E-Commerce Notes #10

C2C

Usage of tech. to enable customers to share resources with each other. Major revenue model : subscription, transaction fees and advertisements

M-Commerce : With the wireless tech. its possible to conduct transactions on a mobile. Revenue model : sale of goods.

E-Commerce enablers : hardware : Web Servers from IBM, Oracle, DELL; Software : OS, Server Software from Oracle (technology).

• E-Commerce software system that enables B2B and B2C.
• Networking  products like routers from CISCO.
• CRM softwares : Salesforce.com
• Online payment system : Paypal, Cybercash, etc.

Seven unique features of e-commerce technology :

• Ubiquity - No regional boundary, new market channels has been created causing expansion in the size of overall market, resulting in improved efficiency by lowering the cost of operations. Like travelling, and inventory mngmt. Cost is zero.
• Global Reach - Low cost entry in global market
• Universal standard - Easy to find a product's quality and prices. Thus a transparent market.
• Richness - Has altered industrial structure by reducing the strength of powerful distribution channel. Cutting down the intermediates.
• Interactivity - Has altered the industrial structure by increasing interactivity. Reduced the industry cost by reducing dependency on sale-forces. Direct interaction with the seller.
• Personalization / Customization - Alters the industry structure by reducing the threat of substitute by providing personalized environment to the users.
• Information Density - Has changed the industry structure by weakening the power of sales channel, shifting bargaining power to the consumers, it has lowered the cost of obtaining, processing and distributing information about supplies and consumers.

What is Industry Structure : It refers to the nature of the players in the industry and their relative bargaining power.
E-Commerce changes the industry structure and industry structure can be characterized by five forces :

• Rivalry among the existing competitors

• Threat of substitute products.

• Barriers to the entry in industry.

• Bargaining power of suppliers.

• Bargaining power of buyers.

By describing the industry structure you need to understand the general business environment of the industry and overall profit that can be generated in that environment. E-Commerce has potential to change the strength of these competitive forces.

<<DIAGRAM>>

To study the industry structure we conduct analysis : Is an effort to understand & describe the nature of competition in the industry, nature of substitute products, barriers to entry and relative strength of buyers' and sellers'.

GREAT IMPACT on Music industry, no impact on chemical industry.

INDUSTRY VALUE CHAIN : It’s a set of activities performed in a firm or industry that transforms input into final products. Each of this activity adds economic value to the final product. And industrial structure analysis helps to understand the impact of e-commerce tech. or overall business environment. Value chain analysis helps to identify more precisely how e-commerce can change business operations at industrial  level.

Every industry can be characterized by the set of these value-added activities : e-commerce effect each player as well as overall operational efficiency of the system. e.g. : manufacturer can reduce cost by having direct relationship

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Distributers can build an efficient online inventory management system

Retailers : Customer

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Firm value chain : Set of activities a firm engages into to create a final product from the raw input. A firm developer supports activities that coordinate the whole process contribute to the overall efficiency of the system. Primary activities of firm value chain are :

• Inbound logistics.
• Operations logistics
• Outbound Logistics
• S & M
• After sale services