Chapter 11 Key Concepts

CHAPTER 11

What you should know:
-B2C vs. B2C (this chapter focuses on B2C)
-Top 4 payment methods of all commerce
-Cash
-Cheque
-Debit Card
-Credit Card
-Online payments
-95% of ecommerce transactions in the US are with credit cards
-Scrip (fake money, like Canadian Tire $ or Air Miles, that cannot be exchanged for cash, but can be used to purchase merchandise on the Internet) “Flooz” and “Beenz”.
-Consumer security
-Privacy & security
-Independence (whatever form of payment I have, I should be able to use w/ that merchant)
-Portability
-Convenience (must be simple to use)
-Phishing (when a Bank or other trusted authority is giving you money, and a third party sends you a login page that is not actually yours, in order to get your login info)
-Payment cards (all plastic; debit or credit, charge cards, etc.)
-Credit cards (open-loop processing)
-Charge cards (closed-loop processing) must be paid at the end of the month. Safer than open-loop, as there are fewer parties involved – you deal directly with Amex, not the bank
-Single-use credit cards
Advantages of using plastic
-Consumer protection from fraud
-World-wide acceptance (for credit cards mostly)
-Currency conversion (foreign exchange transactions)
-Merchant protection (authorization/verification) – the vendor knows he is going to get paid
Disadvantages
-associated fees for transactions or monthly fees for the merchant
-minimum charge of $0.30 per transaction or 1-2% of the value of the transaction
-annual fees for the consumer
-Payment processing
-EMV standard (like EDI system)
-30 day shipping requirement (if your card is billed, they must ship the product within 30 days)
-merchant accounts required to accept credit cards
-general payment service providers- icVerify software- runs credit card numbers to verify that they are legit
-online payment service providers (such as Internet Secure, PayPal, etc.) that process online payments for the vendor
-Electronic Cash
Advantages
-works well for micro-payments and small-payments
-the exchange of digital information, not the bank account information
-readily exchange for cash, unlike Scrip
-Useful for those who cannot get credit cards (due to bad credit, or the country they reside in)
-no need for authorizations, like credit cards
-Independence: unrelated to any proprietary network or storage device
-Portability: freely transferable btw/ two parties (across borders)
-Convenience: does not require any special software/hardware
Disadvantages
-Not standardized or universally accepted
-no audit trail, due to independence and privacy
-potential for double spending and money laundering
-susceptible to forgery
Online systems
-PayPal, WorldPay, Authorize.net, etc.
-Electronic Wallets
-smart cards: websites where you store all your personal information, such as medical, passport, car servicing, debit and credit information
-server-side wallets: used to auto-fill fields. Information is with only one server
-client-side: all information is stored in your own computer, not someone else’s.

Chapter 10 Key Concepts

Computer security

logical security protection of assets from unauthorized access, use, alterations, or destruction. Physical security includes tangible protection devices, such as alarms, guards, fire proof doors, etc.

Managing Risk
Countermeasure - procedure either physical or logical that recognizes, reduces, or eliminates a threat.
Contain and control
Prevent Check Figure 10-1 pg 441
Ignore
Insurance or backup plan
Threats include - eavesdropper is a person or device that can listen in on and copy internet transmission. Hackers create these devices.

Computer security is split between 3 categories:
Secrecy - protecting against unauthorized data disclosure and ensuring the authenticity of data source
Integrity - preventing unauthorized data modification
Necessity - preventing data delays or denials (removal)
Man in the middle exploit - e mail message is intercepted and its contents are changed before forwarded

Security Policy is a written statement describing which assets to protect and why they are being protected, who is responsible for that protection, and which behaviours are acceptable and which are not.
First step - determine which assets to protect from which threats. Eg credit cards should be protected from eaves droppers.
Next - organization determines what resources are available to protect the assets identified.
Finally - organization commits resources to building or buying software, hardware, and physical barriers that implement the security policy.

Security policy covers many security centres
Authentication - who is tring to access the e commerce site
Access control - who is allowed to log on to and access site
Secrecy - who is permitted to view selected info
Data integrity - who is allowed to change data
Audit - who or what causes specific events to occur




Security for Client Computers

Cookies
Stateless connection makes each transmission of info is independent or no continuous connection such as shopping carts and payment processing
Session cookies - web client ends connection (shopping cart)
Persistent cookies - remain on computer indefinitely (login information recognition)
First party cookies are pleaced on client computer by web server site
Third party cookies - originates on a web site other than the site being visited

Web bug is a tiny graphic that a third party web site places on another web page

Active Content programs that are embedded transparently in web pages and that cause action to occur such as displaying movie graphics, downloads, and audio
-Programs that are active content are Trojan horses and zombies

Java applets is active content developed by sun Microsystems
-Java sandbox protects computer because java scripts are embedded onto client’s computer where security violations can occur.

