Ecommerce Exam 1 - Rodi

ecommerce

the use of internet, the web, and mobile apps and browsers running on mobile devices to transact business.

ebussiness

the digital enabling of transactions and processes within a firm, involving information systems under the control of the firm

internet

worldwide network of computer networks built on common standards

World Wide Web

an information system running on the internet infrastructure and that provides access to trillions of web pages

mobile platform

provides the ability to access the Internet from a variety of highly mobile devices such as smartphones, tablets, and other ultra-lightweight laptop computers

Information Asymmetry

any disparity in relevant market information among parties in a transaction

marketplace

physical space you visit in order to transact

ubiquity

available just about everywhere, at all times

marketspace

a marketplace extended beyond traditional boundaries and removed from a temporal and geographic location

reach

the total number of users or customers an e-commerce business can obtain

Universal Standards

standards that are shared by all nations around the world

richness

the complexity and content of a message

Interactivity

technology that allows for two-way communication between merchant and consumer

information density

the total amount and quality of information available to all market participants

personalization

the targeting of marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases

customization

changing the delivered product or service based on a user's preferences or prior behavior

business-to-consumer (B2C) e-commerce

online businesses selling to individual consumers

Business-to-business (B2B) e-commerce

online businesses selling to other businesses

Consumer-to-consumer (C2C) e-commerce

Consumers selling to other consumers with the help of an online market maker

Mobile E-Commerce (M-Commerce)

use of mobile devices to enable online transactions

Social e-commerce

e-commerce enabled by social networks and online social relationships

local e-commerce

e-commerce that is focused on engaging the consumer based on his or her current geographic location

Disintermediation

displacement of market middlemen who traditionally are intermediaries between producers and consumers by a new direct relationship between producers and consumers

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 when users receive value from the fact that everyone else uses the same tool or product

Web 2.0

set of applications and technologies that enable user-generated content

business model

a set of planned activities designed to result in a profit in a marketplace

business plan

a document that describes a firms business model

e-commerce business model

a business model that aims to use and leverage the unique qualities of the Internet and the World Wide Web

Eight Key Elements of a Business Model

1. Value proposition

2. Revenue model

3. Market opportunity

4. Competitive environment

5. Competitive advantage

6. Market Strategy

7. Organizational development

8. Management team

Value Proposition

defines how a company's product or service fulfills the needs of customers

revenue model

describes how a business will earn revenue, generate profits, and produce a superior return on invested capital

Advertising Revenue Model

a business provides a forum for advertisements and receives fees from advertisers

Subscription revenue model

a business offers its users content or services and charges a subscription fee for access to some or all of its offerings

freemium strategy

a business gives away a certain level of product or services for free but then charges a subscription fee for premium levels of the product or service

transaction revenue model

a business receives a fee for enabling or executing a transaction

sales revenue model

a business derives revenue by selling goods, content, and/or services to customers

Affiliate revenue model

a business steers customers to an "affiliate" and receives a referral fee or percentage of the revenue from any resulting sales

Market Opportunity

refers to the company's intended marketspace and the overall potential financial opportunities available to the firm in that marketspace

Competitive Environment

refers to the other businesses selling similar products in the same marketspace, the presense of substitute products and potential new entrants, and the power of customers and suppliers over the business

Direct Competitors

Businesses that sell similar products and services into the same market segment. Ex. Priceline and Expedia

Indirect competitors

companies that may be in different industries but still compete indirectly because their products can substitute one for another. Ex. car manufacturers and airline companies

Competitive Advantage

achieved by a business when it can produce a superior product and/or bring the product to market at a lower price than most, or all, of its competitors

asymmetry

exists whenever one participant in a market has more resources than other participants

first-mover advantage

a competitive market advantage for a firm that results from being the first into a marketplace with a serviceable product or service

complementary resources

resources not directly involved in the production of the product but required for success, such as marketing, management, financial assets, and reputation

Unfair competitive advantage

occurs when one business develops an advantage based on a factor that other businesses cannot purchase

perfect market

a market in which there are no competitive advantages or asymmetries because all firms have equal access to all the factors of production

leverage

when a business uses its competitive advantage to achieve more advantage in surrounding markets

