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E-marketplaces by domainlawyer

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									Drivers and barriers to ebusiness adoption

Lecture 2 first part 16.01.08 Turid Hedlund
16.1.08 E-business Turid Hedlund

The digital economy
An economy based on digital technologies (IT) including digital communication networks (internet, intranets and extranets etc.)  A global platform where people and organizations can interact, communicate, collaborate and search for information


Characteristics of digital economy
Digitizable products, databases, news, information, TV, electronic games, software  Deliverable in digital form over the world  Companies, organizations and people conduct financial transactions via networked computers and mobile devices.


Characteristics of digital economy cont.
Microprocessors and networking capabilities embedded in physical goods e.g. automobiles  Information is transformed to a commodity  Knowledge is codified  Work and production are arranged in new and innovative ways


Digital enterprice


Brick and mortar (organizations that perform their primary business off-line, sellig physical products or services by physical agents)





Click and mortar (organizations that conduct some e-business activities, usually as an additional marketing channel) Virtual (pure-play) organizations (organizations that conduct their business activities solely online)

Drivers for consumer to adopt to a digital environment (Internet)
Rich content  Customisation  Convenience  Choice  Cost reduction

(Chaffey 2007)

Barriers of consumers to Internet adoption
No percieved benefit  Lack of trust  Security problems  Lack of skills  Cost of technology

 (Chaffey 2007)

Opportunities for e-business


Reach
 Potential

number of customers is incresed  Large number of categories of products


Richness
A

characteristic of the information provided through internet of links with partners (Google)



Affiliation
 Effectiveness
 (Chaffey 2007)

Risks with e-business







Web site voulnerability – they might collapse because of sudden peaks of visitors or hackers penetrating the security of the system Marketing through e-mail might annoy customers, breaking privacy and data protection laws Problems with fulfillment of orders Customer enquiries don’t reach the right person and might be ignored


(Chaffey 2007)

The digital environment
Ubiquity/ Global reach




Internet and Mobile technologies available everywhere, at home, at work and anytime The technology is reaching across national boundaries.


What about language borders?



The market space of the Internet is worldwide


As soon as a popular site appears in one country similar sites appear in other countries

Mobile telecommunications

 

Gradual merger of portable computing and mobile phones Mobility changes the ways people interact, communicate and collaborate Still barriers to widespread adoption of mcommerce

IT-security
Virus checkers  Firewalls  Encryption of monetary and sensitive transactions


Computer literacy

Interactivity
The technology works through interaction with the user  An interactive web site provides opportunities for the customers and the business to communicate and share information


References
Chaffey, D. (2007). E-business and E-commerce Management. Harlow: Prentice Hall



Exercise
 You

are employed by a company that may wish to introduce e-commerce, present reasons for change to a board meeting are in the same meeting. Present arguments that points out the barriers to adoption of e-commerce by the customers

 You

E-marketspaces following Turban (2006) chapter 2
Lecture 2 Second part Turid Hedlund
16.1.08 E-business Turid Hedlund

From physical market to emarketspace
Changes
    

Information richness Lower information search costs for the buyers Temporal separation of time of purchase and time of ownership (physical products) Temporal proximity of time of purchase and time of ownership (digital products) Buyer and seller can be in different locations

Marketspace components and participants


Customers
 People

using and surfing the web  Organisations are the largest consumers about 85% of EC activities
 

Sellers
 Storefronts  Digitised

on the web, or other marketplaces

Products and services
products and services and physical

products,

Marketspace components cont.



Infrastructure
 Hardware,

networks, software etc..

Front end
 The

portion of a seller’s processes through which consumers interact that support order-taking, payment processing and delivery



Back end
 Activities

Marketspace components cont.


Intermediaries
A

third party that operates between sellers and buyers



Exercise
 Define

and give examples of digital products

Types of e-marketplaces


Electronic storefronts
A

single companys website where products and services are sold
General stores  Specialised stores  Regional and global stores


Types of e-marketplaces


Information portals
A

single point of access to information located inside and outside an organisation  Can be used in e-stores, e-learning, intrabusiness etc.  Public or corporate portals.  Publishing portals  Mobile portals accessible in particular from mobile devices

Intermediation


Intermediaries act and mediate between the seller and buyers
 Providing

information about demand an supply, prices, requirement and help matching sellers and buyers  Provide value-added services like transfer of products, payment arrangements etc.  Automated services or services that require expertise

Disintermediation - reintermediation


Disintermediation


Elimination of intermediaries between sellers and buyers. For example travel agencies Establishment of new intermediary roles for traditional intermediaries that have been disintermediated. Intermediaries specialised in managing the electronic mediary role as for example stock brokers.



Reintermediation


Market mechanisms


Electronic catalogs
 Allow

besides static presentation also dynamic information presentatation – real time information (stock markets)  Allow a certain degree of customization




Standard catalogs – customized catalogs for a specific customer or company or customer segment Catalogs can be integrated with business processes

Market mechanisms cont.


Search engines




A computer program that can access databases of internet resources, perform searches on specific keywords and report the result needed for large catalogs and business or organizational sites



Intelligent agents

 

Software that can performe routine tasks that require intelligence Monitor movements on a web site and provide assistance Make comparison on products and prices
Order-processing technology allowing customers to collect items they wish to buy during a shopping session



Shopping carts


Electronic auctions
    

Similar to conventional auctions but conducted oline Dynamic pricing – prices are allowed to fluctuate
Forward auctions


A seller solicits consecutive bids from buyers A buyer solicits bids from sellers Many sellers and many buyers (stocks and commodities)

Reverse auctions


Dubble auctions


Dutch flower auction

Electronic auctions
Benefits to sellers  Increased revenue from broad bidder base  Opportunity to bargain – no fixed prices  Selling of large quantities quickly in B2B Benefits to buyers  Unique items are sold  Entertainment  Convenience and ability to bid from anywhere  Anonymity usually arranged by the auctioneers

Electronic auctions cont.
Benefits to e-auctioneers  Higher repeat purchases (customers tend to come back)  Higher ”stickiness” (customers stay for a longer time)  Easy expansion of the auction business

Impact of auctions


  

Auctions are efficient coordination mechanisms for establishing a price equilibrium (telecommunication bandwith) Auctions act as social mechanisms to determine price (unique or rare objects, art, wine etc.) Auctions as highly visible distribution mechanisms Auctions as an e-business component (stand alone or combined with other activities)

M-commerce
Mobile computing - real-time access to information applications and tools regardless of time and space.  E-business is conducted in a wireless environment


Thank You!
Next lecture on Business models and stratiegies


								
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