E- Commerce

What is E-Commerce?
The conduct of selling, buying, logistics, or other
organization-management issues via the WEB.
OR
Technology mediated exchanges between parties
(individuals and/or organizations) as well as the
electronically based intra- or interorganizational activities
that facilitate such exchanges.

HISTORY
E-commerce actually began in the 1970s when larger
corporations started creating private networks to share
information with business partners and suppliers.
This process, called Electronic Data Interchange (EDI),
transmitted standardized data that streamlined the
procurement process between businesses, so that
paperwork and human intervention were nearly
eliminated.

 EDI is still in place, and is so effective at

reducing costs and improving efficiency
that an estimated 95% of Fortune 1,000
companies use it.
Prodigy was running text ads and selling
flowers in the early '80s
The first documented Online sale in 1994
was a CD.

Four Categories of e-Commerce

Business to Business (B2B) refers to the full spectrum of e-commerce

that can occur between two organizations.
This includes purchasing and procurement, supplier management,
inventory management, channel management, sales activities, payment
management &service and support.
Examples: FreeMarkets, Dell and General Electric

Business to Consumer (B2C) refers to exchanges between

business and consumers, like the ones managed by Amazon
Yahoo and Charles Schwab & Co.
The activities tracked are consumer search, frequently
asked questions and service and support.

 Peer to Peer (C2C) exchanges involve transactions

between and among consumers. These can include third
party involvement, as in the case of the auction website
Ebay.

Examples: Owners.com, Craiglist, Monster

Consumer to Business (C2B) involves when
consumers band together to present themselves as a
buyer in group.

Example: www.speakout.com

Convergence
of e-Commerce Categories

Business
Consumers

And Selling to

Business
Publishers order
paper supplies from
paper companies

Amazon orders
from publishers

Consumers buy
thousands of Harry
Potter books from
Amazon

Consumers

Consumers
aggregate to bulk
purchase from
Amazon

Consumers resell
copies on eBay

Position

Resources

Simple Rules

Strategic Logic

Establish position

Leverage resources

Strategic Steps

Identify an attractive
market
Locate a defensible
position
Fortify and defend

Establish a vision
Jump into the confusion
Build resources
Keep moving
Leverage across markets Seize opportunities
Finish strong

Strategic Question

Where should we be?

What should we be?

Source of
Advantage

Unique, valuable position Unique, valuable,

with tightly integrated
inimitable resources
activity system

Works Best In

Slowly changing, wellstructured markets

Moderately changing,
well structured markets

Rapidly changing,
ambiguous markets

Duration of
Advantage

Sustained

Sustained

Unpredictable

It will be too difficult to

alter position as conditions
change
Profitability

Company will be too

slow to build new
resources as conditions
change
Long-term dominance

Managers will be too

tentative in executing on
promising opportunities
Growth

Risk
Performance Goal

Pursue opportunities

How should we
proceed?
Key processes and
unique simple rules