Global E-Commerce

New Chapter

-

Next Chapter

-

2014 to 2015 trends?

-Grows over 15%. -Continued growth of cloud computing -Explosive growth in Big Data -Continued growth of user generated content.

Five Primary Revenue Models:

1. Advertising Model 2. Subscription Revenue Model 3. Transaction Fee Revenue Model 4. Sale Revenue Model 5. Affiliate Revenue Model

Innovative phase:

1961 to 1974; building blocks conceptualized annd brought to actual hardware/software; TCP/IP

Commercialization phase:

1995 to now

T/F: WWW is the Internet protocol used to transfer Web pages.

False

T/F: Amazon Web Services is an example of cloud computing.

True

T/F: HTML is used to format the structure and style of a Web page.

True

Web 2.0 examples?

Twitter, YouTube, Instagram, Wikipedia, Tumblr.

Internet of Things (IoT)

Use of the internet to connect a wide variety of devices, machines, and sensors.

intranet

a TCP/IP network located within a single organization for purposes of communications and information processing.

Ping

a program that allows you to check the connection between your client and server

Which of the following is the core communications protocol for the Internet? a. TCP/IP b. Telnet c. TLS d. FTP

a. TCP/IP

The address used by a browser to identify the location of content on the Web is called: a. a uniform resource locator. b. a file path. c. a domain name. d. an IP address.

a. a uniform resource locator

Which of the following is the best definition of transaction cost? a. the cost of participating in a market the expense of changing national or regional prices b. the cost of finding suitable products in the market c. the cost merchants pay to bring their goods to market d. the cost merchants pay to bring their goods to market

a. the cost of participating in a market the expense of changing national or regional prices

Internet2

advanced networking consotium of more than 350 memebers intitutions working in partnerships to facilitat the development, deployment, amd use of revolutionary internet technologies.

Information asymmetry

any disparity in relevant market information among parties in transaction.

Which of the following technologies has enabled the Internet to grow exponentially to support millions of users, without overloading the network architecture? a. Wi-Fi b. client/server computing c. IPv6 d. fiber optics

b. client/server computing

Limitations of the current internet:

bandwidth limitations, quality of service limitations, network architecture limitations, and wired internet.

Which source of e-commerce revenues has grown from nearly zero prior to 2007 to an estimated $128 billion in 2015? a. B2B e-commerce b. B2G e-commerce c. mobile B2C e-commerce d. social e-commerce

c. mobile B2C e-commerce

fiber-optic cable

consists of up to hundreds of strands of glass or plastic that use light to transmit data.

When creating a new Product in PrestaShop, which of the following attributes are required? a. Product type (can be either standard, pack or virtual) b. Name c. Enabled (can be yes or no) d. All of these values (type, name, and enabled) must be set

d. All of these values (type, name, and enabled) must be set

The backbone of the Internet is formed by: a. Network Access Points (NAPs). b. Internet Exchange Points (IXPs). c. Metropolitan Area Exchanges (MAEs). d. Tier 1 ISPs.

d. Tier 1 ISPs.

latency

delays in messages caused by the uneven flow of information packets through the network.

customer intimacy strategy

focuses on developing strong ties with customers in order to increase their switching costs.

Backbone

high-bandwidth fiber-optic cable that transports data across the internet.

Bandwidth

measures how much data can be transfered over a communication medium within a fixed period of time; is usually expressed in bits per second (bps), kilobits per second (kbps), megbits per second (mbps), or gigabits per second (gbps).

differentiated quality of service (diffserv)

new technology that assigns levels of priority that assigns levels of priority to packets based on the type of data being transmitted. *latency solutions

Broadband

refers to any communication technology that permits clients to play streaming audio and video files at acceptance speeds - generally above 100 kbps.

Bluetooth

technology standard for short-range wireless communication under 30 feet.

Market entry costs

the cost merchants must pay just to bring their goods to market.

Simple Mail Transfer Protocol (SMTP)

the internet protocol used to send mail to a server.

