E-commerce 2015

business. technology. society.

eleventh edition

Kenneth C. Laudon
Carol Guercio Traver

Copyright © 2015 Pearson Education, Inc.

 Specific Course Information
 Catalog Description:

Explores what an e-business is and how it is managed. As an interdisciplinary topic

encompassing both business and technology, e-business aspects and applications
throughout the business world include commercial business, government,
education, and health services. The major characteristics, opportunities, and
limitations of this form of business are explored. Students study various issues and
risks that exist in the rapidly changing world of e-business.

 Prerequisites: IS345

 Required, Elective, or Selected Elective: Required.

 Important Information
• Instructor’s Information:
 Name: Dr. Nouf Mezel Alharbi
 E-mail: nmoharbi@taibahu.edu.sa
 Office: Al-Jazira Building (B 230) - Room 370
 Office Hours: Sunday (10:00-12:00), Tuesday (10:00-12:00)

 Required Textbook:
 Kenneth C Laudon and Carol Guercio Taver (2013), E-commerce, 9th Edition, Prentice Hall Dave
Chaffey, (2010), E-Business and E-Commerce Management: Strategy, Implementation and Practice,
4th Edition. Prentice Hall
 E-Commerce, Business. Technology. Society 2014 (10th Edition) 10th Edition by Kenneth C. Laudon and
Carol Traver 

 Assessment
 2 Midterm Examinations 40%
Mid Exam I: Week 7 (02-05-2023), Mid Exam II: Week 11 (06-06-2023)
 Practice in the Lab 20%
 Final Examination 40%
Chapter 1
The Revolution Is Just Beginning

Copyright © 2015 Pearson Education, Inc.

 E-commerce Trends 2014–2015
 Retail e-commerce grows over 15%
 Continued expansion of mobile, social, and
local e-commerce
 Mobile platform rivals PC platform
 Continued growth of cloud computing
 Explosive growth in Big Data
 Continued growth of user-generated content
on social networks, blogs, wikis

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 The First 30 Seconds
 First 20 years of e-commerce
 Just the beginning
 Rapid growth and change

 Technologies continue to evolve at

exponential rates
 Disruptive business change
 New opportunities

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 What Is E-commerce?
 Use of Internet and Web to transact
business
 More formally:
 Digitally enabled commercial transactions
between and among organizations and
individuals

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 E-commerce vs. E-business
 E-business:

 Digital enabling of transactions and

processes within a firm, involving
information systems under firm’s control
 Does not include commercial transactions
involving an exchange of value across
organizational boundaries

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 Why Study E-commerce?
 E-commerce technology is different, more
powerful than previous technologies
 E-commerce brings fundamental changes to
commerce
 Traditional commerce:
 Consumer as passive targets
 Mass-marketing driven
 Sales-force driven
 Fixed prices
 Information asymmetry

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 Eight Unique Features of
E-commerce Technology
1. Ubiquity
2. Global reach
3. Universal standards
4. Information richness
5. Interactivity
6. Information density
7. Personalization/customization
8. Social technology

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 Web 2.0
 User-centered applications and social
media technologies
 User-generated content and communication
 Highly interactive, social communities
 Large audiences; yet mostly unproven business
models
 Examples: Twitter, YouTube, Instagram,
Wikipedia, Tumblr, Uber

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 Types of E-commerce
 May be classified by market relationship or technology

 Business-to-Consumer (B2C)
 Business-to-Business (B2B)
 Consumer-to-Consumer (C2C)
 Mobile e-commerce (M-commerce)
 Social e-commerce
 Local e-commerce

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 The Growth of B2C E-commerce in the U.S.
Figure 1.3, Page 19

SOURCE: Based on data from eMarketer, Inc., 2014b; authors’ estimates.

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 The Growth of B2B E-commerce in the U.S.
Figure 1.4, Page 20

SOURCE: Based on data from U.S. Census Bureau, 2014; authors’ estimates.

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 The Internet
 Worldwide network of computer
networks built on common standards
 Created in late 1960s
 Services include the Web, e-mail, file
transfers, and so on
 Can measure growth by number of
Internet hosts with domain names

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 The Web
 Most popular Internet service
 Developed in early 1990s
 Provides access to Web pages
 HTML documents that may include text,
graphics, animations, music, videos
 Web content has grown exponentially
 Google reports 60 trillion unique URLs

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 The Mobile Platform
 Most recent development in Internet
infrastructure
 Enables access to the Internet via
wireless networks or cell-phone service
 Mobile devices include
 Tablets
 Smartphones
 Ultra-lightweight laptops

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 Insight on Technology: Class Discussion

Will Apps Make the Web Irrelevant?

 What are the advantages and disadvantages
of apps, compared with Web sites, for
mobile users?
 What are the benefits of apps for content
owners and creators?
 Will apps eventually make the Web
irrelevant? Why or why not?

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 Origins and Growth of E-commerce
 Precursors:
 Baxter Healthcare
 Electronic Data Interchange (EDI)
 French Minitel (1980s videotex system)
 None had functionality of Internet

 1995: Beginning of e-commerce

 First sales of banner advertisements

 E-commerce fastest growing form of

commerce in United States

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 E-commerce: A Brief History
 1995–2000: Invention
 Key concepts developed
 Limited bandwidth and media
 Euphoric visions of
 Friction-free commerce
 Lowered search costs, disintermediation, price transparency,
elimination of unfair competitive advantage
 First-mover advantages
 Network profits

 Dot-com crash of 2000

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 E-commerce: A Brief History (cont.)
 2001–2006: Consolidation
 Emphasis on business-driven approach
 Traditional large firms expand presence
 Start-up financing shrinks up
 More complex products and services sold
 Growth of search engine advertising
 Business Web presences expand to include e-
mail, display and search advertising, and limited
community feedback features

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 E-commerce: A Brief History (cont.)
 2007–Present: Reinvention
 Rapid growth of:
 Online social networks
 Mobile platform
 Local commerce

 Entertainment content develops as source of

revenues
 Transformation of marketing
 Coordinated marketing on social, mobile, local platforms
 Analytic technologies

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 Assessing E-commerce
 Many early visions not fulfilled
 Friction-free commerce
 Consumers less price sensitive
 Considerable price dispersion

 Perfect competition
 Information asymmetries persist

 Intermediaries have not disappeared

 First mover advantages
 Fast-followers often overtake first movers

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 Predictions for the Future
 Technology will propagate through all commercial
activity
 Large, traditional companies will continue to play
dominant role, consolidating audiences
 Start-up ventures can still attract large audiences in non-dominated
arenas
 Integrated online/offline companies will experience
more growth than purely online companies
 Additional factors:
 Increased regulation and control
 Cost of energy

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 Understanding E-commerce:
Organizing Themes
 Technology:
 Development and mastery of digital computing and
communications technology
 Business:
 New technologies present businesses with new ways of
organizing production and transacting business
 Society:
 Intellectual property, individual privacy, public welfare
policy

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 Insight on Society: Class Discussion

Facebook and the Age of Privacy

 Why are social network sites interested in collecting
user information?
 What types of privacy invasion are described in the
case? Which is the most privacy-invading, and why?
 Is e-commerce any different than traditional
markets with respect to privacy? Don’t merchants
always want to know their customer?
 How do you protect your privacy on the Web?

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 Academic Disciplines
Concerned with E-commerce
 Technical approach  Behavioral approach
 Computer science  Information systems
 Management science  Economics
 Information systems  Marketing
 Management
 Finance/accounting
 Sociology

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