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Pertemuan 2 Understanding e-Commerce

and e-Business

Matakuliah : J0324 / Sistem e-Bisnis

Tahun : 2005

Versi : 02/02

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Learning Outcomes

Pada akhir pertemuan ini, diharapkan mahasiswa

akan mampu :

• menyebutkan fungsi dan perbedaan antara e-Commerce dan e-Business

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Outline Materi

• Electronic Commerce: Definitions and Concepts

• The EC Framework, Classification and Content

• E-commerce Business Plans, Cases and Models

• Benefits and Limitations of EC

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The Interdisciplinary Nature of EC

• Major EC disciplines – Computer science– Marketing– Consumer behavior– Finance– Economics– Management information systems

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The Future of EC

• 2004—total online shopping and B2B transactions in the US between $3 to $7 trillion by 2008:– number of Internet users worldwide should reach 750

million – 50 percent of Internet users will shop – EC growth will come from:

• B2C• B2B • e-government• e-learning• B2E• c-commerce

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E-commerce Business Models

• Business models—a method of doing business by which a company can generate revenue to sustain itself

• Examples:– Name your price– Find the best price– Dynamic brokering– Affiliate marketing

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E-commerce Business Plans and Cases

• Business plan: a written document that identifies the business goals and outlines the plan of how to achieve them

• Business case: a written document that is used by managers to garner funding for specific applications or projects; its major emphasis is the justification for a specific investment

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Structure of Business Models

• Business model: A method of doing business by which a company can generate revenue to sustain itself

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Structure of Business Models (cont.)• Revenue model: description of how the

company or an EC project will earn revenue– Sales– Transaction fees – Subscription fees– Advertising – Affiliate fees– Other revenue sources

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Typical Business Modelsin EC

1. Online direct marketing

2. Electronic tendering systems

tendering (reverse auction): model in which a buyer requests would-be sellers to submit bids, and the lowest bidder wins

3. Name your own price: a model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price

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Typical Business Models in EC (cont.)

4. Affiliate marketing: an arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to the selling company’s Web site

5. Viral marketing: word-of-mouth marketing in which customers promote a product or service to friends or other people

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Typical Business Models in EC (cont.)

6. Group purchasing: quantity purchasing that enables groups of purchasers to obtain a discount price on the products purchased

7. SMEs: small to medium enterprises

8. Online auctions

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Typical Business Models in EC (cont.)

8. Product and service customizationcustomization: creation of a product or service according to the buyer’s specifications

8. Electronic marketplaces and exchanges9. Value-chain integrators10.Value-chain service providers

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Typical Business Models in EC (cont.)

12. Information brokers

13.Bartering

14.Deep discounting

15.Membership

16.Supply chain improvers

Business models can be independent or they can be combined amongst themselves or with traditional business models

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Benefits of EC

• Global reach• Cost reduction• Supply chain

improvements• Extended hours: 24/7/365• Customization• New business models• Vendors’ specialization

• Rapid time-to-market• Lower communication

costs• Efficient procurement• Improved customer

relations• Up-to-date company

material• No city business permits

and fees• Other benefits

Benefits to organizationsBenefits to organizations

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Benefits of EC (cont.)

• Ubiquity• More products and

services• Cheaper products

and services• Instant delivery• Information

availability

• Participation in auctions

• Electronic communities

• “Get it your way” • No sales tax

Benefits to consumers

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Benefits of EC (cont.)

• Benefits to society– Telecommuting– Higher standard of

living– Hope for the poor– Availability of public

services

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Limitations of EC

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Barriers of EC

• Security • Trust and risk• Lack of qualified

personnel• Lack of business

models• Culture

• User authentication and lack of public key infrastructure

• Organization • Fraud • Slow navigation on

the Internet• Legal issues

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Major Business Pressures and the Role of EC

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MajorBusiness Pressures (cont.)

Societal andenvironmental

pressures

Changing nature of workforce

Government deregulation of banking and other services

Shrinking government subsidies

Increased importance of ethical and legal issues

Increased social responsibility of organizations

Rapid political changes

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MajorBusiness Pressures (cont.)

Technological

pressures

Rapid technological obsolescence

Increase innovations and new technologies

Information overload Rapid decline in

technology cost vs. performance ratio

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The Networked Organization

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• Source : Turban, Efraim, David King, Jae Lee and Dennis Viehland. Electronic Commerce. A Managerial Perspective (2004). Prentice Hall. PPT for Chapter : 1