E-commerce in the popular sense can be defined as the use of the Internet and the Web to conduct business transactions. A more technical definition is that e-commerce involves digitally enabled commercial transactions between and among organizations and individuals. E-commerce differs from e-business in that no commercial transaction (an exchange of value across organizational or individual boundaries) takes place in e-business. E-business is the digital enablement of transactions and processes within a firm and therefore does not include any exchange in value. E-commerce and e-business intersect at the business firm boundary, at the point where internal business systems link up with suppliers, for instance; e-business turns into e-commerce when an exchange of value occurs across firm boundaries.
The unique features of e-commerce technology include:
Possible examples include:
One major limitation to the growth of e-commerce is the price of PCs which at present excludes half the population of the U.S from home participation. Another limitation is the need for many people to learn a complicated operating system, at least in comparison to other technologies such as the television or the telephone. People must also learn a set of sophisticated skills to make effective use of the Internet and e-commerce capabilities. Another limitation is the unlikelihood that the digital shopping experience will ever replace the social and cultural experience that many seek from the traditional shopping environment. Finally, persistent global income inequality will exclude most of the world’s population, who do not and probably will not in the foreseeable future, have access to telephones or PCs. Social and cultural limitations are likely to the tougher to overcome than technological limitations.
The major differences between E-commerce I and E-commerce II are:
1. What is a business model? How does it differ from a business plan?
A business model is a set of planned activities (business processes) that are designed to result in a profit in the marketplace. A business plan on the other hand is a document that outlines the details of the business model.
2. Would you say that Amazon.com and Half.com are direct or indirect competitors?
Amazon.com and Half.com are direct competitors because they sell products and services that are very similar and they sell to the same market segment. They both sell books, music, computers and software, games and toys, electronics, tools, movies and DVDs, and camping equipment. Although Half.com is a consumer-to-consumer business model while Amazon.com is a business–to-consumer business model, and Half.com is selling new, overstocked, remaindered, and used products at discounted prices, the two compete for essentially the same market segment of consumers. Half.com may attract the bargain hunter variety of shopper who would not stop at Amazon first, but it is still essentially the same market segment.
3. Why is it difficult to categorize e-commerce business models?
It is difficult to categorize e-commerce business models because the number of models is limited only by the human imagination and new business models are being invented daily. Even within the broad-based generic types, there are overlaps, and fundamentally similar business models make appear in more than one. The type of e-commerce technology used can also affect the classification of a business model. Also, some companies may employ multiple business models. For example, e-Bay is essentially a C2C marketplace, but also functions as a B2C market maker and in addition has an m- commerce business model.
4. What are the major differences between virtual storefronts, such as marthastewart.com, and clicks and bricks operations such as walmart.com.? What are the advantages and disadvantages of each?
The major difference between virtual storefronts and clicks and bricks operations is that virtual storefronts do not have any tie to a physical location. The major advantages of the virtual storefronts are that they have low barriers to entry into the Web e-tail market and that they do not bear the costs associated with building and maintaining physical stores. The disadvantages are that they must build a brand name from scratch, quickly, and become profitable with no prior brand name or experience, which can be very difficult. The major advantages of the clicks and bricks operations are that they have an already established brand name, an established customer base, an established sales force, and the resources to operate on the very thin margins associated with the retail industry. It is also much less expensive for them to acquire new customers than it is for the virtual storefronts. The major disadvantages of the bricks and clicks firms are that they face new competition in an extremely competitive environment from new firms who may have more expertise at building credible Web sites, and who can focus exclusively on building rapid response order systems.
5. How have the unique features of e-commerce technology changed industry structure?
The unique features of e-commerce technology have changed industry structure first of all, because the ubiquity of e-commerce has created new marketing channels and expanded the size of the overall market. The global reach of e-commerce has changed industry structure by lowering barriers to entry, but at the same time expanding the market. The costs of industry and firm operations have decreased, enabling global competition. The universal standards of e-commerce have also lowered barriers to entry and intensified competition, but firms face less steep costs for computing and communication enabling broad-scope business strategies. The richness of e-commerce reduces the strength of distribution channels, decreases firms’ reliance on traditional sales forces, and helps them to develop better post-sales support strategies. Firms can use the interactive properties of e-commerce to develop differentiation strategies and customization techniques to reduce the threat from substitutes. Interactivity and personalization and customization techniques also decrease firms’ reliance on traditional sales forces, helping them to reduce operational costs. Furthermore, because they can use personalization and customization techniques, some firms are successful in differentiating themselves from the competition thereby raising the barriers to entry for potential competitors. The information density of e-commerce weakens powerful sales channels, shifting some bargaining power to consumers, but also lowers the operational costs for firms associated with obtaining, processing, and distributing information about suppliers and consumers.
1. Compare and contrast intranets, extranets and the Internet as a whole.
An intranet is a TCP/IP network located within a single organization whose function it is to provide the communications and information processing needs for the organization. An extranet, on the other hand, is formed when organizations allow outsiders to access their internal TCP/IP network. For example, a company may permit suppliers to gain access to their intranet in order to view information such as production schedules or inventory allotments so that the suppliers will know when the company will need to restock. It is the exact same technologies that enable the operation of the Internet which also allow private or governmental organizations to operate their own internal networks and to create extranets to allow for the exchange of information across organizational boundaries. All of the protocols that are used on the Internet are also used on private intranets and extranets, and all applications available on the Internet are compatible with intranets and extranets.
