Lecture E-commerce (7/e): Chapter 1 - Kenneth C. Laudon, Carol Guercio Traver

Chapter 1 - The revolution is just beginning. After studying this chapter, you will know: Facebook - The new face of E-commerce? E-commerce trends 2010-2011, the first 30 seconds, What is E-commerce? E-commerce vs. E-business, why Study E-commerce?...

E­commerce    

Kenneth C

Laudon Carol Guercio Traver

business. technology. society.

seventh edition

E­commerce: business. technology. 

society.

The New Face of E­Commerce?

Class Discussion

What has the experience been like?

advertisement on Facebook or by using a link provided by a friend?

information you have posted on Facebook?

E­commerce Trends 2010­2011

 Social networking continues to grow

 Social e-commerce platform emerges

 Online consumer sales return to growth

 Mobile computing begins to rival PC

 Explosive growth in online video viewing

 Continued privacy and security concerns

 First 16 years of e-commerce

Just the beginning

Rapid growth and change

 Technologies continue to evolve at

exponential rates

Disruptive business change

New opportunities

Digitally enabled commercial

transactions between and among

organizations and individuals

 E-business:

 Digital enablement of transactions and

processes within a firm, involving information

systems under firm’s control

involving an exchange of value across

organizational boundaries

Web 2.0

 Technologies that allow users to:

Create and share content, preferences, bookmarks, and online personas

Participate in virtual lives

Build online communities

Life, Wikipedia, Digg

 Can measure growth by looking at number

of Internet hosts with domain names

The Web

 Most popular Internet service

 Developed in early 1990s

 Provides access to Web pages

HTML documents that may include text, graphics, animations, music, videos

 Web content has grown exponentially

 Google indexes between 75 – 100

billion pages

 What is the significance of the “bow-tie”

form of the Web?

 Why does Barabasi call the Web a

Origins & Growth of E­commerce

 Precursors:

 Baxter Healthcare

 Electronic Data Interchange (EDI)

 French Minitel (1980s videotex system)

 None had functionality of Internet

 1995: Beginning of e-commerce

 First sales of banner advertisements

 E-commerce fastest growing form of

commerce in United States

Figure 1.4, Page 25

 E-commerce growth will eventually cap as

it confronts its own fundamental

Potential Limitations on the Growth 

of B2C E­commerce

 Expensive technology

 Sophisticated skill set

 Persistent cultural attraction of physical

markets and traditional shopping

experiences

 Persistent global inequality limiting access

to telephones and computers

 1995-2000: Innovation

 Key concepts developed

 Dot-coms; heavy venture capital investment

Early Visions of E­commerce

 Computer scientists:

 Inexpensive, universal communications and

computing environment accessible by all

 Economists:

 Nearly perfect competitive market and friction-free

commerce

 Lowered search costs, disintermediation, price

transparency, elimination of unfair competitive

advantage

 Entrepreneurs:

 Extraordinary opportunity to earn far above normal

“Noodlenomics” Guides Internet Investment in 

2010

Class Discussion

 What explains the rapid growth in private investment

in e-commerce firms in the period 1998–2000? Was

this investment irrational?

 What was the effect of the big bust of March 2000

on e-commerce investment?

 What is the value to investors of a company such as

YouTube which has yet to show profitability?

 Why do you think investors today would be

interested in investing in or purchasing e-commerce

Assessing E­commerce

 Many early visions not fulfilled

 Consumers less price sensitive

 Considerable price dispersion

 Perfect competition

 Information asymmetries persist

 Disintermediation

 Fast-followers often overtake first movers

 Technology will propagate through all commercial

activity.

 Prices will rise to cover the real cost of doing business.

 E-commerce margins and profits will rise to levels more typical of all retailers.

 Cast of players will change.

 Traditional Fortune 500 companies will play dominant role.

 New startup ventures will emerge with new products, services.

 Number of successful pure online stores will remain

smaller than integrated offline/online stores.

 Regulatory activity worldwide will grow.

 New technologies present businesses with new ways

of organizing production and transacting business

 Society:

 Intellectual property, individual privacy, public welfare policy

Insight on Society

Who Really Cares About Online Privacy?

Class Discussion

described in the case?

privacy-invading? Why?

 Is e-commerce any different than traditional

markets with respect to privacy? Don’t

merchants always want to know their customer?

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