E-Commerce: Mechanisms, Infrastructures, and Tools

Learning Objectives
1.

2.

3.
4.
5.

Describe the major electronic commerce (EC)

activities and processes and the mechanisms that
support them.
Define e-marketplaces and list their components.
List the major types of e-marketplaces and describe
their features.
Describe electronic catalogs, search engines, and
shopping carts.
Describe the major types of auctions and list their
characteristics.
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Learning Objectives
6. Discuss the benefits and limitations of e-auctions.
7. Describe bartering and negotiating online.
8. Describe virtual communities.
9. List the major Web 2.0 tools and their use in EC.
10. Describe social networks as an EC mechanism.
11. Understand virtual worlds and their use in EC.
12. Describe Web 3.0 and define Web 4.0.

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2.1 Electronic Commerce

Mechanisms:
Generic enablers of information systems
Databases
Networks
Security software
Server software
Operating systems
Hardware
Hosting services

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Electronic Commerce Mechanisms:

Special enablers
Electronic markets
Shopping carts
E-catalog services: payment & fulfillment
CRM
Streaming video

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EC Activities

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Mechanisms that support the

activities

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J&J

Store front

MarketPlace

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E-Marketplaces B2B
Online Market Marketplaces have 3 major functions
Matching buyers and sellers
Facilitating the exchange of information , goods,
services and payments
Providing legal and regulatory framework

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2.2 B2B MarketPlaces

Science
Medical
Automotive

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Positive changes because of eMarketPlace

Greater information

Ability of buyers, sellers,

richness
Lower information
search time
Possibly less time
between purchase and
possession of physical
products

and virtual market to

each be in a different
location
Increased effectiveness
and lower transactional
and distribution costs

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MrktSpace same as E-Mrktplace

Customers, Sellers, Product
Infrastructure- networks, hardware, software

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MrktSpace same as E-Mrktplace

Front end- sellers portal, e-catalogs, shopping cart,

search engine, payment gateway

Back end- order aggregation, fulfillment, inventory

management, purchasing from suppliers, accounting

and finance, insurance, payment processing ,
packaging and delivery
Intermediaries- 3rd party between the manf. And

buyers
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E-Marketplaces
Intermediaries- Middle man
Disintermediation- shortening the supply chain
Reintermediation-Science Warehouse

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Types E-Marketplaces
Private E-Marketplaces

sell-side: A private e-marketplace in which one company sells

either standard and/or customized products to qualified
companies. i.e. Cisco
buy-side : A private e-marketplace in which one company
makes purchases from invited suppliers. i.e. Nordstrom

Public E-Maketplaces

Exchanges- where many buyers and many sellers come

together- Science Warehouse

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2.3 Store fonts, Malls and

Portals B2C

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Customer Shopping Mechanisms:

Storefronts, Malls, and Portals
Webstore (storefront)

A single companys website where products or services

are sold; usually has an online shopping cart
associated with it
Many Webstores target a specific industry and find
their own unique corner of the market.

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Customer Shopping Mechanisms:

Storefronts, Malls, and Portals
e-mall (online mall)

An online shopping center where many online stores

are located

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Customer Shopping
Mechanisms
Intermediaries- E*trade, Yahoo Stores, WebMD
Disintermediation- travel agents
Reintermediation-Travelocity

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Customer Shopping Mechanisms:

Storefronts, Malls, and Portals
Web portal

A single point of access, through a Web browser, to critical

business information located inside and outside (via
Internet) an organization
Types of Portals
Commercial portals- yahoo
Corporate portals - mysandiego
Publishing portals specific interest- techweb.com
Personal portals netvibes.com more customization options
mobile portal
voice portal
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2.4 Merchant solutions

Advantages E-catalogs
Lower cost
Ease of updating
Integrate purchase process
Coverage of a wide spectrum of products
Customization.
Print is now used as a supplement or quarterly

enhancement to the updated website.

