Part 1:IntroductionChapter 1 Introduction to Electronic Commerce 2
Electronic Commerce:The Second Wave 4
Electronic Commerce and Electronic Business 5
Categories of Electronic Commerce 5
The Development and Growth of Electronic Commerce 7
The Dot-Com Boom,Bust,and Rebirth 9
The Second Wave of Electronic Commerce 11
Business Models,Revenue Models,and Business Processes 14
Focus on Specific Business Processes 14
Role of Merchandising 15
Product/Process Suitability to Electronic Commerce 15
Advantages of Electronic Commerce 17
Disadvantages of Electronic Commerce 18
Economic Forces and Electronic Commerce 20
Transaction Costs 21
Markets and Hierarchies 23
Using Electronic Commerce to Reduce Transaction Costs 24
Network Economic Structures 25
Network Effects 26
Using Electronic Commerce to Create Network Effects 26
Identifying Electronic Commerce Opportunities 27
Strategic Business Unit Value Chains 27
Industry Value Chains 29
SWOT Analysis:Evaluating Business Unit Opportunities 31
International Nature of Electronic Commerce 32
Trust Issues on the Web 33
Language Issues 34
Cultural Issues 35
Culture and Government 37
Infrastructure Issues 39
Summary 42
Key Terms 42
Review Questions 43
Exercises 43
Cases 44
For Further Study and Research 48
Chapter 2 Technology Infrastructure:The Internet and the World Wide Web 53
The Internet and the World Wide Web 55
Origins of the Internet 55
New Uses for the Internet 56
Commercial Use of the Internet 57
Growth of the Internet 57
Emergence of the World Wide Web 59
Packet-Switched Networks 61
Routing Packets 62
Internet Protocols 63
TCP/IP 64
IP Addressing 64
Domain Names 66
Web Page Request and Delivery Protocols 68
Electronic Mail Protocols 68
Unsolicited Commercial E-Mail(UCE,Spam) 69
Markup Languages and the Web 70
Standard Generalized Markup Language 71
Hypertext Markup Language 72
Extensible Markup Language(XML) 78
HTML and XML Editors 85
Intranets and Extranets 85
Intranets 85
Extranets 86
Public and Private Networks 86
Virtual Private Network(VPN) 87
Internet Connection Options 88
Connectivity Overview 88
Voice-Grade Telephone Connections 89
Broadband Connections 89
Leased-Line Connections 91
Wireless Connections 91
Internet2 and the Semantic Web 95
Summary 97
Key Terms 98
Review Questions 100
Exercises 100
Cases 101
For Further Study and Research 104
Part 2:Business Strategies for Electronic CommerceChapter 3 Selling on the Web:Revenue Models and Building a Web Presence 110
Revenue Models 111
Web Catalog Revenue Models 112
Digital Content Revenue Models 119
Advertising-Supported Revenue Models 121
Advertising-Subscription Mixed Revenue Models 125
Fee-for-Transaction Revenue Models 126
Online Video 135
Fee-for-Service Revenue Models 136
Revenue Models in Transition 137
Subscription to Advertising-Supported Model 138
Advertising-Supported to Advertising-Subscription Mixed Model 138
Advertising-Supported to Fee-for-Services Model 138
Advertising-Supported to Subscription Model 139
Multiple Transitions 139
Revenue Strategy Issues 141
Channel Conflict and Cannibalization 141
Strategic Alliances and Channel Distribntion Management 143
Mobile Commerce 144
Creating an Effective Web Presence 145
Identifying Web Presence Goals 145
Achieving Web Presence Goals 146
Web Site Usability 151
How the Web Is Different 151
Meeting the Needs of Web Site Visitors 152
Trust and Loyalty 155
Rating Electronic Commerce Web Sites 155
Usability Testing 156
Customer-Centric Web Site Design 156
Connecting with Customers 157
The Nature of Communication on the Web 157
Summary 161
Key Terms 161
Review Questions 162
Exercises 162
Cases 163
For Further Study and Research 167
Chapter 4 Marketing on the Web 171
Web Marketing Strategies 173
Product-Based Marketing Strategies 174
Customer-Based Marketing Strategies 176
