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Understanding the New Internet Economy
Chapter 1
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Electronic Commerce• The process of buying or selling goods or
services across a telecommunications network
• Many technologies facilitate E-commerce– Electronic funds transfer– Electronic data interchange– Internet / World Wide Web
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Networks
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Networks
• A network is a group of computers connected by cable, telephone, or wireless device.
• Networks can be “local” or “wide” area.• The Internet is a wide area network.
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The Internet
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The Internet
• The Internet is a collection of interconnected networks that use common universally accepted protocols.
• The Internet is a world-wide network.
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The Internet
• The Internet contains computers that are either servers or clients.
• Servers provide the basic resources that users (clients) need.
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Common Internet Services
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The World Wide Web• The WWW or Web is one of the common
Internet services.• A Web Server is able to serve or supply
Web pages containing text, graphics, and multimedia.
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E-Business Advantages
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E-Business Disadvantages
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The Value Chain
• A value chain or network is the collection of activities involved in the production of a class of goods or services.
• E-commerce can facilitate these chains or networks by using IT to exchange information between network members.
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Value Chains and E-Commerce
• E-Commerce can “shorten” a Value chain by linking manufacturers with ultimate customers.
• E-Commerce can eliminate intermediaries such as distributors, and in some cases retailers.
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The Value Chain
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A Value Network
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E-Business Models
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Business to Consumer (B2C)• Direct to customer commerce• Shortens the supply chain to consumers• Results in higher margin to business or
higher value for customer or both• Can take a variety of forms• Examples…
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Ashford.com
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Barnes&Noble.com
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Harry and David
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Business to Business (B2B)
• Direct exchanges between businesses• Many forms and facilitating technologies• Can be used to form stronger links between
members
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Elements of B2B Exchanges
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B2B Summary
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Business to Government (B2G)
• Similar to B2B model• Facilitates sales to governmental entities
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eFederal.com
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Consumer to Consumer (C2C)• Exchanges between consumers• Some sites similar to the “Want-Ads”• eBay provides a C2C auction function • InfoRocket provides a link to independent
expert consultants who answer questions for money
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InfoRocket.com
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Consumer to Business (C2B)
• Reverse auction or demand collection model
• Name price for commodity or service
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priceline.com