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CHAPTER 1

Created by, David Zolzer, Northwestern State University—Louisiana

The Revolution Is Just Beginning


PERTEMUAN 1


Amazon.com: Before and After Most well-known e-commerce company Conceived by Jeff Bezos in 1994 Opened in July 1995 Four compelling reasons to shop

Selection (1.1 million titles) Convenience (anytime, anywhere) Price (high discounts on bestsellers) Service (automated order confirmation,

tracking, and shipping information)


Amazon.com: Before and After

($1.4 Billion)$2.7 Billion2000

($720 Million)$1.6 Billion1999

($125 Million)$610 Million1998

($31 Million)$148 Million1997

($6.24 Million)$15.6 Million1996

EarningsRevenues

Revenues and Earnings


E-commerce vs. E-business

E-commerce involves Digitally enabled commercial transactions

between organizations and individuals. Digitally enabled transactions include all

transactions mediated by digital technology

Commercial transactions involve the exchange of value across organizational or individual boundaries in return for products or services


E-commerce vs. E-business

E-business involves Digital enablement of transactions

and processes within a firm, involving information systems under the control of the firm

E-business does not involve commercial transactions across organizational boundaries where value is exchanged


The Difference Between E-Commerce and E-Business

, Figure 1.1


Seven Unique Features of E-commerce Technology and Their Business Significance

, Table 1.1


Page 11, Figure 1.2

Changing Trade-Off Between Richness and Reach


Major Types of E-Commerce

Market relationships Business-to-Consumers (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C)

Technology-based Peer-to-Peer (P2P) Mobile Commerce (M-commerce)


Major Types of E-CommercePage 14, Table 1.2


Business-to-Consumer E-commerce

Most commonly discussed type Online businesses attempt to

reach individual consumers Consumers will spend $65 billion

in 2001.


Business-to-Business E-commerce Businesses focus on sell to other

businesses Largest form of e-commerce $700 billion in transactions in 2001 Primarily involved inter-business

exchanges at first Other models have developed

e-distributors infomediaries B2B service providers


Consumer-to-Consumer E-commerce

Provide a way for consumers to sell to each other

Estimated $5 billion market Consumer:

prepares the product for market places the product for auction or

sale relies on market maker to provide

catalog, search engine, and transaction clearing capabilities


Peer-to-Peer E-commerce

Enables Internet users to share files and computer resources

Napster


Mobile E-commerce

Wireless digital devices enable transactions on the Web

Uses personal digital assistants (PDAs) to connect

Used most widely in Japan and Europe


AKHIR PERTEMUAN 1


PERTEMUAN 2


Growth of the Internet and the Web Created in the late 1960s About 350 million computers

worldwide to date Links businesses, educational

institutions, government agencies, and individuals

Provides services such as e-mail, document transfer, newsgroups, shopping, research, instant messaging, music, video, and news


Growth of the Internet and the Web

Internet hosts are growing at a rate of 45% per year

Extraordinary growth -- time to reach 30% US households Radio - 38 years Television - 17 years Internet/Web - 8 years (1993)


The Growth of the InternetPage 16, Figure 1.3


The Growth of Web ContentPage 17, Figure 1.4


The Growth of B2C E-CommercePage 20, Figure 1.5


The Growth of B2B E-CommercePage 21, Figure 1.6


Origins and Growth of E-Commerce Baxter Healthcare

Primitive form of B2B using telephone-based modem to permit hospitals to reorder supplies (early 1970s)

PC-based remote order entry system (1980s) Electronic Data Interchange (EDI)

standards developed that permitted firms to exchange commercial documents and conduct digital commercial transactions across private networks (1980s)


Origins and Growth of E-Commerce

French Minitel videotext system First B2C arena (1981) 15 million in use throughout France

World Wide Web 1993 first browsers 1995 first banner ads


Technology and E-Commerce in Perspective

Internet and the Web are just two of a long list of technologies that have greatly change commerce

Other technologies spawned business models and strategies

Explosive early growth followed by retrenchment and then long-term successful exploitation of the technology


Technology and E-Commerce in Perspective

Although e-commerce has grown explosively, there is no guarantee it will continue to grow

Confront own fundamental limitations

B2C only about 1% of overall retail market

With current growth rates, B2C will roughly equal the annual revenue of Wal-Mart in 2005


Limitations of the Growth of B2CE-Commerce

Page 23, Table 1.3


Web Access Via Wireless Devices in the United States

Page 24, Figure 1.7


E-Commerce I and II E-Commerce I

Explosive growth starting in 1995 Widespread of Web to advertise

products Ended in 2000 when dot.com began to

collapse E-Commerce II

Began in January 2001 Reassessment of e-commerce

companies


E-Commerce I 1995-2000 For computer scientist and

information technologists Vindication of a set of information

technologies developed over 40 years

Extending from the early Internet to the PC and local area networks

The vision of universal communications


E-Commerce I 1995-2000 For economists

Raised realistic prospect of perfect Bertrand Market

where price, cost, and quality information is equally distributed

where a nearly infinite set of suppliers compete against one another

where customers have access to all revelant market information worldwide

Merchants have equal direct access to hundreds of millions of customers


E-Commerce I 1995-2000

Disintermediation displacement of market

middlemen who traditionally are intermediaries between producers and consumers by a new direct relationship between manufacturers and content originators with their customers



Friction-free commerce a vision of commerce in which

information is equally distributed transaction costs are low prices can be dynamically adjusted to

reflect actual demand intermediaries decline unfair competitive advantages are

eliminated



First mover a firm that is first to market in a

particular area and that moves quickly to gather market share

Network effect occurs where users receive value

from the fact that everyone else uses the same tool or product


E-Commerce II 2001-2006 Crash in stock market values of E-

commerce I companies throughout 2000 is an end to E-commerce I

Led to a sobering reassessment of the prospects of e-commerce and the methods of achieving business success.

E-commerce II begins in 2001 and ends five year later -- the limit for making technology and business projections


E-Commerce II 2001-2006 Reasons for the end of E-Commerce I

run-up in technology stocks due to enormous information technology capital expenditure of firms rebuilding their internal business systems to withstand Y2K

telecommunications industry had built excess capacity in high-speed fiber optic networks

1999 e-commerce Christmas season provided less sales growth that anticipated and demonstrated e-commerce was not easy (eToys.com)

valuations of dot.com and technology companies had risen so high supporters were questioning whether earnings could justify the prices of the shares.


E-Commerce I and E-Commerce II Compared

Page 32, Table 1.5


Understanding E-Commerce: Organizing Themes Technology: Infrastructure

development and mastery of digital computing and communications technology

Business: Basic Concepts new technologies present businesses and

entrepreneurs with new ways of organizing production and transacting business

Society: Taming the Juggernaught global nature of e-commerce poses public

policy issues of equity, equal access, content regulation, and taxation


The Internet and the Evolution of Corporate Computing

Page 37,

Figure 1.8


Disciplines Concerned with E-Commerce

Page 39, Figure 1.9


AKHIR PERTEMUAN 2

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