Communicating with Different Market Segments 178
Trust,Complexity,and Media Choice 178
Market Segmentation 180
Market Segmentation on the Web 182
Offering Customers a Choice on the Web 183
Beyond Market Segmentation:Customer Behavior and Relationship Intensity 183
Segmentation Using Customer Behavior 184
Customer Relationship Intensity and Life-Cycle Segmentation 186
Acquisition,Conversion,and Retention of Customers 189
Customer Acquisition,Conversion,and Retention:The Funnel Model 190
Advertising on the Web 191
Banner Ads 192
Text Ads 194
Other Web Ad Formats 195
Site Sponsorships 196
Online Advertising Cost and Effectiveness 197
Effectiveness of Online Advertising 198
E-Mail Marketing 199
Permission Marketing 199
Combining Content and Advertising 200
Outsourcing E-Mail Processing 201
Technology-Enabled Customer Relationship Management 201
CRM as a Source of Value in the Marketspace 202
Creating and Maintaining Brands on the Web 204
Elements of Branding 205
Emotional Branding vs.Rational Branding 206
Brand Leveraging Strategies 206
Brand Consolidation Strategies 206
Costs of Branding 207
Affiliate Marketing Strategies 207
Viral Marketing Strategies 209
Search Engine Positioning and Domain Names 209
Search Engines and Web Directories 209
Paid Search Engine Inclusion and Placement 210
Web Site Naming Issues 214
Summary 217
Key Terms 217
Review Questions 219
Exercises 219
Cases 220
For Further Study and Research 224
Chapter 5 Business-to-Business Online Strategies 227
Purchasing,Logistics,and Support Activities 229
Purchasing Activities 230
Direct vs.Indirect Materials Purchasing 232
Logistics Activities 234
Support Activities 235
E-Government 236
Network Model of Economic Organization 238
Electronic Data Interchange 239
Early Business Information Interchange Efforts 239
Emergence of Broader EDI Standards 240
How EDI Works 242
Value-Added Networks 246
EDI Payments 249
EDI on the Internet 249
Open Architecture of the Internet 249
Supply Chain Management Using Internet Technologies 251
Value Creation in the Supply Chain 251
Increasing Supply Chain Efficieneies 253
Using Materials-Tracking Technologies with EDI and Electronic Commerce 254
Creating an Ultimate Consumer Orientation in the Supply Chain 256
Building and Maintaining Trust in the Supply Chain 257
Electronic Marketplaces and Portals 258
Independent Industry Marketplaces 258
Private Stores and Customer Portals 260
Private Company Marketplaces 260
Industry Consortia-Sponsored Marketplaces 261
Summary 263
Key Terms 263
Review Questions 264
Exercises 264
Cases 265
For Further Study and Research 268
Chapter 6 Online Auctions,Virtual Communities,and Web Portals 273
Auction Overview 274
Origins of Auctions 275
English Auctions 275
Dutch Auctions 276
First-Price Sealed-Bid Auctions 277
Second-Price Sealed-Bid Auctions 277
Open-Outcry Double Auctions 277
Sealed-Bid Double Auctions 277
Reverse(Seller Bid)Auctions 278
Online Auctions and Related Businesses 279
General Consumer Auctions 280
Specialty Consumer Auctions 284
Consumer Reverse Auctions and Group Purchasing Sites 285
Business-to-Business Auctions 287
Business-to-Business Reverse Auctions 289
Auction-Related Services 291
Virtual Communities:Web Portals and Social Networks 295
Mobile Communications Technology 296
Mobile Business 297
Intelligent Software Agents 297
Virtual Communities 298
Early Web Communities 298
Web Community Consolidation 299
The Second Wave of Electronic Commerce:Social Networking 299
Revenue Models for Social Networking Sites 302
Summary 308
Key Terms 308
Review Questions 309
Exercises 310
Cases 311
For Further Study and Research 313
Part 3:Technologies for Electronic CommerceChapter 7 Electronic Commerce Software 318
Web Hosting Alternatives 319
Basic Functions of Electronic Commerce Software 322
Catalog Display 323
Shopping Cart 325
