Class 1, 2 and 3

E-Business & E-Commerce
Management

The 10 Books Every
eCommerce Professional
Should Read
Friday, 29 January 2016 2

Convert!: Designing Web Sites to
increase Traffic and Conversion -
Benjamin Hunt
Don’t Make me Think - Steve Krug
The Complete E-Commerce Book:
Design, Build & Maintain a
Successful Web-Based Business -
Janice Reynolds
Electronic Commerce: A Managerial
Perspective - Efraim Turban,
Michael Chung, Jay Lee
Return on Relationship - Ted Rubin
and Kathryin Rose

Definition of Marketing
• Philip Kotler
• Social and Managerial process by which individuals and groups obtain
what they need and want through creating, offering, and exchanging
products of value with others.
• This definition rests on the following core concepts: needs, wants,
demands, products, value, cost and satisfaction, exchange and
transactions, relationships and networks, markets, marketers and
prospects.

Definition (cont)
• Needs – exist in biology they are not created by marketers – i.e.
shelter, food, clothing, safety, belonging, esteem
• Wants – Need food want hamburger, fries, coke.
• Desire – Wants for specific products backed by an ability and
willingness to buy them

Definition of Commerce
• The exchange of goods and services for money
• Consists of:
• Buyers - these are people with money who want to purchase a good or
service.
• Sellers - these are the people who offer goods and services to buyers.
• Producers - these are the people who create the products and services
that sellers offer to buyers.

Elements of Commerce
• You need a Product or service to sell
• You need a Place from which to sell the products
• You need to figure out a way to get people to come to your place.
• You need a way to accept orders.
• You also need a way to accept money.
• You need a way to deliver the product or service, often known as fulfillment.
• Sometimes customers do not like what they buy, so you need a way to
accept returns.
• You need a customer service and technical support department to assist
customers with products.

History of The Internet
• Started as a US government project in 1969.
• The purpose was to create a net that can function even if one center is
destroyed in a military attack.
• - “Hub and spokes” can be useless if the hub is destroyed.
• - Network can continue to be functional even if some nodes are
destroyed, as long as information can pass through other nodes.
• Effective in 1971 with computers on both coasts of the US.

In the 1980´s
• Personal computers or terminals were connected to a server.
• The server was a mainframe, or connected to a mainframe computer.
• The mainframe was connected to another mainframe of the company in
another location via dedicated lines.
• Only large companies could afford the expense and investment in
equipment.

Today
• Connections across countries and continents made through dedicated
fast lines.
• A company may have one local network (LAN) in NY, which is
connected to the Internet through a Regional network.

Computer classifications
• Mainframes:
• Midrange:
• Micro-computer:

What is a network
• Series of points or nodes interconnected by communication paths
• Node is a connection point for transmitting data
• Network can interconnect with other networks to form global networks

Benefits of a network
• Facilitates resource sharing
• Provides reliability
• Cost effective
• Provide a powerful medium across geographical divide

Different kinds of networks
• Type of signal
• Nature of connection
• Types of physical links
• Topology
• Communication model
• Geographical distance

Geographical Distance
• Local area network (LAN): small area, share a single server
• Metropolitan area network (MAN): a wider network, can bridge several
LAN’s
• Wide area network (WAN): a broader area covered, can include several
MAN’s
• Internet: a network of networks that covers the entire globe

TCP/IP Protocol
• Allows any two computers to communicate and exchange data.
• The Internet transfers data packets among computers.
• Each packet is identified by the sender address and a receiver
address.
• The sender´s computer transfers the data packet to another computer
on the Internet, which transfers it to a chain of other computers until it
reaches the final destination.

