e-commerce mekanisme pasar (market mechanisms). learning objectives define e-marketplaces and their...
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E-Commerce Mekanisme Pasar
(Market Mechanisms)
E-Commerce Mekanisme Pasar
(Market Mechanisms)
Learning Objectives
Define e-marketplaces and their components List the major types of e-markets and their features Define supply chains and value chains and understand their
roles Describe the role of intermediaries in EC Describe electronic catalogs, shopping carts, and search
engines Describe the various types of auctions and list their
characteristics Discuss the benefits, limitations, and impacts of auctions Describe bartering and negotiating online Describe the impact of e-marketplaces on organizations Define m-commerce and explain its role as a market
mechanism
Electronic Marketplaces
Markets facilitate exchange of Information Goods Services Payments
Markets create economic value for Buyers Sellers Market intermediaries Society at large
Electronic Marketplaces [2]
Three main functions of markets Matching buyers and sellers Facilitating the exchange of information,
goods, services, and payments associated with market transactions
Providing an institutional infrastructure
Marketspace Components
Marketspace: a marketplace in which sellers and buyers exchange goods and services for money (or for other goods and services), but do so electronically Customers Sellers Goods (physical or digital) Infrastructure Front-end Back-end Intermediaries/business partners Support services
Marketspace Components [2]
Customers Web surfers looking for
• Bargains (harga yg murah)
• customized items (Item yg bisa di ubah)
• Collectors’ items (item yg dikoleksi)
• entertainment etc. Organizations account
for over 85 percent of EC activities
Sellers Hundreds of thousands of
storefronts are on the Web Advertising and offering
millions of Web sites Sellers can sell
• Direct from their Web site • E-marketplaces
Marketspace Components [3]
Products Physical products Digital products—
goods that can be transformed to digital format and delivered over the Internet
Infrastructure Hardware Software Networks
Marketspace Components [4]
Front-end business processes include Seller’s portal Electronic catalogs shopping cart Search engine Payment gateway
Back-end activities are related to Order aggregation and
fulfillment Inventory management Purchasing from suppliers Payment processing Packaging and delivery
Marketspace Components [5]
Intermediary a third party that operates between sellers
and buyersOther business partners
collaborate on the Internet, mostly along the supply chain
Support services such as Certification and trust services Knowledge providers
Types of Electronic Markets
Electronic storefronts a single company’s Web site where products and
services are soldMechanisms for conducting sales
Electronic catalogs Payment gateway Search engine Shipment court Customer services Electronic cart E-auction facilities
Electronic malls (e-malls) an online shopping center where many stores are
located
Types of Electronic Markets [2]
General stores/malls—large marketspaces that sell all types of products
Public portals Specialized stores/malls—
sell only one or a few types of products
Regional vs. global stores
Pure online organizations vs. click-and-mortar stores
Types of stores and malls
E-marketplaces online market, usually B2B, in which buyers and sellers negotiate; the three types of e-marketplaces are private, public, consortia
E-Marketplaces
Private e-marketplaces Online markets owned by a single company:
• Sell-side: company sells either standard or customized products to qualified companies
• Buy-side marketplaces: company makes purchases from invited suppliers
Public e-marketplaces B2B markets, usually owned and/or managed
by an independent third party, that include many sellers and many buyers (exchanges)
Consortia & Information Portals
Consortia
E-marketplaces that deal with suppliers and buyers in a single industry
• Vertical consortia are confined to one industry• Horizontal allow different industries trade there
Information portal
A personalized, single point of access through a Web browser to business information inside (and marginally from outside) an organization
• Publishing portals Commercial portals • Personal portals Corporate portals • Mobile portals
Supply Chains
Supply chain The flow of materials, information, money, and
services from raw material suppliers through factories and warehouses to the end customers
Includes organizations and processes that create and deliver the following to the end customers:
– Products – Information– Services
Supply Chains [2]
A supply chain involves activities that take place during the entire product life cycle
It also includes: Movement of information and money and
procedures that support the movement of a product or a service
The organizations and individuals involved
A Simple Supply Chain
Supply Chain Components
Upstream supply chain includes the activities of suppliers (manufacturers
and/or assemblers) and their suppliersInternal supply chain
includes all in-house processes used in transforming the inputs received from the suppliers into the organization’s outputs
Downstream supply chain includes all the activities involved in delivering the
product to the final customers
Types of Supply Chains
Integrated make-to-stockContinuous replenishmentBuild-to-order—model in which a
manufacturer begins assembly of the customer’s order almost immediately upon receipt of the order
