The Internet and World Wide Web: E-commerce Infrastructure
The Origins of Internet.
The Internet has involved from a collection of mainframe computers located on a few U>S> college campuses to an nterconnected network of thousands of networks and millions of computers worlwide.
The history of the Internet can be divided into three phases:
• During the Innovation Phase (1961-1974), the Internet’s purpose was to link researchers nationwide via computer.
• During the Institutional Phase (1975-1995), the Departement of Defense and National Science Foundation provided funding to expand the fundamental building blocks of the Internet into a complex millitary communications system and then into a civilian system.
• During the Commercialization Phase (1995 to the present), government agencies encouraged corporations to assume responsibility for further expansion of the network, and private business began to exploit the Internet for cormercial purpose.
The Key Technology Concepts Behind the Internet
The Internet’s three key technology components are:
• Packet switching, which slices digital message into packets, routes the packets along different communication paths as they become available, and then reassembles the packets once they arrive at their destination.
• TCP/IP. TCP establishes the connections among sending and receiving Web computers and handles the assembly of packets at the point of transmission, as well as their reassembly at the receiving end. IP provides the addresing scheme, enabling messages to arrive at the proper destination computer.
• Client/server technology, which makes it possible for large amounts of information to be stored on Web servers and shared with individual users on their client computers.
The Role of Internet Protocols and Utility Programs.
Internet protocols and utility programs make the following Internet services possible:
• HTTP delivers requested Web pages, allowing users to view them.
• STMP and POP enable e-mail to be routed to a mail server and then pick up by the recipient’s server, while IMAP enables e-mail to be sorted before being downloaded by the recipient.
• FTP is used to transfer files from servers to client and vice versa.
• SSL ensures that information tranmissions are encrypted.
• Telnet is utility program that enables work to be done remotely.
• Finger is utility program that allows you to find out who is logged onto a remote network.
• Ping is utility program that allows users to verify a connection between client and server.
• Tracert lets you track the route a message takes from a client to a remote computer.
The Structure of The Internet Today.
The main structural elements of the Internet are:
• The bacbone, which is composed primarily of high-bandwidth fiber-optic cable operated by the variety of providers.
• NAPs and MAEs, which are hubs that use high-speed switching computers to connect the backbone with regional and local networks.
• Campus are networks, which are local are networks operating within a single organization that connect directly to regional networks.
• Internet Service Providers, which deal with the “last mile” of service to homes and offices. ISPs offer a variety of types of service, ranging from dial-up service to broadband DSL, cable modem, T1 and T3 lines, and the satellite link service.
The Limitations of Today’s Internet.
To envision what the Internet of tomorrow-Internet II-will look like, we must first look at the limitations of today’s Internet.
• Bandwidth limitations: Today’s Internet is slow and incapable of effectively sharing and displaying large files, such as video and voice files.
• Quality of services limitations: Data packets don’t all arrive in the correct order, at the same moment, causing latency; latency creates jerkiness in video files and voice messages.
• Network architecture limitations: Servers can’t keep up with demand. Future improvements to Internet infrastructure will improve the way servers process requests for information, thus improving overall speed.
• Language development limitations: The nature of HTML restrics the quality of “rich” information that can be shared online. Future languages will enable improved display and the viewing of video and graphics.
The potential Capabilities of Internet II.
Internet2 is consortium working together to develop and test new technologies for potential use on the Internet. Internet2 participants are working in a number of areas, including
• advanced network infrastucture;
• new networking capabilities;
• middleware; and
• advance applications that incorporate audio and video to create new services.
In addition to the Internet2 project, other groups are working to expand Internet bandwidth via improvements to fiber-optic technologies and through photonics technologies such as Dense Wavelenght Division Multiplexing, optical and fiber switches, optical switching components, optical integrated circuits, and optical networks. Wireless LAN and 3G telephone technologies will provide users of cellular phones and PDAs with increased access to the Internet and its various services. The increased bandwidth and expanded connections of the Internet II era will result in a number of benefits, including
• IP multicasting, which will enable more efficient delivery of data;
• latency solutions such as diffserve (differentiated quality of service), which assigns levels of priority to packets based on the type of data being transmitted;
• guaranteed service levels;
• lower error rates;
• declining costs; and
• access anywhere and anytime from mobile hand-held devices.
How the World Wide Web works.
The Web was developed during 1989-1991 by Dr.Tim Berners-Lee, who created a computer program that allowed formatted pages stored on the Internet to be linked using keywords (hyperlinks). In 1993, Marc Andreesen created the first graphical Web browser, which made it possible to view documents on the Web graphically and created the possibility of universal computing.
• Hypertext, which is a way of formatting pages with embedded link that connect documents to one another and that also link pages to other objects.
• HTTP (HyperText Transfer Protocol), which is the protocol used to transmit Web pages over the Internet.
Showing posts with label TUGAS RANGKUMAN BUKU E-COMMERCE. Show all posts
Showing posts with label TUGAS RANGKUMAN BUKU E-COMMERCE. Show all posts
Monday, April 07, 2008
Sunday, April 06, 2008
Rangkuman buku E-commerce (Bab IV)
Building An E-Commerce Web Site
The two most important management challenges in building a successfull e-commerce site are:
1. Developing a clear understanding of your bussiness objectives and
2. Knowing how to choose the right technology to achieve those objectives
Pieces Of The Site-Building Puzzle
Let’s assume you are a manager for a medium sized, industrial parts firm of around 10,000 employees worldwide, operating in ten countries in Europe, Asia, and North America. Senior management has given you a budget of $1 million to build an e-commerce site within one year. The purpose of this site will be to sell and service the firm’s 20,000 customers, who are mostly small machine and metal fabricating shops around the world.
