BowenAECM7000-1

NORTHCENTRAL UNIVERSITY ASSIGNMENT COVER SHEET

Learner: Anthony Bowen

ECM7000

Dr Kirby Scheer

Ecommerce Back to Basics

Assignment 1: E-commerce Business Models

Faculty Use Only Anthony, There were a few areas within the paper were the content could be expanded to give further depth and explanation. When writing out paragraphs it is important to make sure that each paragraph is complete and provides meaningful content. When paragraphs are only a sentence our two in length, this tends to be a little short and can be expanded with additional content. There were a few formatting items that persisted throughout the document. Overall the Turn It In report, which is also being uploaded had a low similarity index which shows that much of the content was original. The other content was cited and referenced, but make sure to spell the Laudons name properly. Please see comments throughout the document including the references.

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Kirby Scheer, Ph.D. 6.16 Content 2.58 Presentation 5 Writing 11/16/09

Running head: Ecommerce Business Models

Ecommerce Business Models Northcentral University November 11, 2009

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Business Changes Due To the Internet The World Wide Web (www) as it is known as has changed the traditional way business is conducted and information is accessed (Laundon & Traver, 2007). In the mid-1990s, we saw the birth of the online giants, Google, AOL, Intel, Yahoo and Microsoft and the way their technology allowed companies to embrace change online. This change that the Iinternet created, forced companies to embrace the new Iinternet business model online and move their products and services online to reach customers directly. The internet features of a universal technology standard based on hyper text mark up language (HTML) allowed the capability for companies (Koerweroerwer, 2007), to post video, audio and text marketing messages to interact with the consumer to sell goods and services directly to them. This was the birth of ecommerce, as stated by Laundon & Traver (2007) e-commerce is the digital commercial transactions between organizations to organizations (B2B) and individuals (B2C). It involves the buying and selling of goods and services online. Because of the internet we have been able to watch steaming videos online with YouTube, purchase online downloaded music from iTunes and the all purpose Blackberry communication device (Koerweroerwer, 2007).
Comment [KS2]: This author is actually Laudon, not Laundon. This should be consistent throughout the document. Comment [KS1]: The term Internet is technically capitalized. This should be consistent throughout the document.

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Electronic commerce allows people to search for products online from various companies that sell goods and services and have no geographic boundaries and a global reach online. It allows you to conduct business virtually around the clock online. In many cases e-commerce technologies lower the cost of production and distribution of goods and services as seen within the travel industry. The last fifteen years, people have been able to do research and gather information online via various search engines, working professionals have streamlined communication with using email to send and receive documents with colleagues and clients, (Yu & Hui, 2007). People were able to buy books, purchase hotels, vacations packages, car rentals and airfare online. Having worked in the travel industry for the last 20 years, I have seen first hand the impact of the internet on the travel industry and how is has changed the travel industry and the way traditional business was conducted. In cases it has eliminated the middle man and folded companies overnight that were slow to embrace the internet. This was very common within the travel industry as mom and pop travel agencies started to loose their customers and market share to online travel account start up giants such as Priceline, Orbitz, Travelocity, Cheap Tickets and Hotels.com and had to shut down overnight. All of the low cost air carriers have cut out the need for the traditional travel agency to sell their products as they move to an online direct channel to reach customers. JetBlue, Frontier, Spirit Airlines, Air Tran, Virgin America and TED by United have all entered the market over the last 9 years and sell their products directly online to consumers. Types of Ecommerce