Java Script is a scripting language developed by Netscape to enable web page designers
to build active content. Can be used to attack by executing code that destroys the client’s hard disk, discloses emails stored, or sends sensitive info. Cannot attack unless opened.

Active X controls contain programs and properties that web designers place on web pages to perform particular tasks.

Digital Certificates is an attachment to an email message or a program embedded in a web page that verifies sender or Web site. “signed” message code.
Stegonography is process of hiding information within another piece of information.

Communication Channel Security

Sniffer programs record information that passes through a computer
Backdoors are holes in the software either accidentally left open of intentionally.

Integrity threats include active wire tapping when an unauthorized party can alter a message stream of information. Cybervadalism which is defacing existing web pages. Phishing expeditions capture confidential customer information.

Hash coding, Asymmetric Encryption, Symmectic ecryption see pg 468

Chapter 9 Key Concepts

Web Hosting Alternatives
-Self-hosting (when large companies run servers in-house)
- Commerce Service Providers (CSPs)/Managed Service Providers (MSPs)/Application Service Providers (ASPs): (firms that offer Web server management, and rent application software, etc.) A.k.a. ISPs.
-Shared hosting (the client’s web site is on a server that hosts other Web sites simultaneously and is operated by the service provider at its location)
-Dedicated hosting (the service provider makes a Web server available to the client, but the client does not share the server with other clients of the service provider)
-Co-allocation (the service provider rents a physical space to the client to install its own server hardware. Client also maintains the server. The server provides the reliable Internet connection)

Basic Functions of E-commerce Software
Catalogue display
-organizes and lists the goods and services to be sold
-a static catalogue: simple list written in HTML. Code must be edited every time a change is needed
-a dynamic catalogue: stores info on the items in a database
Shopping cart capabilities
-used instead of filling out online forms
-avoids double sending
-checkout button as a confirmation
Transaction processing
-when the virtual shopper checks out
-software performs the necessary calculations
-most complex part of the sale

Advanced Functions of E-commerce Software
Middleware: software that handles connections between e-commerce software and accounting systems.
-Interoperability: making a company’s information systems work together
Enterprise Application Integration and Databases: Takes requests messages received by the web server and runs application programs that perform some kind of actions based on the contents of the requests messages
-Business logic: the actions that application server software performs are determined by the rules used in the business.
-the linking of these scattered applications is called Enterprise Application Integration
-Database manager: software that stores information in a highly structured way that makes it easy for the software to retrieve the information stored in the database.
-Distributed information systems: information systems that store the same data in many different physical locations
Web services: Combination of software tools that let application software in one organization communicate with other applications over a network by using a specific set of standard protocols
Integration with enterprise resource planning: Business systems that integrate all facets of a business including accounting logistics, manufacturing marketing planning and project management and treasury functions
Customer relationship management: Must obtain data from operations software that conducts activities such as sales automation, customer service centre operations, and marketing campaigns.
-Supply chain software (SCM), content management software, knowledge management software (KM):
Content management system: Shares information between employees, customers, suppliers, and partners. Helps companies control the large amounts of text, graphics, and media files

Chapter 8 Key Concepts

Web Server Basics
3 Elements of a Web Server:
-Hardware (computers and related components)
-Operating system software
-Web server software

Types of Web Sites:
-Development sites (simple sites that companies use to evaluate different Web designs)
-Intranets (corporate in-house networks)
-Extranets (Intranets that allow certain authorizes parties outside the organization, such as suppliers or partners, to access certain parts of their information systems)
-Transaction-processing sites (commerce sites, such as B2B and B2C)
-Content-delivery sites (sites that deliver content, such as news and other digital information)

Web Clients and Web Servers
-Web Client: when a person uses their Internet connection to become part of the Web, by requesting services such as database access, information retrieval, etc.
-Web Server: the computers that perform these requests, which often have more memory and larger, faster disk drives.
-Dynamic Content: non-static information constructed in response to a Web Client’s request.
-server-side scripting: programs running on the Web server create the Web pages before sending them back to the requesting Web clients as part of response messages.
-dynamic page generation technologies include JavaServer Pages (JSP) and Active Server Pages (ASP).
-Web browser software: includes Microsoft Internet Explorer or Netscape Navigator.

Various meanings of “Server”
-any computer used to provide or serve files or make programs available to other computers connected through a network such as a LAN or WAN.