1. You must be aware of the main areas where you will need to make decisions. On the organizational and human resources front, you will have to bring together a team of individuals who possess the skill sets needed to build and manage a successfull e-commerce site. This team will make the key decisions about technology, site design, and the social and information policies that will be applied at your site. The entire site development effort must be closely managed if you hope to avoid that disasters that have occurred at some firms.
2. You will also need to make decisions about your site’s hardware, software, and telecommunications infrastructure. While you will have technical advisors help you make this decisions, ultimately the operation of the site is your responsibility. The demands of your customers should drive your choices of technology. Your customers will want technology that enables them to find what their want easily, view the product, purchase the product, and then receive the product from your warehouse quickly. You will also carefully have to consider your site’s design. Once you have identified the key decision areas, you will need to think about a plan for the project.
Planning: The Systems Development Life Cycle
One methodology for developing an e-commerce site plan is the systems development life cycle. The system development life cycle (SDLC) is a methodology for understanding the business objectives of any system and designing an appropriate solution. The five major steps involved in the systems development life cycle for an e-commerce site are:
1. Systems Analysis/Planning
2. Systems Design
3. Building the System
4. Testing
5. Implementation
Factors In Optimizing Web Site Performance
The purpose of a Web site is to deliver content to customers and to complete transactions. The faster and more reliably these two objectives are met, the more effective the Web site is from a commerce perspective. The optimization of web site performance is more complicated than it seems and involved three factors: page content, page generation, and page delivery.
Web Site Budgets
While how much you spend to build a Web site depends on how much you can afford, and, of course, the size of the opportunity. Web site costs according to a survey of 125 Web site managers. About 75% of the costs of Web sites involved technology cost-development, software licenses, and hardware. About 18% of costs will be for design and development, and 6% for marketing the site. (Source: Jupiter Media Metrix, 2002)
Choosing Server Software
What you able to do at an e-commerce site is largely a function of the software. As a business manager in charge of building the site, you will need to know some basic information about e-commerce software. The more sophisticated the software and the more ways you can sell goods and services, the more effective your business will be.
Simple Versus Multi-Tiered Web Site Architecture
Prior to development of e-commerce, Web sites simply delivered Web pages to users who were making requests through their browser for HTML pages. Web site software was appropriately quite simple-it consisted of a server computer running basic Web server software. We might call this arrangement a single-tier system architecture. System architecture refers to arrangement of software, machinery, and tasks in an information system needed to achieve a spesific functionality (much like a home’s architecture refers to arrangement of building materials to achieve a particular functionality).
In addition to having specialized application servers, e-commerce sites must be able to pull information from and add information to pre-existing corporate databases. These older databases that predate the e-commerce era are called backend or legacy databases. Corporation have made massive investments in these systems to store their information on customers, products, employees, and vendors. These backend systems constitute an additional layer in a multi-tiered site.
In two-tier architecture, a Web server responds to requests for Web pages and a database server provides backend data storage. In a multi-tier architecture, in contrast, the Web server is linked to a middle-tier layer that typically includes a series of application servers that perform specific, tasks, as well as to a backend layer of existing corporate systems containing product, customer, and pricing information. A multi-tiered site typically employs several or more physical computers, each running some of the software applications and sharing the work load across many physical computers.
The nine basic business and system functionalities an e-commerce site should contain include:
• Digital catalog-allows a site to display goods using text and graphics.
• Product database-provides product information, such as a description, stocking number, and inventory level.
• Customer on-site traking-ebables a site to create a site log for each customer visit, aiding in personalizing the shopping experience and identifying common customer paths and destination.
• Shopping cart/payment system-provides an ordering system, secure credit-card clearing, and other payment options.
• Customer database-include customer information such as the name, address, phone number, and e-mail address.
• Sales database-contain information regarding the customer ID, product purchased, date, payment, and shipment to be able to provide after-sale customer support.
• Ad server-tracks the site behavior of prospects and customer that come through e-mail or banner ad campaigns.
• Site tracking and reporting system-monitors the number of unique visitor, page visited, and product purchased.
• Inventory management system-provides a link to production and suppliers in order to facilitate order replenishment.
Describe the major issues surronding the decision to outsource site development and/or hosting.
Advantage of building a site in-house include:
• the ability to change and adapt the site quickly as the market demands, and
• the ability to build a site that does exactly what company needs.
Disadvantage of building a site in-house include:
• the costs may be higher;
• the risks of failures may be greater, given the complexity of issues such as security, privacy, and inventory management;
• the process may be more time-consuming than if you had hired an outside specialist firm to manage the effort; and
• staff may experience a longer learning curve that delays your entry into the market.
Using design templates cuts development time, but pre-set templates can also limit functionality.
A similar decision is also necessary regarding outsourcing the hosting of the site versus keeping it in-home. Relying on an outside vendor to ensure that the site is life twenty-four hours a day places the burden of reliability on someone else, in return for a monthly hosting fee. The downside is that if the site requires fast upgrades due to heavy traffic, the chosen hosting company may or may not be capable of keeping up. Reliability versus scalability are the issues in this instance.
Identify and understand the major considerations involved in choosing Web server and e-commerce merchant server software.
Early Web sites used single-tier system architecture and consisted of a single-server computer that delivered static. Web pages to users making requests through their browsers. The extended functionality of today’s Web sites required the development of a multi-tiered systems architecture, which utilizes a variety of specialized Web servers, as well as link to pre-existing “backend” or “legacy” corporate databases.
All e-commerce site require basic Web server software to answer requests from customer for HTML and XML pages. When choosing Web server software, companies are also choosing what operating system the site will run on; Apache, which runs on the UNIX system, is the market leader.
Web server provide a host of services, including
• processing user HTML requests
• security services
• file transfer protocol
• search engine
• data engine
• e-mail
• site management tools
Dynamic server software allows sites to deliver dynamic content, rather than static, unchanging information. Web application server programs enable a wide range of e-commerce functionality, including creating a customer database, creating an e-mail promotional program, accepting and processing orders, as well as many other services.