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They are four types of ecommerce, according to Laundon & Traver (2007). These can be grouped into four categories, business selling to business (B2B), business selling to consumer (B2C), consumer selling to business (C2B), and consumer selling to consumer (C2C). Business to business (B2B) companies are those companies that purchase goods and services online from each other, such as wholesalers and retailers, government and vendors. Considering most complete paragraphs are four five sentences in length, how can additional content be added to complete the above paragraph? Electronic Commerce (B2C) is constantly growing and evolving as we have seen online retailers, online travel, online supermarkets, electronics, household goods and Christmas shopping all done on a business to consumer basis. Business to consumer (B2C) or the end user has become the most common type of transaction done online today (Laundon & Traver (2007). This is all due to the widespread availability of goods and services online and the ease of conducting online transactions (Huang, Liang, Lai & Lin, 2009). With the introduction of high speed internet, a lot of strictly ecommerce business model have evolved because shopping online is done with ease. Online universities are growing and traditional universities are embracing this model. Harvard, Stanford, NYU and eCornell have all introduced online certificate and courses to reach a global audience. Online dating sites, online gambling and online banking and paying bills online has become a norm for people. The company I recently worked for was a European Tour Operator that sold vacation packages through two online business channels. Their business to business, channel was sold to travel agents who were the retailers and the travel agents booked the vacation packages via the

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travel agent booking engine online for their customers and were then paid a commission. This was their largest distribution channel. The other online distribution channel was the business to consumer where the clients could book their vacation packages directly on the company website and it was their fastest growing distribution channel. This was all done seamless on a secured website with the ability to make credit cards payments online as well. The travel and tourism industry have embraced ecommerce to become the market leader in B2C business to consumer transaction and causing the entire travel industry structure to change (Werthner & Ricci, 2004). One of the changes that the recent company I worked for had implemented was to develop a client relations management system that would integrate the online brochure distribution system with an integrated business to business to consumer (b2b2c) sales strategy approach. Consumer selling to consumer (C2C) is seen on EBay, Craigslist and online classifieds sites that allows consumers to buy and sell auction goods online utilizing third party payment systems and shopping carts. Consider expanding this paragraph. There are some good examples of Websites given that sell C2C, but why have these Websites grown in popularity? The slow economy and the influx of people that are looking for work and have posted their resume on various companies job sites, is a good example of the consumer to business (C2B) model. It is very clear the all of the types of ecommerce are used today in the business world and have clearly changed the traditional way we do business. What would an example of these types of sites be? Ecommerce I

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The Ecommerce I era, was formally introduced in 1995 and ended in March of 2000 with the collapse of the dot.com companies formed because of billions of dollars in venture capital equity funding (Laundon & Traverse, 2007). This was the era where everyone was embracing the internet as the technology of the future. Companies wanted to take advantage of the global market reach and expand their customer base. The stock market had started to invest heavily in the blue chip stocks as thousands of technology based companies formed and went public to trade their stocks for quick cash (Lowenstein, 2004). Search engine companies were formed to embrace the technology boom such as Lycos, Netscape, Yahoo, Google and other search engine providers were formed. It was the era for the tech entrepreneur and the perfect market for start up funding for companies that had a pure online strategy. There was no oversight or governance with regards to venture capital financing and the lavish spending that occurred. A lot of start up companies with funding ran out of monies before the projects were completed. The same was happening in the travel industry as start up venture capital firm, Far & Wide Vacations started to buy up various travel companies. Their main objective was to move all of the travel companies into the pure online world to sell vacation packages. Some of the companies purchased were Africa Travel Inc, Swain Australia Tours, Regina Tours, Central Holidays, Lion World Travel, Grand European Tours, among others. They invested heavily into technology to bring these companies product online and were unable to get a return on investment. This lavish spending and investing was eventually going to create a bubble that would burst as it did in March 2000. The stock market crashed when the unprofitable tech companies

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that went public and were not generating any revenue, however their stocks were selling at high rates (Ennis, 2009), caused investors to start to dump their stocks. As the blue chip stocks started to fall, investors scramble to sell off their tech stocks, causing a massive panic and eventually the collapse of the stock market. It was officially nicknamed the, dot. com bubble (Ennis, 2009), as internet stocks fell and companies that were not generating any revenue folded because they did not have any cash flow to sustain them. So they defaulted on the loans and were unable to payback the investment monies and caused the stock market crash and the end of the Ecommerce I era. The spacing between different paragraphs should be a double space not more than.

