1.

Identify the eight unique features of e-commerce technology and explain how
these features set e-commerce apart from more traditional ways of conducting
commercial transactions.

The eight unique features of e-commerce technology are ubiquity, global reach, universal
standards, richness, interactivity, information density, personalization/customization, and
social technology.

The fact that e-commerce is available nearly everywhere, at any time, (ubiquity) extends the
marketplace beyond traditional boundaries and removes it from a temporal and geographic
location. A marketspace is created in which shopping can take place anywhere, enhancing
consumer convenience and reducing shopping costs, whereas in traditional commerce the
marketplace is a physical place you must visit in order to transact.

The global reach of e-commerce means that commerce is enabled across national and cultural
boundaries as never before, with potentially billions of consumers and millions of businesses
worldwide included in the marketspace. Traditional commerce, by contrast, is local or
regional involving local merchants or national merchants with local outlets.

Universal standards (one set of technical media standards) also allow for the seamless
enablement of global commerce. In contrast, most traditional commerce technologies differ
from one nation to the next. In traditional markets, national sales forces and small retail stores
can provide a complex and content-rich message. However, there is generally a trade-off
between the richness of the message and the number of consumers who can be reached with
the marketing message. In e-commerce the trade-off is no longer necessary.

An information rich environment is extended globally. Unlike any other commercial

technology of the twentieth century, except perhaps the telephone, e-commerce technologies
are interactive, allowing for two-way communication between the seller and the consumer. E-
commerce technologies reduce information collection, storage, processing, and
communication costs, thereby greatly increasing the prevalence, accuracy, and timeliness of
information. This information density (information that is more plentiful, cheaper, and of
higher quality) sets e-commerce apart from all other traditional methods of conducting
transactions.

E-commerce technologies also permit the personalization and customization of marketing

messages on a level that was impossible with previous commerce technologies. Marketing
messages can be targeted to specific individuals based on their interests and past purchasing
behavior, and the product or service can be altered to suit a customer's preferences and prior
behavior. Social technology allows users to easily generate and share content and permits a
many-to-many model of mass communications that is different from previous technologies.
This supports the creation of new business models and products that support social network
services.
 2. What is a first mover? Why was being a first mover considered to be important
during the early years of e-commerce?
First movers are firms who are first to market in a particular area, and who move quickly to
gather market share. First movers hope to establish a large customer base quickly, build brand
name recognition early, and inhibit competitors by building in switching costs for their
customers through proprietary interface designs and features. The thinking was that once
customers became accustomed to using a company's unique web interface and feature set,
they could not easily be switched to competitors. In the best case, the entrepreneurial firm
would invent proprietary technologies and techniques that almost everyone adopted, creating
a network effect, which occurs where all participants receive value from the fact that everyone
else uses the same tool or product.

3. Value chain analysis is useful at the business level to highlight specific activities
in the business where information systems are most likely to have a strategic
impact. Discuss this model, identify the activities, and describe how the model
can be applied to the concept of information technology.
The value chain model identifies specific, critical leverage points where a firm can use
information technology most effectively to enhance its competitive positions. Exactly where
can it obtain the greatest benefit from strategic information systems? What specific activities
can be used to create new products and services, enhance market penetration, lock in
customers and suppliers, and lower operational costs? This model views the firm as a series or
chain of basic activities that add a margin of value to a firm's products or services. These
activities can be categorized as either primary activities or support activities.

 Primary activities are most directly related to the production and distribution of the
firm's products and services that create value for the customer. Primary activities
include: inbound logistics, operations, outbound logistics, sales and marketing,
and service.
 Support activities make the delivery of the primary activities possible and consist
of: organization infrastructure (administration and management), human resources
(employee recruiting, hiring, and training), technology (improving products and
the production process), and procurement (purchasing input).

4. Discuss some of the unique features that must be considered when designing a
mobile web presence.

Designing a mobile web presence is somewhat different from designing a website that will be
accessed via a traditional desktop computer. For instance, mobile hardware is smaller, and
there are more resource constraints on data storage and processing power. The mobile
platform is also constrained by slower connection speeds than provided by traditional desktop
computers. As a result, file sizes should be kept smaller, and the number of files sent to the
user reduced. Mobile displays are much smaller and require simplification, and some screens
are not as easily visible in sunlight. Touch screen technology also introduces new interaction
routines that are different from the traditional mouse and keyboard. The mobile platform is
not as easy to use as a data entry tool, and therefore choice boxes and lists should be used
more frequently so that the user can easily scroll and touch-select options, rather than type
them in. You will also want to determine whether to create a mobile-friendly version of your
e-commerce site or implement responsive web design or adaptive web design, or create an
entirely new mobile app.

