Lecture 3 : E-commerce mechanisms, infrastructure and tools

E-marketplaces

• markets (electronic or otherwise ) have 3 main functions
• matching buyers and sellers
• facilitating the exchange of information , goods, services, and payments associated with market transaction
• providing an institutional infrastructure , such as legal and regulatory framework , which enables the efficient functioning of the market
• E-marketplaces/spaces changed several of the processes used in trading and supply chains
• greater information richness
• lower information search costs for buyers
• diminished information asymmetry beetween sellers and buyers
• ability of buyers and sellers to be in different locations
• A marketplace in which sellers and buyers exchange goods and services for money (or for other gooods and services)

marketspace components

• customers
• sellers
• product & services (digital products: goods that can be transformed into digital format and delivered over the internet )
• infrastructure
• fron t-end : the portion of an e-seller's business processes through which customer interact , including the seller's portal , electronic catalogs , a shopping cart , a search engine and a payment gateway
• Back end : the activities that support online order-taking . it includes fulfillment , inventory management , purshasing from the supplier , payment processing , packaging and delivery
• intermediary : a third party between sellers and buyers (other business partner shippers, support services digital sign)

types of e-marketplaces ; from storefront to portalsr

• electronic storefront
• a single company's website where the product or service are sold
• Most common mechanisms :
• electronic catalog
• search engine (help the customer find a product on the website)
• e-auctuions facilities

E-mall (online mall /electronic mall)

• Aan online shopping center where many online stores are locted
• types of stores and malls
• general stores/ malls (amazon)
• specialized stores/malls (flower)
• regional versus global stores (souq)
• pure online organizations versus click and mortar stores

types of e-marketplaces

• Public e-marketplace ; An online market , usually B2b in which buyers and sellers exchange goods or services ; that include many sellers and many buyers (stock exchange)
• Private e-marketplaces : online markets owned by a single company ; may be either sell-side or buy-side e-marketplaces
• sell-side e-marketplace :
• A private e-marketplace in which a company sells either standard or customized products to qualified companies
• Buy-side e-marketplace
• A private e-marketplace in which a company makes purchases from invited suppliers

information portal

• a single point of access through a web browser to business information inside and /or outside an organization
• six major types of portals
• commercial (public) yahoo.com
• corprate portals
• publishing portals
• personal portals
• mobile portals
• voice portals

intermediation in EC

• online intermediaries
• companies that facilitate transactions between buyers and sellers and receive a percentage of the transaction value
• infomediaires
• electronic intermediaries that control information flow in cyberspace , often aggregating information and selling it to others
• five limitations of direct interaction
• search costs
• lack of privacy
• incomplete information
• contract risk
• pricicng inefficiencies

intermediation in EC

• Disintermediation : elimination of intermediaries between buyers and sellers
• Reintermediation: establishment of new intermediary roles for traditional intermediaries that have been disintermediated

Electronic catalogs and other market mechanisms

• electronic catalogs
• the presentation of product inforamtion in an electrwonic form ; the backbone of the most e-selling sites
• classififcation of electronic catalogs
• the dynamics of the information presentation
• the degree of customization
• integartion with business process
• online catalogs vs paper catalogs
• ease of updating
• ability to be integrated with the purshsing process
• coveragte of a wide spectrum of products
• interactivity
• customization
• strong search capabilities

2 approaches to creating customized catalogs

• let the customer identify the parts of interest to them from the total catalog
• let the system automatically identify customer characteristics based on the customer;s transaction records

search engine

• a computer program that can access a database of internet resources , search for specific information or keyword , and report the results
• types of EC searches
• internet/web search
• enterprise search : the practice of identifying and enabling specific content across the enterprise to be indexed , searched , and displayed to authorized users
• Desktop search ; search tools that search the contents of a user's or organization' computer files , rather than searching the internet
• Software (intelligent0 agent
• software that can perform routine tasks that require intelligence

Electronic shopping cart

• an order -processing technology that allows customers to accumlate items they wish to buy while they continue to shop
• Auction
• A competitive process in which a seller solicits consecutive bids from buyers (forward auction)
• a buyer solicits bids from sellers (backward auctions ) prices are determined dynamically by the bids