Channel assembly—model in which product is assembled as it moves through the distribution channel
Supply Chains: Integrated & Build-to-Order
Value Chain & Value System
Value chain the series of activities a company performs to
achieve its goal(s) at various stages of the production process
each activity adds value to the company’s product or service, contributes to profit, and enhances competitive position in the market
Value system a set of value chains in an entire industry,
including the value chains of tiers of suppliers, distribution channels, and customers
Supply Chain & Value Chain
Value chain and the supply chain concepts are interrelated Value chain shows the activities performed
by an organization and the values added by each
The supply chain shows flows of materials, money, and information that support the execution of these activities
Intermediation in E-Commerce
Intermediaries provide value-added activities and services to buyers and sellers: wholesalers, retailers, infomediaries
Roles of intermediaries Search costs: databases on customer preferences Lack of privacy: anonymity of sellers and buyers Incomplete information: gather product information Contract risk: protect sellers against non-payment Pricing inefficiencies: induce appropriate trades
E-Distributors on B2B
E-distributor an e-commerce intermediary that connects
manufacturers (suppliers) with buyers by aggregating the catalogs of many suppliers in one place—the intermediary’s Web site
E-distributors also provide support services Payments Deliveries Escrow services Aggregate buyers’ and or sellers’ orders
Disintermediation & Reintermediation
Disintermediation elimination of intermediaries between sellers and
buyersReintermediation
establishment of new intermediary roles for traditional intermediaries that were disintermediated
Syndication as an EC Mechanism
Syndication the sale of the same good (e.g., digital content)
to many customers, who then integrate it with other offerings and resell it or give it away free
Competition in the Internet Ecosystem
Competition in the Internet ecosystem (business model of the online economy) Inclusive with low barriers to entry Self-organizing Old rules may no longer apply
Competition is tense Lower buyers’ search cost Speedy comparisons Differentiation and personalization
Competition in the Internet Ecosystem [2]
Differentiation providing a product or service that is unique
Personalization the ability to tailor a product, service, or Web
content to specific user preferencesLower prices
Competition in the Internet Ecosystem [3]
Customer service is an extremely important competitive factor
Some competitive factors are less important as a result of EC: Size of company is no longer significant Geographical location is insignificant Language barriers are being removed Digital products do not have normal wear and
tear
Competition in the Internet Ecosystem [4]
EC supports efficient markets and could result in almost perfect competition with these characteristics: Many buyers and sellers must be able to enter the
market at no entry cost Large buyers or sellers are not able to individually
influence the market The products must be homogeneous Buyers and sellers must have comprehensive
information about the products and about the market participants’ demands, supplies, and conditions
Porter’s Competitive Analysis
Porter’s competitive forces model applied to an industry views 5 major forces of competition that determine the industry’s structural attractiveness
These forces, in combination, determine how the economic value created in an industry is divided among the players in the industry
Such an industry analysis helps companies develop their competitive strategy
Porter’s Competitive Forces Model
Liquidity
Liquidity The need for a critical mass of buyers and
sellers• The fixed cost of deploying EC can be very high• Without a large number of buyers, sellers will not
make moneyEarly liquidity
Achieving a critical mass of buyers and sellers as fast as possible, before the market-maker’s cash disappears
Quality Uncertainty & Assurance
Quality uncertainty The uncertainty of online buyers about the
quality of products that they have never seen, especially from an unknown vendor
• Provide free samples• Return if not satisfied
– Microproduct—a small digital product costing a few cents
• Insurance, escrow, and other services
E-Market Success Factors
Product characteristics Type Price Availability of standards
and product information Industry
characteristics Brokers currently
necessary Intelligent systems may
replace brokers
Seller characteristics Consumers find sellers
with the lowest prices Low-volume, higher-
profit-margin transactions Consumer
characteristics Impulse buyers Patient buyers Analytical buyers
Contributors to e-market success
Electronic Catalogs
Electronic catalogs The presentation of product information in an
electronic form; the backbone of most e-selling sites
Evolution of electronic catalogs Merchants—advertise and promote Customers—source of information and price comparisons Consist of product database, directory and search capability
and presentation function Replication of text that appears in paper catalogs More dynamic, customized, and integrated
Classifications of E-catalogs
Dynamics of information presentation Static or dynamic
Degree of customization Ready-made or customized