E-commerce merchant server software is another important software package that provides catalog displays, information storage and customer tracking, order taking (shopping cart), and credit card puchase processing. E-commerce suites can save time and money, but customization can significantly drive up costs. Factors to consider when choosing an e-commerce suite include the functionality, support for different business models, visual site management tools and reporting system, performance and scalability, connectivity to existing business systems, compliance with standards, and global and multicultural capability.
Understand the issues involved in choosing the most appropriate hardware for an commerce site.
Speed, capacity, and scalability are three of the most important considerations when selecting an operating system, and therefore the hardware that it runs on.
To evaluate how fast the site needs to be, companies need to assess the number of simultaneous users the site espects to see, the nature of their requests, the type of information requested, and the bandwidth available to the site. The answer to these question will provides guidance regarding the processors necessary to meet customer demand. In some cases, adding additional processing power can add capacity, thereby improving system speed.
Scalability is also an important issue. Increasing processing supply by scaling up to meet demand can be done through:
• vertical scaling-improving the processing power of the hardware, but maintaining the same number of servers;
• Horizontal scaling-adding more of the same processing hardware; and
• Improving processing architecture-identifying opretions with similar workloads and using dedicated tuned servers for each type of load.
Identify additional tools that can can improve Web site performance.
In addition to providing a speedy Web site, companies must also strive to have a well-designed site that encourages visitors to buy. Building in interactivity improves site effectiveness, as does personalization technique that provide the ability to track customers while they are visiting the site. Commonly used software tools for achieving high levels of Web site interactivity and customer personalization include:
• Common gateway interface (CGI) scripts-a set of standards for communication between a browser and a program on a server that allows for interaction between the user and the server.
• Active Server Pages (ASP)-a Microsoft tool that also permits interaction between the browser and the server.
• Java applets-programs written in Java programming language that also provide interactivity.
• JavaScript-used to validate user input, such as an e-mail address.
• ActiveX and VBScript-Microsoft’s version of Java and JavaScript, respectively.
• Cookies-text files stored on the the user’s hard drive that provide information regarding the user and his or her past experience at a Web site.
The two most important management challenges in building a successfull e-commerce site are:
1. Developing a clear understanding of your bussiness objectives and
2. Knowing how to choose the right technology to achieve those objectives
Pieces Of The Site-Building Puzzle
Let’s assume you are a manager for a medium sized, industrial parts firm of around 10,000 employees worldwide, operating in ten countries in Europe, Asia, and North America. Senior management has given you a budget of $1 million to build an e-commerce site within one year. The purpose of this site will be to sell and service the firm’s 20,000 customers, who are mostly small machine and metal fabricating shops around the world.
1. You must be aware of the main areas where you will need to make decisions. On the organizational and human resources front, you will have to bring together a team of individuals who possess the skill sets needed to build and manage a successfull e-commerce site. This team will make the key decisions about technology, site design, and the social and information policies that will be applied at your site. The entire site development effort must be closely managed if you hope to avoid that disasters that have occurred at some firms.
2. You will also need to make decisions about your site’s hardware, software, and telecommunications infrastructure. While you will have technical advisors help you make this decisions, ultimately the operation of the site is your responsibility. The demands of your customers should drive your choices of technology. Your customers will want technology that enables them to find what their want easily, view the product, purchase the product, and then receive the product from your warehouse quickly. You will also carefully have to consider your site’s design. Once you have identified the key decision areas, you will need to think about a plan for the project.
Planning: The Systems Development Life Cycle
One methodology for developing an e-commerce site plan is the systems development life cycle. The system development life cycle (SDLC) is a methodology for understanding the business objectives of any system and designing an appropriate solution. The five major steps involved in the systems development life cycle for an e-commerce site are:
1. Systems Analysis/Planning
2. Systems Design
3. Building the System
4. Testing
5. Implementation
Factors In Optimizing Web Site Performance
The purpose of a Web site is to deliver content to customers and to complete transactions. The faster and more reliably these two objectives are met, the more effective the Web site is from a commerce perspective. The optimization of web site performance is more complicated than it seems and involved three factors: page content, page generation, and page delivery.
Web Site Budgets
While how much you spend to build a Web site depends on how much you can afford, and, of course, the size of the opportunity. Web site costs according to a survey of 125 Web site managers. About 75% of the costs of Web sites involved technology cost-development, software licenses, and hardware. About 18% of costs will be for design and development, and 6% for marketing the site. (Source: Jupiter Media Metrix, 2002)
Choosing Server Software
What you able to do at an e-commerce site is largely a function of the software. As a business manager in charge of building the site, you will need to know some basic information about e-commerce software. The more sophisticated the software and the more ways you can sell goods and services, the more effective your business will be.
Simple Versus Multi-Tiered Web Site Architecture
Prior to development of e-commerce, Web sites simply delivered Web pages to users who were making requests through their browser for HTML pages. Web site software was appropriately quite simple-it consisted of a server computer running basic Web server software. We might call this arrangement a single-tier system architecture. System architecture refers to arrangement of software, machinery, and tasks in an information system needed to achieve a spesific functionality (much like a home’s architecture refers to arrangement of building materials to achieve a particular functionality).
In addition to having specialized application servers, e-commerce sites must be able to pull information from and add information to pre-existing corporate databases. These older databases that predate the e-commerce era are called backend or legacy databases. Corporation have made massive investments in these systems to store their information on customers, products, employees, and vendors. These backend systems constitute an additional layer in a multi-tiered site.
In two-tier architecture, a Web server responds to requests for Web pages and a database server provides backend data storage. In a multi-tier architecture, in contrast, the Web server is linked to a middle-tier layer that typically includes a series of application servers that perform specific, tasks, as well as to a backend layer of existing corporate systems containing product, customer, and pricing information. A multi-tiered site typically employs several or more physical computers, each running some of the software applications and sharing the work load across many physical computers.
