Ecommerce Exam 1

Ecommerce

the use of the Internet, the Web, and mobile apps and browsers running on mobile devices to transact business. More formally, digitally enabled commercial transactions between and among organizations and individuals

Ebusiness

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

The Web (WWW)

an information system running on the internet infrastructure providing access to web pages

The mobile platform

provides the ability to access the Internet from a variety of highly mobile devices

Information Asymmetry

any disparity in relevant market information among parties in a transaction

marketplace

physical place you visit in order to transact

ubiquity

available anywhere at all times, reduces transaction costs

marketspace

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

reach

total number of users or visitors that an ecommerce business can obtain

universal standards

standards that are shared by all nations around the world, technical ecommerce standards

information 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

Price transparency

the ease with which consumers can find out the variety of prices in a market

Cost transparency

the ability of consumers to discover the actual costs merchants pay for products

price discrimination

the business practice of selling the same good at different prices to different customers

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 users preferences

Business to Consumer (B2C)

online businesses selling to individual customers

Business to Business (B2B)

online business selling to other businesses

Consumer to Consumer (C2C)

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

Mobile Ecommerce (Mcommerce)

use of mobile devices to make online transactions

Social Ecommerce

ecommerce enabled by social networks and online social relationships

Local Ecommerce

ecommerce that is focused on engaging consumers based on their 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

Metcalfe's Law

the value of a network grows by the square of the number of participants

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 firm

E-commerce Business Model

A business model that to use and leverage the unique qualities of the Internet, the Web, and the mobile platform.

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 Fee 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

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

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 its competitors

Asymmetry

When 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 firm develops an advantage based on a factor that other firms 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 advantages 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 development

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

seed capital

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

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

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

online retailer/etailer

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

Community Provider

creates an online environment where people with similar interests can transact (buy and sell goods); share interests, photos, and videos; communicate with like-minded people; and receive interest-related information

Content Provider

distributes information content, such as digital news, music, photos, video, and artwork

portal

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

Transaction Broker

provides online processing for transactions that were previously handled in person by phone or by mail

Market Creator

builds a digital environment where buyers and sellers can meet, display products, search for products, and establish a price for products ex: Ebay, marketplace

e-distributor

provides an online catalog that represents the products of thousands of direct manufacturers

e-procurement company

A company that helps businesses automate their procurement process (the range of activities involved 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 and thousands of buyers

Industry consortia

industry-owned vertical marketplaces that serve specific industries

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

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

Commoditization

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

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

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

Sustaining Technologies

technologies that enable the incremental improvement of products and services

Disruptors

the entrepreneurs and their business firms that lead a business model disruption

Packet Switching

a method of slicing digital messages comprised of bits into packets, sending the packets along different communication paths as they become available, and then reassembling the packets once they arrive at their destination

Packets

the discrete units into which digital messages are sliced for transmission over 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/Internet Protocol (TCP/IP)

core communications protocol for the Internet

TCP

establishes connections among sending and receiving computers and handles assembly and reassembly of packets

IP

provides the internet addressing scheme and is responsible for the delivery of packets

UDP

provides an alternative to TCP when the error-checking and correction functionality of TCP is not supported

Network Interface Layer

responsible for placing packets on and receiving them from the network medium

Internet Layer

responsible for addressing, packaging, and routing messages on the Internet

Transport Layer

responsible for providing communication with other protocols within the TCP/IP suite

QUIC

implements basic transport services within an encrypted envelope and uses UDP to traverse the Internet

Application Layer

includes protocols used to provide user services or exchange data

Border Gateway Patrol (BGP)

enables the exchange of routing information among systems on the internet

IPv4 Internet address

Internet address expressed as a 32-bit number that appears as a series of four separate numbers marked off by periods, such as 64.49.254.91

IPv6 Internet Address

Internet address expressed as a 128-bit number

Domain name

IP address expressed in natural language

Uniform Resource Locator (URL)

The address used for locating a document on the Web.

Client/Server Computing

A model for computing that splits processing between clients and servers on a network, assigning functions to the machine most able to perform the function.

Cloud Computing

Model of computing in which computer processing, storage, software, and other services are provided as a shared pool of virtualized resources over a network, primarily the Internet.