Internet addressing system
• Internet uses TCP/IP, therefore every computer on the Internet has an
IP address
• IP address is numerical, separated by dots
• Works with DNS:
– com: for commercial purposes
– net: for Internet Service Providers
– org: for non-profit, non-commercial groups
– gov: reserved for government
– mil: reserved for military
– int: reserved for international organizations

Assimilation of Technology
• Technology first adopted to increase efficiency – doing the same tasks
faster e.g. word processing instead of typing
• Technology next adopted to increase effectiveness – doing tasks not
only faster but better e.g. spreadsheets transformed finance and
accounting (as well as science and other fields)

Introduction to E-commerce
• E-Commerce, Web, Networks, Internet
• The evolution of new businesses
• The adoption of Brick and Mortar companies to the new economy
• Market failures and economic explanations for the new economy

Electronic Commerce
• Activity of offering and contracting products and services via electronic
ways, including all actuations which takes place before, while or after
concluding the contract, such as
• Distribution of catalogues
• Delivery of commercial communications
• Electronic payments
• After-sale services (i.e. maintenance)

Electronic Commerce
• Every signed contract with:
• offer and acceptance transmitted via electronic equipment, which itself
is
– used for data processing and storing and
– connected to a telecommunication network.
• The process of buying, selling, or exchanging products, services, or
information via computer networks

EC is defined through these perspectives
• Communications
• Commercial (trading)
• Business process
• Service
• Learning
• Collaborative
• Community

e-Business
• A broader definition of EC that includes not just the buying and selling
of goods and services, but also servicing customers, collaborating with
business partners, and conducting electronic transactions within an
organization

Pure Versus Partial EC
• EC takes several forms depending on the degree of digitization (the
transformation from physical to digital)
– the product (service) sold,
– the process,
– the delivery agent (or intermediary)

The Dimensions of Electronic Commerce

EC organizations
• Brick-and-Mortar organizations
– Old-economy organizations (corporations) that perform most of their
business off-line, selling physical products by means of physical
agents
• Virtual (pure-play) organizations
– Organizations that conduct their business activities solely online
• Click-and-Mortar (click-and-brick) organizations
– Organizations that conduct some e-commerce activities, but do their
primary business in the physical world

Where EC is conducted
• Electronic market (e-marketplace)
– An online marketplace where buyers and sellers meet to exchange
goods, services, money, or information
• Inter organizational information systems (IOSs)
– Communications system that allows routine transaction processing
and information flow between two or more organizations
• Intra organizational information systems
– Communication systems that enable e-commerce activities to go on
within individual organizations

The EC Framework, Classification, and Content
• Networked computing is the infrastructure for EC, and it is rapidly
emerging as the standard computing environment for business, home,
and government applications
– Networked computing connects multiple computers and other
electronic devices located in several different locations by
telecommunications networks, including wireless ones
– Allows users to access information stored in several different
physical locations and to communicate and collaborate with people
separated by great geographic distances

The EC Framework
• Intranet
– An internal corporate or government network that uses Internet tools,
such as Web browsers, and Internet protocols
• Extranet
– A network that uses the Internet to link multiple intranets

The EC Framework, Classification, and Content
• An EC Framework—supports five policymaking support areas
– People
– Public policy
– Marketing and advertisement
– Support services
– Business partnerships
•

E-commerce as the Networked Economy
• Create value largely through gathering, synthesizing and distribution of
information
• Formulate strategies that make management of the enterprise and
technology convergent
• Compete in real time rather than in “cycle time”
• Operate in a world characterized by low barriers to entry, near-zero
variable costs of operation and shifting competition
• Organize resources around the demand side rather than supply side
• Manage better relationships with customers through technology

E-commerce Today
• The Internet is the perfect vehicle for e-commerce because of its open
standards and structure.
• No other methodology or technology has proven to work as well as the
Internet for distributing information and bringing people together.
• It’s cheap and relatively easy to use it as a medium for connecting
customers, suppliers, and employees of a firm.
• No other mechanism has been created that allow organizations to
reach out to anyone and everyone like the Internet.