Narrowband

the traditional telephone modem connection, now opperating at 56.6 kbps.

Wi-Fi

wireless standards for Ethernet networks with greater speed and range than Bluetooth.

Eight components of an effective business model:

1. Value Proposition 2. Revenue Model 3. Market Opportunity 4. Competitive Environment 5. Competitive Advantage 6. Market Strategy 7. Organizational Development 8. Capabilities of the Management Team

E-commerce changes industry structure by?

Changing: -Rivalry among existing competitors -Barriers to entry -Threat of new substitute products -strength of suppliers -Bargaining power of buyers

T/F: For a small community business, targeting a large market segment is generally a better strategy than focusing on the smaller community based economy because it has a greater growth potential.

False

E-commerce features

Ubiquity, global , universal standards, richness, interactivity, information density, • personalization/customization, social technology, & basic models.

Social Technology

User content generation and social network technologies.

Organizational Development

What organizational structures within the firm are necessary to carry out the business plan. (Departments)

Latency

a delay in messages caused by uneven flow of information packets through the networks.

Business Plan

a document that outlines the details of a business model.

Client/server computing

a model of computing in which powerful personal computers are connected in a network together with one or more servers.

focus strategy

a plan to compete within a narrow market segment or product segment.

client

a powerful personal computer that is part of a network.

Web 2.0

a set of applications and technologies that allows users to create, edit, and distribute content; share preferences, bookmarks, and online personas; participate in virtual lives; and build online communities.

Business Model

a set of planned activities (business processes) that are designed to result in a profit in the marketplace

Which is the largest segment of e-commerce by annual sales? a. B2B b. C2C c. Mobile e-commerce d. B2C

a. B2B

When we say that a firm is focusing on a narrow market segment or product scope, this refers to which generic business strategy? a. Focus strategy b. Cost strategy c. Differentiation strategy d. Scope strategy

a. Focus strategy

E-commerce can be defined as: a. the use of the Internet, the Web, and mobile apps to transact business. b. the digital enablement of transactions and processes within an organization. c. the use of any Internet technologies in a firm's daily activities. d. any digitally enabled transactions among individuals and organizations.

a. the use of the Internet, the Web, and mobile apps to transact business.

Competitive Advantage

achieved by a firm when it can produce a superior product and/or bring the product to market at a lower price than most, or all, of its competitors.

E-commerce business model

aims to use and leverage the unique qualities of the Internet, the Web, and the mobile platform.

Internet

an interconnected network of thousands of netweorks and millions of computers linking businesses, educational institutions, government agenciesn, and individuals.

Complex and content-rich information that can be delivered without sacrificing reach refers to which of the following features of e-commerce? a. Ubiquity b. Richness c. Interactivity d. Personalization/Customization

b. Richness

Stickiness is an important attribute for which of the following revenue models? a. sales revenue model b. advertising revenue model c. transaction fee revenue model d. subscription revenue model

b. advertising revenue model

Which of the following is an example of the subscription revenue model? a. eBay b. eHarmony c. Twitter d. E*Trade

b. eHarmony

network externalities

benefits that arise because everyone uses the same technology.

Difference between e-business and e-commerce?

e-business does not encompass commercial transactions involving an exchange of value across organizational boundaries. E-commerce involves the transactions of goods where e-business just looks at the information within an organization.

local e-commerce

e-commerce that is focused on engaging the consumer based on his or her current geographic location.

Internet Foundation Tech.

packet switching, the transmission control protocol/internet protocol (TCP/IP) communications protocol, and client/server computing.

IP protocol

protocol that provides the internet's scheme and is responcible for the actual delivery of the packets.

Market Opportunity

refers to the company's intended marketspace and the overall potential financial opportunities available to the firm in that marketspace.

Transaction costs

the costs of participating in a market.

E-business

the digital enabling of transactions and processes within a firm, involving information systems under the control of the firm.

Search cost

the effort required to find suitable products.

HyperText Transfer Protocol (HTTP)

the internet protocol used for transfering webv pages.