Web Client/Server Communication
-is exchanged using HTTP between the Client (making the request) and the Server (fulfilling the request)

Two-Tier Client/Server Architecture
-the basic Web client/server model is a Two-Tier model, because there is only one client and one server.
-the Web client sends a request message, and receives a response message in return.

Three-Tier and N-Tier Client/Server Architectures
-extends two-tier to include more complex processing such as retrieving files from a database to generate a dynamic web page. N-tier architectures have more than three tiers.

Electronic Mail
Benefits
-one of the first Internet Applications
-documents, pictures, movies, worksheets, etc can be sent along with the message as attachments
-simple and fast
Drawbacks
-time spent answering emails
-computer viruses
-Spam (unsolicited commercial email)
-Black-list filtering: blocks addresses that are known spammers
-White-list filtering: allows messages from known contacts

Web site and internet utility programs
Finger and Ping Utilities
Tracert and Other Route-Tracing programs
Telnet and FTP Utilities
Indexing and Searching Utility Programs
Data Analysis Software
Link-Checking Utilities
Remote Server Administration

Web Server Hardware
Server Computers
Web Server Performance Evaluation
Web Server Architecture

Chapter 12 Key Concepts

Planning Ecommerce Initiatives:
Identifying Objectives
-Examples of objectives include: increasing sales in existing markets, opening new markets, serving existing customers better, identifying new vendors, coordinating more efficiently with existing vendors, or recruiting new employees more effectively.

Linking Objectives to Business Strategies
-Downstream Strategies: improve the value that the business provides to its customers
-Upstream Strategies: focus on reducing costs or generating value by working closely with suppliers, etc,
-other activities/initiatives include: building brands, enhancing existing marketing programs, selling products and services, selling advertising, managing supply chains, operating auctions, building virtual communities and Web portals.

Measuring Benefits
Tangible benefits of Ecommerce include increased sales and reduced costs. An example of an intangible benefit is increased customer satisfaction.

Managing Costs
-total cost of ownership: hardware/software costs, costs of hiring & training, paying the Web design, those who write or customize the software, create, operate and maintain the website.
-change management: process of helping employees cope with changes by communicating the need for change, including employees in the decision process, and allowing them to participate in the planning for the change.
-opportunity costs: the forgone benefits that a company could have obtained/lost benefits from an action not taken.
-web site costs: a basic entry-level site costs around $1 million, whereas a true differentiator would cost upwards of $15 million. Costs of maintaining and improving the site will be between 50-200% of the initial startup cost.

Comparing Benefits to Costs
-Major investments in equipment, personnel, or other assets are called capital projects or capital investments.
-If the benefits of a project exceed the costs by a considerable margin, the company invests in the project.
-Need to identify potential benefits, identify costs required to generate those benefits, and then evaluate whether or not those benefits exceed the costsàthe cost/benefit approach

Return on Investment
-measures the amount of income that will be provided by a specific current expenditure. Some of these techniques include: net present value method (NPV), internal rate of return (IRR), and the payback method.
-ROI techniques provide quantitative expressions of a comfortable benefit-to-cost margin for a specific company.

Strategies for developing Ecommerce Web Sites:
Internal development vs Outsourcing
-Using internal people to lead all projects ensures that the company’s specific needs are addressed and that the initiative is congruent with the goals and culture of the org.
-Outsourcing: hiring another company to provide the outside support for all or part of the project.
-The internal team: must have knowledge about the Internet & technologies, be creative thinkers, have business knowledge and the respect of the firm’s operating management. Also, a good sense of the company’s goals and culture is important. Measuring achievements can be non-monetary such as increased customer satisfaction, number of sales leads generated, etc. The company must recognize the value of its human capital, even though such assets do not show up on financial statements.
-Early outsourcing: when a company outsources the initial design and development to launch the project quickly. The outsourcing team then trains the company’s IS team in the new technology before handing the operation of the site over to them.
-Late outsourcing: the company’s IS team do the initial design & development work, implement the system until it becomes a stable part of operations. The maintenance of the system is then outsourced so that the IS team can develop new technologies to further their competitive advantage.
-Partial outsourcing: the company identifies portions of the project that can be completely designed, developed, implemented and operated by another firm that specializes in a particular function.

