and tablets.
- Global reach: enables e-commerce to transcend cultural, - Social E-commerce: online shopping facilitated by social
regional, and national boundaries, expanding its customer networks, driven by features like social sign-on, network
base more efficiently than traditional commerce. notifications, collaborative shopping, social search, and
- Universal standards: ensure globally shared technical norms, integrated shopping tools.
reducing market entry costs for businesses and search costs
for consumers.
- Local E-commerce: targets consumers based on their E-commerce 2007-Present: evolved with Web 2.0, mobile
geographic location, offering location-specific products and devices, and cloud computing, enabling user-generated content,
services. social networks, and on-demand services. This era is defined by
a "social, mobile, local" online marketplace.
E-commerce brief story
Understanding E-commerce: organizing themes
e-commerce 1995-200: Invention: During this period, e-
commerce focused on selling simple retail goods online with - Technology: infrastructure
basic ads and weak search engines. Key developments include: o Understanding e-commerce requires knowledge of
- Disintermediation: eliminating middlemen to reduce costs technologies like packet-switched communications,
- Friction-free Commerce: equal information access, low TCP/IP, cloud-computing, web servers, and software
transaction costs, and dynamic pricing. programming
- First-mover advantage: early market entrants gained - Business: basic concepts
significant profits and market share. o Digital markets, digital goods, business models,
- Network effect: the value of a product increased as more industry value chains, value webs, digital disruption,
people used it and consumer behaviour in digital markets
- Society: Training the juggernaut
E-commerce 2001-2006: consolidation: e-commerce became
o Success of e-commerce depends on addressing
more business-driven, expanding beyond retail to services like
societal pressures, including intellectual property,
travel and finance. Key developments are:
privacy, and public policy concerns.
- Broadband adoption: enabled faster and more reliable online
transactions E-commerce business models and concepts
- Search Engine Marketing: became a primary tool for online
- Business models: a strategy for making profit
advertising
- Business plan: a document explaining the business model
- Expanded web presence: businesses used websites, email,
- E-commerce business model: uses the Internet, Web, and
and digital campaigns for marketing
mobile platforms to generate revenue
8 key elements of business models - Market Strategy: plan for entering a market and attracting
customers
- Value Proposition: explains how a company’s product/service
How will you promote your products/services to reach your
meets customer needs.
audience?
Why should customers choose you over competitors?
- Organizational development: a plan for structuring the
- Revenue Model: how a business earns money, generate profit,
company to achieve its goals
and ensure good ROI, 5 revenue models are:
What company structure is needed to execute the business
o Advertising Model: earns revenue by displaying ads
plan?
(ex. Yahoo)
- Management team: consists of key employees who ensure
o Subscription Model: Charges users a recurring fee for
the business model succeeds
access (ex. Netflix)
What skills and experience should the company’s leaders
o Transaction Free Model: Earns by facilitating
have?
transactions (ex. Shopee)
o Sales Model: Sells products/services directly (ex. Major B2C Models
Amazon)
- E-tailer: an online retail store where customers can shop
o Affiliate Model: earns commission for referring
anytime from anywhere. A Virtual Merchant (ex. Amazon)
customers (ex. MyPoints, Pinterest)
- Community Provider: a website where people with shared
- Market Opportunity: the potential for profit in a specific
interest or social connections interact online. (ex. Facebook,
market. Includes the company’s target market and its
LinkedIn, Twitter, Pinterest)
financial potential.
- Content provider: offers digital media like news, books,
What market will you serve, and how big is it?
movies, music, and games online. (ex. Netflix, apple music,
- Competitive Environment: other companies selling similar
CNN)
products in the same market
- Portal: a website that provides a mix of content, search, and
Who are your competitors?
online services, aiming to be a user’s main hub, types of
- Competitive advantage: what makes a company better than
portals are:
its competitors, either superior products or lower prices
What makes your business standout?
 o General (horizontal) Portal: offers a wide range of vertical marketplace, connecting a limited group of approved
services (ex. Yahoo, AOL, Facebook) suppliers with industry buyers. (SupplyOn)
o Specialized (vertical/vortal) Portal: focuses on a - Private Industrial Network: a company-owned digital network
that streamlines communication and supply chain
specific industry or interest (ex. Sailnet)
coordination with a select group of partners. The owner
o Search Portal: primarily provides search services (ex. covers the cost, which are offset by improved production and
Google, Bing) distribution efficiencies. (Walmart, Procter & Gamble)
- Transaction Broker: processes online sales, helping
customers complete transactions more efficiently and How E-Commerce changes business: Strategy, Structure, and
affordably. (ex. eBay) Process:
- Market Creator: uses the internet to connect buyers and
- Ubiquity: Expands market size, creates new channels,
sellers. (ex. Amazon, eBay)
reduces costs, and enables new strategies.
- Service provider: earns revenue by offering services instead of
- Global Reach: Lowers barriers, expands markets, reduces
physical products. (ex. VisaNow, RocketLawyer)
costs, and increases global competition.
Major B2B Models - Universal Standards: Lowers competition barriers, reduces
costs, and supports broader business strategies.
- E-Distributor: sells products and services directly to - Richness: Strengthens distribution channels, reduces costs,
businesses online, like a single-firm online retail/wholesale and improves post-sale support.
store for business needs. (ex. Amazon Business) - Interactivity: Reduces substitutes through customization and
- E-procurement: a company that creates and sells access to lowers costs.
digital markets for business transactions. A platform where - Personalization/Customization: Raises industry barriers,
buyers and sellers trade indirect inputs. (ex. Ariba Supplier lowers costs, and enhances marketing.
Network, PerfectCommerce) - Information Density: Shifts power to consumers, reduces
- Exchange: a digital marketplace that connects numerous costs of obtaining and processing information.
suppliers with a smaller group of large commercial buyers. - Social Technologies: Gives consumers more control, creates
Facilitates transactions between these parties, charging fees user-driven content, and attracts new suppliers.
and commissions for its services. (Go2Paper)
- Industry Consortium: a digital marketplace owned by industry
players, designed to serve specific sectors like automotive,
aerospace, chemicals, floral, or logging. It operates as a
Industry Structure: refers to the key players in a market and their build stronger value webs by connecting with partners, suppliers,
power dynamics. It is shaped by five forces: and customers to improve efficiency and collaboration.
- Competition among existing businesses Business Strategy: a plan to achieve long-term success and high
- Threat of substitute products returns. Types of business strats are:
- Barriers to entering the market - Differentiation: making unique products to stand out
- Power of suppliers - Cost competition: selling at lower prices than competitors
- Power of buyers - Scope: competing in global markets
- Focus/Market niche: targeting a specific segment
E-commerce significantly impacts industry structure, sometimes
- Customer Intimacy: building strong relationships with
disrupting entire industries while creating new ones. Its effects
customers
can be positive or negative, depending on the business. Some
firms thrive, other struggle. Profit: the difference between the selling price and production
costs.
Industry Value Chains: a value chain is the series of activities that
turn raw materials into final products or services, adding value at
each step. Every industry has value-adding activities carried out
by different players. E-commerce influences these activities,
improving efficiency and reshaping business operations. 6
generic players in an industry value chain are: suppliers,
manufacturers, transporters, distributors, retailers, and
customers.
Firm Value Chains: the series of activities perform to turn raw
materials into final products, adding value at each step:
- Inbound logistics: receiving and storing raw materials
- Operations: manufacturing or production process
- Outbound logistics: delivering products to customers
- Sales and marketing: promoting and selling products
- After-sales service: support and maintenance for customers
Firm value web: a network of business that use e-commerce to
coordinate their value chains. The internet helps companies