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Chapter 1 Foundations of Electronic Commerce 1

The Case of Intel Corp. 1

1.1 Intel Corp.and Happy Puppy 1

CHAPTER 1 Foundations of Electronic Commerce 1

The Case of Happy Puppy 2

1.2 Definitions and Content of the Field 3

Application Case 1.1 Egghead Becomes a Virtual Software Company Definitions 4

The EC Field 6

Electronic Markets 7

Interorganizational Information Systems 8

Interorganizational Information Systems and Electronic Markets 8

Application Case 1.2 Wal-Mart Uses IOSs 9

Classification of the EC Field by the Nature of the Transactions 10

The Electronic Marketing Process 11

Application Case 1.3 HBO Uses the Intranet to Boost Sales Efforts 11

Interdisciplinary Nature of EC 13

A Brief History of EC 13

The Future of EC 14

1.3 Benefits and Limitations 14

The Benefits of EC 14

The Limitations of EC 16

1.4 The Driving Forces of Electronic Commerce 17

The New World of Business 17

Business Pressures 19

Organizational Responses 19

Business Process Reengineering 21

Application Case 1.4 FedEx s Web Shopping/Shipping Service 22

Application Case 1.5 The Internet and the Intranet Shorten Time to Market of New Drugs 24

1.5 Impact of EC:Everything Will Be Changed 24

Improving Direct Marketing 25

Other Marketing-Related Impacts 26

Transforming Organizations 28

Redefining Organizations 28

Impacts on Manufacturing 29

Impacts on Finance and Accounting 29

Human Resource Management,Training,and Education 30

1.6 Putting It All Together 30

1.7 Managerial Issues 32

Summary 33

Questions for Review 34

Questions for Discussion 34

Internet Exercises 34

Keywords 34

Real World Case:An Electronic Fish Market Reengineers the Fishing Industry 36

References 37

CHAPTER 2 Retailing in Electronic Commerce 39

2.1 Amazon s Competitive Structure 39

Chapter 2 Retailing in Electronic Commerce 39

2.2 Overview of Electronic Marketing Structure 40

2.3 Forecast of the B2C Electronic Markets 41

2.4 Business Models of Electronic Marketing 44

Direct Marketing versus Indirect Marketing 44

Full Cybermarketing versus Partial Cybermarketing 44

Electronic Distributor versus Electronic Broker 45

Electronic Store versus Electronic Shopping Mall 45

Generalized E-Malls/Stores versus Specialized E-Malls/Stores 45

Proactive versus Reactive Strategic Posture Toward Cybermarketing 45

Global versus Regional Marketing 46

Sales versus Customer Service 46

2.5 Direct Marketing 46

Proactive and Full Direct Marketing:The Dell Computer Case 46

Reactive and Partial Direct Marketing:Ford Case 48

2.6 Online Customer Service 49

Application Case 2.1 Automobile Sales Online 50

2.7 Electronic Intermediaries 50

Generalized E-Brokers 51

Specialized Electronic Distributors 52

2.8 Reactive Electronic Department Stores 53

The JCPenney Case 53

Electronic Department Stores Worldwide 54

2.9 Regional Shopping Service 54

Preliminary Requirement Determination 54

2.10 Procedure for Internet Shopping:The Consumer s Perspective 55

Search for Avdilable Items 55

APPlication Case 2.2 BestBookBuys.com Finds the Best Price 56

Compare the Candidate Items with Multiple Perspectives 56

Place An Order 56

Pay for the Goods 57

Receive the Delivered Items and Inspect Their Quality 58

Contact the Vendor to Get After-Service and Support or Return the Goods if Disappointed 58