Selecting a hosting service
The most important factors to evaluate when selecting a hosting service:
-functionality
-reliability
-bandwidth and server ability
-security
-backup and disaster recovery
-cost

New methods for implementing partial outsourcing
-Incubators: companies that offer start-up companies a physical location with offices, accounting and legal assistance, computers, and Internet connections at a very low cost. Sometimes they offer seed money, management service, and marketing assistance as well. In exchange, they receive an ownership interest in the company, typically between 10 and 50 percent. Once the company is ready to go out on its own, the incubator sells its shares and invests in a new start-up company.
-Fast Venturing: an existing company that wants to launch an electronic commerce initiative, joins external equity partners (banks or venture capitalists) and operational partners (firms such as systems integrators, consultants, and Web portals) that can offer the experience and skills to develop be project very rapidly.

Managing Ecommerce implementations:
Project management
-The collection of formal techniques for planning and controlling the activities undertaken to achieve a specific goal.

Project portfolio management
-Each project in monitored as if it were an investment in a financial portfolio.

Staffing for Ecommerce
The general areas of staffing that are most important to the success of e-commerce initiatives include:
-business managers (sets objectives, implements business plan, makes adjustments)
-project managers (tracks costs/accomplishments of project objectives)
-account managers (keeps track of multiple Web sites in use by a project)
-applications specialists (maintenance of specific functional software programs)
-web programmers (designs and writes the underlying code for database driven sites)
-web graphics specialists (art, layout, composition, visual appeal/ease of use of Web site)
-content creators (writes original content for a Web site)
-content managers or editors (purchases and adapts existing material for Web site use)
-customer service reps (managing customer relationships in the ecommerce operation)
-systems administrators (responsible for the system’s reliable & secure operation)
-network operators (resolve network problems, developing fault resistant technologies)
-database administrators (defining data elements in database design, & DMBS operation)

Post-implementation Audits
-A formal review of a project after it is set up and running. It gives managers a chance to examine the objectives, performance specifications, cost estimates, and scheduled delivery dates of the project in its planning stage and compare it to what actually happened.

Chapter 7 Key Concepts

Chapter 7 – Legal, Ethical and Tax Issues; This is Really Good Stuff

The legal environment of electronic commerce
-Scholars define the relationship between geographic boundaries and legal boundaries in terms of four elements: power, effects, legitimacy, and notice.
1. Power – a form of control over physical space and the people and objects that reside in that space, and is a defining characteristic of statehood.
Jurisdiction - The ability of a government to exert control over a person or corporation.
-laws in the physical world do not apply to people who are not located in or do not own assets in the geographic area that created those laws. For example, a Japanese website that offers delivery to goods in the US would however be subject to US laws.
2. Effects – the impact of a person’s/corporation’s behavior
3. Legitimacy – those subject to laws should have some role in formulating them
4. Notice – the expression of a change in rules (usually legal or cultural rules) typically represented by a physical boundary

Jurisdiction on the Internet
-more difficult to establish on the Internet than in the real world because geographic boundaries do not exist
Contract – a promise or set of promises between two or more legal entities that provides for an exchange of value (goods or services) between them. A failure to comply with a contract is called a breach of contract.
Subject-matter jurisdiction – a courts authority to decide a particular type of dispute; state courts have subject matter jurisdiction over issues governed by state laws, and federal courts have subject-matter jurisdiction over issues governed by federal laws.
Personal jurisdiction – a court’s authority to hear a case based on the residency of the defendant (when the defendant is a resident of the state in which the court is located)
-an out of state person can voluntarily submit to the jurisdiction or a particular state court by agreeing to do so and signing a forum selection clause, making them subject to their own jurisdiction’s laws as well as the laws of the selected jurisdiction.

Jurisdiction in International Commerce
-is more complex
-generally governed by treaties between the countries engaged in the dispute
-most courts are reluctant to serve as forums for international disputes

Conflict of Laws takes place when business is governed by state, local and federal laws that address the issues in different ways

Contracting and enforcement in E-commerce
-Any contract includes 3 essential elements:
1. An offer
2. An acceptance
3. Consideration
Offer – a commitment with certain terms made to another party. Offer can be revoked as long as no payment, delivery of service, or other consideration has been accepted
Acceptance – the expression of willingness to take an offer, including all of its stated terms
Consideration – the agreed upon exchange of something of value, such as money, property or future services
-an implied contract can also be formed when two or more parties that act as if a contract exists, even if no contract has been written and signed
-when a seller advertises goods for sale on a web site, that seller is not making an offer, but is inviting offers from potential buyers

Warranties on the Web & Authority to form contracts
Warranty disclaimer – is a statement declaring that the seller will not honor some or all implied warranties. These should be in large type, bold font or a contrasting color, as they must be noticeable to the buyer.
Authority to bind – determining whether an individual has the authority to commit a company to a contract

Terms of Service Agreements
TOS (Terms of Service)- a page full of detailed rules and regulations, most of which are intended to limit the Web site owner’s liability for what you might do with the information you obtain from the site