You can choose to build a mobile web app, a native app, or a hybrid app. Building a mobile
web app that uses the mobile device's browser requires more effort and cost than developing a
mobile website, suffers from the same limitations as any browser-based application, but does
offer some advantages such as better graphics, more interactivity, and faster local
calculations. Building a native app, which is programmed for specific mobile operating
systems, requires much more programming; however, it will allow you much greater creative
rein in making a unique customer experience. You can also choose to create a hybrid, cross-
platform mobile app with various low-cost or open source app development toolkits.

5. Explain both demand and supply-side considerations when choosing the

hardware platform for an e-commerce site. Include a discussion of I/O-intensive
vs. CPU-intensive operations and scalability.

The hardware platform refers to the underlying computing equipment that a system will need
to perform all of the necessary e-commerce functions. You must have enough platform
capacity to meet peak demand, without overinvesting in unnecessary and expensive
equipment. The question is: How much computing and telecommunications capacity will be
enough to meet that peak demand?

On the demand side, the first factor to consider is the maximum number of simultaneous users
your site experiences. System performance will degrade as more simultaneous users request
service. Processing HTTP requests for static pages is an I/O or input/output intensive
operation, meaning that it does not require heavy-duty processing power. However, as
customers request more advanced services such as searching the site, registering with the site,
filling a shopping cart and checking out, and particularly downloading large multimedia files,
much more processing power is required, and site performance can deteriorate rapidly. The
user profile on your site will help to determine the necessary hardware platform.

What types of requests will users on your site make, for how many pages, and for what kind
of service? Another factor to consider is the nature of the content on your site. If your site
uses dynamic page generation and business logic, as does the shopping cart, the load on the
processor increases rapidly. These types of requests are CPU-intensive operations, meaning
that they require a great deal of processing power. Any user interactions that require
interfacing with a database, such as filling out forms, adding items to the shopping cart,
making purchases, or filling out customer questionnaires, require lots of processing power.
The final factor to consider on the demand side is the telecommunication link your site has to
the Web. The number of hits your site can handle per second depends on the bandwidth
connections between your server and the Web. The larger the available bandwidth, the more
simultaneous users your site can handle. The connection to the client is also a consideration.
As consumers embrace broadband connections, they will be able to make far more frequent
requests and will demand richer content from your site. This increased demand will mean that
additional capacity requirements may be needed.

After you have estimated the present and future demands you expect your site to have, you
will have to look at supply side considerations. First and foremost is scalability. How will
your site be able to increase in size as demand warrants? You can scale your site vertically by
upgrading the servers from single processor to multiple processors. The drawbacks are that
this can become expensive with each growth cycle and that the site becomes overly dependent
on just a small number of powerful machines. You can also scale your site horizontally by
adding multiple single processor servers and balancing the load among many servers.

Scaling horizontally can be less expensive since you can use older PCs that would otherwise
be discarded. In addition, you will have to purchase special load-balancing software. The
main drawbacks of scaling horizontally are that the size of the physical facility will have to
increase, and that there is added management complexity. Perhaps the best method for
meeting the demands for service on your site is to improve the processing architecture of your
site by splitting the workload up into I/O-intensive and CPU-intensive operations. Then you
can fine-tune the servers to handle each type of workload. You can add RAM to servers that
will store the HTML pages, reducing the load on the hard drives, and move the CPU-intensive
activities to high-end multiple processor servers that are dedicated to handling a particular
task, such as order processing and accessing the necessary databases. These steps will enable
you to reduce the number of servers required to handle your peak demand.

6. Define elevator pitch and describe its key elements.

An elevator pitch is a short two-to-three-minute presentation aimed at convincing investors to
invest. The key elements of an elevator pitch are an introduction, in which you state your
name and position, your company's name and a tagline in which you compare what your
company does to a well-known company; background, in which you state the origin of your
idea, and the problem you are trying to solve, the industry size/market opportunity, in which
you provide brief facts about the size of the market; revenue model/numbers/growth metrics,
in which you provide insight into your company's revenue model and results thus far, how fast
it is growing, and early adopters, if there are any; funding, in which you state the amount of
funds you are seeking and what it will help you achieve; and finally exit strategy, in which
you explain how your investors will achieve a return on their investment.
7. Describe the visions and forces during the early days of e-commerce in terms of
what the various interest groups hoped for: the computer science and
information technology people; the economists; and the entrepreneurs, venture
capitalists and marketers. Explain whether what each group envisioned came to
fruition and why or why not.