2.11 Aiding Comparison Shopping 58

Search of Hypertext Files by Agents 58

Search in a Web-Based Database:Human and Software Agents Sharing Information 59

Comparable Item Retrieval and Tabular Comparison 59

Comparison of Multiple Items from Multiple Malls 61

Comparison as a Multiple-Criteria Decision Making 62

Disintermediation and Reintermediation 63

2.12 The Impact of EC on Traditional Retailing Systems 63

Impact on Manufacturer s Distribution Strategy 64

2.13 Managerial Issues 65

Summary 65

Keywords 66

Questions for Review 66

Questions for Discusion 66

Internet Exercises 67

Team Exercises 68

Real World Case:Lowest Price on Earth:Buy.com 69

References 70

CHAPTER 3 Internet Consumers and Market Research 72

3.1 Building Customer Relationships 72

Chapter 3 Internet Consumers and Market Research 72

3.2 The Consumer Behavior Model 73

Consumer Behavior 74

Direct Sales,Intermediaries,and Customer Relations 75

3.3 Personal Characteristics and the Demographics of Internet Surfers 75

Environmental Variables 76

Personal Characteristics and Individual Differences 76

Application Case 3.1 Purchasing and Baby Boomers 78

Consumers Buying Patterns 80

3.4 Consumer Purchasing Decision Making 81

The Purchasing Decision-Making Model 81

The Customer Decision Model in Web Purchasing 83

A Model of Internet Consumer Satisfaction 83

3.5 One-to-One and Relationship Marketing 84

One-to-One Marketing:An Overview 84

Issues in EC-Based One-To-One Marketing 85

3.6 Delivering Customer Service in Cyberspace 87

Types of Customer Service Functions and Tools 88

Product Life Cycle and Customer Service 88

Some Tools of Customer Service 90

Application Case 3.2 American Airlines Builds the Largest Personalized Site on the Internet 91

Examples of Superb Customer Service 92

Application Case 3.3 Canadian Tire Provides Superb Customer Service via an Integrated Call Center 93