Use and Protection of Intellectual Property
Intellectual Property – a general term that includes all products of the human mind, tangible or intangible
Copyright – the right granted by a government to the author or creator of a literary or artistic work, for a specific length of time provided in the copyright law and gives the creator sole and exclusive right to print, publish, or sell the work.
-can include books, music, recordings, architectural drawings, computer software, etc.
-Fair Use of a copyrighted work includes copying it for use in criticism, comment, news reporting, research, etc.
Patent - an exclusive right granted by the government to an individual to make, use, and sell an invention.
-Business Process Patent – protects a specific set of procedures for conducting a particular business activity.
Trademark – a distinctive mark, device, motto, or implement that a company affixes to the goods it produces for identification purposes.
-Service Mark – similar to a trade mark, but used to identify services provided
Common Law – part of British and US law established by the history of court decisions that has accumulated over many years (precedent?)
Statutory Law – also part of British and US law, arises when the elected legislative bodies pass laws, which are also statutes.

Domain names, Cyberaquatting, and Name stealing
Cybersquatting – registering a domain name that is the trademark of another person or company in the hopes that the owner will pay huge sums of money to acquire the URL
Name Changing – when someone registers purposely misspelled variations of well-known domain names, to lure consumers who make typographical errors
Name Stealing – when someone posing as a site’s administrator changes the ownership of the site’s assigned domain name to another site and owner.

Defamation – a defamatory statement is false and injures the reputation of another person or company. If it injures the reputation of a product of service instead of a person, it is called product disparagement
Trademark dilution – the reduction of the distinctive quality of a trademark by alternative uses

Online Crime, etc.
-includes stalking, distribution of pornography, and gambling

Taxation and Ecommerce
-An online business can be subject to several types of taxes: income tax, property tax, and transaction tax.
Income tax: levied by national, state and local governments on the net income generated by business activities
Transaction tax: include sales tax, use taxes, excise tax, etc.
Property tax: on the personal property and real estate used in the business

Chapter 6 Key Concepts

7 Types of Auctions
1. English Auction: bidders publicly announce their successive higher bids until no higher bid is forthcoming. Item is sold to the highest bidder. Also called an ascending price auction, or open auction.
-bidders tend not to bid at their full private valuations, only slightly higher than the bidder before, preventing the seller from achieving the maximum price
2. Dutch Auction: an open auction in which bidding starts at a high price and drops until a bidder accepts the price, also known as a descending price auction. Used in the Netherlands by farmers to sell perishable goods.
-are difficult for customers to understand, and expensive to run
3. First-Price Sealed-Bid Auctions: bidders submit their bids independently and are prohibited from sharing information with each other, where the highest bidder wins.
4. Second-Price Sealed-Bid Auctions: similar to first-price, but highest bidder is awarded the item at the price by the second highest bidder. Also called Vickrey auctions.
-encourages bidders to bid the amounts of their private valuations.
5. Open-Outcry Double Auctions: used by the Chicago Board of Trade for commodity futures and stock options. Buy and sell offers are shouted by traders standing in a small area on the exchange floor called a trading pit.
-can get a little hectic
-only work well for items of known quality in large quantities
6. Sealed-Bid Double Auctions: buyers and sellers each submit combined price-quantity bids to an auctioneer, who then matches the seller’s offers to the buyer’s offers until everything is sold. Used by the NYSE.
7. Reverse (Seller-Bid) Auctions: multiple sellers submit price bids to an auctioneer who represents a single buyer. Bids are for a given amount of a specific item that the buyer wants to purchase. Prices go down until no seller is willing to bid lower. Used by Priceline.com

Online Auctions
General Consumer Auctions: most successful example is eBay. Includes a third-party assurance provider, a minimum bid increment, a proxy bid (the bidders maximum bid). Amazon also added auctions to its services.
Specialty Consumer Auctions: special interest markets for certain target markets, in order to meet specified needs of those segments.
Consumer Reverse Auctions and Group Purchasing Sites:
-reverse auctions directed at a consumer market, using a reverse bid, ie. Priceline.com
-group purchasing site: seller posts item with a price. As more bids (without any specified prices) are put in, it forces the seller to reduce its price. Good for non-perishable goods with a high value-to-size ratio

Business to Business Auctions:
Developed from manufacturers’ need to get rid of excess inventory. Liquidation brokers sell excess inventory of smaller companies.
Business to Business Reverse Auctions:
Similar to consumer reverse auction, but takes place between businesses or suppliers

Auction-related services
Escrow services – an independent third party who holds an auction buyer’s payment until the buyer receives the purchased item and is satisfied with what the seller represented it to be. Escrow services charge a fee in order to provide this service.
Auction Directory and Information Services – a web directory of auctions, offering tips, newsletters, info on fair market value, current selling prices, etc.
Auction Software – software that helps buyers and sellers manage their online auctions. Ie. Sniping software helps bidders place the winning bid before the last second of the auction clock.
Consignment Services – an auction for people who wish to sell an item but do not have the time or skills to do it themselves. The consignment services will take care of the whole thing and deduct a fee from the sellers profit.

