Electronic Commerce

Springer Texts in Business and Economics

Efraim Turban • David King  Jae Kyu Lee • Ting-Peng Liang • Deborrah C. Turban

A Managerial and Social Networks Perspective

Eighth Edition


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Book Details
 Price
 4.00 USD
 Pages
 820 p
 File Size
 19,907 KB
 File Type
 PDF format
 ISBN
 978-3-319-10090-6
 978-3-319-10091-3 (eBook)
 Copyright   
 Springer International Publishing Switzerland 2015  

Pref ace
There has been a severe recession in the world economy in recent years, yet
electronic commerce, the topic of this book, has grown rapidly, with companies
like Facebook, Google, Pinterest, Alibaba Group and Amazon.com setting
new levels of performance every year.
Electronic commerce (EC) is a business model in which transactions take
place over electronic networks, mostly the Internet. It includes the process of
electronically buying and selling goods, services, and information. Certain
EC applications, such as buying and selling stocks and airline tickets online,
are reaching maturity, some even exceeding non-Internet trade volumes.
However, EC is not just about buying and selling; it also is about electronically
communicating, collaborating, and discovering information. It is about
e-learning, customer service, e-government, social networks, and much more.
EC is having an impact on a signifi cant portion of the world, affecting businesses,
professions, trade, and of course, people.
The most important developments in EC since 2012 are the phenomenal
growth of social networks, especially Facebook, Google+, and Twitter, and the
trend toward conducting EC via mobile devices. Other major developments
are the global expansion of EC, especially in China, where you can fi nd the
world’s largest EC company. In addition, some emerging EC business models
are changing industries (e.g., travel, banking, fashion, and transportation).
In the 8th edition, we bring forth the latest trends in e-commerce, including
social businesses, social networking, social collaboration, innovations,
and mobility.
Note: Portions of this book were previously published by: Pearson
Education, Inc. under the title: Electronic Commerce 2012: A Managerial
and Social Networks Perspective.

What’s New in This Edition?
The following are the major changes in this edition:
• New chapters
Chapter 7 in EC 2012 has been replaced by two chapters. The new Chapter
7 concentrates on social media marketing, social shopping, and social
CRM. Chapter 8 focuses on enterprise social networks, crowdsourcing,
and other applications of social media.
• New topics
Many new topics were added in all chapters, while obsolete topics were
deleted. The major new topics are divided here into the following
categories:
1. Topics in basic e-commerce and m-commerce
• Cyberwars
• Digital coupons
• Gamifi cation
• Global payment systems
• IBM’s Smarter Commerce
• Mobile apps
• Mobile banking
• Mobile shopping/sales
• Mobile videos and advertising
• New shopping aid tools (that shoppers must have)
• New wearable computing applications including smart glasses, cities, and cars
2. EC technology
• Augmented reality
• Crowdsourcing
• Micro payments devices
• Big data in EC and its analysis
• E-payments, including Bitcoin
• Develop your own applications (DYOA)
• IBM’s Pure Data Systems for analytics
• Internet of Things (IoT)
• Machine-to-machine (M2M) communications
• New devices for e-learning
• 3D printing and EC
• Wearable devices
3. Managerial topics
• The issues surrounding Bring Your Own Device (BYOD)
• Collaborative strategic planning
• Crowdfunding
• Innovation and performance improvement
• Internet sales tax
• New aspects of online competition
• Sharing economy (P2P economy)
• Small retailers going global
4. Social media and commerce topics
• Collaboration 2.0 (social collaboration)
• New methods of social networking data collection and analysis
• Gamifi cation in social networks
• Innovation and creativity in social commerce
• P2P lending and other P2P activities
• Sentiment analysis
• Shopping for virtual goods
• Social customers
• Social graph
• Social media frameworks, characteristics, and tools
• Social media search engines (social search)
• Social TV and social radio
• Transformation of traditional companies into social businesses
5. New cases
The following are some of the new cases:
Starbucks, Pinterest, Cemax of Mexico, P&G, Sony USA, Madagascar’s
Port, Red Hat, Axon of New Zealand, Yodobuch (Japan), eGovernment in
Germany, Korea’s multipurpose smart cards, iRobot, Telstra (Australia),
Etsy, Del Monte, Polyvore, and I am Hungry (a failure case).
6. New Features
In additional to the regular features of the book (discussed later) we
added:
• A large number of links to resources, examples, and videos
• Many examples of mobile applications
• Short video cases (as exercises)
7. Wikipedia and other wiki-based resources
Given the copyright issues and some uneven quality issues, we eliminated
citations from Wikipedia and similar wiki-based sources.