The computer scientists and information technologists' vision included universal

communications and a computing environment that everyone could access with inexpensive
computers. Their interest was in creating a vast worldwide information collection from
libraries, universities, governments, and scientific institutions that was ungoverned by any
nation and free to all. They believed that the Internet, and by extension, the e-commerce that
operated within the infrastructure, should be self-governed and self-regulated.

The economists envisioned a near-perfect competitive market where price, cost, and quality
information are equally distributed. The marketspace would include a nearly infinite number
of suppliers with equal access to hundreds of millions of customers, but where those
consumers in turn would have access to all relevant market information—a hypercompetitive
market. Market middlemen would disappear, resulting in lowered costs to consumers. This
intensely competitive, disintermediated environment with lowered transaction costs would
eliminate product brands as well as the possibility of monopoly profits based on brands,
geography, or special access factors. Unfair competitive advantages and the ability to reap
returns on capital that far extended a fair market rate of return would be eliminated. Their
vision was called friction-free commerce.

The entrepreneurs, venture capitalists, and marketers in turn saw e-commerce as an

opportunity to earn great returns on invested capital. They saw the e-commerce marketspace
and technologies as a powerful method of increasing their ability to even more precisely
segment the market into groups with different price sensitivities. They believed that huge
profits could be garnered by firms that quickly achieved high market visibility and that these
successful first movers would become the new intermediaries of e-commerce, displacing the
traditional retail merchants and content suppliers.

The computer scientists' vision of an ungoverned Internet has not come to fruition as
governments have increasingly sought to regulate and control the technology to ensure that
positive social benefits result. The economists' vision has also for the most part not
materialized for a variety of reasons. Consumers have proven to be less price sensitive than
expected and the importance of brand names to consumers' perceptions of quality and service
has been extended rather than decreased or eliminated. Entrepreneurs have discovered new
methods for differentiating products and services. New information asymmetries are
continually being introduced by marketers. Disintermediation has also not occurred as new
middlemen emerged. The visions of the entrepreneurs, venture capitalists, and marketers have
also largely not come to fruition as the first movers from the early years of e-commerce only
rarely succeeded. The fast follower large traditional firms with the resources needed to
develop mature markets are displacing most of the venture capitalist backed entrepreneurs.

8. Why study e-commerce?

E-commerce is a disruptive innovation that is different and more powerful than any of the
other technologies we have seen in the past century. E-commerce technologies—and the
digital markets that result—have brought about some fundamental, unprecedented shifts in
commerce. While other technologies transformed economic life in the twentieth century, the
evolving Internet and other information technologies are shaping the twenty-first century.
9. What are the major stages in the development of corporate computing, and how
does the Internet and Web fit into this development trajectory?
The major stages of computer technology are the following Mainframe Computers (1950-
1975); Minicomputers (1970-1980); Personal Computers (1980-present): Local Area
Networks and Client/Server Computing (1980-present); Enterprise-wide Computing (1990-
present); and the Internet and Web/Mobile Platform/Cloud Computing era (1995-present).
The Internet, while representing a sharp break from prior corporate computing and
communications technologies, is nevertheless just the latest development in the evolution of
corporate computing and part of the continuing chain of computer-based innovations in
business.

10. You are consulting with the owner of Better Fitness, a national chain of gyms.
What strategies might Better Fitness use in applying information services to
achieve a competitive advantage?

Better Fitness could use computers, smart products, and mobile apps to monitor and evaluate
health and fitness of members and customize workouts in product differentiation strategy.
They could use information systems for sales and marketing data research in order to define a
niche market that would bring greater profits. They could allow customers to review their
health data and add additional information or view statistics to create customer intimacy. If
the individual gyms are franchises, then a network could be used for franchisees to share data
and research new sales tactics, etc.
11. Describe the major issues surrounding the decision to build and/or host your own e-
commerce site or to outsource some aspects of site development. Include the
advantages and disadvantages of each decision.

If you decide to build an e-commerce site in-house, you will need a multi-skilled staff
including programmers, graphic artists, web designers, and project managers. You will also
have to select and purchase software and hardware. Building a site from scratch involves a
great deal of risk, and the costs can be high because many of the required elements of an e-
commerce site such as shopping carts, credit card authentication and processing, inventory
management, and order processing are quite complex. Specialized firms have already
perfected these tools and your staff will often have to learn to build these features themselves.
The advantage is that you and your staff may be able to build a site that exactly suits the
specific needs of your company. Another advantage is that you will be developing a skilled
staff and consequently acquiring an invaluable supply of in-house knowledge that will enable
your firm to change the site if necessary due to the rapidly changing business environment.