3.7 Market Research for EC 93

Application Case 3.4 Representative Examples of Superb Customer Service 94

Market Segmentation 95

Oniline Market Research 96

Online Market Research Methods 97

Application Case 3.5 Marketing Research on the Internet 98

Data Mining 100

Application Case 3.6 British Telecom Uses Data Mining 101

3.8 Intelligent Agents for Consumers 102

Intelligent Agents for Products and Vendor Finding 103

Intelligent Agent for Information Search and Filtering 103

Negotiation Agents 104

Application Case 3.7 ZineZone Helps in Information Search 104

Negotiation Agents 105

Intelligent Agents for Customer Service 106

Learning Agents 106

3.9 Organizational Buyer Behavior 107

A Behavioral Model of an Organization Buyer 107

Management Issues 108

Summary 109

Keywords 110

Questions for Review 110

Questions for Discussion 111

Internet Exercises 111

Team Exercises 112

Real World Case:Kansas City Power and Light Company 113

References 114

Appendix 3A Example of an Online Market Research Tool for Segmentation 116

CHAPTER 4 Advertisement in Electronic Commerce 117

4.1 CD-Max Uses E-Mail Lists to Advertise 117

Chapter 4 Advertisement in Electronic Commerce 117

4.2 Web Advertisement 118

On Overview 118

Internet Advertising Terminology 119

Why Internet Advertisement 120

The Internet versus Traditional Methods 121

Internet is the Fastest Growing Medium in History 122

Objectives and Growth of Internet Advertisement 122

Targeted(One-to-One)Advertisement 123

Types of Internet Advertisement 123

4.3 Advertisement Methods 123

Banners 123

Application Case 4.1 Procter Gamble Co s(P G)Interactive Marketing 123

Application Case 4.2 Targeted Advertisement:The Double Click Approach 124

Splash Screen 126

Spot Leasing 126

URL(Universal Resource Locators) 126

E-Mail 126

Chat Romms 127

Other Forms 128

4.4 Advertisement Strategies 128

Considerations in the Internet-Based Ad Design 128

Active Push Strategy 129

Passive Full Strategy 129

Associated Ad Display Strategy 130

Ads as a Commodity 130

Implementing the Strategies 132

Customizing Ads 132

Interactive Ad Strategies 132

Comparison Ads as a Medium of Advertisement 132

Attracting Visitors to a Site 134

Online Events,Promotions,and Attractions 135

Application Case 4.3 How to Entice Web Surfers to Read Internet Ads 136

Bargains,Special Sales,and Financial Incentives 136

4.5 Push Technology and Intelligent Agents 137

Push Technology 137

Push on the Intranet 138

The Future of Push Technology 138

Intelligent Agents 139

Application Case 4.4 Fujitsu Uses Agents for Targeted Advertising in Japan 139

4.6 Economics and Effcetiveness of Advertisement 140

Exposure Models That are Based on CpMs 140

Click-Through 140

Interactivity 140

Achual Purchase 141

Other Methods 141

4.7 Online Catalogs 142

Evolution of Online Catalogs 142

Comparison of Online Catalogs With Paper Catalogs 142

Advertising in Online Catalogs Versus Electronic Malls 143

Application Case 4.5 AMP s Online Catalogs Cut the Cost to One-Sixth 144

Customized Catalogs 144

4.8 Special Advertisement Topics 145

How Much to Advertise? 145

Application Case 4.6 Electronic Catalogs at Boise Cascade:B2B 146

Auditing and Analyzing Web Traffic 147

Internet Standards 147

Application Case4.7 Sample of an Audit Report 148

Localization 148

The Major Web Ad Players 149

4.9 Managerial Issues 150

Summary 150

Keywords 151

Questions for Review 152

Questions for Discussion 152

Internet Exercises 152

Team Assignments 153

Exercises 154

Real World Case:Chevron s World of Car Characters 155

References 156

CHAPTER 5 Electronic Commerce for Service Industries 157

5.1 Ordering Journals Electronically 157

Chapter 5 Electronic Commerce for Service Industries 157

5.2 Broker-Based Services 158

Service Industries versus Manufacturing and Product Retailing 159

5.3 Travel and Tourism Services 159

Benefits and Limitations 160

Services Provided 160

Corporate Travel 161

Application Case 5.1 Carlson Travel and American Express Automate Corporate Travel 161

The Impact of EC on the Travel Industry 162

Application Case 5.2 Zeus Tours and Yacht Cruises Inc.Uses EC 163

The Future 163

5.4 Employment Placement and the Job Market 164

Driving Forces of the Electronic Job market 164

The Internet Job Market 165

The Advantage of the Electronic Job Market 165

Application Case 5.3 Web Site Matches Workers with Jobs in the Philippines 166

The Limitations of the Electronic Job Markets 166

Examples of Services on the Net 166

Example of Career Services on the Net 167

Intelligent Agents 167

5.5 Real Estate:From Virtual Realtors to Virtual Reality 168

Application Case 5.4 Finding Super Deals 169

Real Estate Applications 169

Application Case 5.5 How One Deal More than Paid for the Web Site of Colliers Arnold 170

5.6 Trading Stocks Online 170

Online Stock Trading 170

Investment Information 171

Initial Public Offerings(IPOs)and the Internet 173

Related Markets 173

Individual Investors and Day Trading 173

5.7 Cyberbanking and Personal Finance 173

Application Case 5.6 Cyberbanking at Wells Fargo 174

Implementation Issuses in Banking and Online Trading 175

Application Case 5.7 Security at Bank of America Online 176

Billing Online 178

5.8 Auctions:From Theory to Practice 179

Types of Auctions 179

Electronic Auctions 179

Benefits and Limiitations 181

Impacts 181

Business-to-Business Auctions 181

5.9 Online Publishing,Knowledge Dissemination,and Other Services 183

Online Publishing 183

Knowledge Dissemination 184

Application Case 5.8 Interactive MBA at City University of Hong Kong 185

Other Services Online 186

5.10 the Impact on Intermediaries and Their Changing Roles 187

5.11 Managerial Issues 189

Summary 189

Keywords 191

Questions for Review 191

Questions for Discussion 191

Internet Exercises 192

Team Exercises 193

Real World Case:Cushman and Wakefield Uses an Intranet to Communicate Effectively 194

Real world Case:Web Takes Banking to Sea 195

References 195

CHAPTER 6 Business-to-Business Electronic Commerce 197

6.1 Procurement Revolution at General Electric 197

Chapter 6 Business-to-Business Electronic Commerce 197

TPN at GE Lighting Division 198

Benefits of TPN 198

Side Benefits to Suppliers 198

Open as a Public Bidding Site 199

6.2 Characteristics of B2B EC 199

Supply Chain 199

Entities of B2B EC 201

6.3 Models of B2B EC 203

Supplier-Oriented Marketplace 204

Buyer-Oriented Marketplace 205

Intermediary-Oriented Marketplace 206

Virtual Corporation:Networking Between Business Partners 207

Networking Between Headquarters and Subsidiaries 207

Application Case 6.1 Marriott International s Extranet Links Global Franchisees 208

