Chapter 1 Introduction to Electronic Commerce

Electric Commerce (or e-commerce)

business activities conducted using electronic data transmission over the Internet and the World Wide Web

Electronic Business (or e-business)

another term for electronic commerce; sometimes used as a broader term for electronic commerce that includes all business processes, as distinguished from a narrow definition of electronic commerce that includes sales and purchase transactions only.

pure dot-com/dot-com

a company that operates only online

business-to-consumer (or B2C)

transactions conducted between shoppers and businesses on the Web

business-to-business (or B2B)

transactions conducted between businesses on the Web

supply management/procurement

the business activity that includes all purchasing activities plus the monitoring of all elements of purchase transactions

e-procurement

the use of Internet technologies in a company's purchasing and supply management functions

business activity

a task performed by a worker in the course of doing his or her job.

transaction

an exchange of value

business processes

the activities in which businesses engage as they conduct commerce

telecommuting/telework

an employment arrangement in which the employee logs in to the company computer from an off-site location through the Internet instead of traveling to an office

consumer-to-consumer (or C2C)

a category of electronic commerce that includes individuals who buy and sell items among themselves

business-to-government (or B2G)

business transactions conducted with government agencies, such as paying taxes and filing required reports.

electronic funds transfers (EFTs or wire transfers)

electronic transfer of account exchange information over secure private communications networks.

electronic data interchange (EDI)

exchange between businesses of computer-readable data in a standard format

trading partners

businesses that engage in EDI with one another

value-added network (VAN)

an independent company that provides connection and EDI transaction forwarding services to businesses engaged in EDI

Web 2.0

technologies that include software that allows users of Web sites to participate in the creation, editing, and distribution of content on a Web site owned and operated by a third party.

first-mover advantage

the benefit a company can gain by introducing a product or service before its competitors

smart-follower strategy

an approach in which a business observes first-mower failures and enters a business later, when large investments are no longer required and business processes have been tested.

mobile commerce (or m-commerce)

resources accessed using devices that have wireless connections, such as stock quotes, directions, weather forecasts, and airline flight schedules

Smartphone

a mobile phone that includes a functional Web browser and a full keyboard

mobile apps

programs that run on wireless devices such as smart phones and tablets

social commerce

the use of interpersonal connections online to promote or sell goods and services

crowdsourcing site

also called a crowdfunding site, a social networking site that allows users to solicit investments or contributions from other users

big data

very large stores of information such as that collected by online sellers about their customers

data analytics

sophisticated statistical tools for investigating patterns and knowledge contained in big data

business model

a set of processes that combine to yield a profit

revenue model

the combination of strategies and techniques that a company uses to generate cash flow into the business from customers

merchandising

the combination of store design, layout, and product display intended to create an environment that encourages customers to buy

commodity item

a product or service that has become so standardized and well-known that buyers cannot detect a difference in the offerings of various sellers; buyers usually base their purchase decisions for such products and services solely on price

shipping profile

the collection of attributes, including weight and size, that affect how easily a product can be packaged and delivered

virtual community

an electronic gathering place for people with common interests

social networking sites

a Web site that individuals and businesses can use to conduct social interactions online

market

a real or virtual space in which potential buyers and sellers come into contact with each other and agree on a medium of exchange (such as currency or barter)

hierarchical business organizations

firms that include a number of levels with cumulative responsibility. These organizations are typically headed by a top-level president or officer. A number of vice presidents report to the president. A larger number of middle managers report to the vice presidents

firms (or companies)

the business activity that occurs within large hierarchical business organizations

transaction costs

the total of all costs incurred by a buyer and seller as they gather information and negotiate a transaction

vertical integration

the practice of an existing firm replacing one of its suppliers with its own strategic business unit that creates the supplied product.

strategic business unit/business unit

a unit within a company that is organized around a specific combination of product, distribution channel, and customer type

network economic structure

a business structure wherein firms coordinate their strategies, resources, and skill sets by forming a long-term, stable relationship based on a shared purpose

strategic alliances/strategic partnerships

the coordination of strategies, resources, and skill sets by companies into long-term, stable relationships with other companies and individuals based on shared purposes

virtual companies

a strategic alliance occurring among companies that operate on the Internet

strategic partners

the entities taking part in a strategic alliance

law of diminishing returns

the characteristic of most activities to yield less value as the amount of consumption increases

network effect

an increase in the value of a network to its participants, which occurs as more people or organizations participate in the network

industry

multiple firms selling similar products to similar customers

value chain

a way of organizing the activities that each strategic business unit undertakes to design, produce, promote, market, deliver, and support the products or services it sells

primary activities

activities that are required to do business: design, production, promotion, marketing, delivery, and support of products or services

supporting activities

secondary activities that back up primary business activities. these include human resource management, purchasing, and technology development

value system/industry value chain

the larger stream of activities in which a particular business unit's value chain is embedded

SWOT analysis

evaluation of the strengths and weaknesses of a business unit, and identification of the opportunities presented by the markets of the business unit and threats posed by competitors of the business unit

machine translation

language translation that is done by software; such translation can reach speeds of 400,000 words per hour

localization

a type of language translation that considers multiple elements of the local environment, such as business and cultural practices, in addition to local dialect variations in the language

culture

the combination of language and customs that are unique to a particular population

freight forwarder

a company that arranges shipping and insurance for international transactions

customs broker

a company that arranges the payment of tariffs and compliance with customs laws for international shipments

bonded warehouse

a secure location where incoming international shipments can be held until customs requirements are satisfied or until payment arrangements are completed.