Web server

the software that enables a computer to deliver web pages written in HTML to cleint computers on a network that requests this service by sending an HTTP request.

Basic E-commerce Models

Business-to-Consumer (B2C), Business-to-Business (B2B), & Consumer-to- Consumer (C2C).

T/F: An asymmetry exists whenever all participants in a market have equivalent resources.

False

Dot-com crash

Returned to the pre boom prices, pushed by the attacks of 911, 1 in 2 internet companies survived,

Universal Standards Benefits

1. Reduced search costs for consumers 2. Becomes simpler, faster, with more accurate price discovery 3. Lower market entry costs for merchants

Institutionalization phase:

1975-1995; large companies invested into the internet; DOD invested for a military system

Management Team

Background needed for the company's leaders. (i.e. degree)

Value Proposition

Defines how a company's product or service fulfills the needs of customers.

Revenue Model

Describes how the firm will earn revenue, produce profits, and produce a superior return on invested capital.

Market Strategy

Details how a company intends to enter market and attract customers.

Interactivity

E-commerce technologies allow two-way communication between the merchant and the consumer.

Personalization/Customization

E-commerce technologies enable merchants to target their marketing messages to a person's name, interests, and past purchases. They allow a merchant to change the product or service to suit the purchasing behavior and preferences of a consumer.

Top Down Market Estimate (MaRS)

Estimate market potential, determine adoption rates, predict your market share.

Subscription Revenue Model

Firms that use the subscription model offer users access to some or all of their content or services for a subscription fee.

Transaction Fee Revenue Model

Firms that use the transaction fee model derive profit from enabling or executing transactions. For instance, transaction fees are paid to eBay when a seller is successful in auctioning off a product, and E*Trade receives a transaction fee when it executes a stock transaction for a customer.

Affiliate Revenue Model

In the affiliate model, sites receive referral fees or a percentage of the revenue from any sales that result from steering business to the affiliate.

Sale Revenue Model

In the sales revenue model, companies draw profit directly from the sale of goods, information, or services to consumers.

Richness

Information that is complex and content-rich can be delivered without sacrificing reach.

Ubiquity

It is available just about everywhere and at all times.

Future of the internet

Largest advancements in two areas: 1. fiber optic trunk line bandwidth 2. wireless internet services

In at most 3-5 sentences, describe one way that universal standards contribute to the value of e-commerce. Make sure that your answer 1) defines (or explains) one befit of a universal standard and 2) describes how it contributes to the value of e-commerce.

One benefit of universal standards is reduced search costs for consumers. Because the underlying internet and web function the same for all e-commerce sites, search engines can aggregate and disseminate links to products based on search terms faster than the sites can communicate to their customers. Consequently, customers can find information without having to wait for a company to reach them in a targeted advertisement. One benefit of universal standards is faster price discovery. When customers can easily compare features and prices across different e-commerce providers they can more quickly identify a range of costs. User reviews also add insight when buyers discuss how well the product or service met their needs. This richness of information allows buyers to quickly determine the cost to meet their needs. One benefit of universal standards is lower market entry costs for new merchants. There are many inexpensive and feature rich e-commerce solutions available. Getting an online store front can be done in a matter of hours at a nominal cost, which allows a new merchant to quickly begin selling products online with little upfront costs or technology hurdles. The global reach also allows them to begin selling world-wide.

Dot-com boom

People were so excited about the internet they invested towards practically anything to do with it.

Market Niche

Small sub-segments of larger markets have a greater potential for growth without the intense competitive pressure. Communities that place a strong emphasis on the advertising revenue model will find marketers more interested in placing ads on a site that targets a specific niche.

Advertising Model

The advertising model derives its profit by displaying paid advertisements on a Web site. The goal is to convince advertisers that the site has the ability to attract a sizeable viewership, or a viewership that meets a marketing niche sought by the advertiser.

Global reach

The potential market size is roughly equal to the size of the online population of the world.