Furthermore, these sources are evolving and changing. Yet, we strongly
recommend that instructors encourage students to look at these sources.
Note that Wikipedia provides information about the completeness and
the quality of many of its entries. Therefore, instructors should review
the entries before recommending them to students.
• Online tutorials
We provide fi ve technology-related online tutorials (instead of 12 in EC 2012).
The following tutorials are not related to any specifi c chapter. They cover
the essentials of EC technologies and provide a guide to relevant resources.
T1 – eCRM T2 – EC technology: EDI, Extranet, RFID, and cloud computing
T3 – Business intelligence and analytics, data, text, and Web mining
T4 – Competition in cyberspace T5 – E-collaboration
The tutorials are available at affordable-ecommerce-textbook.com/turban

Table of Contents
Part I Introduction to E-Commerce and E-Marketplaces
1 Overview of Electronic Commerce ............................................. 3
Opening Case: How Starbucks Is Changing
to a Digital and Social Enterprise .................................................. 3
The Problem ............................................................................... 4
The Solution: Going Digital and Social ..................................... 4
The Results..................................................................................... 6
1.1 Electronic Commerce: Defi nitions and Concepts ................. 7
Defi ning Electronic Commerce............................................. 7
Defi ning E-Business.............................................................. 7
Major EC Concepts ............................................................... 7
Electronic Markets and Networks ......................................... 8
1.2 The Electronic Commerce Field: Growth, Content,
Classifi cation, and a Brief History ........................................ 8
The Content and Framework of E-Commerce ...................... 8
An EC Framework ................................................................ 9
Classifi cation of EC by the Nature of the Transactions
and the Relationships Among Participants ........................... 10
A Brief History of EC ........................................................... 11
Case 1.1: Net-a-Porter: Dress for Success ..................................... 13
The Opportunity .................................................................... 14
The Solution .......................................................................... 14
The Results............................................................................ 14
1.3 Drivers and Benefi ts of E-Commerce ................................... 15
The Drivers of E-Commerce ................................................. 15
The Benefi ts of E-Commerce................................................ 15
1.4 E-Commerce 2.0: From Social Commerce
to Virtual Worlds ................................................................... 16
Social Computing ................................................................. 16
Web 2.0 ................................................................................. 17
Social Media ......................................................................... 18
Social Networks and Social Network Services ..................... 18
Enterprise Social Networks ................................................... 19
Social Commerce .................................................................. 19
Virtual Worlds and Second Life ............................................ 20
The Major Tools of Web 2.0 ................................................. 20
1.5 The Digital and Social Worlds: Economy, Enterprises,
and Society ............................................................................ 20
The Digital Economy ............................................................ 21
The Digital Enterprise ........................................................... 22
The Social Business (Enterprise) .......................................... 23
The Digital Revolution and Society ...................................... 24
1.6 The Changing Business Environment,
Organizational Responses, and EC and IT Support .............. 27
The Changing Business Environment ................................... 28
Performance, Business Pressures,
and Organizational Responses and EC Support .................... 28
1.7 Electronic Commerce Business Models ............................... 31
The Structure and Properties of Business Models ................ 31
Typical EC Business Models................................................. 33
Classifi cation of Business Models in E-Commerce .............. 34
1.8 The Limitations, Impacts, and the Future
of E-Commerce ..................................................................... 34
The Limitations and Barriers of EC ...................................... 34
Why Study E-Commerce?..................................................... 35
The Future of EC ................................................................... 36
1.9 Overview of This Book ......................................................... 37
Part I: Introduction to E-Commerce and E-Marketplaces ..... 37
Part II: EC Applications ........................................................ 38
Part III: Emerging EC Delivery Platforms ............................ 38
Part IV: EC Support Services ................................................ 38
Part V: EC Strategy and Implementation .............................. 38
Part VI: Launching Online Businesses and EC Projects ....... 38
Online Mini Tutorials ............................................................ 38
Online Supplements .............................................................. 38
Managerial Issues........................................................................... 38
Closing Case: E-Commerce at the National Football
League (NFL) ................................................................................. 43
Glossary ......................................................................................... 45
References ...................................................................................... 46
2 E-Commerce: Mechanisms, Platforms, and Tools .................... 51
Opening Case: Pinterest: A New Kid
on the E-Commerce Block ............................................................. 51
The Opportunity ......................................................................... 52
The Solution ............................................................................... 52
Results and Managerial Issues ................................................... 53
Conclusion ................................................................................. 54
2.1 Electronic Commerce Mechanisms: An Overview ............... 54
EC Activities and Support Mechanisms ............................... 54
The Online Purchasing Process ............................................ 55
2.2 E-Marketplaces ..................................................................... 55
Electronic Markets ................................................................ 57
Components of and the Participants
in E-Marketplaces ................................................................. 58
Disintermediation and Reintermediation .............................. 59
Case 2.1: EC Application: How Blue Nile Inc.