Online Services to Business 208

6.4 Procurement Management Using the Buyer s Internal Marketplace 209

Buyer s Internal Marketplace 209

Issues in Procurement Management 210

Inefficiency in Procurement Management 210

Godls of Procurement Reengineering 210

The Major Solution:B2B EC 210

Application Case 6.2 MasterCard s Procurement Card Case 211

Customer s Internal Marketplace Cases 211

6.5 Supplier-Oriented Marketplace:Cisco Connection Online Case 211

Cisco Connection Online 211

6.6 Buyer-Oriented Marketplace:GE s TPN Case Revisited 213

Electronic Bidding Process 213

Benefits to Buyers 213

Benefits to Sellers 214

Lessons 214

6.7 Intermediary-Oriented Marketplace:Boeing s PART Case 214

Goal of Boeing s PART Page 214

Spare Parts Business Using Traditional EDI 215

Debut PART Page on the Internet 215

Benefits of PART Page 215

Portable Access to Technical Drawings/Support 215

Benefits to Boeing s Customers 216

6.8 Just-In-Time Delivery:FedEx InterNetShop Case 216

Why JIT Delivery for B2B EC 216

FedEx:A Delivery Company 216

FedEx on the Internet for Customer s Tracking Request 217

Proprietary Network for Progress Entry:COSMOS 217

Valued-Added Service to Ensure the Customer s Delivery Commitment 217

Supporting Customer s Tailored Tracking System 217

Benefits to FedEx 217

Application Case 6.3 Outsourcing On-Time Delivery:National Semiconductor Experience 218