E-commerce Today
• The Internet allows big businesses to act like small ones and small
businesses to act big.
• The challenge to businesses is to make transactions not just cheaper
and easier for themselves but also easier and more convenient for
customers and suppliers.
• It’s more than just posting a nice looking Web site with lots of cute
animations and expecting customers and suppliers to figure it out
• Web-based solutions must be easier to use and more convenient than
traditional methods if a company hopes to attract and keep customers.

Key Drivers of E-commerce
• Technological – degree of advancement of telecommunications
infrastructure
• Political – role of government, creating legislation, funding and support
• Social – IT skills, education and training of users
• Economic – general wealth and commercial health of the nation

Key Drivers of E-business
• Organizational culture- attitudes to R&D, willingness to innovate and
use technology
• Commercial benefits- impact on financial performance of the firm
• Skilled/committed workforce- willing and able to implement and use
new technology
• Requirements of customers/suppliers- in terms of product and service
• Competition- stay ahead of or keep up with competitors

Appeal of E-commerce
• Lower transaction costs - if an e-commerce site is implemented well, the web can
significantly lower both order-taking costs up front and customer service costs
• Larger purchases per transaction - Amazon offers a feature that no normal store
offers
• Integration into the business cycle
• People can shop in different ways.
– The ability to build an order over several days
– The ability to configure products and see actual prices
– The ability to easily build complicated custom orders
– The ability to compare prices between multiple vendors easily
– The ability to search large catalogs easily
• Larger catalogs
• Improved customer interactions - company.

Limitations of E-commerce
• To organizations: lack of security, reliability, standards, changing
technology, pressure to innovate, competition, old vs. new technology
• To consumers: equipment costs, access costs, knowledge, lack of
privacy for personal data, relationship replacement
• To society: less human interaction, social division, reliance on
technology, wasted resources, JIT manufacturing

Technical limitations
• There is a lack of universally accepted standards for quality, security,
and reliability
• The telecommunications bandwidth is insufficient
• Software development tools are still evolving
• There are difficulties in integrating the Internet and EC software with
some existing (especially legacy) applications and databases.
• Special Web servers in addition to the network servers are needed
(added cost).
• Internet accessibility is still expensive and/or inconvenient

Benefits of E-commerce
• To consumers: 24/7 access, more choices, price comparisons,
improved delivery, competition
• To organizations: International marketplace (global reach), cost
savings, customization, reduced inventories, digitization of
products/services
• To society: flexible working practices, connects people, delivery of
public services

Benefits to Consumers
Convenience
Buying is easy and private
Provides greater product access and selection
Provides access to comparative information
Buying is interactive and immediate

Benefits to Organizations
Powerful tool for building customer relationships
Can reduce costs
Can increase speed and efficiency
Offers greater flexibility in offers and programs
Is a truly global medium

Benefits to Society
More individuals can work from home
Benefits less affluent people
Third world countries gain access
Facilitates delivery of public services

Seven Unique Features of E-commerce Technology and
Their Significance
• Is ubiquitous (available everywhere, all the time)
• Offers global reach (across cultural/national boundaries)
• Operates according to universal standards (lowers market entry for
merchants and search costs for consumers)
• Provides information richness (more powerful selling environment)
• Is interactive (can simulate face-to-face experience, but on a global
scale)
• Increases information density (amount and quality of information
available to all market participants)
• Permits personalization/customization

A simple stage model for buy-side and sell-side e-
commerce
Friday, 29 January 2016 48Ajith Sundaram

The environment in which e-business services are
provided
Friday, 29 January 2016 Ajith Sundaram 49

Environment Constraints and Opportunities
• Customers – which services are they offering via their web site that
your organization could support them in?
• Competitors – need to be benchmarked in order to review the online
services they are offering – do they have a competitive advantage?
• Intermediaries – are new or existing intermediaries offering products or
services from your competitors while you are not represented?

