Information Management
Lecture 1
E-commerce – Use of Internet to transact business.
Includes Web, mobile browsers and apps.
Digitally enabled commercial transactions between and among
organizations and individuals
E-business – Digital enabling of transactions and process withing a firm,
involving information systems under firm’s control.
Does not include commercial transactions involving an exchange of
value across organizational boundaries.
Major technical trends in E-commerce:
Mobile platform – technology is available anytime and anywhere.
Cloud computing – Delivery of computing services (storage,
processing power, software) – Allows businesses to scale on-demand
without owning physical infrastructure.
Internet of Things – Devices are connected and exchange data.
Big data – Vast amount of structured and unstructured data that is
generated through digital actions.
Artificial intelligence technologies – ChatGPT, Recommendation
systems.
Blockchain: Decentralized and secure ledger technology that records
transactions.
Web3: Decentralized internet that leverages blockchain technology –
Users have more control.
Metaverse – Virtual environment where users can interact with each
other, businesses, and the environment.
Major Societal Trends in E-commerce:
User-generated content – Users now generate content (podcasts,
courses, vlogs, videos newsletters etc.)
Commercial and governmental invasions of privacy – Concerns
over privacy invasion increase.
Online security issues – Security declines as companies are hacked
and customers fall victim to various techniques.
Concerns about increasing market dominance of (Big Tech)
Eight Features of E-Commerce technology:
1. Ubiquity – Technology is available anytime and everywhere.
2. Global Reach – Reaches across geographical boundaries.
3. Universal Standards – Same technical standards for conducting E-
Commerce.
4. Richness – Communication can be more complex and contain more
information.
5. Interactivity – Two-way communication between parties.
6. Information density – Information costs are reduced, and quality is
increased.
7. Personalization/customization – Content can be tailored to the
user’s needs.
8. Social Technology – Technology supports user-generated content,
user interaction, and collaboration.
Types of E-Commerce:
Business-to-consumer (B2C) – Businesses sell goods or services to
consumers.
Business-to-business (B2B) - Businesses sell goods or services to
businesses.
Consumer-to-Consumer (C2C) – Consumers trade goods or services
with one another.
Mobile E-Commerce (M-Commerce) – E-commerce enabled via
mobile devices (smartphones or tablets)
Social E-Commerce – E-Commerce enabled by social networks.
Local E-Commerce – E-Commerce aimed at engaging consumers
based on their geographical location.
Lecture 2
E-Commerce Business Models:
Business model – Set of planned activities designed to result in a
profit in a marketplace.
Business plan – Describes a firm’s business model
E-Commerce business model – Uses/leverages unique qualities of
Internet and Web.
Eight Key Elements of a Business Model:
1. Value proposition
2. Revenue model
3. Market opportunity
4. Competitive environment
5. Competitive advantage
6. Market strategy
7. Organizational development
8. Management team
1. Value proposition:
a. What customer need does the good fulfill?
b. Successful E-Commerce value proposition:
Personalization/customization
Reduction of product search, price discovery costs
Facilitation of transactions by managing product
delivery
2. Revenue Model:
a. How will you earn money?
b. Major types of revenue models:
Advertising revenue model
Subscription revenue model
Freemium Strategy
Transaction fee revenue model
Sales revenue model
Affiliate revenue model
3. Market opportunity:
a. What marketspace do you intend to serve and what is its size?
Marketspace – are of actual or potential commercial
value in which company intends to operate.
Realistic market opportunity – Defined by revenue
potential in each market niche in which company hopes
to compete.
b. Market opportunity typically divided into smaller niches.
4. Competitive Environment:
a. Who else occupies your intended marketspace?
Other companies selling similar products in the same
marketspace.
Includes both direct and indirect competitors.
b. Influenced by:
Number and size of active competitors
Each competitor’s market share
Competitors’ profitability
Competitors’ pricing
5. Competitive advantage:
a. What special advantages does your firm bring to the
marketspace?
Is your product superior to or cheaper to produce than
competitors?
b. Important concepts:
Asymmetries
First-mover advantage, complementary resources
Unfair competitive advantage
Leverage
Perfect markets
6. Market strategy:
a. How do you plan to promote your products or services to attract
your target audience?
Details how a company intends to enter market and
attract customers
Best business concepts will fail if not properly marketed
to potential customers
7. Organizational development:
a. What types of organizational structures within the firm are
necessary to carry out the business plan?
b. Describes how firm will organize:
Typically, divided into functional departments
As company grows, hiring moves from generalists to
specialists
8. Management team:
a. What kind of backgrounds should the company’s leaders have?
b. A strong management team:
Can make the business model work
Can give credibility to outside investors
Has market-specific knowledge
Has experience in implementing business plans
Raising Capital:
Seed capital
Elevator pitch – few minutes lasting pitch about the company
Traditional sources:
o Incubators, angel investors
o Commercial banks, venture capital firms
o Equity crowdfunding
Categorizing E-Commerce Business Models:
No one correct way to categorize: There are many!
E-Commerce business model is not e-commerce technology
Similar models appear in different sectors
Companies may use multiple business models
B2C Business Models:
1. Online retailer (e-tailer):
2. Community provider (social network)
3. Content provider
4. Portal
5. Transaction broker
6. Market creator
7. Service provider
1. Online Retailer:
Online version of traditional retailer
Main revenue model: Sales
Variations:
o Virtual merchant
o Omnichannel
o Manufacturer-direct
Low barriers to entry
2. Community Provider:
Provide online environment (social network) where people with
similar interests can transact, share content, and communicate.
Revenue models: Typically use a hybrid model, combining
advertising, subscriptions, sales, and transaction fees.
3. Content Provider
Digital content on the web.
Revenue models: Advertising, subscription, and digital goods
sales.
4. Portal
Search with an integrated content and service package.
Revenue models: Advertising, referral fees, transaction fees, and
premium subscriptions.
Types: Horizontal (general) and vertical (specialized).
5. Transaction Broker
Processes online transactions, saving time and money.
Revenue model: Transaction fees.
6. Market Creator
Creates a digital environment for buyers and sellers to transact.
Revenue model: Transaction fees, merchant fees.
Includes on-demand services (sharing economy).
7. Service Provider
Provides online services that are valuable, convenient, and cost-
effective.
Revenue models: Service sales, subscription fees, advertising,
and marketing data sales.
How E-Commerce Changes Business:
Alters industry structure by changing:
o Rivalry among competitors
o Barriers to entry
o Threat of substitutes
o Supplier strength
o Buyer power
Industry & Firm Value Chains:
Industry Value Chains – Activities from suppliers to retailers that
transform raw inputs into final products.
Firm Value Chains – Activities a firm engages in to create final
products.
Firm Value Webs – Uses Internet technology to coordinate value
chains among business partners.
Business Strategy:
Aim: Achieve superior long-term returns on invested capital.
Five generic strategies:
1. Product/service differentiation
2. Cost competition
3. Scope
4. Focus/market niche
5. Customer intimacy