6.9 Other B2B Models,Auctions,and Services 218

Business-to-Business Auctions 218

Managed Interactive Bidding 219

Facilitating Auctions and Bartering 219

Application Case 6.4 How Freemarket Operates:A New B2B Model 220

Business-to-Business Services 221

6.10 From Traditional to Internet-Based EDI 222

Traditional EDI 222

Internet-Based EDI 224

6.11 Integration with Back-End Information Systems 225

Enterprice Resource Planning System 226

6.12 The Role of Software Agents for B2B EC 227

Agent s Role in the Seller-Oriented Marketplace 227

Agent s Role in the Buyer-Oriented Marketplace 228

6.13 Elcetronic Marketing in B2B 228

Relationship Marketing 229

Direct Marketing to Reach Functional Buyers 229

Internet Marketing Strategies 230

How to Build Your E-Mail Lists and Marketing Database 230

Electronic/Interactive Media 230

Audience Strategy and Mailing Lists 230

6.14 Solutions of B2B EC 231

6.15 Managerial Issues 233

Summary 234

Keywords 235

Questions for Review 235

Questions for Discussion 236

Questions for Cases 236

Team Exercises 237

Internet Exercises 237

Real World Case:Fruit of the Loom s Distributors 238

References 238

CHAPTER 7 Intranet and Extranet 240

7.1 Automotive Network Exchange-The Largest Extranet 240

Chapter 7 Intranet and Extranet 240

Benefits of ANX 240

Virtually Private Network for ANX 241

7.2 Architecture of the Internet,Intranet,and Extranet 241

The Internet 241

The Intranet:An Intra Business Delivery System 242

The Extranet 242

Roads Ahead 243

7.3 Intranet Software 243

7.4 Applications of Intranets 244

Generic Functions of Intranet 244

Intranet Application Areas 244

Industry-Specific Intranet Solutions 245

7.5 Intranet Application Case Studies 246

Intranet Case Studies with ROI Analysis 246

Short Intranets Application Cases 246

Share Knowledge Among Corporate Employees:Coopers and Lybrand 247

7.6 Considerations in Intranet Deployment 248

7.7 The Extranets 248

Basic Concept of Extranets 248

Application Case 7.1 Toshiba s Extranet Keeps Dealers on Time 249

Planning Extranets:Coordination and Security 250

Potential of the Extranet Market 250

7.8 The Structure of Extranets 251

Elements of Extranet 251

7.9 Extranet Products and Services 251

Categories of Extranet Products and Services 251

Extranet Tools and Services Providers 252

7.10 Applications of Extranets 252

Benefits of Extranets 252

Industry Specific Extranet Solutions 253

7.11 Business Models of Extranet Applications 253

Connect Business Customers to Sell Parts:AMP 253

Connect Dealer s Kiosk:General Motors 254

Connect with Suppliers for Purchases:VHA,Inc. 254

Tracking Shipping Status:CSX Technology 255

Reduce Design Cycle Time by Connecting Suppliers:Adaptec,Inc. 255

Reduce Product Development Time by Connecting Suppliers: Caterpillar,Inc. 256

Link the Worldwide Chains Employees:Kinko s,Inc. 256

Link Business Partners:Countrywide Home Loan 256

Embedded Extranet:FedEx s Extranet Embedded in Cisco 257

Connect with Service Institutions:IntraLoan 257

7.12 Managerial Issues 258

Summary 259

Keywords 259

Questions for Review 260

Questions for Discussion 260

Internet Exercises 260

Team Exercises 261

Real World Case:Cadence Design Systems--ROI of Intranet 1.766 Percent 262

References 263

Appendix 7.1 Industry-Specific Intranet Solutions 265

Appendix 7.2 Industry-Spceific Extranet Solutions 269

Chapter 8 Electronic Payment Systems 274

CHAPTER 8 Electronic Payment Systems 274

8.1 Is SET a Failure? 274

8.2 Electronic Payments and Protocols 275

Secure Electronic Transaction Protocol for Credit Card Payment 275

Application Case 8.1 Merchants Offer Multiple Payment Options 277

Electronic Fund Transfer and Debit Card on the Internet 277

Stored-Value Cards and E-Cash 277

Electronic Check Systems 278

8.3 Security Schemes in Electronic Payment Systems 278

Security Schemes 278

Application Case 8.2 10 Tips for Selecting a CA 282

Secure Socket Layer Protocol 282

8.4 Electronic Credit Card System on the Internet 284

The Players 284

The Process of Using Credit Cards 284

Secure Electronic Transaction Protocol 285

Electronic Wallet 286

Storage of Certificates 286

Secure Socket Layer Protocol for Electronic Payment 287

8.5 Electronic Fund Transfer and Debit Cards on the Internet 287

Electronic Fund Transfer 287

Debit Card 288

Application Case 8.3 Bank Online and Security Tips 289

Financial EDI 290

8.6 Stored-Value Cards and E-Cash 291

Smart Cards 291

Application Case 8.4 Mondex Makes Shopping Easy 291

Representation of E-Cash Systems 292

Closed versus Open E-Cash System 293

Contact versus Contactless IC Cards 293

Integrating Internet and Non-Internet Payment Systems 293

Application Case 8.5 Smart Tollway:Highway 91 294

Ceiling of Stored Values and Multiple Currencies 295

8.7 Electronic Check Systems 295

8.8 Unified Payment Systems 296

Integrating Payment Methods 296

How Many Cards Are Appropriate? 297

8.10 Managerial Issues 298

8.9 Prospect of Electronic Payment Systems 298

Summary 299

Keywords 299

Questions for Review 299

Questions for Discussion 300

Internet Exercises 300

Team Exercises 301

Real World Case:Transportation Cards in the Big Cities 302

References 303

Chapter 9 EC Strategy and Implementation 305

9.1 IBM s E-Business s Strategy 305

CHAPTER 9 EC Strategy and Implementation 305

9.2 Strategic Planning for EC 306

Industry and Competitive Analysis 308

Strategy Formulation 309

Critical Success Factors for EC 310

A Value Analysis Approach 310

Application Case 9.1 Value Analysis Questions 311

Return on Investment and Risk Analysis 312

Application Case 9.2 Lockheed Martin Uses Ec to Compete 313

Application Case 9.3 Marriott s Analysis Emphasizes Shareholders Values 314

Electronic Commerce Scenarios 314

Strategic Planning Framework:Competitive versus Cooperative Strategies 314

9.3 Electronic Commerce Strategy in Action 317

What Questions a Strategic Plan Should Answer 317

The Steps to Successful EC Programs 318

9.4 Competitive Intelligence on the Internet 321

Using the Internet to Conduct Competitive Intelligence 321

Application Case 9.4 Competitive Intelligence on the Internet 321

Using Push Technology for Competitive Intelligence 322

9.5 Implementation:Plans and Execution 322

A Pilot Project 323

Electronic Commerce Leadership 323

Application Case 9.5 Examples of Market Leaders 324

Uncovering Specific Ec Opportunities and Applications 324

Creating a Web Team and Assigning Functional Skills to Subprojects 325

Evaluating Outsourcing 326

Application Case 9.6 Strategic Directions at Schubb Crop. 326

Application Case 9.7 AT T s Cyberspace Solution Helps Businesses Conduct Commerce on the Internet 328