Ecommerce II After the dust settled from the dot.com bubble in 2000, the following year companies and investors alike started to reorganize e-commerce companies and look at their value. According to Laudon, & Traver (2007), it was the e-commerce II era between 2001 and 2007 where investors and companies were business driven, emphasis was on large traditional firms as opposed to pure online and venture capital was focused on traditional financing. They looked at mixed, clicks and bricks strategies, where traditional companies were involved in e-commerce as part of their sales strategy. This was very common for the travel industry as most companies started to embrace they internet as a means to brand their companies and create a market awareness of their goods and services.

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My previous company, the Travel Corporation was able to focus on their strength of selling their products through the travel agencies brick and mortar channel and at the same time started to move their brochure and tour products online for ease of access and product awareness. My responsibility as the Ecommerce Director was to move three brands Trafalgar Tours, Contiki Holidays and Insight Vacations products online to promote and brand them. The focus was to increase the customer and travel agency base to drive the calls into the call center, with a clicks and bricks strategy of promoting online but utilizing the call center for the bookings. While this was occurring the company decided to build a global online booking engine and affiliate program to take direct bookings from the business to consumer channel and adapt to the changes in the consumers buying habits. The company strategy was to focus on their strength of the agency distribution booking channel and looking at penetrating the large online agency accounts, Priceline, Orbitz and Travelocity that were moving huge market shares for travel as opposed to the traditional brick and mortar travel agency. A strategic mix market model was developed to accomplish this goal to provide the web services for booking capability and content availability online to penetrate this new market. Conclusion The ecommerce business environment today, will allow society to interact with various cultures, countries and people with the move towards globalization. As geographic boundaries fall, organizational goals and visions will change with regards to sales and marketing initiatives that are focused on the global customer and global competition. Business leaders must provide practical support providing positive workable ideas, plans and solutions in order to bring balance

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to organizations as technology of ecommerce will bring competition and intertwine with traditional brick and mortar business. Companies need to understand that E-commerce will create and become a major element of competitive advantage in the modern business environment (Radovilsky & Hegde, 2004). The way we do business today has changed when compared to 15 years ago as the birth of the internet has changed the business transaction between, buyers and sellers. E-commerce will be part of most companies business strategy, mobile e-commerce with smart phones will be more utilized to interact with customers and the social media trends of Facebook, MySpace and Twitter. Becoming aware of your organization's culture and adapting to change can mean the difference between success and failure in today's fast-changing e-commerce business environment. This was a good concluding paragraph. The Internet has certainly made business move faster.
Formatted: Centered

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References Ennis, R (2009).End of an Era Financial Analysts Journal, 65(1), 6-8 Retrieved from Business Source Elite database

Huang, C, Liang, W, Lai, Y, & Lin, Y. (Jan 2010). The agent-based negotiation process for B2C e-commerce. Expert Systems With applications, 37, 1 p 348(12) Retrieved November 10, 2009, from Academic OneFile via Gale:

Koerweroerwer, S (2007). The top 10 most significant ecommerce developments. Information Today, 24(8), 42 Retrieved from Business Source Elite database

Laudon, K. C. & Traver, C.G (2007). E-Commerce: Business,Technology, Society, 4nd Edition, Upper Saddle River, NJ: Pearson/Prentice Hall, p 2-37

Lowenstein, R (2004) Origins of the crash: the great bubble and its undoing. New York, NY: Penguin Press, Pg 120-124

Pavlou, P, & Fygenson, M (2006).Understanding and prediction electronic commerce adoption: An extension of planned behavior. MIS Quarterly, 30(1), 115-143. Retrieved from Business Source Elite database

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Radovilsky, Z , & Hegde, V. G, (March 2004). Factors influencing e-commerce implementation: analysis of survey results. Journal of Academy of Business and Economics,4,1 p 29(9). Retrieved November 10, 2009, from Academic OneFile via Gale:

Werthner, H, & Ricci, F,(2004). E-commerce and Tourism: Communications of the ACM, 47(12), 101-105. Retrieved from Business Source Elite database

Yu, C , & Hui,D (2007). Welcome to the World of Web 2.0: CPA Journal, pp.6-10 Retrieved from Business Source Elite database