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2.5 Auctions, Bartering

auction

A competitive process in which a seller solicits

consecutive bids from buyers (forward auctions) B2C,
B2B
or a buyer solicits bids from sellers (reverse auctions);
prices are determined dynamically by the bids- B2B

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name-your-own-price model
Auction model in which a would-be buyer specifies the
price (and other terms) he or she is willing to pay to any
willing and able seller; a C2B model that was pioneered
by Priceline.com.

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Innovative Auctions
Every Year Warren Buffett, the famous U.S. stock
investor invites a group of 8 people to lunch with
him. $30,000 per person
Buffet placed the invitation on Ebay, in 2008 one of
the winning bids was for 2,110,000.
** The winner stated that before the auction he had
no chance to be invited.
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Auctions
Many Sellers, Many Buyers

double auction- group purchasing An auction in which

multiple buyers and their bidding prices are matched with
multiple sellers and their asking prices, considering the
quantities on both sides
penny auction A formal auction in which participants pay a
nonrefundable small fee for each bid; bid level changes by
small increments

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2.5 Auctions
dynamic pricing- benefit of Auctions

Prices that change based on supply and demand

relationships at any given time

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Auctions
Limitations of E-Auctions
Minimal Security C2C auctions conducted on the
internet are not secure because the are done in an
unencrypted enviornment
Possibility of Fraud- buyers cannot actual see/touch
the product
Limited Participation- some auctions are by invitation
only. However sellers benefit from large pools of buyers

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Bartering
e-bartering (electronic bartering)

Bartering conducted online

bartering exchange
A marketplace in which an intermediary arranges barter
transactions

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2.6 Social Software Tools:

From Blogs to Wikis to Twitter

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Web 2.0 tools

Interpersonal Computing
Web Services
Saas

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Web 2.0 tools

Interpersonal Computing
social software- allows users to interact and share data

Social Networking
Wikis
Online Video
Bloggs
Microblogging - Twitter

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Business Advantage
Social networking is penetrating into enterprises and

even becoming a B2B phenomenon

Communicate quickly
Real-time customer feedback
Build relationships with customers, partners
Shrinks the emotional distance between your company and
customer

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Web 2.0 tools

Web Services- Websites

sharing Related Data.

Mashups Zillow and Google

maps. Drawing content from

2 sources API
Payment service PaypalCustomers interacting with 2
organizations that are
automatically interlinked by
the internet

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Web 2.0 tools

SaaS- Application functionality. Applications and Data

have access from ANY Internet enable device

Online replacement of application software that would be

installed in our computer

Google Docs
Juice Online Desktop
Zoho- Microsoft office

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 Tag- optimizing shifting from keywords to tags

SEO optimization
A nonhierarchical key word or term assigned to a piece of
information (such as an Internet bookmark, digital image,
video clip, or any computer document)

folksonomy = Managing tags to annotate and

categorize content.

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2.7 Virtual Communities

virtual community

A group of people with similar interests who interact

with one another using the Internet

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Virtual Communities
Types of Communities

Associations- Parent-Teacher Association (PTA)

Affinity portals communities organized by interest, hobbies,
technical topic, vocations, political parties, trade unions
Ethnic communities
Gender communities

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Virtual Communities
Types of Communities cont.

Catering to young people

Communities of practice- professors, physicians, dentists
Neighborhood communities local communities
Social networks sites
Virtual worlds- 3D Communities

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The Future: Web 3.0 and Web 4.0

Semantic Web

An evolving extension of the Web in which Web

content can be expressed not only in natural language,
but also in a form that can be understood, interpreted,
and used by intelligent computer software agents,
permitting them to find, share, and integrate
information more easily

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Summary
1.
2.
3.
4.
5.

Activities and mechanisms

E-marketplaces and their components
The major types of e-marketplaces
Types of auctions and their characteristics
The benefits and limitations of auctions

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Summary
7. Bartering and negotiating
8. The structure and role of virtual communities
9. Web 2.0 tools
10. Social networks as an EC mechanism
11. Virtual worlds
12. Web 3.0 an

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