Web Content Design 328

Security and Control in EC 329

9.6 Project and Strategy Assessment 329

Need for Assessment 329

Measuring Results 330

Collecting Information 330

Finalization 331

9.7 Managerial Issues 332

Summary 332

Keywords 333

Questions for Review 333

Questions for Discussion 333

Internet Exercises 334

Team Exercises 334

Real World Case 9.1:Wizards of the Coast.Inc. 336

Real World Case 9.2:SkyMall s EC Strategy 337

References 339

Chapter 10 Public Policy:From Legal Issues to Privacy 340

CHAPTER 10 Public Policy:From Legal Issues to Privacy 340

10.1 EC-Related Legal Incidents 340

Contractual Issues in EC 340

Copyright Infringement on the Web 341

10.2 Legal,Ethical,and Other Public Policy Issues 341

Legal and Ethical Issues:An Overview 342

Ethical Issues 342

10.3 Protecting Privacy 343

Privacy Issues 345

How is Private Information Collected? 345

Privacy Protection 347

Protecting Your Privacy 348

Application Case 10.1 Case of Microsoft and Geo Cities Privacy Policies 349

Federal Trade Commission(FTC)Audit 350

Movement of Advocate Groups and Industry 351

Electronic Privacy Information Center(EPIC) 351

Privacy Policy Basics-A Sample 352

10.4 Protecting Intellectual Property 352

Copyrights 353

Application Case 10.2 Copyright Protection versus Free Speech on the Internet 354

Domain Names 355

10.5 Free Speech,Internet Indecency,and Censorship 356

The Free Speech Versus Censorship Issue 356

Protecting Children 357

Controlling Spamming 360

10.6 Taxation and Encryption Policies 361

Taxation Policies 361

Encryption Policy 362

10.7 Other Legal Issues:Contracts,Gambling,and More 364

Application Case 10.3 Linking to Your Web Site 365

Electronic Contracts 365

Gambling 366

10.8 Consumer and Seller Protection in EC 367

Fraud on the Internet 367

Application 10.4 How David Lee Was Cheated by an International Investment Group 368

Buyer Protection 369

Third-Party Services 370

Application Case 10.5 Internet Shopping Rights 370

Authentication and Biometric Controls 371

Sellers Protection 372

10.9 Managerial Issues 373

Summary 374

Keywords 375

Questions for Review 375

Questions for Discussion 376

Exercises and Debates 377

Internet Exercises 378

Team Assignments 379

References 379

CHAPTER 11 Infrastructure for EC 381

11.1 It Takes More than Technology 381

Virtual Vineyards:Where Content is the Key 381

Chapter 11 Infrastructure for EC 381

United Parcel Service(UPS)Servicing the Masses 383

11.2 A Network of Networks 385

11.3 Internet Protocols 386

TCP/IP 386

Domain Names 388

Internet Client/Server Applications 388

New World Network:Internet2 and Next Generation Internet(NGI) 389

11.4 Web-Based Client/Server 390

Hyper Text Transport Protocol 390

Web Browsers 391

Application Case 11.1 Left Your Browser Behind? Soon a Kiosk May be Coming to the Rescue 392

Web Servers 393

Commercial Web Servers 393

Web Server Usage Survey 394

11.5 Internet Security 395

Cornerstones of Security 395

Encryption 396

Digital Signatures:Authenticity and Nondenial 398

Digital Certificates and Certificate Authorities(CAs) 399

Secure Electronic Transactions 400

Firewalls:Access Control 400

Secure Socket Layer 400

Application Case 11.2 E-Commerce Sites Top Hacker Hit List 402

Virtual Private Networks 403

11.6 Selling on the Web 404

Functional Requirements 404

Electronic Commerce Solutions:Outsourcing versus Insourcing 405

Electronic Catalogs and Merchant Servers 407

Electronic Commerce Suites 408

11.7 Chatting on the Web 410

11.8 Multimedia Delivery 412

Webcasting 412

Bandwidth Requirements for Streaming Audio and Video 414

Internet Telephones 414

Application Case 11.3 V-Commerce:The Next Frontier? 416

11.9 Analyzing Web Visits 417

11.10 Managerial Issues 417

Summary 418

Keywords 419

Questions for Review 420

Questions for Discussion 420

Internet Exercises 421

Team Exercises 422

Real World Case:Internet Bookseller Realizes 440 Percent Internet Sales Growth 423

