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Chapter 8
E-Commerce and Web 2.0
David Kroenke
Chapter Preview
Chapter has two major themes: e-commerce and Web 2.0.
1. E-commerce: Begin by discussing how companies use ecommerce and survey important e-commerce technology.
Conclude by discussing the role of e-commerce in supply chain
management.
2. Web 2.0: What it means, and what capabilities does it provide?
How do businesses use social networking, including groups and
applications. Well discuss three primary uses for Twitter in
commerce. After that, well investigate user generated content
and discuss some of the risks of it and social networking as well.
Finally, well wrap up with 2020.
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Types of Nonmerchant
E-commerce Companies
1. Auctions match buyers and sellers using the e-commerce
version of standard auction where auction company
receives a commission on each product sold. eBay.com is
the best-known example.
2. Clearinghouse provides goods at a stated price, arranges
for delivery but never takes title to the goods. Company
receives a commission on each product sold. Amazon.com
is the best-known example.
3. Electronic exchanges are a type of clearinghouse similar
to a stock exchange. Company matches up buyers and
sellers and a transaction occurs. Exchange takes a
commission. Priceline.com is the best-known example.
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2. Price conflict
Occurs when a manufacturer sells directly to consumers and
undercuts retailers prices
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Study Questions
Q1 How do companies use e-commerce?
Q2 How can information systems enhance supply chain
performance?
Q3 Why is Web 2.0 important to business?
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Fundamentals of Social
Networking
Social networking (SN)interaction of
people connected by friendship, interests,
business association, or other common trait
and supported by Web 2.0 technology
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Figure CE15-6
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Study Questions
Q1 How do companies use e-commerce?
Q2 How can information systems enhance supply chain
performance?
Q3 Why is Web 2.0 important to business?
Q4 How can organizations benefit from social networking?
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Benefits of UGC
SN users are three times more likely to trust peers
opinions over advertiser claims.
Increases loyalty to company site and brand loyalty
Increases brand involvement, interaction, intimacy,
influence
Discussion groups share advice and assistance.
Provides useful information for product marketing
and development
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UGC Applications
Figure 8-21
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Impact of UGC
Increases conversion rates
Conversion rates are higher for products with lessthan-perfect reviews than for products with no
reviews at all.
UGC to post answers to questions, articles, best
practices, blogs, code samples, and other
resources
Return rates fall dramatically as number of product
reviews increases
Videos provide bait for advertising
Some sites include UGC as part of the product
Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall
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2020?
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2020?
Expect that technology will enable voice and video
to be integrated into social networking.
Speak your tweets and have a program translate
your voice message into text? offers a limited
version of that service.
Tweet your video? 12Seconds.TV
What will social networking do to management?
What will microblogging do to employee evaluation
and compensation?
What will happen to language? Writing skills?
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