Is Changing the Jewelry Industry................................................... 59
Types of E-Marketplaces ........................................................... 60
2.3 Customer Shopping Mechanisms: Webstores,
Malls, and Portals ................................................................. 61
Webstores .............................................................................. 61
Electronic Malls .................................................................... 61
Web (Information) Portals .................................................... 62
The Roles and Value of Intermediaries
in E-Marketplaces ................................................................. 63
2.4 Merchant Solutions: Electronic Catalogs,
Search Engines, and Shopping Carts .................................... 64
Electronic Catalogs ............................................................... 64
EC Search Activities, Types, and Engines ............................ 65
Shopping Carts ...................................................................... 66
2.5 Auctions, Bartering, and Negotiating Online ....................... 67
Defi nition and Characteristics ............................................... 67
Dynamic Pricing ................................................................... 67
Traditional Auctions Versus E-Auctions............................... 68
Types of Auctions ................................................................. 68
Benefi ts and Limitations of E-auctions ................................. 70
Impacts of Auctions .............................................................. 72
Online Bartering.................................................................... 72
Online Negotiating ................................................................ 72
2.6 Virtual Communities and Social Networks ........................... 73
Characteristics of Traditional Online
Communities and Their Classifi cation .................................. 73
Online Social Networks and Social Network Sites ............... 74
Social Network Services ....................................................... 74
Business-Oriented Public Social Networks .......................... 75
Case 2.2: EC Application: Craigslist: The Ultimate
Online Classifi ed Community ........................................................ 76
Private (or Enterprise) Social Networks .................................... 77
Business Models and Services Related to Social Networking..... 77
Mobile Social Commerce .......................................................... 78
Mobile Social Networking ......................................................... 78
Recent Innovative Tools and Platforms
for Social Networking ................................................................ 79
2.7 Virtual Worlds as an Electronic Commerce Platforms ......... 80
Major Features ...................................................................... 80
Avatars ................................................................................... 80
Business Activities and Value in Virtual Worlds................... 81
2.8 Emerging EC Platforms: Augmented Reality
and Crowdsourcing ............................................................... 83
Augmented Reality ............................................................... 83
Crowdsourcing ...................................................................... 83
2.9 The Future: Web 3.0, Web 4.0 and Web 5.0 ......................... 86
Web 3.0: What Does the Future Hold? ................................. 86
The Technological Environment ........................................... 87
Managerial Issues........................................................................... 88
Closing Case: Madagascar’s Port Modernizes
Customs with TradeNet ................................................................. 93
Glossary ......................................................................................... 95
References ...................................................................................... 96
Part II E-Commerce Applications
3 Retailing in Electronic Commerce: Products and Services ...... 103
Opening Case: Amazon.com: The King of E-Tailing .................... 104
3.1 Internet Marketing and B2C Electronic Retailing ................ 106
Overview of Electronic Retailing ......................................... 107
Size and Growth of the B2C Market ..................................... 107
What Sells Well on the Internet ............................................ 108
Characteristics and Advantages of Successful E-Tailing ...... 108
3.2 E-Tailing Business Models ................................................... 110
Classifi cation of Models by Distribution Channel ................ 110
Other B2C Models and Special Retailing ............................. 113
B2C Social Shopping ............................................................ 113
Virtual Visual Shopping ........................................................ 114
3.3 Online Travel and Tourism (Hospitality) Services ............... 114
Characteristics of Online Travel ............................................ 114
Special Online Travel Services ............................................. 115
Case 3.1: EC Application: WAYN: A Lifestyle
and Travel Social Network ............................................................. 116
Benefi ts, Limitations, and Competition
in Online Travel Services ........................................................... 117
Competition in Online Travel .................................................... 117
Corporate Travel ........................................................................ 117
3.4 Employment and the Online Job Market .............................. 118
The Internet Job Market ........................................................ 118
Benefi ts and Limitations of the Electronic Job Market ......... 120
3.5 Online Real Estate, Insurance, and Stock Trading ............... 121
Real Estate Online ................................................................. 121
Insurance Online ................................................................... 122
Online Stock Trading and Investments ................................. 123
3.6 Online Banking and Personal Finance .................................. 124
E-Banking ............................................................................. 125
Online Banking Capabilities ................................................. 125