• Suppliers – are suppliers offering different methods of procurement to
competitors that give them a competitive advantage?
• Macro-environment
• Society – what is the ethical and moral consensus on holding personal
information?
• Country specific, international legal – what are the local and global legal
constraints, for example, on holding personal information, or taxation rules
on sale of goods?

• Country specific, international economic – what are the economic
constraints of operating within a country or global constraints?
• Technology – what new technologies are emerging by which to deliver
online services such as interactive digital TV and mobile
phone-based access?

An online marketplace map

Major Types of E-commerce
• Business to Business. B2B
• Business to Consumer. B2C
• Business to Government. B2G
• Consumer to Consumer. C2C
• Customer to Business. C2C
• Business to Employee. B2E

Business to Business. B2B
• B2B is that model of e-commerce whereby a company conducts its
trading and other commercial activity through the internet and the
customer is another business itself.

Business to Consumer. B2C
• Visiting the Virtual Mall
• Customer Registers
• Customer Buys Product
• Merchant Processes the order
• Credit/Debit card is processed
• Operations Management
• Shipment and Delivery
• Customer Receives
• After Sales Service

Business to Government. B2G
• Professional affairs conducted between companies and regional,
municipal or federal governing bodies.
• Business to government typically encompasses the determination and
evaluation of government agency needs,
• the creation and submission of proposals and the completion of the
contracted work

Consumer to Consumer. C2C
• Customer sells directly to other customers via
• online classified ads
• auctions
• selling personal services or expertise online.

Customer to Business. C2B
• Consumer-to-business (C2B) is a business model where an end user
or consumer makes a product or service that an organization uses to
complete a business process or gain competitive advantage.

Business to Employee. B2E
• Exchange of intra firm information with employees over the internet or
an intranet.
– term of employment,
– benefits,
– policies,
– operation manuals,
– company newsletter

B2B and B2C interactions between an organization

B2B and B2C Characteristics
Characteristic B2C B2B
Proportion of adopters with
access
Low to medium High to very high
Complexity of buying decisions Relatively simple – individual and
influencers
More complex – buying process
involves users, specifiers, buyers,
etc.
Channel Relatively simple – direct or from
retailer
More complex, direct or via
wholesaler, agent or distributor
Purchasing characteristics Low value, high volume or high
value, low volume. May be high
involvement
Similar volume/value. May be
high involvement. Repeat orders
(rebuys) more common
Product characteristic Often standardized items Standardized items or bespoke for
sale

Disintermediation of a consumer distribution channel
(a) the original situation,
(b) disintermediation omitting the wholesaler, and
(c) disintermediation omitting both wholesaler and retailer

From original situation (a) to disintermediation (b) and
reintermediation (c)

Business Models Based on the Value Chain in the Market Place
Raw
material
producer
Manufacturer
Distributor
Retailer
Consumer
Exchange
C2B
B2C
B2C C2CNew
Middleman
• Independent
market
operators
Service Providers:
• Logistics
• Financial

IT Act 2000
• An Act to provide legal recognition for transactions carried out by
means of electronic data interchange and other means of electronic
communication, commonly referred to as "electronic commerce", which
involve the use of alternatives to paper-based methods of
communication and storage of information, to facilitate electronic filing
of documents with the Government agencies and further to amend the
Indian Penal Code, the Indian Evidence Act, 1872, the Bankers' Books
Evidence Act, 1891 and the Reserve Bank of India Act, 1934 and for
matters connected therewith or incidental thereto.

Important Concepts of IT Act, 2000
• Electronic Record
• Secure electronic Record
• Digital Signature
• Secure Digital Signature
• Certifying authority
• Digital signature certificate

T h e P i r a t e B a y :
Searching for a Safe Haven
The Pirate Bay (TPB) is one of the world’s most popular pirated music
and content sites, offering free access to millions of copyrighted songs
and thousands of copyrighted Hollywood movies. It claims it is the world’s
largest BitTorrent tracker.
In June 2013, TPB reported that it had over 6 million registered users. It
is in the top 500 Web sites in the world in terms of global traffic, with
about 20% of the visitors coming from the United States. It even has a
Facebook page and Twitter feed.