The nine basic business and system functionalities an e-commerce site should contain include:
• Digital catalog-allows a site to display goods using text and graphics.
• Product database-provides product information, such as a description, stocking number, and inventory level.
• Customer on-site traking-ebables a site to create a site log for each customer visit, aiding in personalizing the shopping experience and identifying common customer paths and destination.
• Shopping cart/payment system-provides an ordering system, secure credit-card clearing, and other payment options.
• Customer database-include customer information such as the name, address, phone number, and e-mail address.
• Sales database-contain information regarding the customer ID, product purchased, date, payment, and shipment to be able to provide after-sale customer support.
• Ad server-tracks the site behavior of prospects and customer that come through e-mail or banner ad campaigns.
• Site tracking and reporting system-monitors the number of unique visitor, page visited, and product purchased.
• Inventory management system-provides a link to production and suppliers in order to facilitate order replenishment.
Describe the major issues surronding the decision to outsource site development and/or hosting.
Advantage of building a site in-house include:
• the ability to change and adapt the site quickly as the market demands, and
• the ability to build a site that does exactly what company needs.
Disadvantage of building a site in-house include:
• the costs may be higher;
• the risks of failures may be greater, given the complexity of issues such as security, privacy, and inventory management;
• the process may be more time-consuming than if you had hired an outside specialist firm to manage the effort; and
• staff may experience a longer learning curve that delays your entry into the market.
Using design templates cuts development time, but pre-set templates can also limit functionality.
A similar decision is also necessary regarding outsourcing the hosting of the site versus keeping it in-home. Relying on an outside vendor to ensure that the site is life twenty-four hours a day places the burden of reliability on someone else, in return for a monthly hosting fee. The downside is that if the site requires fast upgrades due to heavy traffic, the chosen hosting company may or may not be capable of keeping up. Reliability versus scalability are the issues in this instance.
Identify and understand the major considerations involved in choosing Web server and e-commerce merchant server software.
Early Web sites used single-tier system architecture and consisted of a single-server computer that delivered static. Web pages to users making requests through their browsers. The extended functionality of today’s Web sites required the development of a multi-tiered systems architecture, which utilizes a variety of specialized Web servers, as well as link to pre-existing “backend” or “legacy” corporate databases.
All e-commerce site require basic Web server software to answer requests from customer for HTML and XML pages. When choosing Web server software, companies are also choosing what operating system the site will run on; Apache, which runs on the UNIX system, is the market leader.
Web server provide a host of services, including
• processing user HTML requests
• security services
• file transfer protocol
• search engine
• data engine
• site management tools
Dynamic server software allows sites to deliver dynamic content, rather than static, unchanging information. Web application server programs enable a wide range of e-commerce functionality, including creating a customer database, creating an e-mail promotional program, accepting and processing orders, as well as many other services.
E-commerce merchant server software is another important software package that provides catalog displays, information storage and customer tracking, order taking (shopping cart), and credit card puchase processing. E-commerce suites can save time and money, but customization can significantly drive up costs. Factors to consider when choosing an e-commerce suite include the functionality, support for different business models, visual site management tools and reporting system, performance and scalability, connectivity to existing business systems, compliance with standards, and global and multicultural capability.
Understand the issues involved in choosing the most appropriate hardware for an commerce site.
Speed, capacity, and scalability are three of the most important considerations when selecting an operating system, and therefore the hardware that it runs on.
To evaluate how fast the site needs to be, companies need to assess the number of simultaneous users the site espects to see, the nature of their requests, the type of information requested, and the bandwidth available to the site. The answer to these question will provides guidance regarding the processors necessary to meet customer demand. In some cases, adding additional processing power can add capacity, thereby improving system speed.
Scalability is also an important issue. Increasing processing supply by scaling up to meet demand can be done through:
• vertical scaling-improving the processing power of the hardware, but maintaining the same number of servers;
• Horizontal scaling-adding more of the same processing hardware; and
• Improving processing architecture-identifying opretions with similar workloads and using dedicated tuned servers for each type of load.
Identify additional tools that can can improve Web site performance.
In addition to providing a speedy Web site, companies must also strive to have a well-designed site that encourages visitors to buy. Building in interactivity improves site effectiveness, as does personalization technique that provide the ability to track customers while they are visiting the site. Commonly used software tools for achieving high levels of Web site interactivity and customer personalization include:
• Common gateway interface (CGI) scripts-a set of standards for communication between a browser and a program on a server that allows for interaction between the user and the server.
• Active Server Pages (ASP)-a Microsoft tool that also permits interaction between the browser and the server.
• Java applets-programs written in Java programming language that also provide interactivity.
• JavaScript-used to validate user input, such as an e-mail address.
• ActiveX and VBScript-Microsoft’s version of Java and JavaScript, respectively.
• Cookies-text files stored on the the user’s hard drive that provide information regarding the user and his or her past experience at a Web site.
Rangkuman buku E-commerce (Bab II)
A successful business models effectively addresses eight key elements:
• Value proposition-how a company’s product or services fulfills the needs of customer. Typical e-commerce value propositions include personalization, customization, convenience, and reduction of product search and price delivery costs.
• Revenue models-how the company plan to make money from its operations. Major e-commerce revenue models include the advertising models, subsciption model, transaction fee model, sales model, and affiliate model.
• Market opportunity-the revenue potential within a company’s intended marketspace.
• Competitive environment-the direct and indirect competitors doing business in the same marketspace, including how many there are and how profitable they are.
• Competitive advantage-the factors that differentiate the business from its competition, enabling it to provide a superior product at a lower cost.
• Market strategy-the plan a company develops that outlines how it will enter a market and attract customers.
• Organizational development- the process of defining all the functions within a business and the skills necessary to perform each job, as well as the process of recruiting and hiring strong employees.
