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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)
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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
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Market relationships
Business-to-Consumers (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C) Peer-to-Peer (P2P) Mobile Commerce (M-commerce)
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Technology-based
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Business-to-Consumer Ecommerce
Most commonly discussed type Online businesses attempt to reach individual consumers Consumers will spend $65 billion in 2001.
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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
Consumer-to-Consumer Ecommerce
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
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Peer-to-Peer E-commerce
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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
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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
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Internet hosts are growing at a rate of 45% per year Extraordinary growth -- time to reach 30% US households
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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)
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First B2C arena (1981) 15 million in use throughout France 1993 first browsers 1995 first banner ads
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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 longterm successful exploitation of the technology
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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 6% of overall retail market With current growth rates, B2C will roughly equal the annual revenue of Wal-Mart in 2005
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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
E-Commerce I 1995-2000
For computer scientist and information technologists the early success of e-commerce was:
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
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E-Commerce I 1995-2000
For economists
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
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
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E-Commerce I 1995-2000
Friction-free commerce
information is equally distributed transaction costs are low prices can be dynamically adjusted to reflect actual demand intermediaries decline unfair competitive advantages are eliminated
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E-Commerce I 1995-2000
First mover
a firm that is first to market in a particular area and that moves quickly to gather market share occurs where users receive value from the fact that everyone else uses the same tool or product
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Network effect
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E-Commerce II 2001-2006
Crash in stock market values of Ecommerce 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
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E-Commerce II 2001-2006
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.
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Between 1998 and 2000 venture capitalists poured an estimated $120 billion into approximately 12,450 dot.com start-up ventures Investment bankers took 1,262 of these companies public in IPOS IPO shares were targeted to open around $15 per share, and it was not uncommon for them to be trading at $45 a share or more later the same trading day
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Technology: Infrastructure
development and mastery of digital computing and communications technology new technologies present businesses and entrepreneurs with new ways of organizing production and transacting business global nature of e-commerce poses public policy issues of equity, equal access, content regulation, and taxation Slide 1-39
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