Page 73 - Electronic Commerce

Chapter 1

Summary
48
In this chapter, you learned that electronic commerce is the application of new technologies,
particularly Internet and Web technologies, to help individuals, businesses, and other organiza-
tions conduct business more effectively. Electronic commerce is being adopted in waves of
change. The first wave of electronic commerce ran from about 1995 through 2003 and was
characterized by a period of rapid growth followed by a contraction, although there were ele-
ments of steady growth during the entire period. This period included much experimentation with
a wide range of revenue models and business strategies and developed primarily in the United
States. The second wave, which ran from 2004 through 2009, saw global expansion of elec-
tronic commerce driven by improvements in the technologies of the Internet and the Web. Digital
product distribution grew dramatically as content providers came to terms with piracy and devel-
oped strategies for succeeding in the online environment. A third wave of electronic commerce
began in 2010 and is exploiting the critical mass of mobile users who have powerful devices and
are eager to do business and participate in social networking online. Other characteristics of the
third wave include increased participation by smaller businesses, sophisticated analysis of the
large amounts of data generated by electronic commerce activities, and increased integration of
tracking technologies into business operations.
Using electronic commerce, some businesses have been able to create new products and
services, and others have improved the promotion, marketing, and delivery of existing offerings.
Firms have also found many ways to use electronic commerce to improve purchasing and sup-
ply activities; identify new customers; and operate their finance, administration, and human
resource management activities more efficiently. You learned that electronic commerce can help
businesses reduce transaction costs or create network economic effects that can lead to greater
revenue opportunities.
You examined an overview of markets, hierarchies, and networks—the economic structures
in which businesses operate—and learned how electronic commerce fits into those structures.
Porter’s ideas about value chains at the business unit and industry levels were presented, and
you learned how to use value chains and SWOT analysis as ways to understand business pro-
cesses and analyze their suitability for electronic commerce implementation.
The inherently global nature of electronic commerce leads to many opportunities and a
number of challenges. You learned that companies engaged in international electronic com-
merce must understand the trust, cultural, language, and legal issues that arise when doing
business across national borders.

Key Terms

big data business-to-business (B2B)
bonded warehouse business-to-consumer (B2C)
business activity business-to-government (B2G)
business model commodity item
business processes consumer-to-consumer (C2C)
business unit crowdsourcing

Copyright 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.