• Management team-the group of individuals retained to guide the company’s growth and expansion.
Decribe the major B2C business models.
• Portal-offers powerfull search tools plus an integrated package of content and services; typically utilizes a combined subscription/advertising revenue/transaction fee model; may be general or specialized (vortal).
• E-tailer-online version of traditional retailer; includes virtual merchants (online retail store only), clicks-and-mortar e-tailers (online distribution channel for a company that also has physical stores); catalog merchants (online version of direct mail catalog); manufacturers selling directly over the Web.
• Content provider-information and entertainment companies that provide digital content over the Web; typically utilizes an advertising, subscription, or affiliate referral fee revenue model.
• Transaction broker-processes online sales transactions; typically utilizes a transaction fee revenue model.
• Market creator-uses Internet technology to create markets that bring buyers and sellers together; typically utilizes a transaction fee revenue model.
• Services provider-offers services online.
• Community provider- provides an online community of like-minded individuals for networking and information sharing; revenue is generated by referral fees, advertising, and subscriptions.
Decribe the major B2B business models.
The major business models used to date in the B2B arena include:
• E-distributor-suplies products directly to individual businesses.
• E-procurement-single firms create digital marketplaces for direct inputs, usually for a vertical industry group.
• Industry consortia-industry-owned vertical industry group.
• Single-firm networks-company-owned private industrial networks to coordinate supply chains with a limited set of partners.
• Industry-wide networks- industry owned private industrial networks to set standars, coordinate supply and logistics for an industry.
Recognize business models in other emerging areas of e-commerce.
A variety of business models can be found in the consumer-to-consumer e-commerce, peer-to-peer e-commerce areas:
• C2C business models connect consumers with other consumers. The most successful has been the market creator business model used by eBay.com and Half.com.
• P2P business models enable consumers to share files and services via the Web without common servers. A challenge has been finding a revenue model that works.
• M-commerce business models take traditional e-commerce models and leverage emerging wireless technologies to permit mobile access to the Web.
• E-commerce enablers’ business models focus on providing the infrastructure necessary for e-commerce companies to exist, grow, and posper.
Understand key business concepts and strategies applicable to e-commerce.
The Internet and the Web have had a major impact on the business environment in last decade, and has affected:
• Industry structure-the nature of players in an industry and their relative bargaining power-by changing the basic of competition among rivals, the barriers to entry, the threat of new substitute products, the strenght of suppliers, and the bargaining power of buyers.
• Industry value chains-the set of activities performed in an industry by suppliers, manufacturers, transporters, distributors and retailers that transforms raw inputs into final products and services-by reducing the cost of information and other trensaction costs.
• Firm value chains-the set of activities performed within an individual firm to create final products from raw inputs-by increasing operational efficiency.
• Business strategy-a set of plans for achieving superior long-term returns on the capital invested in a firm-by offering unique ways to differentiate products, obtain cost advantages, compete globally, or compete in narrow market or product segment.
• Value proposition-how a company’s product or services fulfills the needs of customer. Typical e-commerce value propositions include personalization, customization, convenience, and reduction of product search and price delivery costs.
• Revenue models-how the company plan to make money from its operations. Major e-commerce revenue models include the advertising models, subsciption model, transaction fee model, sales model, and affiliate model.
• Market opportunity-the revenue potential within a company’s intended marketspace.
• Competitive environment-the direct and indirect competitors doing business in the same marketspace, including how many there are and how profitable they are.
• Competitive advantage-the factors that differentiate the business from its competition, enabling it to provide a superior product at a lower cost.
• Market strategy-the plan a company develops that outlines how it will enter a market and attract customers.
• Organizational development- the process of defining all the functions within a business and the skills necessary to perform each job, as well as the process of recruiting and hiring strong employees.
• Management team-the group of individuals retained to guide the company’s growth and expansion.
Decribe the major B2C business models.
• Portal-offers powerfull search tools plus an integrated package of content and services; typically utilizes a combined subscription/advertising revenue/transaction fee model; may be general or specialized (vortal).
• E-tailer-online version of traditional retailer; includes virtual merchants (online retail store only), clicks-and-mortar e-tailers (online distribution channel for a company that also has physical stores); catalog merchants (online version of direct mail catalog); manufacturers selling directly over the Web.
• Content provider-information and entertainment companies that provide digital content over the Web; typically utilizes an advertising, subscription, or affiliate referral fee revenue model.
• Transaction broker-processes online sales transactions; typically utilizes a transaction fee revenue model.
• Market creator-uses Internet technology to create markets that bring buyers and sellers together; typically utilizes a transaction fee revenue model.
• Services provider-offers services online.
• Community provider- provides an online community of like-minded individuals for networking and information sharing; revenue is generated by referral fees, advertising, and subscriptions.
Decribe the major B2B business models.
The major business models used to date in the B2B arena include:
• E-distributor-suplies products directly to individual businesses.
• E-procurement-single firms create digital marketplaces for direct inputs, usually for a vertical industry group.
• Industry consortia-industry-owned vertical industry group.
• Single-firm networks-company-owned private industrial networks to coordinate supply chains with a limited set of partners.
• Industry-wide networks- industry owned private industrial networks to set standars, coordinate supply and logistics for an industry.
Recognize business models in other emerging areas of e-commerce.
A variety of business models can be found in the consumer-to-consumer e-commerce, peer-to-peer e-commerce areas:
• C2C business models connect consumers with other consumers. The most successful has been the market creator business model used by eBay.com and Half.com.
• P2P business models enable consumers to share files and services via the Web without common servers. A challenge has been finding a revenue model that works.
• M-commerce business models take traditional e-commerce models and leverage emerging wireless technologies to permit mobile access to the Web.
• E-commerce enablers’ business models focus on providing the infrastructure necessary for e-commerce companies to exist, grow, and posper.
Understand key business concepts and strategies applicable to e-commerce.