This despite the fact that TPB has been subjected to repeated legal
efforts to shut it down. In fact, the authorities pursuing TPB must feel as if
they are engaged in a never-ending game of Whack-a-mole, as each time
they “whack” TPB, it somehow manages to reappear.
But the battle is far from over. The Internet is becoming a tough place for
music and video pirates to make a living in part because of enforcement
actions, but more importantly because of new mobile and wireless
technologies that enable high-quality content to be streamed for just a
small fee.

TPB is part of a European social and political movement that opposes copyrighted
content and demands that music, videos, TV shows, and other digital content be free
and unrestricted. TPB does not operate a database of copyrighted content. Neither
does it operate a network of computers owned by “members” who store the content,
nor does it create, own, or distribute software (like BitTorrent and most other so-called
P2P networks) that permit such networks to exist in the first place.
Instead, TPB simply provides a search engine that responds to user queries for music
tracks, or specific movie titles, and generates a list of search results that include P2P
networks around the world where the titles can be found. By clicking on a selected
link, users gain access to the copyrighted content, but only after downloading
software and other files from that P2P network.

TPB claims it is merely a search engine providing pointers to existing P2P networks
that it does not itself control. It says that it cannot control what content users
ultimately find on those P2P networks, and that it is no different from any other search
engine, such as Google or Bing, which are not held responsible for the content found
on sites listed in search results.
From a broader standpoint, TPB’s founders also claim that copyright laws in general unjustly
interfere with the free flow of information on the Internet, and that in any event, they were not
violating Swedish copyright law, which they felt should be the only law that applied.
And they further claimed they did not encourage, incite, or enable illegal downloading.
Nevertheless, the defendants have never denied that theirs was a commercial enterprise.
Despite all the talk calling for the free, unfettered spread of culture, TPB was a money-making
operation from the beginning, designed to produce profits for its founders, with advertising as
the primary source of revenue.

However, the First Swedish Court in Stockholm declared TPB’s four founders
guilty of violating Swedish copyright law, and sentenced each to one year in prison
and payment of $3.5 million in restitution to the plaintiffs, all Swedish divisions of
the major record firms (Warner Music, Sony, and EMI Group among them). The court
found that the defendants had incited copyright infringement by providing a Web site
with search functions, easy uploading and storage possibilities, and a tracker.
The court also said that the four defendants had been aware of the fact that
copyrighted material was shared with the help of their site and that the defendants
were engaged in a commercial enterprise, the basis of which was encouraging visitors
to violate the copyrights of owners. In fact, the primary purpose of TPB was to violate
copyrights in order to make money for the owners (commercial intent).

Meanwhile, the U.S. government pressured the Swedish government to strengthen
its copyright laws to discourage rampant downloading. In Sweden, downloading music
and videos from illegal sites was very popular, engaged in by 43% of the Swedish
Internet population.
To strengthen its laws, Sweden adopted the European Union convention on
copyrights, which allows content owners to receive from Internet providers the names
and addresses of people suspected of sharing pirated files. In France, participating in
these pirate sites will result in banishment from the Internet for up to three years. As a
result, Internet traffic in Sweden declined by 40%, and has stayed there.

TPB has appealed the court judgment, has paid no fine, and its founders have, as yet, never spent a
night in jail. TPB continues to operate much as before. Well, almost. In 2011, the firm moved its
servers into caves in Sweden, and dispersed multiple copies of its program to other countries just in
case Swedish police tried to confiscate its servers again. Since then, like the fight against the original
Caribbean pirates of the seventeenth century, global forces continue to marshal against TPB. Not the
British Navy this time, but a loose coalition of a number of European countries and the United States.
The firm has been hounded by lawsuits, police raids, and confiscation of servers in France, Finland,
Italy, Germany, Denmark, Ireland, the U.K., and Greece. These countries have in some cases
refused to allow Internet service providers in their countries to host TPB, or link to TPB, no matter
where in the world its servers are located, although TPB has in some cases been able to circumvent
this by frequently changing its IP address. In 2013, authorities shut down TPB’s top-level domains in
Sweden, Greenland, and Iceland. For the time being at least, it has found a safe haven in the the
Caribbean island Saint Maarten, a fitting location for a latter-day pirate organization.