Virtual Communities and Web Portals
-Mobile Communications Technology
‘Wireless communication capabilities’. The PDA is an example that uses WAP (Wireless Application Protocol).
-WAP allows Web pages formatted in HTML to be displayed on devices with small screens such as PDAs and mobile phones.
-GPS (Global Positioning Service): user enters a destination, GPS tracks the users current location and then announces directions to the destination.
-Mobile Business
Expected to pick up in popularity soon, once mobile phones, notebooks, etc are interconnected in ways that allow people to switch modes of access seamlessly. Few companies have been successful so far.
-Intelligent Software Agents
Sites that help users find products and services for sale on the Web at buyers specifications.
-Virtual Communities
A gathering place for people and businesses that does not have a physical existence, ie. Chat rooms, usenet newsgroups, and web sites. They offer people a way to connect with each other and discuss common issues and interests.
-another form is a ‘virtual learning community’ such as WebCT
-Bogs (Web Logs): web sites that contain commentary written by individuals
-Social Networking Sites: virtual communities that exist for the sole purpose of community (Facebook)
-Idea-based virtual communities: communities based on certain ideas or specialized topics

Revenue Models for Web Portals and Virtual Communities
Advertising Supported
Site is free for users; survives on revenue from ads placed on the site
Mixed Revenue
Charges a fee to users and always runs ads on the site. Monetizing refers to converting existing regular site visitors into fee-paying members.
Internal
Web portals of large organizations that provide info to employees on Intranets that are cost effective for employers.

Chapter 5 Key Concepts

Supply chain – the part of an industry value chain that precedes a particular strategic business unit
E-sourcing – the use of internet technologies in sourcing potential suppliers

Electronic Data Interchange (EDI) – a computer to computer transfer of business information between two businesses that uses a standard format of some kind
-firms that trade this data in specific formats are EDI compatible
-trade data such as transaction info, price quotes, & order status inquiries
-the most common method for B2B transactions
-first developed by freight companies to reduce paperwork and streamline the interchange of information-the internet provides the most inexpensive communication channel that lacked in EDI for many years

Value Added Networks (VANs) – a company that provides communications equipment, software, and skills needed to receive, store and forward electronic messages that contain EDI transaction sets.
-businesses use VANs instead of connecting directly to their trading partners by installing EDI translator software that is compatible with the VAN

Value creation in the Supply Chain
-Tier one suppliers: long-term relationships formed with a small number of very capable suppliers
-Tier two suppliers: these suppliers in turn develop long-term relationships with a larger number of the next level of suppliers
-Tier three suppliers: provide components and raw materials to the previous two levels

Benefits:
-increase the speed and reduce the cost of processing transactions
-reduce errors in entering data
-receive rapid notification about product design changes and adjustments
-share information about customer demand fluctuations
-increase supply-chain efficiencies

Web Portals
A site that serves as a customizable home base from which users do their searching, navigating, and other web-based activity

E-marketplaces and Portals
After the Internet emerged in the 1990’s spurred the development of different models of B2B e commerce, such as:
-Independent Industry Marketplaces
A collection of portals that include industry marketplaces, independent exchanges, and public markets, which are all information sources for companies of the same industry

-Private Stores and Customer Portals
A private store is a pass-word protected area of a web site that offers individual customers negotiated price reductions on a limited selection of products and customized features.
A customer portal is a corporate web site designed to meet the needs of customers by offering additional services such as private stores, part-number cross-referencing, etc.