Market Strategy

the plan a business puts together that details exactly how it intends to enter a market and attract customers

organizational structure

comprises the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered

Organizational Development

plan that describes how a business will organize the work that needs to be accomplished

Management Team

employees of the business responsible for making the business model work

seed capital

typically, an entrepreneur's personal funds derived from savings, credit card advances, home equity loans, or from family and friends

elevator pitch

short two-to-three minute presentation aimed at convincing investors to invest

Incubators

typically provide a small amount of funding and also an array of services to start-up companies

Angel Investors

typically wealthy individuals or a group of individuals who invest their own money in exchange for an equity share in the stock of a business; often are the first outside investors in a start-up

Venture Capital Investors

typically invest funds they manage for other investors; usually later-stage investors

crowdfunding

using the internet to enable individuals to collectively contribute money to support a project

Online retailer (e-tailer)

A business that enables customers to shop and purchase via a website and/or mobile app.

Barriers to Entry

the total cost of entering a new marketplace

Community Provider

creates an online environment where people can "meet" online to connect and communicate; share interests, photos, and videos; and, increasingly, transact (buy and sell goods and services) (reddit)

Content Provider

Distributes digital content, such as news, information, music, photos, and video (apple music)

portal

offers users search tools as well as an integrated package of content and services all in one place (Yahoo)

Transaction Broker

provides online processing for transactions that were previously handled in person, by phone, or by mail (booking.com)

market creator

builds a digital environment (market) in which buyers and sellers can meet, display and search for products and services, establish prices for products, and transact (eBay)

service provider

offers services online

E-distributor

A company that provides an online catalog of products from different manufacturers that are available for purchase by individual businesses.

E-procurement

a company that helps businesses automate their procurement process (the range of activities invloved in obtaining goods and services)

Scale Economies

efficiencies that arise from increasing the size of a business

exchange

an independent digital marketplace that connects hundreds to potentially thousands of suppliers and buyers

industry consortia

industry-owned vertical marketplaces that serve specific industries

vertical marketplace

supply companies with products and services of specific interest to their industry

Horizontal Marketplaces

supply companies in different industries with a particular type of product and service

private b2b network

Digital network designed to coordinate the flow of communications and supply chains among firms engaged in business together.

Industry Structure

refers to the nature of the players in an industry and their relative bargaining power

industry structural analysis

an effort to understand and describe the nature of competition in an industry, the nature of substitute products, the barriers to entry, and the relative strength of consumers and suppliers

new industry dynamics

the give and take of the marketplace

value chain

the set of activities performed in an industry or in a firm that transforms raw inputs into final products and services

firm value chain

the set of activities a firm engages in to create final products from raw inputs

value web

networked business ecosystem that coordinates the value chains of several firms

Business Strategy

a set of plans for achieving superior long-term returns on the capital invested in a business

profit

the difference between the price a business is able to charge for its producst and the cost of producing and distributing goods

Differentiation

refers to the ways producers can make their own products or services unique and different to distinguish them from those of competitors

commoditization

a situation where there are no differences among products or services, and the only basis of choosing products is price

Strategy of cost competition

offering products and services at a lower cost than competitors

scope strategy

competing in all markets around the globe, rather than just local, regional, or national markets

focus/market niche strategy

competing within a narrow market or product segment

Customer Intimacy

focusing on developing strong ties with customers in order to increase switching costs

Disruptive Technologies

technologies that underpin a business model disruption (AI)

Digital Disruption

a business model disruption that is driven by changes in information technology

Sustaining Technologies

technologies that enable the incremental improvement of products and services

disruptors

the entrepreneurs and firms that lead a business model disruption

Packet Switching

Method of slicing digital messages into parcels (packets), sending packets along different communication paths as they become available, and then reassembling packets at destination

packets

the discrete units into which digital messages are sliced for transmission over the Internet

router

special-purpose computer that interconnects the computer networks that make up the Internet and routes packets to their ultimate destination as they travel the Internet

routing algorithm

computer program that ensures that packets take the best available path toward their destination

Protocols

rules and standards for data transfer

Transmission Control Protocol (TCP)

core communications protocol for the internet