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CHAPTER 1
The Revolution Is Just
Beginning
Created by, David Zolzer, Northwestern State University—Louisiana
Copyright © 2002 Pearson Education, Inc.
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PERTEMUAN 1
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Amazon.com: Before and After
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Most well-known e-commerce company
Conceived by Jeff Bezos in 1994
Opened in July 1995
Four compelling reasons to shop
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Selection (1.1 million titles)
Convenience (anytime, anywhere)
Price (high discounts on bestsellers)
Service (automated order confirmation,
tracking, and shipping information)
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Amazon.com: Before and After
Revenues and Earnings
Revenues
Earnings
1996
$15.6 Million
($6.24 Million)
1997
$148 Million
($31 Million)
1998
$610 Million
($125 Million)
1999
$1.6 Billion
($720 Million)
2000
$2.7 Billion
($1.4 Billion)
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E-commerce vs. E-business
E-commerce involves
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Digitally enabled commercial transactions
between organizations and individuals.
Digitally enabled transactions include all
transactions mediated by digital
technology
Commercial transactions involve the
exchange of value across organizational or
individual boundaries in return for
products or services
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E-commerce vs. E-business
E-business involves
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Digital enablement of transactions
and processes within a firm, involving
information systems under the
control of the firm
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E-business does not involve
commercial transactions across
organizational boundaries where
value is exchanged
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The Difference Between ECommerce and E-Business
Page 8, Figure 1.1
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Seven Unique Features of E-commerce
Technology and Their Business
Significance
Page 9, Table 1.1
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Changing Trade-Off Between
Richness and Reach
Page 11, Figure 1.2
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Major Types of E-Commerce
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Market relationships
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Business-to-Consumers (B2C)
Business-to-Business (B2B)
Consumer-to-Consumer (C2C)
Technology-based
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Peer-to-Peer (P2P)
Mobile Commerce (M-commerce)
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Major Types of E-Commerce
Page 14, Table 1.2
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Business-to-Consumer Ecommerce
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Most commonly discussed type
Online businesses attempt to
reach individual consumers
Consumers will spend $65 billion
in 2001.
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Business-to-Business E-commerce
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Businesses focus on sell to other
businesses
Largest form of e-commerce
$700 billion in transactions in 2001
Primarily involved inter-business
exchanges at first
Other models have developed
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e-distributors
infomediaries
B2B service providers
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Consumer-to-Consumer Ecommerce
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Provide a way for consumers to
sell to each other
Estimated $5 billion market
Consumer:
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prepares the product for market
places the product for auction or
sale
relies on market maker to provide
catalog, search engine, and
transaction clearing capabilities
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Peer-to-Peer E-commerce
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Enables Internet users to share
files and computer resources
Napster
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Mobile E-commerce
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Wireless digital devices enable
transactions on the Web
Uses personal digital assistants
(PDAs) to connect
Used most widely in Japan and
Europe
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AKHIR PERTEMUAN 1
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PERTEMUAN 2
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Growth of the Internet and the Web
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Created in the late 1960s
About 350 million computers
worldwide to date
Links businesses, educational
institutions, government agencies,
and individuals
Provides services such as e-mail,
document transfer, newsgroups,
shopping, research, instant
messaging, music, video, and news
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Growth of the Internet and the Web
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Internet hosts are growing at a
rate of 45% per year
Extraordinary growth -- time to
reach 30% US households
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Radio - 38 years
Television - 17 years
Internet/Web - 8 years (1993)
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The Growth of the Internet
Page 16, Figure 1.3
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The Growth of Web Content
Page 17, Figure 1.4
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The Growth of B2C E-Commerce
Page 20, Figure 1.5
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The Growth of B2B E-Commerce
Page 21, Figure 1.6
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Origins and Growth of E-Commerce
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Baxter Healthcare
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Primitive form of B2B using telephone-based
modem to permit hospitals to reorder supplies
(early 1970s)
PC-based remote order entry system (1980s)
Electronic Data Interchange (EDI)
standards developed that permitted firms
to exchange commercial documents and
conduct digital commercial transactions
across private networks (1980s)
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Origins and Growth of E-Commerce