References 423

Chapter 12 Economics,Global,and Other Issues in EC 425

CHAPTER 12 Economics,Global,and Other Issues in EC 425

12.1 Electronic Distribution of Music by N2K 425

12.2 Marketplace versus Marketspace 426

12.3 The Components of Digital Economics 428

12.4 Competition in Marketspace 429

Application Case 12.1 Amazon.com versus Barnes Noble 430

Application Case 12.2 Strong Competition in Selling Books,Music And Videos 432

12.5 Some Issues in Digital Economy and Success Factors 433

The Need for a Critical Mass of Buyers and Sellers 433

Quality Uncertainty and Quality Assurance 434

Pricing on the Internet 435

Contributors to Electronic Market Success 436

12.6 Impacts on Industry Structure,Intermediaries,and Others 437

The Roles and Value of Brokers in E-Markets 438

Potential Winners and Losers in EC 440

12.7 Virtual Communities 442

The Internet Communities 442

12.8 Global Electronic Commerce 445

Barriers to Global EC 445

The U.S.Policy Regarding Global EC 447

Application Case 12.3 Small Businesses and Global Trade 448

12.9 Electronic Commerce in Small Companies 449

Supporting Small Businesses 450

Application Case 12.4 Korean Government Helps Online Business 451

12.10 Research in EC 452

Behavioral Topics 452

Suggested Technical Topics 452

Suggested Managerial Research Types 452

Internet Usage 454

Opportunities for Buying 454

Purchasing Incentives 454

Increased Security and Trust 454

12.11 The Future of EC 454

Efficient Information Handling 454

Innovative Organizations 454

Virtual Communities 455

Payment Systems 455

Business-to-Business 455

Technology Trends 455

Summary 456

Keywords 457

Questions for Review 457

Questions for Discussion 458

Internet Exercises 458

Team Assignment 459

Real World Case 1:Chemdex Brings Efficiencies to Chemical Market 460

Real World Case 2:New Entrants to the Dutch Flower Market 461

References 462

APPENDIX A Creating Web Pages 463

A.1 HyperText Markup Language(HTML) 463

Simple Example 463

Appendix A Creating Web Pages 463

Linking One Page to Another with Anchor Tags 466

Overview of HTML Tags 466

Adding Images to a Page 467

Displaying Data and Controlling Page Layout with Tables 469

Controlling Navigation with Frames 471

Sending Information to the Web:Universal Resource Locators versus Forms 472

A.2 HTML Editors 473

A.3 Cascading Style Sheets and Dynamic HTML 474

A.4 Virtual Reality Modeling Language(VRML) 475

A.5 The Coming of XML and XSL 477

References 482

Appendix B Web Programming:Adding Desktop Interactivity and Dynamic Data Access 483

APPENDIX B Web Programming:Adding Desktop Interactivity and Dynamic Data Access 483

B.1 Desktop Interactivity and Processing 483

Java 484

JavaScript and the Document Object Model(DOM) 486

A Word About Active X and VBS cript 489

B.2 Delivering Dynamic Content 489

Common Gateway Interface Programming 489

Database Gateways 491

Alternative APIs 491

Server-Side Scripting 492

Maintaining State:Cookies,Hidden Fields,and Other Tricks 492

References 494

APPENDIX C Software Agents 495

C.1 Why Software Agents for EC,Especially Now? 495

Information Overload 495

Appendix C Software Agents 495

Delegate,Do Not Navigate 496

Value of Software Agents in a Networked World 496

C.2 Brief History of Intelligent Agents 497

C.3 Definitions 497

Reactivity 498

Temporal Continuity 498

Goal Drives 498

C.5 Simple Software Agents:How Do They Work? 498

Autonomy 498

C.4 Characteristics of Software Agents:The Essentials 498

Automating a Single Set of Tasks within a Single Application 498

C.6 Learning Agents 499

Value of Learning Agents 501

Learning Agents:An Example 501

C.7 Keeping Up with and Watching Out for the Future 501

References 503

Glossary 505

Glossary 505

Index 513

Index 513