TPB has caused England, France, Malaysia, Finland, and most recently
the United States to consider strong intellectual property protection laws
that will prevent domestic search engines and ISPs from linking to
infringing sites, or resolving their domain names.
Meanwhile, the world’s largest advertising agency, GroupM, keelhauled
TPB and 2,000 other sites worldwide in 2011 by putting the sites on its
blacklist of copyright infringing sites where it will not buy advertising
space. Pirating intellectual property is, above all, about the money, as any
good pirate knows.

The TPB case is just the latest in a saga of court cases involving the record industry, which wants to
preserve its dominance of copyrighted music, and Internet users who want free music. In 2005, after
several years of heated court battles, the case of Metro-Goldwyn-Mayer Studios v. Grokster, et al.
finally reached the U.S. Supreme Court.
In June 2005, the Court handed down its unanimous decision: Internet file-sharing services such as
Grokster, StreamCast, BitTorrent, and Kazaa could be held liable for copyright infringement because
they intentionally sought to induce, enable, and encourage users to share music that was owned by
record companies. Indeed, it was their business model: steal the music, gather a huge audience, and
monetize the audience by advertising or through subscription fees.
Since the court ruling, Kazaa, Morpheus, Grokster, BearShare, iMesh, and many others have either
gone out of business or settled with the record firms and converted themselves into legal file-sharing
sites by entering into relationships with music industry firms. In May 2010, Mark Gorton, founder of the
largest U.S. pirate site, LimeWire, lost a copyright infringement case. In May 2011, admitting his guilt (“I
was wrong”), and having facilitated the mass piracy of billions of songs over a 10-year period, Gorton
and his file-sharing company agreed to compensate the four largest record labels by paying them $105
million.

These legal victories, and stronger government enforcement of copyright laws,
have not proven to be the magic bullet that miraculously solves all the
problems facing the music industry. The music industry has had to drastically
change its business model and decisively move towards digital distribution
platforms.
They have made striking progress, and, for the first time, in 2011 sales of music
in a purely digital format accounted for more revenue than sales of music in a
physical format. To do so, the music industry employed a number of different
business models and online delivery platforms, including Apple’s iTunes pay-
per-download model, subscription models, streaming models and now music in
the cloud.

In each of these new media delivery platforms, the copyright owners—record
companies, artists, and Hollywood studios—have struck licensing deals with the
technology platform owners and distributors (Apple, Amazon, and Google). These
new platforms offer a win-win solution. Consumers are benefitted by having near
instant access to high-quality music tracks and videos without the hassle of P2P
software downloads.
Content owners get a growing revenue stream and protection for their copyrighted
content. And the pirates? TPB and other pirate sites may not be able to compete with
new and better ways to listen to music and view videos. Like the real pirates of the
Caribbean, who are now just a footnote in history books, technology and consumer
preference for ease of use may leave them behind.

Questions
• Why did TPB believe it was not violating copyright laws? What did the
Swedish court rule?
• How has TPB managed to continue operating despite being found in
violation of copyright laws?
• How has the music industry reacted to the problems created by pirates
like TPB?

Professional Looking e-Commerce Sites

Professional Looking e-Commerce Sites
• What was common among them all….??
• How can they still be in market after such a huge competition….??
• As a customer how would you choose a ecommerce site to shop…??
• What feature of an ecommerce site would make you happy…??
• What makes you unhappy…??
• What are you afraid of when buying online…??

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