-Private Company Marketplaces
A marketplace that provides auctions, requests for quotes postings, and other features to companies that want to operate their own marketplace

-Industry Consortia-Sponsored Marketplaces
A marketplace formed by several large buyers in a particular industry

Chapter 4 Key Concepts

Marketing on the Web

7 Pages every website should have: (this link is on WebCT)
Contact us
Testimonials
Privacy Policy
FAQ (do you have PayPal, MC, etc.)
“Gimme” page (if people want to sign up for newsletters/special offers etc. where they have to leave their contact info to get something in return)
About us
Confirmation (an order confirmation)

Web Marketing
-Product-based strategies (Staples, NCIX)
-Customer-based strategies (BMO, Okanagan College)
-Trust and Media Selection (low level of trust [mass media mass market], one on one selling: high level of trust = repeat customer [personal contact])
-Market Segmentation (Dell or BMO categorize by what needs are) similar to customer-based strategies
-The Long Tail (companies ignore products that are not as profitable on the long tail, although the profit from products on the short tail is not nearly as much as that of the long tail. E commerce is better at offering the long tail because it has no inventory costs. Ie Netflix)

Consumer Behavior
-Segmentation
Browsers [people who have no intentions of buying, only looking]
Shoppers [people who have a specific need and shop around]
Buyers [people making purchases from the site]
each group needs different strategy
-Relationship Marketing
Awareness (making people aware; wanting to go to your site)
Exploration (get people to explore and look up info)
Familiarity (when they buy and know how the process works)
Commitment (people like to come back because they are committed)
Separation (when people become disillusioned or unhappy from negative experiences)

Consumer Strategies
-Acquisition (cost of getting someone to your site)
-Conversion (what it takes to convert someone from a browser to a buyer)
-Retention (trying to get people to be committed)

Advertising Strategies
-Banner Ads, Pop-up ads, active ads, interstitial ads, site sponsorships
-problems: measuring effectiveness of advertising
-CPM (cost per thousand banner impressions)
-CPC (cost per click)
-CPT (cost per transaction if the customer ends up purchasing thorough a media)

Email and CRM Strategies
-Permission marketing (when people ask to receive newletters, etc)
-Content and advising (sending other info in addition to products)
-Outsourcing processing (processing email for people, spam mail and filters)
-eCRM solutions (Customer Relationship Management) is more important in ecommerce

Branding Strategies
-Leveraging and Consolidation (adding of services ie Google News)
-Affiliate Marketing (commissioned salesperson using a known brand)
-Viral Marketing (word of mouth through technology)

Search Engine Strategies
-Search engines (Google, Yahoo, etc.)
-web directories (people gather information, not a crawler)
-SEO for keywords (Search Engine Optimization) using key search words to get your site to be the first site hit in search results
-Paid Inclusion (paying to have your site be the first hit on search results)
-Blogs, Social Media Sites, Forums
-Website domain names (.net or .com etc incase people misspell the website)

Chapter 3 Key Concepts

Revenue Models

Web Catalogue
-product listing with info and pricing
-sell directly to customers online
-need checkout and shipping process
-sales contracts, returns policies, etc.
-uses standard mark-up pricing model
-value-added services for additional cost
Wal Mart, Victoria’s Secret, etc.

Digital Content
-firms own rights to intellectual property (journal articles, industry reports, etc.)
-more academic and research focused
-controlled by academic institutions (Business Schools)
-subscription or purchase per use
CMA, EBSCO, ACM Digital Library, ProQuest, etc.

Advertising Supported
-solely supported by advertising
-accounting for hits on the ads
-no subscriptions
-number of impressions (# of times ad is displayed) (CPM)
-number of clicks on ads (CPC)
-high traffic websites
Search engines, Monster.ca, AOL, MSN, Autotrader, etc.

Mixed Mode
-membership requirements
-subscription fees
-advertising to generate revenue
-uses BOTH advertising and subscription
Hotmail.com, Mustang.com
-to move a customer from fee to paid; more features and less advertising

Fee-For-Transaction/Fee-For-Service
-paid per purchase
-own the product after purchase
-discounter
-pricing info and login
-transaction fees
-trying to remove the middle-man (disintermediation)
Customer Integrated Systems (CIS) where the customer does the work
Ticketselleronline.com

The product does not determine the revenue model, its how the product is delivered

Strategic Issues
Channel/Conflict Cannibalizationgic : online stores stealing sales from the physical stores
Alliances/Distribution Management: ie Amazon.com can sell products (set up a storefront online) for small companies, who are trusted and reliable. Great way for a vendor to test the market for a product
Mobile Commerce: advertising and access to digital information is going to have to hit the mobile market; blackberry, cell phones, text messaging

Web Presence

-website must be attractive

-stickiness (attracting people and getting them to stay and browse)

-provide rich links and content

-help and support

-trusting relationship with customers

-meeting expectations

Chapter 2 Key Concepts

Origins of the Internet: (The physical network)
-1960s: Created by the US Department of Defence in order to keep their information secure and safe
-1972: email was created
-1974: Dr.Serf created TCP/IP (the language used to send data back & forth)
-1979: Usenet (groups or forums)
-1980s: NSF (National Science Foundation) Funded by US gov't to give the public access to all parts of the government
-1995: Internet was privatized and number of hosts increased dramatically