Pure Virtual Banks ................................................................ 125
International and Multiple-Currency Banking ...................... 126
Online Financial Transaction Implementation Issues ........... 126
Case 3.2: EC Application: Security for Online
Bank Transactions .......................................................................... 126
Online Billing and Bill Paying ................................................... 128
3.7 On-Demand Delivery of Products, Digital Items,
Entertainment, and Gaming .................................................. 129
On-Demand Delivery of Products ......................................... 129
Online Delivery of Digital Products,
Entertainment, and Media ................................................... 130
Social Television (TV) ........................................................ 131
3.8 Other B2C Services: From Dating Services
to Wedding Planning ........................................................... 133
Online Dating Services ....................................................... 133
Planning a Wedding ............................................................ 134
Buying Cars Online ............................................................. 134
Selling-Build-to-Order Cars Online .................................... 134
Other Online Services ......................................................... 135
3.9 Online Purchasing-Decision Aids ....................................... 136
Shopping Portals ................................................................. 136
Helping Communities ......................................................... 136
Price and Quality Comparison
by Shopbot Software Agents ............................................... 136
Ratings, Reviews, and Recommendation Sites ................... 137
Comparison Shopping Websites.......................................... 138
Trust Verifi cation Sites ........................................................ 138
Other Shopping Assisting Tools .......................................... 139
Virtual Visual Shopping ...................................................... 140
Mobile Apps ........................................................................ 141
3.10 The New Face of Retail Competition: Retailers
Versus E-Tailers................................................................... 141
The Online Versus Offl ine Competition:
An Overview ....................................................................... 141
Retailers Versus E-Tailers ................................................... 142
What Can Traditional Retailers Do? ................................... 144
3.11 Issues in E-Tailing and Lessons Learned ............................ 145
Disintermediation and Reintermediation ............................ 145
Channel Confl ict.................................................................. 146
Possibility of a Price Confl ict and Determining
the Right Price by Sellers .................................................... 146
Product and Service Customization
and Personalization ............................................................. 147
Fraud and Other Illegal Activities ....................................... 147
Lessons Learned from Failures and Lack
of Success of E-Tailers ........................................................ 147
Managerial Issues........................................................................... 148
Closing Case: Etsy – A Social-Oriented B2C Marketplace ........... 154
Glossary ......................................................................................... 156
References ...................................................................................... 156
4 Business-to-Business E-Commerce ............................................. 161
Opening Case: Alibaba.com: The World’s Largest
B2B Marketplace ........................................................................... 161
4.1 Concepts, Characteristics, and Models
of B2B E-Commerce ............................................................ 164
Basic B2B Concepts and Process ......................................... 164
The Basic Types of B2B Transactions
and Activities......................................................................... 165
The Basic Types of B2B E-Marketplaces
and Services .......................................................................... 165
Market Size and Content of B2B .......................................... 166
B2B Components .................................................................. 167
Service Industries Online in B2B ......................................... 168
Partner and Supplier Relationship Management ................... 170
The Benefi ts and Limitations of B2B ................................... 170
4.2 One-to-Many: Sell-Side E-Marketplaces .............................. 171
Sell-Side Models ................................................................... 171
Sales from Catalogs: Webstore ............................................. 171
Comprehensive Sell-Side Systems ........................................ 173
Selling via Distributors and Other Intermediaries ................ 173
4.3 Selling via E-Auctions .......................................................... 173
The Benefi ts of Auctions on the Sell Side ............................ 173
Auctioning from the Company’s Own Site ........................... 174
Using Intermediaries in Auctions ......................................... 174
Case 4.1: EC Application: How the Commonwealth
of Pennsylvania Sells Surplus Equipment ..................................... 174
Examples of B2B Forward Auctions ......................................... 175
4.4 One-From-Many: E-Procurement at Buy-Side
E-Marketplaces ..................................................................... 175
Ineffi ciencies in Traditional Procurement
Management .......................................................................... 175
Procurement Methods ........................................................... 176
E-Procurement Concepts ....................................................... 177
The Benefi ts and Limitations of E-Procurement ................... 179
4.5 Reverse Auctions at Buy-Side E-Marketplaces
(E-Tendering) ........................................................................ 180
The Major Benefi ts of Reverse Auctions .............................. 180
Conducting Reverse Auctions ............................................... 180
Case 4.2: EC Application: Branas Isaf Competes
