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In this chapter, the learning objectives are: Classification of computers, computer network, introduction to internet, growth of internet, introduction to web and growth of web, internet and web gave birth to e- commerce, understand the evolution from internet to e-commerce, define e-commerce and describe how it differs from e-business,...
CSC 330 E-Commerce Teacher Ahmed Mumtaz Mustehsan GM-IT CIIT Islamabad Virtual Campus, CIIT COMSATS Institute of Information Technology T1-Lecture-2 E Commerce: Chapter-1 T1-Lecture-2 For Lecture Material/Slides Thanks to: Copyright © 2010 Pearson Education, Inc Objectives Classification of computers Computer network Introduction to internet, growth of internet Introduction to web and growth of web Internet and Web gave birth to e- commerce Understand the evolution from internet to e-commerce Define e-commerce and describe how it differs from e-business Identify and describe the unique features of e-commerce technology and discuss their business significance Describe the major types of e-commerce Evolution of e-commerce Discuss the origins and growth of e-commerce Identify the factors that will define the future of e-commerce Describe the major themes underlying the study of e-commerce Identify the major academic disciplines contributing to ecommerce T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 1-3 Computer classifications Mainframes: - term for very large computers - used to handle large amount of data or complex processes - main advantage is reliability Midrange: - medium sized, less expensive and smaller - usually a server Micro-computer: - work stations with computing capabilities - single-users systems linked to form a network T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 1-4 What is a network Series of points or nodes interconnected by communication paths Node is a connection point for transmitting data Network can interconnect with other networks to form global networks T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 1-5 Benefits of a network Facilitates resource sharing Provides reliability Cost effective Provide a powerful medium across geographical divide T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 1-6 when internet born Worldwide network of computer networks built on common standards Created in late 1960s (1969) when terminals were connected with mainframe computers The purpose was to create a net that can function even if one center is destroyed in a military attack ◦Network can continue to be functional even if some nodes are destroyed, as long as information can pass through other nodes Services include the Web, e-mail, file transfers, etc T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 1-7 In the 1980´s Personal computers or terminals were connected to a server The server was a mainframe, or connected to a mainframe computer The mainframe was connected to another mainframe of the company in another location via dedicated lines Only large companies could afford the expense and investment in equipment T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 1-8 Geographical Distance Local area network (LAN): small area, share a single server Metropolitan area network (MAN): a wider network, can bridge several LAN’s Wide area network (WAN): a broader area covered, can include several MAN’s T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 1-9 Network crossed boundaries Internet: a network of networks that covers the entire globe Connections across countries and continents made through dedicated fast lines A company may have one local network (LAN) in NY, which is connected to the Internet through a Regional network Well established in North America, Europe and certain Asian countries T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 110 E-COMMERCE TECHNOLOGIES A commercial History T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 125 The Growth of B2C E-commerce Figure 1.4, Page 25 SOURCES: eMarketer, Inc., 2009a; U.S Census Bureau, 2009b; authors’ estimates T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 126 The Growth of B2B E-commerce SOURCES: U.S Census Bureau, 2009a; authors’ estimates T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 127 Potential Limitations on the Growth of B2C E-commerce Expensive technology Sophisticated skill set Persistent cultural attraction of physical markets and traditional shopping experiences Persistent global inequality limiting access to telephones and computers Saturation and ceiling effects T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 128 Early Visions of E-commerce Computer scientists: ◦Inexpensive, universal communications and computing environment accessible by all Economists: ◦Nearly perfect competitive market and friction-free commerce ◦Lowered search costs, disintermediation, price transparency, elimination of unfair competitive advantage Entrepreneurs: ◦Extraordinary opportunity to earn far above normal returns on investment first mover advantage T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 129 Early Visionary introduced new terminologies 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 friction-free commerce : a vision of commerce in which information is equally distributed, transaction costs are low, prices can be dynamically adjusted to reflect actual demand, intermediaries decline, and unfair competitive advantages are eliminated first mover: a firm that is first to market in a particular area and that moves quickly to gather market share network effect: occurs where users receive value from the fact that everyone else uses the same tool or product T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 130 Assessing e-commerce Many early visions not fulfilled Friction-free commerce Consumers less price sensitive Considerable price dispersion Perfect competition Information asymmetries persist Disintermediation Smart people/ firms buy and sell goods using their expertise, end-user is still paying more First mover advantage Fast-followers often overtake first movers T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan 1Copyright © 2010 Pearson Education, Inc 31 Advantages and Disadvantages of Commerce Advantages: Electronic costs commerce can increase sales and decrease If advertising is done well on the Web, it can get a firm’s promotional message out to potential customers in every country Using e-commerce sales support and order-taking processes, a business can: Reduce costs of handling sales inquiries Provide price quotes E commerce has increased the purchasing and selling opportunities for buyers and sellers made negotiating price and delivery terms easy T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 132 Advantages and Disadvantages of Commerce Disadvantages: Perishable It products are difficult to sell online is difficult to: ◦Calculate return on investment ◦Integrate existing databases and transactionprocessing software into software that enables e-commerce Cultural and legal obstacles exist T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 133 Predictions for the Future Technology Prices will propagate through all commercial activity will rise to cover the real cost of doing business E-commerce retailers margins and profits will rise to levels all Cast of players will change ◦ Traditional Fortune 500 companies will play dominant role ◦ New startup ventures will emerge with new products, services Number of successful pure online stores will remain smaller than integrated offline/online stores Growth of regulatory activity worldwide Influence of cost of energy T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 134 Understanding E-commerce: Organizing Themes Technology: ◦Development and mastery of digital computing and communications technology Business: ◦New technologies present businesses with new ways of organizing production and transacting business Society: ◦Intellectual property, individual privacy, public welfare policy T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 135 Academic Disciplines Concern with e-commerce Technical approach Computer science Development of computer Hardware, software, and Tele-communication systems, standard of encryption and database design Management science Mathematical model of business processes, optimization of processes, opportunity to exploited Internet technology T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 136 Academic Disciplines Concern with e-commerce Behavioral approach Information systems Data mining, Search engine design and AI Economics Consumer behavior, pricing, and features of ecommerce market Marketing Brand development and extension, consumer behavior on web sites, using web technology target different segment consumer groups Management Entrepreneurial behavior and challenges faced by young firms Finance/accounting Valuation and accounting practices Sociology/ psychology Internet usage, the role social inequalities, use of web as a social network and group communications T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 137 Points of Discussions What techniques of privacy invasion are prevailing through social media? How you protect your privacy on the Web? Is e-commerce any different than traditional markets with respect to privacy? Don’t merchants always want to know their customer? What impact has created by OLX in our society? What type of risk is involved? Why you think investors today would be interested in investing in or purchasing e-commerce companies? Would you invest in an e-commerce company today? T1-Lecture-2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 138 The end chapter-1 Thank You ... 20 Types of E-commerce Classified by Market Relationship Business-to-Consumer (B2C) e-commerce online businesses attempt to reach individual consumers Business-to-Business (B2B) e-commerce. .. organizational boundaries T1 -Lecture- 2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc 116 The Difference Between E-commerce and E-Business T1 -Lecture- 2 CSC330 E Commerce... Consumer-to-Consumer (C2C) e-commerce consumers selling to other consumers T1 -Lecture- 2 CSC330 E Commerce Ahmed Mumtaz Mustehsan Copyright © 2010 Pearson Education, Inc121 Types of E-commerce