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French Minitel videotext system
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First B2C arena (1981)
15 million in use throughout France
World Wide Web
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1993 first browsers
1995 first banner ads
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Technology and E-Commerce in
Perspective
Internet and the Web are just two of
a long list of technologies that have
greatly change commerce
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Other technologies spawned
business models and strategies
Explosive early growth followed
by retrenchment and then longterm successful exploitation of the
technology
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Technology and E-Commerce in
Perspective
Although e-commerce has grown
explosively, there is no guarantee it
will continue to grow
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Confront own fundamental
limitations
B2C only about 1% of overall retail
market
With current growth rates, B2C will
roughly equal the annual revenue
of Wal-Mart in 2005
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Limitations of the Growth of B2C
E-Commerce
Page 23, Table 1.3
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Web Access Via Wireless Devices
in the United States
Page 24, Figure 1.7
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E-Commerce I and II
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E-Commerce I
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Explosive growth starting in 1995
Widespread of Web to advertise
products
Ended in 2000 when dot.com began to
collapse
E-Commerce II
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Began in January 2001
Reassessment of e-commerce
companies
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E-Commerce I 1995-2000
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For computer scientist and
information technologists
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Vindication of a set of information
technologies developed over 40
years
Extending from the early Internet to
the PC and local area networks
The vision of universal
communications
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E-Commerce I 1995-2000
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For economists
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Raised realistic prospect of perfect
Bertrand Market
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where price, cost, and quality information is
equally distributed
where a nearly infinite set of suppliers
compete against one another
where customers have access to all revelant
market information worldwide
Merchants have equal direct access to
hundreds of millions of customers
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E-Commerce I 1995-2000
Disintermediation
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displacement of market
middlemen who traditionally are
intermediaries between
producers and consumers by a
new direct relationship between
manufacturers and content
originators with their customers
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E-Commerce I 1995-2000
Friction-free commerce
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a vision of commerce in which
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information is equally distributed
transaction costs are low
prices can be dynamically adjusted to
reflect actual demand
intermediaries decline
unfair competitive advantages are
eliminated
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E-Commerce I 1995-2000
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First mover
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a firm that is first to market in a
particular area and that moves
quickly to gather market share
Network effect
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occurs where users receive value
from the fact that everyone else
uses the same tool or product
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E-Commerce II 2001-2006
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Crash in stock market values of Ecommerce I companies throughout 2000 is
an end to E-commerce I
Led to a sobering reassessment of the
prospects of e-commerce and the
methods of achieving business success.
E-commerce II begins in 2001 and ends
five year later -- the limit for making
technology and business projections
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E-Commerce II 2001-2006
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Reasons for the end of E-Commerce I
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run-up in technology stocks due to enormous information
technology capital expenditure of firms rebuilding their
internal business systems to withstand Y2K
telecommunications industry had built excess capacity in
high-speed fiber optic networks
1999 e-commerce Christmas season provided less sales
growth that anticipated and demonstrated e-commerce
was not easy (eToys.com)
valuations of dot.com and technology companies had
risen so high supporters were questioning whether
earnings could justify the prices of the shares.
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E-Commerce I and E-Commerce II
Compared
Page 32, Table 1.5
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Understanding E-Commerce:
Organizing Themes
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Technology: Infrastructure
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Business: Basic Concepts
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development and mastery of digital computing
and communications technology
new technologies present businesses and
entrepreneurs with new ways of organizing
production and transacting business
Society: Taming the Juggernaught
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global nature of e-commerce poses public
policy issues of equity, equal access, content
regulation, and taxation
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The Internet and the Evolution of
Corporate Computing
Page 37,
Figure 1.8
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Disciplines Concerned with ECommerce
Page 39, Figure 1.9
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AKHIR PERTEMUAN 2
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