Internet Commerce - Tutorial Task 1

Chapter 1 The Revolution Is Just Beginning

In order to give you an idea on how to answer the questions the first three questions have been answered.

1. What are some of the unique features of e-commerce technology?( Question 3, p.52)

The unique features of e-commerce technology include:

1. Ubiquity: It is available just about everywhere and at all times.
2. Global Reach: The potential market size is roughly equal to the size of the online population of the world.
3. Universal standards: The technical standards of the Internet and therefore of conducting e-commerce, are shared by all of the nations in the world.
4. Richness: Information that is complex and content-rich can be delivered without sacrificing reach.
5. Interactivity: E-commerce technologies allow two-way communication between the merchant and the consumer.
6. Information density: The total amount and quality of information available to all market participants is vastly increased and is cheaper to deliver.
7. Personalization/Customization: E-commerce technologies enable merchants to target their marketing messages to a person’s name, interests and past purchases. They allow a merchant to change the product or service to suit the purchasing behavior and preferences of a consumer.

2. What are three benefits of universal standards? (Question 5, p.52)

The benefits of universal standards are:

1. reduced search costs for consumers
2. becomes simpler, faster, and more accurate price discovery
3. lower market entry costs for merchants

3. How are the Internet and the Web similar to, or different from other technologies that have changed commerce in the past? (Question 9, p.52)

The Internet and the Web are similar to other technologies that have changed commerce in the past in that each new technological innovation spawns explosive growth characterized by thousands of start-up companies. Many of these fail in a period of retrenchment and consolidation that follows establishment. As with other technological revolutions, eventually it is the large, already established firms who have the resources to exploit the new technology. The growth of the Internet, when compared to other electronic technologies such as radio and television, has been much more rapid: the Internet and Web achieved a 53% share of U.S households in only 10 years. In comparison, it took 38 years for radio and 17 for television to achieve a 30% share.

4. Define disintermediation and explain the benefits to Internet users of such a phenomenon. How does disintermediation impact friction-free commerce? (Question 12, p.52)

Disintermediation: displacement of market middleman who traditionally are intermediaries between producers and consumers by a new direct relationship between manufacturers and content originators with their customers. Such as: wholesalers and distributors.

Benefits of disintermediation:

Decline of prices for products and services

Intense competition

Lowered transaction costs

Eliminate product brands

Source: Text book page 29

5. What are some of the major advantages and disadvantages of being a first mover? (Question 13, p.53)

Advantages:

· Gather more profits

· Gather market share

· Establish a large customer base

· Build brand name recognition early

· Create an entirely new distribution channel

· Inhibit competitors by building in Switching Costs for their customers through proprietary interface designs and features available only at one site.

Disadvantages:

· Many first movers have not succeeded and are instead replaced by fast followers, larger firms with the financial, marketing, legal, and production assets necessary to develop mature markets.

Source: Text book page 30

Choose an e-commerce Web site and assess it in terms of the seven unique features of e-commerce technology described in Table 1.2. Which of the features does the site implement well, and which features poorly, in your opinions? Discuss with your partner and suggest ways of improvement (take brief notes). (Question 2, p.53)

Carsales

http://www.carsales.com.au

Brief description:

A good E-Commerce website which allows people to find new or used cars from private sellers or from dealers all over Australia. This website is quite similar to Ebay, the only difference is that Carsales is more specific in dealing car transaction and Ebay is dealing a broad range of good and services.

7 Features of E-Commerce	Comments about Carsales.com.au
Ubiquity	Good. This website is accessible anywhere and anytime.
Global Reach	Good. This website is also accessible by users outside Australia.
Universal Standards	Good.
Richness	Neutral.
Interactivity	Good. Potential buyer of the car can contact the sellers, by leaving a message that will be sent to the sellers, and then the sellers can contact the potential buyer to negotiate about the price etc.
Information Density	Good.
Personalization Customization	Good.

Self Study Journal Week 1 (Japolim - 10348454)

There are several important aspects that I can learn from week 1 lecture, and they are as follows:

The unique features of e-commerce technology include:

1. Ubiquity: It is available just about everywhere and at all times.
2. Global Reach: The potential market size is roughly equal to the size of the online population of the world.
3. Universal standards: The technical standards of the Internet and therefore of conducting e-commerce, are shared by all of the nations in the world.
4. Richness: Information that is complex and content-rich can be delivered without sacrificing reach.
5. Interactivity: E-commerce technologies allow two-way communication between the merchant and the consumer.
6. Information density: The total amount and quality of information available to all market participants is vastly increased and is cheaper to deliver.
7. Personalization/Customization: E-commerce technologies enable merchants to target their marketing messages to a person’s name, interests and past purchases. They allow a merchant to change the product or service to suit the purchasing behavior and preferences of a consumer.

The definition of " Disintermediation " :

Displacement of market middleman who traditionally are intermediaries between producers and consumers by a new direct relationship between manufacturers and content originators with their customers. Such as: wholesalers and distributors

The definition of " friction-free commerce ":

A vision of commerce in which information is equally distributed, transaction costs are low, prices can be dynamically adjusted to reflect actual demand, intermediaries decline, and unfair competitive advantages are eliminated.

Types of E-Commerce:

Classified by nature of market relationship:

• B2C (Business-to-Consumer) example: Amazon.com
• B2B (Business-to -Business) example: ChemConnect.com
• C2C (Consumer-to-Consumer) example: eBay.com
  

Classified by type of technology used:

• P2P (Peer-to-Peer) example: BT (BitTorrent), Kazaa, etc.
• M-Commerce (Mobile Commerce) --> refers to the use of wireless digital devices (handphones, handheld devices, Blackberry) to enable transactions on the web.

Limitations in B2C:

• Expensive technology
• Complex software interface
• Sophisticated skill set
• Persistent Cultural Attraction of physical markets and traditional shopping experiences
• Persistent global inequality limiting access to telephones and computers

Definition of First Mover:
a firm that is first to market in a particular area and that moves quickly to gather market share


The advantages to be First Mover:

• Gather more profits
• Gather market share
• Establish a large customer base
• Build brand name recognition early
• Create an entirely new distribution channel

Disadvantages of First Mover:

Many first movers have not succeeded and are instead replaced by fast followers, larger firms with the financial, marketing, legal, and production assets necessary to develop mature markets.