Chapter 5 - eCommerce

Sustaining Technologies

Maintain current rate of performance improvement of the products and services that use them (Ex. New Phone)

Disruptive Technologies

Technology offers different set of attributes than what is currently used (Ex. AI)

Two-Way Conversations

Allows for interaction between creator and users (Ex.Blog)

Interactive User Experience

Websites are more like desktop apps (Ex. Gmail)

User-Generated Content 

Users create the content itself (Ex. Youtube)

Emergent Structures 

Info is organized by users through tagging and collaborative filtering

Crowdsourcing

Obtaining ideas from a large group of people rather than employee

Types of Crowdsourcing (4)

• Knowledge Discovery

• Distributed Human Intelligence Tracking

• Broadcast Search

• Peer-Vetted Creative Production

Knowledge Discovery

Uses knowledge from public to source info (Ex. Wikipedia)

Distributed Human Intelligence Tracking

Used for tasks where human intelligence is needed (Ex. Surveys)

Broadcast Search

Focused on finding specialists outside organization (Ex. Kaggle)

Peer-Vetted Creative Production

Where firms reach out to public for ideas

Crowdsourcing Success Factors

• Be Diverse

• Be Decentralized

• Be Independent

Prediction Markets

Diverse crowd is polled, and their opinions form a forecast of an eventual outcome

Sharing Economy

An economy where offerings are shared between individuals (Ex. AirBNB)

The Mobile Platform

Use of smartphones, with apps as medium for accessing services and information

Mobile Device Characteristics

• Ubiquity - Access From Anywhere

• Identifiability - Identify through SIM cards

• Context Awareness - Use GPS

Enablers of E-Commerce

• Affordable Computing Equipment

• Access to Internet

• Ease of Use

• Open Standards

eCommerce

Buying & Selling of goods electronically over internet

eBusiness

Use of IT to streamline business processes and operations

Transaction Types

• B2C (Ex. Online Retail)

• B2B (Ex. Supplier - Manufacturer)

• C2B (Ex. Freelancers)

• C2C (Ex. Marketplace)

• eGovernment 

eGovernment

Digital transaction between government and business (Ex. Tax filing)

Company Structures

• Brick & Mortar 

• Bricks & Clicks 

• Pure Play

Brick & Mortar 

Business with only physical location

Bricks & Clicks 

Businesses operating both physically & online 

Pure Play

Businesses operating solely online

Business Model

Captures firms concept & value proposition

Revenue Models

• Pay For Service 

• Subscription 

• Advertisement Support

• Affiliate

• Freemium

Pay For Service

Customers pay for product either at flat rate or based on usage

Advertisement Support

Offers free content to consumers but with ads

Affiliate

Business earns revenue from third parties based on traffic generated

Dominant Business Models

• Online Retailing

• Infomediaries

• Content Providers

• Online Communities

• Exchanges

Online Retailing

Businesses sell products to consumers through eCommerce

Infomediaries 

Provide specialized information, linking to online retailers without taking ownership of inventory

Content Providers

Firms that create and publish a wide variety of content 

Online Communities 

Foster user interaction and sharing 

Exchanges 

Marketplace where buyers and sellers interact, facilitating transactions

eCommerce Implications

• Disintermediation

• Reintermediation

• Market Efficiency 

• Channel Conflict 

• Self-Service 

Disintermediation

Cutting out intermediaries and selling D2C

Reintermediation

Creating new intermediaries (Ex. Expedia)

Market Efficiency

Reduced search costs make it harder for companies to profit

Channel Conflict

Conflict when choosing between disintermediation and reintermediation

Self-Service

Empowerment of employees and customers to perform tasks independently