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Chapter 9

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imissyou419's version from 2017-04-17 23:44

Section

Question Answer
E-commercethe buying and selling of goods and services over public and private computer networks, subset of ebusiness
Merchant companiescompanies that buy and resell their goods - take title to the goods they sell; SELL SERVICE THEY PROVIDE (vs. nonmerchant, they sell service provided by others)
Nonmerchant companiesarrange for the purchase and sale of goods without ever owning or taking title to the goods (i.e. auctions, exchanges, or clearinghouses); sell services provided by others
What are the 3 types of merchant companies1. B2C, 2. B2B, 3. B2G
Business-to-consumer (B2C)e-commerce sales between supplier and a retail customer - the information system has a web storefront where customers can manage their orders
Business-to-business (B2B)e-commerce sales between companies
Business-to-government (B2G)e-commerce sales between companies and government organizations
E-commerce auctionsmatch buyers and sellers by using an e-commerce version of a standard auction; e.g. eBay
Clearinghousesprovide goods and services at a stated price and arrange for the delivery of goods, but they never take title; e.g. Amazon.ca
matches seller and buyer and take payment from buyer to seller
Electronic exchangesexample of clearinghouse that matches buyers and sellers (i.e. Toronto Stock Exchange, priceline.ca)
Disintermediationremoval of intermediaries between parties
Intermediationwhen new parties insert themselves into the distribution chain; e.g. Apple became a significant actor in retail of music and media, travelocity.ca, expedia.ca, priceline.ca
Price elasticitymeasures how much demand rises or falls with changes in its price; shape of the price elasticity curve is the customer's willingness to pay a particular price
Types of nonmerchant companiese-commerce auctions, clearinghouses, electronic exchanges
Issues of e-commercechannel conflict, price conflict, logistic expense, customer service expense, showrooming, taxation
Channel conflictdifference in the way the produce or service are delivered or supported by different sales channels e.g. if products sold online are priced lower than those sold in traditional stores or if they have a different level of after sale support
manufacture sells B2G, but when it sells B2G that had previously purchased from a computer retailer, retailer resent competition and may drop the manufacturer
result: manufacturer loses more sales in the end
Price conflictmanufacturer able to offer a lower price and still make profit
existing channels object, retailer still will not want a lower price to be readily known via web
result: competition for sales reduce the retailer's ability to compete
Logistic expenseentering and processing orders in small quantities (vs. shipping multiple units to a retailer all at once)
average logistic expense per item will be higher for goods sold via ecommerce
result: per unit profit may actually decrease due to increased logistical costs
Customer service expenseincrease for manufacturers that use ecommerce to sell directly to consumers
required to service to less sophisticated users and on a 1-1 basis,
result: service requires additional training and expense
Showroomingcustomer learns about or tries a product or service in the retail store while competing the sales transaction at the low-cost internal sales channel of another retailer
result: store pays sales people, but no direct sale results, physical store incurs cost without realizing a profit
Taxationtraditional sales are taxed on location of sale
B2C sales: how to tax? physical goods could be subject to duties but what about software or services?
result: reduced revenue for the government
Social networka structure of individuals and organizations that are related to each other in some way
Social networkinga process by which individuals use relationships to communicate with others in a social network
Physical capitalinvestment of resources for future profit e.g. investment in physical resources such as factories, machines, manufacturing equipment, etc
Human capitalinvestment in human knowledge and skills for future profit e.g. taking this class
Social capitalinvestment in social relations with the expectation of returns in the market place e.g. business function, LinkedIn or Facebook -
social capital adds value with
information (relationships in social network can provide information about opportunities, ties, alternatives, problems),
influence (influence decision markers in one's employer or in other organizations critical to your success),
social credentials (critical personnel standing with you), and
personal reinforcement (reinforce your professional image and position in an organization)
How do you gain more social capitaladding more friends, strengthening relationships with people who control resources important to you
The importance of weak relationshipsweak relationships contribute most to the growth of social networks; weak links add the greatest number of new connections to your social network
3 ways social network is enabled by IS/IT1. improved search capabilities,
2. reduction in the trade-off of richness and reach (keep track of many more people and enhance personalization),
3. network effects
Web 2.0the integration and interaction of products and services such as smartphones, user-created content, social networking and dynamic marketplaces, not as a specific technology;
companies such as Google, Amazon, eBay exemplify Web 2.0,
they offer software as a free service as opposed to selling it;
instead of software licensing fees, they rely on advertising or other revenue that result as users employ the software as a service (revenue from use);
applications are thin-clients, frequent releases;
does not require advertisement to be successful
viral marketing
produce value increases with uses and users
organic interface, mash ups encouraged
participation (user created contents, crowdsourcing)
some rights reserved
Traditional processingMicrosoft, Oracle, SAP;
software as a product
infrequent, controlled releases
business model relies on sale of software licenses
extensive advertising
product value fixed
controlled, fixed interface
publishing
all rights reserved
Viral marketingvendors wait for users to spread news to one another
User-generated contentrefers to the website content that is contributed by users e.g. reviews, crowdsourcing (participate in creation of product specifications, designs, complete products), kickstarter
more users and content, greater value
Crowdsourcingpractice of obtaining needed service, idea, or content by soliciting contributions from a large number of people, especially from an online community; combines social network, viral marketing, and open source design, saving considerable cost while cultivating customers; crowd performs classic in-house market research and development and does so in such a way that customers are set up to buy
Mashupa webpage or application that uses content from more than one source to create a single new service displayed in a single graphical interface i.e. Google's My Maps; control is necessary to prevent mashups in some industries such as banking (to ensure that credit card transactions are not mashed up with public web applications such as Maps)
E-commerce market consequencesgreater market efficiency (disintermediation, increased info on price and items), knowledge of price plasticity (losing-bidder auction prices, price experimentation, more accurate information obtained directly from customers)
memorize

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