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Understanding E-Commerce: Development, Trends, and Business Models

Chapter 6 explores the pivotal aspects of electronic commerce, including website development, the benefits of reduced advertising costs, and enhanced information accessibility. It highlights the shift from traditional storefronts to online platforms, the impact of globalization, and the role of technology in facilitating business transactions. Key drivers for internet utilization, barriers to entry, and various e-commerce business models such as e-shops and e-malls are discussed. The chapter also examines the implications of Porter's Five Forces model on e-commerce dynamics and the significance of maintaining a competitive edge in the digital marketplace.

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Understanding E-Commerce: Development, Trends, and Business Models

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  1. Chapter 6Electronic Commerce and Business

  2. The Development of Websites • Reduction in costs of advertising • Cheaper and easier provision of information • Ease of update • Reduced importance on physical shop front • Crossing geographical boundaries • Cut out ‘middleman’

  3. E-Commerce • ‘any exchange of information or business transaction that is facilitated by the use of information and communications technologies.’ • Categories • electronic markets • electronic data interchange • internet commerce

  4. The Drivers for Using the Internetfor Business • Cost • Flexibility • Protecting investment • Connectivity • Low risk • Improved customer service • Globalization

  5. Barriers To Entry • Uncertainty over business models • Telecommunications costs • Bandwidth • Security • Lack of standards • Legal frameworks • Preparedness

  6. Repeat Trade Cycles Figure 6.2Repeat trade cycles Source: FT.com

  7. Irregular Invoiced Transactions Figure 6.3Irregular invoiced transactions

  8. Irregular Cash Transactions Figure 6.4 Irregular cash transactions

  9. Porter’s Five Forces Model and E-Commerce • Threat of new entrants • Threat of substitution • Bargaining power of customers • Bargaining power of suppliers • Competition with rivals

  10. E-Commerce Business Models • E-shops and e-malls • E-procurement • E-auctions • Specialist service providers • parcel distribution and tracking • Market segmenters • low-cost airlines

  11. E-commerce Business Models (Continued) • Content providers • news archivists • Internet infrastructure providers • trust services • Push and pull marketing strategies

  12. A Business-To-Consumer Website Figure 6.5 A business-to-consumer website

  13. A Business-To-Business Website Figure 6.6 A business-to-business website Source: with permission from Woolworths

  14. An E-mall Website Figure 6.7 An e-mall website Source: www.imegamall.com, with permission

  15. A Web Auction Site Figure 6.8 A web auction site Source: eBay

  16. Development of a Business Website • Connection • Publication policy • Presentation of materials • Web presence • Website awareness • Website metrics

  17. Trends in E-Commerce • Structural developments • Reliance on advertising • Maintaining competitive advantage • Intelligence on the Web • intelligent agents • bots

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