Transaction Processing 329
Advanced Functions of Electronic Commerce Software 330
Middleware 330
Enterprise Application Integration and Databases 331
Web Services 333
Integration with ERP Systems 336
Electronic Commerce Software for Small and Midsize Companies 337
Basic Commerce Service Providers 337
Mall-Style Commerce Service Providers 339
Estimated Operating Expenses for a Small Web Business 340
Electronic Commerce Software for Midsize to Large Businesses 342
Web Site Development Tools 342
Electronic Commerce Software for Large Businesses 344
Enterprise-Class Electronic Commerce Software 344
Customer Relationship Management Software 347
Supply Chain Management Software 349
Content Management Software 349
Knowledge Management Software 350
Summary 351
Key Terms 351
Review Questions 352
Exercises 353
Cases 354
For Further Study and Research 357
Chapter 8 Electronic Commerce Security 359
Online Security Issues Overview 361
Managing Risk 362
Elements of Computer Security 363
Security Policy and Integrated Security 363
Security for Client Computers 365
Cookies 365
Web Bugs 367
Active Content 367
Java Applets 369
JavaScript 369
ActiveX Controls 370
Graphics and Plug-Ins 370
Viruses,Worms,and Antivirus Software 371
Digital Certificates 376
Steganography 378
Physical Security for Clients 379
Communication Channel Security 379
Secrecy Threats 380
Integrity Threats 382
Necessity Threats 383
Threats to the Physical Security of Internet Communications Channels 383
Threats to Wireless Networks 384
Encryption Solutions 384
Ensuring Transaction Integrity with IIash Functions 392
Ensuring Transaction Integrity with Digital Signatures 392
Guaranteeing Transaction Delivery 394
Security for Server Computers 394
Web Server Threats 394
Database Threats 395
Other Programming Threats 396
Threats to the Physical Security of Web Servers 396
Access Control and Authentication 399
Firewalls 400
Organizations That Promote Computer Security 402
CERT 402
Other Organizations 402
Computer Forensics and Ethical Hacking 403
Summary 404
Key Terms 405
Review Questions 406
Exercises 407
Cases 408
For Further Study and Research 411
Chapter 9 Payment Systems For Electronic Commerce 415
Online Payment Basics 417
Payment Cards 419
Advantages and Disadvantages of Payment Cards 420
Payment Acceptance and Processing 421
Electronic Cash 424
Micropayments and Small Payments 423
Privacy and Security of Electronic Cash 426
Holding Electronic Cash:Online and Offline Cash 426
Advantages and Disadvantages of Electronic Cash 427
How Electronic Cash Works 428
Providing Security for Electronic Cash 428
Electronic Cash Systems 430
Electronic Wallets 433
Microsoft Windows Live ID 434
Yahoo!Wallet 435
Stored-Value Cards 435
Magnetic Strip Cards 435
Smart Cards 436
Internet Technologies and the Banking Industry 438
Check Processing 438
Phishing Attacks 440
Organized Crime,Identity Theft,and Phishing Attacks 443
Phishing Attack Countermeasures 445
Summary 446
Key Terms 446
Review Questions 447
Exercises 447
Cases 448
For Further Study and Research 451
Part 4:IntegrationChapter 10 Planning for Electronic Commerce 456
Planning Electronic Commerce Initiatives 457
Identifying Objectives 458
Linking Objectives to Business Strategies 458
Measuring Benefits 459
Managing Costs 460
Comparing Benefits to Costs 466
Return on Investment(ROI) 466
Strategies for Developing Electronic Commerce Web Sites 467
Internal Development vs.Outsourcing 468
Selecting a Hosting Service 472
New Methods for Implementing Partial Outsourcing 473
Managing Electronic Commerce Implementations 474
Project Management 474
Project Portfolio Management 476
Staffing for Electronic Commerce 476
Postimplementation Audits 479
Summary 480
Key Terms 480
Review Questions 481
Exercises 481
Cases 482
For Further Study and Research 485