The Internet and the Web have had a major impact on the business environment in last decade, and has affected:
• Industry structure-the nature of players in an industry and their relative bargaining power-by changing the basic of competition among rivals, the barriers to entry, the threat of new substitute products, the strenght of suppliers, and the bargaining power of buyers.
• Industry value chains-the set of activities performed in an industry by suppliers, manufacturers, transporters, distributors and retailers that transforms raw inputs into final products and services-by reducing the cost of information and other trensaction costs.
• Firm value chains-the set of activities performed within an individual firm to create final products from raw inputs-by increasing operational efficiency.
• Business strategy-a set of plans for achieving superior long-term returns on the capital invested in a firm-by offering unique ways to differentiate products, obtain cost advantages, compete globally, or compete in narrow market or product segment.
Rangkuman buku E-commerce (Bab I)
Rangkuman dari buku E-commerce: business, technology, society karangan Kenneth C. Laudon dan Carol Guercio Traver
Rangkuman Bab I
What is E-Commerce?
E-Commerce-The use of the Internet and Web to transact business. Digitally enabled transactions include all transactions mediated by digital technology. For the most part, this means transactions that occur over the Internet and the Web. Coomercial transactions involve the exchangeof value (e.g., money) across organizational or individual boundaries in return for products and services. Exchange of value is important for understanding the limits of e-commerce. Without and exchange of values, no commerce occurs.
Why Study E-Commerce?
Prior to the development of e-commerce, the process of marketing and selling goods was a mass-marketing and sales force-driven process. Consumers were viewed as passive targets of advertising “campaigns” and branding blitzes intended to influence their long-term product perceptions and immidiate purchasing behavior. Selling was conducted in well-insulated “channels.” Consumers were considered to be trapped by geographical and social boundaries, unable to search widely for the best price and quality. Information about prices, costs, and fees could be hidden from the consumer, creating profitable “information asymmetries” for selling firm. Information asymmetry refers to any disparity ini relevant market information among parties in a transaction. It was so expensive to change national or regional prices in traditional retailing (what are called menu costs) that “one national price” was norm, and dynamic pricing to the marketplace-changing prices in real time-was unheard of.
Seven Unique Features of E-Commerce Technology
1. Ubiquity
E-Commerce is ubiquitous, meaning that is it available just about everywhere, at all times
2. Global Reach
E-commerce technology permits commercial transactions to cross cultural and national boundaries far more conveniently and cost effectively than is true in traditional commerce. As a result, the potential market size for e-commerce merchants is roughly equal to the size of world’s online population (over 500 million in 2003, and growing rapidy, according to the Computer Industry Almanac)
3. Universal Standards
One strikingly unusual feature of e-commerce technologies is that the technical standards of the Internet, and therefore the technical standards for conducting e-commerce, are universal standards-they are shared by all nations around the world. In contrast, most traditional commerce technology differ from one nation to the next.
4. Richness
Information richness refer to the complexity and the content of a message (Evan and Wurster, 1997; 1999). The richness of traditional markets make them a powerfull selling or commercial environtment. Prior to the development of the Web, there was a trade-off between richness and rich: the larger the audience reached, the less rich the message.
5. Interactivity
E-commerce technologies are interactive, meaning they allow for two-way communication between merchant and consumer. Interactivity allows an online merchant to engage a consumer in ways similar to a face-to-face experience, but on a much more massive, global scale.
6. Information Density
The Internet and the Web vastly increase information density-the total amount and quality of information available to all market participants, consumers, and merchant alike. E-commerce technologies reduce information collection, storage, processing, and communication costs. At the same time, these technologies increase greatly the currency, accuracy, and timeliness of information-making information more useful and important than ever. As a result, information becomes more plentiful, cheaper, and of higher quality.
7. Personalization/Customization
E-commerce technologies permit personalization: Merchant can target their marketing messages to specific individuals by adjusting the message to a person’s name, interests, and past purchases. The technology also permits customization-changing the delivered product or service based on a user’s preferences or prior behavior. Given the interactive nature of e-commerce technology, a lot of information about the consumer can be gathered in the marketplace at the moment of purchase. With the increase in information density, a great deal of information about the consumer past purchases and behavior can be stored and used by online merchants.
Types of E-Commerce
There are variety of different types of e-commerce and many different ways to characterize these types.
B2C. The most commonly discussed type of e-commerce is Business-to-Consumer (B2C) e-commerce, in which online businesses attempt to reach individual consumers.
B2B. Business-to-Business (B2B) e-commerce, in which businesses focus on selling to other businesses.
C2C. Consumer-to-Consumer (C2C) e-commerce provides away for consumer to sell to each other, with the help of an online market maker such as the auction site eBay.
P2P. Peer-to-peer technology enables Internet users to share files and computer resources directly without having to go through a central Web server.
M-commerce. Mobile commerce, or M-commerce, refers to the use of wireless digital devices to enable transactions on the Web.
Understand the visions and forces behind the E-commerce I era
The E-commerce I era was a period of explosive growth in e-commerce, beginning in 1995 with the first widespread use of the Web to advertise products and ending in 2000 with collapse in stock market valuations for dot.com ventures. Among the visions for e-commerce expressed during the period were the following:
• For computer scientists, e-commerce was part of their vision of a universal communications and computing environment that everyone on earth could access with cheap, inexpensive computers.
• For economists, e-commerce raised the realistic prospect of a perfect Bertrand market-where price, cost, and quality information are equally distributed-and friction-free commerce.
• For entrepreneurs and their financial backers, e-commerce represented an extraordinary opportunity to earn far above normal returns on investment. Overall, the E-commerce I period was driven largely by visions of profiting from new technology, with the emphasis on quickly achieving very high market visibility. The source of financing was venture capital funds. The ideology of the period emphasized the ungoverned “Wild West” character of the Web and the feeling that government and courts could not possibly limit or regulate the Internet; there was a general belief that traditional corporations were too slow and bureaucratic, too stuck in the old way of doing business to “get it,” that is, to be competitive in e-commerce.