Universal standards

The technical standards of the Internet and therefore of conducting e-commerce are shared by all of the nations in the world.

T/F: A business model is a set of planned activities designed to result in a profit, while a business plan is a document that outlines the details of the model

True

T/F: A value proposition defines how a company's product or service fulfills the needs of a customer.

True

Information density

The total amount and quality of information available to all market participants is vastly increased and is cheaper to deliver.

E-commerce

The use of the Internet and the Web to conduct business transactions.

In which year can e-commerce be said to have begun? a. 1983 b. 1985 c. 1995 d. 2001

c. 1995

The early years of e-commerce are considered: a. the most promising time in history for the successful implementation of first mover advantages b.an economist's dream come true, where for a brief time consumers had access to all relevant market information and transaction costs plummeted. c. a stunning technological success as the Internet and the Web increased from a few thousand to billions of e-commerce transactions per year. d. a dramatic business success as 85% of dot-coms formed since 1995 became flourishing businesses.

c. a stunning technological success as the Internet and the Web increased from a few thousand to billions of e-commerce transactions per year.

Which of the following terms can be considered synonymous with the term e-commerce? a. the interenet b. e-business c. digital commerce d. the Web

c. digital commerce

Which of the following refers to the complexity and content of a message? a. interactivity b. information density c. richness d. reach

c. richness

Which of the following was the first truly large-scale digitally enabled transaction system in the B2C arena? a. the Baxter Healthcare system b. EDI c. the French Minitel d. Telex

c. the French Minitel

Which element of the business model addresses what a firm provides that other firms do not and cannot? a. revenue model b. competitive advantage c. value proposition d. market strategy

c. value proposition

Which element of the business model refers to the presence of substitute products in the market? a. value proposition b. competitive advantage c. market strategy d. competitive environment

d. comptetive advantage

Which revenue model draws fees from the sale of goods, information or service to the customer? a. Affiliate revenue b. Subscription revenue c. Advertising revenue d. Sale revenue

d. sale revenue

the Web

one of the internet's most popular services , providing access to more than 100 billion Web pages

routing algorithm

ensure the packets take the best availble path toward their desitination.

What will fiber optics do to the internet?

increase the movement of the Internet from narrowband to broadband digital service.

Friction-free commerce

lowered search costs, disintermediation, price transparency, elimination of unfair competitive advantage.

Packet Switching

method of splitting messages up into parcels, routing them along available communications paths, and reassembling them at the destination point.

cloud computing

model of computing in which firms and individuals obtain computing power and software over the internet.

What will wireless internet do to the internet?

move the Internet from predominantly a cable-based stationary service to mobile service

server

networked computer dedicated to common functions that the client computers on the network need

Client/server computing

networks of powerful client computers that are connected to one or more server computers.

Competitive Enviroment

refers to the other companies selling similar products and operating in the same marketspace.

Complementary Resources

resources and assets not directly involved in the production of the product but required for success, such as marketing, management, financial assets, and reputation.

Specialization

seek to become the premier provider in a small market segment or niche.

TCP protocol

set of rules that specific how these messages should be formatted, ordered, compressed, and error-checked. The IP protocol provides the addressing scheme for the internet.

scope strategy

sets out to compete in all markets around the globe, rather than just locally or regionally.

Differentiation

setting your firm or product apart from the competition by establishing some unique property or consumption experience that your competitors do not have.

What are the three forces driving e-commerce?

social, mobile, & local.

Router

special-purpose computer that interconnects the computer netweorks that make up the internet and routes packets to their ultimate desitination as they travel the internet.

Uniform Resource Locator (URL)

the address used by a Web browser to identify the location of the content on the web.

Growth in information density can result in?

•Greater price transparency: Consumers can easily find out the variety of prices in a market. •Greater cost transparency: Consumers can discover the actual costs merchants pay for products. •Greater opportunities for marketers to practice price discrimination: Because marketers are able to gather much more information about their customers, they can segment the market into groups based on willingness to pay different prices for the same or nearly the same goods.