E-catalogs allow integration of: Order taking and fulfillment Electronic payment Intranet workflow Inventory and accounting system Suppliers’ extranet Relationship to paper catalogs
Customized Catalogs
Assembled specifically for: A company An individual shopper
Customization systems can: Create branded, value-added capabilities Allows user to compose order May include individualized prices, products, and
display formats Automatically identify the characteristics of
customers based on the transaction records
Search Engines
Search engine A computer program that can access a
database of Internet resources, search for specific information or keywords, and report the results
Software (intelligent) agent Software that can perform routine tasks that
require intelligence
Search Engines, Intelligent Agentsand Shopping Carts
E-commerce users use both search engines and intelligent agents Search engines find products or services Software agents conduct other tasks
(comparisons)Electronic shopping cart
An order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop
Auctions
Auction A market mechanism by which a seller places an
offer to sell a product and buyers make bids sequentially and competitively until a final price is reached
Auctions deal with products and services for which conventional marketing channels are ineffective or inefficient
Limitations of Traditional Auctions
Traditional auctions are generally a rapid process
It may be difficult for sellers to move goods to the auction site
Commissions are fairly high
Electronic Auctions
Electronic auctions (e-auctions) Auctions conducted online Host sites on the Internet serve as brokers
offering:• Services for sellers to post their goods for sale• Allowing buyers to bid on those items
Many sites have certain etiquette rules that must be adhered to in order to conduct fair business
E-auctions [2]
Major online auctions offer: Consumer products Electronic parts Artwork Vacation packages Airline tickets Collectibles Excess supplies and inventories being
auctioned off by B2B marketers
Dynamic Pricing
Dynamic pricing Prices that change based on supply and
demand relationships at any given timeThe four major categories of dynamic
pricing are based on the number of buyers and sellers involved: One buyer, one seller One seller, many potential buyers One buyer, many potential sellers Many sellers, many buyers
Types of Dynamic Pricing
Dynamic Pricing [2]
One buyer, one seller uses Negotiation Bargaining Bartering
Price will be determined by: Each party’s bargaining power Supply and demand in the item’s market Possibly business environment factors
Dynamic Pricing [3]
One seller, many potential buyers Forward auction
• An auction in which a seller entertains bids from buyers
English auction• An auction in buyers bid on an item in sequence and the
price increases with time
Yankee auction• An auction of multiple identical items in which bidders
can bid for any number of the items offered, and the highest bid wins
Dynamic Pricing [4]
Dutch auction• Auction of multiple identical items, with prices starting
at a very high level and declining as the auction time passes
Free-fall (declining price) auction• A variation of the Dutch auction in which only one
item is auctioned at a time; the price starts at a very high level and declines at fixed time intervals, the winning bid is the lowest one when the time expires
English Auction, Ascending Price
Dynamic Pricing [5]
One buyer, many potential sellers Reverse auction (bidding, or tendering
system)• auction in which the buyer places an item for bid
(tender) on a request for quote (RFQ) system• potential suppliers bid on the job, with price
reducing sequentially• the lowest bid wins• primarily a B2B or G2B mechanism
The Reverse Auction Process
Dynamic Pricing [6]
One buyer, many potential sellers [2] ”Name-your-own-price” model Consumer-to-business (C2B) model
Many sellers, many buyers Double Auction
• Buyers and their bidding prices and sellers and their asking prices are matched, considering the quantities on both sides
Limitations of E-auctions
Possibility of fraud defective goods or receive goods/services without paying
Limited participation invitation only or Open to dealers only
Lack of security C2C auctions sometimes not done in an unencrypted
environmentLimited software
only a few “complete”or “off-the-shelf” market-enabling solutions
Impacts of Auctions
Coordination mechanismSocial mechanism to determine a priceHighly visible distribution mechanismA component in e-commerce
Bartering Online
Bartering An exchange of goods and services
• Bartering exchanges– Give your offer to intermediary
– Intermediary asses value of your product or service in ”points”
– Use “points” to buy what you need
• Bartering sites must be financially secure• Alternative to bartering is to auction surplus and
then use the money collected to buy items needed
Bartering Online [2]
E-bartering bartering conducted online, usually by a
bartering exchangeBartering exchange
a marketplace in which an intermediary arranges barter transactions
Online Negotiating
Online negotiation Electronic negotiation Usually done by software (intelligent) agents that
perform searches and comparisons Improves bundling and customization of products and
servicesDynamic prices can be determined by
negotiationNegotiated prices result from interactions
and bargaining among sellers and buyers Expensive items like cars and real estate Deal with nonpricing terms like payment method and
credit
Online Negotiating [2]
Three factors that facilitate negotiated prices Intelligent agents that perform searches and