2. What are the four major limitations of today’s Internet?
The four major limitations of today’s Internet are bandwidth, quality of service, network architecture, and language development. There is insufficient bandwidth capacity throughout the backbone, the metropolitan switching centers, and most importantly to the houses and small businesses at the end of the information pipeline. Due to insufficient bandwidth and the circuitous nature of packet switching, video and voice traffic suffers from latency which causes these types of messages to arrive with noticeable delays and a jerky quality. Because today’s Internet uses “best efforts” quality of service, each packet is provided with the same level of service. This means that all packets traveling through the communications system are treated the same no matter who is sending them or what type of message they are. Network architecture restrictions also limit the performance of the Internet. A thousand requests for the same file result in a server having to download the file one thousand times rather than being able to transmit it once to all one thousand computers at the same time. This slows down network performance. Finally, HTML, the language for displaying Web pages, has proven to be insufficient for displaying rich documents such as database files, business documents and graphics.
3. What are some of the major technological advancements that are anticipated will accompany Internet II? Define and discuss the importance of each?
The major technological advancements that are anticipated to accompany Internet II are first, a bandwidth explosion fueled by fiber optic technology, which will allow the Internet to move from narrowband to broadband digital service. Second, wireless Web and 3G technologies, which will allow the Internet to move from cable-based stationary service to mobile service. Third, wireless LANS, which will allow laptop computers to be connected to other computers and to one and other as well as to other digital devices including home appliances, vending machines, and remote sensors. Fourth, new Internet appliances that will make it possible to connect nearly all the electronic devices in our lives to the Internet and to private intranets. These new Internet appliances will include thin client computing devices (PCs without hard drives), which rely totally on the Internet server to handle all information processing. Lightweight, portable, full-function PCs and handheld devices will be able to activate and deactivate virtually any device that can be connected to the Internet. This is expected to include home appliances such as TVs, stereos, telephones, games, security systems, cars and Net PCs, which will be interconnected so that they can all be controlled from one source.
4. Name and describe five services currently available through the Web.
Five services that are currently available through the Web are:
a. E-mail: The most widely used application on the Internet allows typed text messages and file attachments to be transferred from one Internet user to another.
b. Search engines: Web sites or a service within a site that enables users to locate information by matching keywords that the user provides to a list of documents containing those words or the closest matches.
c. Intelligent agents or software robots: Software programs that gather and/or filter information on a specific topic and provide a list of the results. For example, intelligent agents have been written to search through e-mail messages for certain keywords or simple concepts or phrases.
d. Instant messaging: A software program that allows typed text to be displayed on a recipient’s computer almost instantaneously, making real-time conversations between two people possible on the Web.
e. Chat: Software that enables several people or even a group of people to carry on a live conversation.
5. What are at least three new services that will available through the next generation of the Internet?
New services that will be available through the next generation of the Internet include:
a. Internet telephony: IP telephony is a general term for technologies that use Voice Over Internet Protocol (VOIP) and the Internet to send voice, fax, and other forms of audio communication over the Internet. The major advantage is that long distance charges are avoided, but packet-switching has often resulted in poor voice quality. In Internet II, with new high bandwidth connections, these quality problems will diminish and the use of VOIP will increase significantly.
b. Digital Libraries: As bandwidth capabilities increase, the distribution of software applications by Application Service Providers (ASPs) will also increase. Libraries of software applications will become commonplace as businesses and individuals decide to rent software for a subscription fee instead of buying it.
c. Distributed Storage: ASPs can both process and store data, distributing it to many servers instead of warehousing it on just one server. Pieces of data can now be extracted from various sources, analyzed, and the results reported in a manner determined by the user. This process used to be difficult for computers but is becoming commonplace today.
d. Distance Learning: In Internet II many limitations of distance learning to date will be overcome as increased bandwidth makes two-way real time communications between students and instructors possible. ASPs can develop software that will merge and synchronize audio, video, and voice and distribute it to schools thereby reducing the data load on the college or university’s computing system.
e. Digital Video: Future digital video networks will be able to deliver better than broadcast quality video over the Internet. Sales presentations and demonstrations will be presented using interactive video and companies will be able to develop interactive customer support services. News services and other media outlets on the Web will likely also be radically transformed by digital video applications
f. Video Conferencing: Few companies or universities have made use of videoconferencing to date because the cost of the equipment and the rental fees were prohibitive, but Internet II will reduce the costs and increase the quality making it a cost effective and efficient way for disparate workers to hold long distance meetings.
g. Tele-immersion: This merger of virtual reality and videoconferencing allows participants to see each other and collaborate on visual projects. Researchers believe that high-speed connectivity and collaborative design techniques will allow customers and vendors to work together to develop new products online, dramatically reducing the time it takes to develop new products.
h. M-commerce applications: In Internet II a wireless device will have the combined capabilities for voice, data, images, audio, and video, allowing the development of many sophisticated mobile commerce applications.
Evaluate Web Searching Engines.
Choose at least three searching engines such as www.google.com ,www.msn.com and www.lycos.com . Search for a keyword “chair” using the three engines and compare the results.
Suppose you are searching for a chair to sit on, that is, furniture.
a. Which searching engine gives the best result based on what you expected to find, where it appears for instance; “at the 3 rd line in the first page.”
b. How do the results differ from each other? Where do the relevant items you appear in the result pages?
c. Let’s assume that you are not satisfied with one of the search engines because the results are unsatisfactory. How can you improve the search engine to improve the search results? What kind of functions can be added to the search engine?
d. Do the search engines provide any information (or knowledge) to help you to understand the context of your query?
If so, please indicate the mechanisms provided.
If not, what mechanisms would you suggest?
You may want to read the papers on WebSifter found on the E-Center for E-Business Web Site.