CHAPTER 8
E-COMMERCE
Hossein BIDGOLI
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Chapter 8 E-Commerce
learning outcomes
LO1 Define e-commerce and describe its advantages,
disadvantages, and business models.
LO2 Explain the major categories of e-commerce.
LO3 Describe the business-to-consumer e-commerce
cycle.
LO4 Summarize the major models of business-to-
business e-commerce.
LO5 Describe mobile- and voice-based e-commerce.
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Chapter 8 E-Commerce
l e a r n i n g o u t c o m e s (cont’d.)
LO6 Explain two supporting technologies for e-
commerce.
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Chapter 8 E-Commerce
Defining E-Commerce
• E-business
– Activities a company performs for selling and buying
products and services, using computers and
communication technologies
• E-commerce
– Buying and selling goods and services over the
Internet
– Builds on traditional commerce by adding the
flexibility that networks offer and the availability of
the Internet
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Exhibit 8.1 Michael Porter’s Value Chain
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Chapter 8 E-Commerce
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Exhibit 8.3 Business-to-Consumer E-Commerce
Business-to-Consumer E-Commerce
Major Categories of E-Commerce
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Chapter 8 E-Commerce
Business-to-Business E-Commerce
• Involves electronic transactions between
businesses
• Electronic data interchange (EDI) and electronic
funds transfer (EFT)
• Fastest growing segment of e-commerce
• Uses:
– Purchase orders, invoices, inventory status, shipping
logistics, business contracts, and other operations
• Example:
– Walmart
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Chapter 8 E-Commerce
Consumer-to-Consumer E-Commerce
• Involves business transactions between users
• Online classified ads:
– Craigslist.org
• Online auction sites:
– eBay.com
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Chapter 8 E-Commerce
Consumer-to-Business E-Commerce
• Involves people selling products or services to
businesses
• Example:
– Creating online surveys
• Search for sellers of a product and services
– Priceline.com
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Exhibit 8.3 Major Activities in B2C E-Commerce
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Chapter 8 E-Commerce
Seller-Side Marketplace
• Most popular B2B model
• Sellers who cater to specialized markets come
together to create a common marketplace for
buyers
• E-procurement
– Enables employees in an organization to order and
receive supplies and services directly from suppliers
– Can also automate some buying and selling activities
• Major vendors of e-commerce and B2B solutions
include I2 Technologies, IBM, Oracle, and SAP
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Chapter 8 E-Commerce
E-Procurement at Schlumberger
• Schlumberger
– Oil field services provider
• E-procurement system for order processing
– Has reduced the cost per order by streamlining
paperwork
– Replaced a centralized electronic data interchange
(EDI) procurement system
– Easy-to-use interface
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Chapter 8 E-Commerce
Buyer-Side Marketplace
• Buyer, or a group of buyers, opens an electronic
marketplace
– Invites sellers to bid on announced products or
requests for quotation (RFQs)
• Buyers can:
– Manage the procurement process more efficiently
– Lower administrative costs
– Implement uniform pricing
• Large corporations, such as General Electric or
Boeing
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Chapter 8 E-Commerce
Web Marketing
• Uses the Web and its supporting technologies to
promote goods and services
• Terms:
– Ad impression
– Banner ads
– Click
– Cost per thousand (CPM)
– Cost per click (CPC)
– Click-through rate (CTR)
– Cookie
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Chapter 8 E-Commerce
Summary
• Michael Porter’s value chain, compared e-
commerce with traditional commerce
• Major e-commerce business models
• Main categories of e-commerce
• B2C e-commerce business cycle
• B2B e-commerce business models
• Mobile and voice e-commerce
• Supporting technologies
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