comparisons Computer technology that facilitates
negotiation process Products and services that are bundled and
customized
Web 2.0 Mechanisms and Tools
Weblogging (blogging) Technology for personal publishing on the
InternetBlog
A personal Web site that is open to the public to read and to interact with
Often dedicated to specific topics or issuesWikilog (wikiblog or wiki)
A blog that allows everyone to participate as a peer; anyone can add, delete, or change content
Podcast A media file that is distributed over the
Internet using syndication feeds for playback on mobile devices and personal computers
As with the term radio, it can mean both the content and the method of syndication
Mashup A Web site that combines content data from
more than one source to create a new user experience
Web 2.0 Mechanisms and Tools [2]
Mobile Commerce (M-commerce)
Mobile computing permits real-time access to information, applications, and tools that, until recently, were accessible only from a desktop computer
Mobile commerce (m-commerce) e-commerce conducted via wireless devices
M-business the broadest definition of m-commerce, in which e-
business is conducted in a wireless environment
The Promise of M-Commerce
Mobility significantly changes the manner in which people and customers: Interact Communicate Collaborate
Mobile applications are expected to change the way we: Live Play Do business
The Promise of M-Commerce [2]
The PC-based Internet culture may change to one based on mobile devices
M-commerce creates new business models for EC, notably location-based applications
Many large corporations with huge marketing presence are transforming their businesses to include m-commerce-based products and services Microsoft AT&T Intel AOL-Time-Warner Sony
Impacts of E-Markets on Business Processes & Organizations
Product promotionNew sales channelDirect savingsReduced cycle timeCustomer service
Brand or corporate image
CustomizationAdvertisingOrdering systemsMarket operations
Impacts of e-markets on B2C direct marketing:
Analysis-of-Impacts Framework
Transforming Organizations
Technology and organizational learning To survive, companies will have to learn and
adapt quickly to the new technologies Corporate change must be planned and
managed New technologies will require new organizational
structures and approaches
Transforming Organizations [2]
The changing nature of work Driven by increased competition in the global
marketplace, firms are Reducing the number of employees and Outsourcing whatever work they can to countries where wages are significantly less
The upheaval brought on by these changes creates new opportunities and new risks; forces us to think new ways of about jobs, careers, and salaries
Transforming Organizations [3]
Digital-Age workers will have to be very flexible—truly secure jobs will be few, many will work from home
Digital-Age companies will have to prize its core of essential workers as its most valuable asset—empowering them and providing them with means to expand their knowledge and skill base
Redefining Organizations
New and improved product capabilities E-markets allow for new products to be created
and/or for existing products to be customized in innovative ways
Customer profiles and data on customer preferences—source of information for improving products or designing new ones
Mass customization enables manufacturers to create specific products for each customer, based on the customer’s exact needs
Redefining Organizations [2]
New business models E-markets affect individual companies,
products, entire industriesImproving the supply chain
Changes in the Supply Chain [1]
Changes in the Supply Chain [2]
Redefining Organizations [3]
Impacts on Manufacturing Manufacturing systems changing from mass
production lines to demand-driven, just-in-time manufacturing
Virtual manufacturing enables global manufacturing plants to run as though they were one in location
Build-to-Order—the biggest change in manufacturing will be the move to build-to-order systems
• Manufacturing or assembly will start only after an order is received
• Will change not only the production planning and control, but also the entire supply chain
Redefining Organizations [4]
Impacts on finance and accounting E-markets require special finance and
accounting systems—most are electronic payment systems complicated by legal issues and international standards
Executing an electronic order triggers back-office transactions
These activities must be efficient, synchronized, and fast so the electronic trade will not be slowed down
Redefining Organizations [5]
Impact on human resource management and training EC is changing how people are recruited,
evaluated, promoted, and developed EC also is changing the way training and
education are offered to employees• Online distance learning and virtual courses are
exploding• Companies are cutting training costs by 50 percent or
more New e-learning systems offer two-way video, on-
the-fly interaction, application sharing
Summary
A marketspace or e-marketplace is a virtual market that doesn’s suffer from limitations of space, time or borders
Types of B2C e-markets are storefronts and e-malls
Types of B2B e-markets are private and public e-marketplaces, which can be vertical (by industry) or horizontal
Auctions can be divided into forward and reverse auction
Exercise
How are mashups helpful to users?List and explain some of the benefits to
sellers or buyers of auctions!