If, on the other hand, you decide to purchase an expensive site-building package, you will
have to evaluate different packages to decide which one will be best suited to your firm's
needs. This can be a lengthy process and some packages may have to be modified. Additional
vendors may have to be hired to execute the modifications, and this can cause the costs to
mount rapidly.
You can also purchase less expensive, prebuilt templates, but you will be limited to the
functionality already built into the template. You can choose templates from merchant-
solution vendors such as Yahoo Small Business or use the templates from a site-building tool
such as WordPress. Brick-and-mortar retailers can generally design a site themselves because
they have a skilled staff in place and have made large investments in information technology,
such as databases and telecommunications. They will usually use outside vendors to build the
e-commerce applications for the site. Medium-size startups will often purchase a prepackaged
site-building tool and make modifications as necessary. Small startups that only require a
simple virtual storefront will usually use a template.

The hosting decision is independent from the building decision, but the two are usually
considered at the same time. Most businesses choose to outsource hosting because it is
generally less expensive than it would be for them to purchase the hardware and the physical
space, lease the communications lines, and hire the staff. Large hosting firms can build the
telecommunication links and emergency power supplies and achieve economies of scale by
establishing huge "server farms" in strategic locations around the country. If you host your
own site, you must also build the security and backup capabilities yourself.

Another option is co-location in which a firm purchases or leases a web server and has total
control over its operation, but the server is located in the vendor's physical facility. In a co-
location agreement, the vendor maintains the facility, the machinery, and the communication
lines. Small ISPs may not be able to provide service that is as reliable as the large providers.
The disadvantage of outsourcing hosting is that as your business grows, you may need more
power or services than the hosting company can provide. This is the main reason that firms
will decide to host their own sites, but the costs will almost always be higher than if they had
chosen an outsourcing firm.

EC 2022
1. Everything on Demand: The “Uberization” of E-commerce - 39
2. ROCKET INTERNET - p69
3. Puma Goes Omni - 91
4. Australia’s Canva Grows from Startup to Super Unicorn - 91
5. Weathering the Storm: Twitter Tweaks Its Business Model - 136
6. Skyscanner: The One-Stop Travel Platform - 280

Case study questions:

1. What is the case study business model?
2. Analyze the business SWOT and Porter's 5 forces.
3. What are the lessons learned from the case study?

OLD - EC2019
1. Opening Case: Uber: The New Face of E-commerce?
Case Study Questions:
1. Have you used Uber or any other on-demand service companies?
2. What is the appeal of these companies for users and providers?
3. Are there any negative consequences to the use of on-demand services like Uber and
Airbnb?

2. Case Study: Pinterest: A Picture Is Worth a Thousand

Words
Case Study Questions
1. Why does Pinterest view Google as its primary competitor?
2. Why does Pinterest focus on the smartphone platform when it develops new
features and products?
3. Why is copyright infringement a potential issue for Pinterest?

3. Opening Case: Tweet Tweet: Twitter’s Business Model

Case Study Questions:

1. What characteristics or benchmarks can be used to assess the business value of a

company such as Twitter?
2. What are Twitter’s most important assets?
3. Which of the various methods described for monetizing Twitter’s assets do you
feel might be most successful?
4. Why has Twitter had such a tough time developing a business model that works?

4. Case Study: Freemium Takes Pandora Public

Case Study Questions
1. Compare Pandora’s original business model with its current business model.
What’s the difference between “free” and “freemium” revenue models?
2. What is the customer value proposition that Pandora offers?
3. Why did MailChimp ultimately succeed with a freemium model but Bare metrics
did not?
 4. What’s the most important consideration when considering a freemium revenue
model?

5. Opening Case: The Wall Street Journal: Redesigning for

Today's Platforms
Case Study Questions

1. What were WSJ’s objectives in redesigning its e-commerce presence?

2. What considerations, if any, unique to the newspaper business were involved?
3. What did WSJ do to meet the needs of mobile device users?

6. Case Study: Dick’s Sporting Goods: Taking Control of Its

E-commerce Operations
Case Study Questions
1. Why did Dick’s decide to leave eBay and take over its own e-commerce operations?
2. What is Dick’s omni-channel strategy?
3. What are the three steps in Dick’s migration to its new website?
4. What are the primary benefits of Dick’s new system?