Understand the success and the failures of E-commerce I.
E-commerce during the E-commerce I era was:
• a technological success, with the digital infrastructure created during the period solid enough to sustain significant growth in e-commerce during the next decade.
• a mixed business success, with significant revenue growth and customer usage, but low profit margins.
E-commerce during E-commerce I era did not:
• fullfill economist’s visions of the perfect Bertrand market and friction-free commerce.
• fullfill the visions of entrepreneurs and venture capitalists for first mover advantages, low customer acquisition and retention costs, and low costs of doing business.
Identify several factors that will define the E-commerce II era.
Factor that will define e-commerce over the next five years include the following:
• E-commerce technology will continue to propagate through all commercial activity, with overall revenues from e-commerce, the number of products and services sold over the Web, and the amount of Web traffic all rising.
• E-commerce prices will rise to cover the real cost of doing business on the Web.
• E-commerce margins and profits will rise to levels more typical of all retailers.
• Traditional well-endowed and experienced Fortune 500 companies will play a growing and more dominant role.
• The number of successful e-commerce firms will adopt a mixed “clicks and bricks” strategy.
• Regulation of e-commerce and the Web by government will grow both in the United States and worldwide.
Describe the major themes underlying the study of e-commerce.
E-commerce involves three broad interrelated themes:
• Technology: To understand e-commerce, you need a basic understanding of informatin technologies upon which it is built, including the Internet and the World Wide Web, and a host of complimentary technologies-personal computers, local are networks, client/server computing, packet-switched communications, protocols such as TCP/IP, Web servers, HTML, and relational database among others.
• Business: While technology provides the infrastructure, it is the business applications-potensial for extraordinary returns on investment-that create the interest and excitement in e-commerce. New technologies present businesses and entrepreneurs with new ways of organizing production and transacting business. Therefore, you also need to understand some key business concept such as electronic markets, information goods, business models, firm and industry value chains, industry structure, and consumer behavior in electronic markets.
• Society: Understanding the pressures that global e-commerce places on contemporary society is critical to being successful in the e-commerce marketplace. The primary societal issues are intelectual property, individual privacy, and public policy.
Identify the major academic disciplines contributing to e-commerce research.
There are two primary approaches to e-commerce: technical and behavioral. Each of these approaches is represented by several academic disciplines. On the technical side:
• Computer scientists are interested in e-commerce as an application of Internet technology.
• Management scientists are primarily interested in building mathematical models of business processes and optimizing them to learn how businesses can exploit the Internet to improve their business of operations.
• Information systems professionals are interested in e-commerce because of its implications for firm and industry values chains, industry structure, and corporate strategy.
• Economists have focused on consumer behavior at Web sites, and on the features of digital electronic markets.
On behavioral side:
• Sociologists have focused on studies of Internet usage, the role of social inequality in skewing Internet benefits, and the use of the Web as a personal and group communications tool.
• Finance and accounting scholars have focused on e-commerce firm valuation and accounting practices.
• Management scholars have focused on entrepreneurial behavior and the challenges face by young firms who are required to develop organizational structures in short time spans.
• Marketing scholars have focused on consumer response to online marketing and advertising campaigns, and the ability of firms to brand, segment markets, target audiences, and position products to achieve higher returns on investment.
Rangkuman Bab I
What is E-Commerce?
E-Commerce-The use of the Internet and Web to transact business. Digitally enabled transactions include all transactions mediated by digital technology. For the most part, this means transactions that occur over the Internet and the Web. Coomercial transactions involve the exchangeof value (e.g., money) across organizational or individual boundaries in return for products and services. Exchange of value is important for understanding the limits of e-commerce. Without and exchange of values, no commerce occurs.
Why Study E-Commerce?
Prior to the development of e-commerce, the process of marketing and selling goods was a mass-marketing and sales force-driven process. Consumers were viewed as passive targets of advertising “campaigns” and branding blitzes intended to influence their long-term product perceptions and immidiate purchasing behavior. Selling was conducted in well-insulated “channels.” Consumers were considered to be trapped by geographical and social boundaries, unable to search widely for the best price and quality. Information about prices, costs, and fees could be hidden from the consumer, creating profitable “information asymmetries” for selling firm. Information asymmetry refers to any disparity ini relevant market information among parties in a transaction. It was so expensive to change national or regional prices in traditional retailing (what are called menu costs) that “one national price” was norm, and dynamic pricing to the marketplace-changing prices in real time-was unheard of.
Seven Unique Features of E-Commerce Technology
1. Ubiquity
E-Commerce is ubiquitous, meaning that is it available just about everywhere, at all times
2. Global Reach
E-commerce technology permits commercial transactions to cross cultural and national boundaries far more conveniently and cost effectively than is true in traditional commerce. As a result, the potential market size for e-commerce merchants is roughly equal to the size of world’s online population (over 500 million in 2003, and growing rapidy, according to the Computer Industry Almanac)
3. Universal Standards
One strikingly unusual feature of e-commerce technologies is that the technical standards of the Internet, and therefore the technical standards for conducting e-commerce, are universal standards-they are shared by all nations around the world. In contrast, most traditional commerce technology differ from one nation to the next.
4. Richness
Information richness refer to the complexity and the content of a message (Evan and Wurster, 1997; 1999). The richness of traditional markets make them a powerfull selling or commercial environtment. Prior to the development of the Web, there was a trade-off between richness and rich: the larger the audience reached, the less rich the message.
5. Interactivity
E-commerce technologies are interactive, meaning they allow for two-way communication between merchant and consumer. Interactivity allows an online merchant to engage a consumer in ways similar to a face-to-face experience, but on a much more massive, global scale.