History of the Web: (How we use the Internet to pulish and view information)
-1945: Memex - Vannevar Busch. Designed a machine that would store data
-1960: Ted Nelson - Hypertext
-1987: Ted Nelson - Xanadu
-1989: Tim Berners-Lee: The Father of the World Wide Web. Created a hypertext system
-1993: Mosaic; the first web browser. Leading to FireFox, Internet Explorer, etc.
-2004: Web 2.0 (the production of content on the internet)

Web 1.0: storing info on the web, can access and read. passive consumption of content
Web 2.0: producing content (i.e. Facebook) on the web


Web Languages:
1. SGML:Standard Generalized Markup Language
-HTML: Hypertext Markup Language
-DHTML:
-XML: eXtensible Markup Language
-XHTML: eXtensible Hypertext Markup Language
2. CSS: design, stylesheets
3. Scripting and Programming: Javascript(client side/server side) PHP (databases etc.) Perl, VBScript, Python
4. Tutorials

Web Software:
Web servers: i.e. Apache, IIS, HFS, Server 2 Go, etc.
-[any computer connected to the internet can be a web server]
Web clients: i.e. Opera, Flock, Mozilla, Internet Explorer, etc.

Future of the Internet:
Internet 2 (huge increase in Bandwidth) [only universities are connected at this time]
Semantic Web (click on anything to get background info on it - not just hyperlinks)

Network Technologies:
Hardware: Routers (connects two different networks and has built-in intelligence), Hubs (gives extra connection points for computers or devices), Switches (a larger Hub), Gateways, Access Point, & Modems (POTS, Cable, DSL).
Protocols:
-Internet (TCP/IP[127.0.0.1 is the local IP address "localhost". 192.168.1.x is the address of the internal network]/TelNet/VOIP). Domain names (ie: .com, .de, or .ca) www.whatismyip.com
-Ports allow people to get through your firewall :80
-Mail (SMTP/POP3/IMAP/WebMail [gmail/hotmail/etc.])
-Newsgroups (NNTP)
-Files (FTP/SFTP), Web (HTTP/HTTPS)[S=secure website].
"Rules and guidelines for transfering info over the Internet"

Network Connectivity:

-Public

-Private

-Brandwidth: telephone(POTS), broadband(Cable/DSL), leased-line (TI/T3), wireless
-Wireless: bluetooth, wi-fi

Chapter 1 Summary

Revenue Model vs. a Business Model

Business Model: bottom-line driven
Revenue Model: a channel for generating revenue

Terms:
Globalization (of markets)
Localization (cultural nuances)
Translation (word by word)
EDI (Electronic Data Interchange)
EFT (Electronic Funds Transfer)

-60% of internet content is in english.

E Commerce is: the exchange of info across electronic networks at any stage of the supply chain, whether it is B2B, B2C, or btw public and private sectors. (E Commerce is: commerce, but commerce accelerated and enhanced by IT)

E-Business is: the transformation of key business processes through the use of INternet technologies. Includes front and back-office applications. Redefines old business models. (IBM)

E Commerce is broadly equivalent to E business

-B2B 97%, B2C 3%

E Commerce Categories/Models:

1. B2B: Supply-chain, Value-chain management (ie Dell)
2. B2C: Commerce over the net (Amazon & Dell)
3. C2B: Demand Aggregation (consumer groups)
4. C2C: Community Groups (eBay auctions)
5. B2G: Business to Government

Disintermediation: getting rid of the middle-man (driving the cost out of the supply chain)

1. First Wave: EFT's, EDI's and VAN. Mostly in the US, therefore predominantly English. Piracy, hacking. Customers not technologically "ready".
2. Second Wave: multi-lingual, multi-cultural, integration, broadband connection.

Product/Process Suitability:

• Commodity Item (hard to differentiate from competitors)
• Shipping Profile (how easily it can be packaged/shipped)
• High value-to-wieght value (ratio of shipping cost to selling price)
• Digital products

Pros of Ecommerce

• Increase sales through enhanced customer service
• decrase cost of handling inquiries and transactions
• reach new potential customers
• increase purchasing opportunities for buyers

Cons of Ecommerce

• difficult to calculate ROI
• perishable items difficult to sell
• cultural and lgeal obstacles

Global Issues in Ecommerce: trust, language, cultural, infrastructure

January 7th, 2008:

First blogg entry for BuAd 335-E commerce. This is gonna be greeaat fun.