Topic 2

Summary

1. Activities and mechanisms. The major activities are information dissemination and presence, online trading, collabora- tion, entertainment, and search. The major mechanisms are marketplaces, webstores, shopping carts, catalogs, search engines, Web 2.0 tools, and virtual worlds. Most of the activities are between sellers and buyers. However, there also are collaboration activities among supply chain members as well as among people within organizations. EC attempts to automate the interaction process for the above activities.
2. E-marketplaces and their components. An e-marketplace or marketspace is a virtual market that does not suffer from limitations of space, time, or borders. As such, it can be very efficient and effective. Its major components include custom- ers, sellers, products (some digital), infrastructure, front-end processes, back-end activities, electronic intermediaries, other business partners, and support services. The role of intermediaries will change as e-markets develop: Some will be eliminated (disintermediation); others will change their roles and prosper (reintermediation). In the B2B area, for example, e-distributors connect manufacturers with buyers by aggregating e-catalogs of many suppliers. New value-added services that range from content creation to syndication are mushrooming.
3. The major types of e-marketplaces. In the B2C area, there are webstores and e-malls. In the B2B area, there are private and public e-marketplaces, which may be vertical (within one industry) or horizontal (across different industries). Exchanges are the platform for many buyers and sellers to meet and trade. Different types of portals provide access to e-marketplaces.
4. Electronic catalogs, search engines, and shopping carts. The major mechanisms in e-markets are e-catalogs, search engines, software (intelligent) agents, and electronic shopping carts. These mechanisms, which are known as merchant suites, facilitate EC by providing a user-friendly and efficient shopping environment.
5. Types of auctions and their characteristics. In forward auctions, bids from buyers are placed sequentially, either in increasing mode or in decreasing mode. In reverse auctions, buyers place an RFQ, and suppliers submit offers in one or several rounds. In name-your-own-price auctions, buyers specify how much they are willing to pay for a product or ser- vice, and an intermediary tries to find a supplier to fulfill the request. Penny auctions are forward auctions where a small fee is paid each time a bid is made. The final member to bid wins the auction when the designated time is up.
6. The benefits and limitations of auctions. The major benefits for sellers are the ability to reach many buyers, sell quickly, and save on intermediary commissions. Buyers have excellent access to auctions and a chance to obtain bargains and col- lectibles while shopping from their homes. The major limitation is the possibility of fraud.
7. Bartering and negotiating. Electronic bartering can greatly facilitate the swapping of goods and services among organi- zations, thanks to improved search and matching capabilities, which is managed by bartering exchanges. Software agents can facilitate online negotiation.
8. The structure and role of virtual communities. Virtual communities create new types of business opportunities. They bring people with similar interests together at one website. (Such groups are a natural target for advertisers and market- ers.) Using chat rooms, discussion spaces, and so forth, members can exchange opinions about certain products and ser- vices. Of special interest are communities of transactions, whose interest is the promotion of commercial buying and selling. Virtual communities can foster customer loyalty. This may increase sales of products made by vendors that spon- sor communities and facilitate customer feedback for improving service and business operations.
9. Social networks as EC mechanisms. These are very large Internet communities that enable the sharing of content, including text, videos, and photos, and promote online socialization and interaction. Hundreds of social networks are emerging around the world, competing for advertising money. Millions of corporations advertise, entertain, and even sell on social networks. Business-oriented communities concentrate on business issues, both in one country and around the world (e.g., recruit- ing, finding business partners). Social marketplaces meld social networks and some aspects of business. Notable business- oriented social networks are LinkedIn and XING. Some companies are active in public social networks such as Facebook. Other companies own and operate their own social networks within the company, which are known as enterprise social networks. Their members are usually employees and retirees. They are used mainly for collaboration, knowledge creation and preservation, training, and socialization. Many large companies have such networks (e.g., IBM, Wells Fargo, Northwestern Mutual).
10. Augmented reality (AR) and crowdsourcing. These emerging technologies facilitate two types of EC activities. AR blends visual aspects of computer and physical worlds. Thus, it can facilitate advertisement and presentation of information. It works by pointing a mobile device (e.g., smartphone) to a product or building and adds information to what you see (e.g., 360 degree view, price tag). Crowdsourcing solicits the wisdom of the crowd for idea genera- tion or problem-solving. It also is used to divide a large task among many people, each of whom is executing a different, small subtask.
11. Web 3.0 and Web 4.0. Web 3.0, the next generation of the Web, will combine social and business computing. It will be more portable and personal, with powerful search engines, increased clout, and greater connectivity with the wireless environment and on-demand applications. Knowledge management will be one of its main pillars. The Semantic Web will play a major role in Web 3.0 applications. Web 3.0 and its applications will depend on IT trends such as the develop- ments in cloud computing, utility computing, parallel processing, and machine intelligence. Web 4.0 is a futuristic Web that will be built on ubiquitous and intelligent systems. It will connect “islands” of intelligence from different sources.