6. Information Density
The Internet and the Web vastly increase information density-the total amount and quality of information available to all market participants, consumers, and merchant alike. E-commerce technologies reduce information collection, storage, processing, and communication costs. At the same time, these technologies increase greatly the currency, accuracy, and timeliness of information-making information more useful and important than ever. As a result, information becomes more plentiful, cheaper, and of higher quality.
7. Personalization/Customization
E-commerce technologies permit personalization: Merchant can target their marketing messages to specific individuals by adjusting the message to a person’s name, interests, and past purchases. The technology also permits customization-changing the delivered product or service based on a user’s preferences or prior behavior. Given the interactive nature of e-commerce technology, a lot of information about the consumer can be gathered in the marketplace at the moment of purchase. With the increase in information density, a great deal of information about the consumer past purchases and behavior can be stored and used by online merchants.
Types of E-Commerce
There are variety of different types of e-commerce and many different ways to characterize these types.
B2C. The most commonly discussed type of e-commerce is Business-to-Consumer (B2C) e-commerce, in which online businesses attempt to reach individual consumers.
B2B. Business-to-Business (B2B) e-commerce, in which businesses focus on selling to other businesses.
C2C. Consumer-to-Consumer (C2C) e-commerce provides away for consumer to sell to each other, with the help of an online market maker such as the auction site eBay.
P2P. Peer-to-peer technology enables Internet users to share files and computer resources directly without having to go through a central Web server.
M-commerce. Mobile commerce, or M-commerce, refers to the use of wireless digital devices to enable transactions on the Web.
Understand the visions and forces behind the E-commerce I era
The E-commerce I era was a period of explosive growth in e-commerce, beginning in 1995 with the first widespread use of the Web to advertise products and ending in 2000 with collapse in stock market valuations for dot.com ventures. Among the visions for e-commerce expressed during the period were the following:
• For computer scientists, e-commerce was part of their vision of a universal communications and computing environment that everyone on earth could access with cheap, inexpensive computers.
• For economists, e-commerce raised the realistic prospect of a perfect Bertrand market-where price, cost, and quality information are equally distributed-and friction-free commerce.
• For entrepreneurs and their financial backers, e-commerce represented an extraordinary opportunity to earn far above normal returns on investment. Overall, the E-commerce I period was driven largely by visions of profiting from new technology, with the emphasis on quickly achieving very high market visibility. The source of financing was venture capital funds. The ideology of the period emphasized the ungoverned “Wild West” character of the Web and the feeling that government and courts could not possibly limit or regulate the Internet; there was a general belief that traditional corporations were too slow and bureaucratic, too stuck in the old way of doing business to “get it,” that is, to be competitive in e-commerce.
Understand the success and the failures of E-commerce I.
E-commerce during the E-commerce I era was:
• a technological success, with the digital infrastructure created during the period solid enough to sustain significant growth in e-commerce during the next decade.
• a mixed business success, with significant revenue growth and customer usage, but low profit margins.
E-commerce during E-commerce I era did not:
• fullfill economist’s visions of the perfect Bertrand market and friction-free commerce.
• fullfill the visions of entrepreneurs and venture capitalists for first mover advantages, low customer acquisition and retention costs, and low costs of doing business.
Identify several factors that will define the E-commerce II era.
Factor that will define e-commerce over the next five years include the following:
• E-commerce technology will continue to propagate through all commercial activity, with overall revenues from e-commerce, the number of products and services sold over the Web, and the amount of Web traffic all rising.
• E-commerce prices will rise to cover the real cost of doing business on the Web.
• E-commerce margins and profits will rise to levels more typical of all retailers.
• Traditional well-endowed and experienced Fortune 500 companies will play a growing and more dominant role.
• The number of successful e-commerce firms will adopt a mixed “clicks and bricks” strategy.
• Regulation of e-commerce and the Web by government will grow both in the United States and worldwide.
Describe the major themes underlying the study of e-commerce.
E-commerce involves three broad interrelated themes:
• Technology: To understand e-commerce, you need a basic understanding of informatin technologies upon which it is built, including the Internet and the World Wide Web, and a host of complimentary technologies-personal computers, local are networks, client/server computing, packet-switched communications, protocols such as TCP/IP, Web servers, HTML, and relational database among others.
• Business: While technology provides the infrastructure, it is the business applications-potensial for extraordinary returns on investment-that create the interest and excitement in e-commerce. New technologies present businesses and entrepreneurs with new ways of organizing production and transacting business. Therefore, you also need to understand some key business concept such as electronic markets, information goods, business models, firm and industry value chains, industry structure, and consumer behavior in electronic markets.
• Society: Understanding the pressures that global e-commerce places on contemporary society is critical to being successful in the e-commerce marketplace. The primary societal issues are intelectual property, individual privacy, and public policy.
Identify the major academic disciplines contributing to e-commerce research.
There are two primary approaches to e-commerce: technical and behavioral. Each of these approaches is represented by several academic disciplines. On the technical side:
• Computer scientists are interested in e-commerce as an application of Internet technology.
• Management scientists are primarily interested in building mathematical models of business processes and optimizing them to learn how businesses can exploit the Internet to improve their business of operations.
• Information systems professionals are interested in e-commerce because of its implications for firm and industry values chains, industry structure, and corporate strategy.
• Economists have focused on consumer behavior at Web sites, and on the features of digital electronic markets.
On behavioral side:
• Sociologists have focused on studies of Internet usage, the role of social inequality in skewing Internet benefits, and the use of the Web as a personal and group communications tool.
• Finance and accounting scholars have focused on e-commerce firm valuation and accounting practices.
• Management scholars have focused on entrepreneurial behavior and the challenges face by young firms who are required to develop organizational structures in short time spans.
• Marketing scholars have focused on consumer response to online marketing and advertising campaigns, and the ability of firms to brand, segment markets, target audiences, and position products to achieve higher returns on investment.
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