by Using E-Tendering .................................................................... 181
Group Reverse Auctions. ............................................................... 182
4.6 Other E-Procurement Methods ............................................. 183
Desktop Purchasing ............................................................... 183
Group Purchasing .................................................................. 183
Buying from Other Sources .................................................. 183
Acquisition Via Electronic Bartering .................................... 184
Selecting an Appropriate E-Procurement Solution ................. 185
4.7 B2B Exchanges (E-Marketplaces):
Defi nitions and Concepts ...................................................... 185
Ownership of B2B Exchanges .............................................. 187
Dynamic Pricing in B2B Exchanges ..................................... 188
Advantages, Limitations, and the Revenue
Model of Exchanges .............................................................. 189
4.8 B2B Portals and Directories .................................................. 190
B2B Portals: An Overview .................................................... 190
Corporate (Enterprise) Portals............................................. 190
Directory Services and Search Engines .............................. 191
4.9 B2B in Web 2.0 and Social Networking ............................. 192
E-Communities in B2B ....................................................... 192
The Opportunities of Social Commerce in B2B ................... 192
The Use of Web 2.0 Tools in B2B ...................................... 193
Virtual Trade Shows and Trade Fairs .................................. 193
Social Networking in B2B .................................................. 194
Examples of Other Activities of B2B Social Networks ...... 194
Strategy for B2B Social Networking .................................. 195
The Future of B2B Social Networking ............................... 195
4.10 Some B2B Support Mechanisms ........................................ 195
Organizational Buyer Behavior ........................................... 195
The Marketing and Advertising Processes in B2B ............. 196
Methods for B2B Online Advertising and Marketing ......... 197
Other B2B Support Mechanisms ........................................ 197
Managerial Issues........................................................................... 198
Closing Case: The University of Sheffi eld
E-Tendering System ....................................................................... 203
Glossary ......................................................................................... 204
References ...................................................................................... 206
5 Innovative EC Systems: From E-Government
to E-Learning, Collaborative Commerce,
and C2C Commerce ..................................................................... 209
Opening Case: Compass Group Turns Managers
into Detectives to Enhance E-Training .......................................... 209
5.1 E-Government: An Overview ............................................... 211
Defi nition and Scope ............................................................. 211
Government-to-Citizens ........................................................ 211
Government-to-Business ....................................................... 214
Government-to-Government ................................................. 215
Government-to-Employees and Internal Effi ciency
and Effectiveness ................................................................... 215
Implementing E-Government ............................................... 216
The Transformation to E-Government .................................. 216
E-Government 2.0 and Social Networking ........................... 216
M-Government ...................................................................... 217
5.2 E-Learning, E-Training, and E-Books .................................. 218
The Basics of E-Learning: Defi nitions
and Concepts ......................................................................... 218
Benefi ts and Drawbacks of E-Learning ................................ 219
Distance Learning and Online Universities .......................... 221
Online Corporate Training .................................................... 222
Social Networks and E-Learning .......................................... 224
Learning in Virtual Worlds and Second Life ........................ 224
Visual Interactive Simulation ................................................ 225
E-Learning Management Systems ........................................ 226
Electronic Books (E-Books) ................................................. 226
5.3 Knowledge Management, Advisory Systems,
and Electronic Commerce ..................................................... 229
An Overview of Knowledge Management ........................... 229
Knowledge Management Types and Activities ..................... 229
Knowledge Sharing ............................................................... 230
Case 5.2: EC Application: Knowledge Management
at Infosys Technologies .................................................................. 230
How Is Knowledge Related to E-Commerce? ........................... 231
KM and Social Networks ........................................................... 232
Finding Expertise and/or Experts Electronically
and the Use of Expert Location Systems ................................... 233
5.4 Collaborative Commerce ...................................................... 236
Essentials of Collaborative Commerce ................................. 236
The Elements and Processes of C-Commerce ...................... 236
Collaboration Hubs ............................................................... 237
Representative Examples of Collaborative
Commerce ............................................................................. 238
Barriers to C-Commerce ....................................................... 240
5.5 Consumer-to-Consumer Electronic Commerce .................... 241
E-Commerce: C2C Applications .......................................... 241
Managerial Issues........................................................................... 243
Closing Case: From Local SDI to E-Government ......................... 247
Glossary ......................................................................................... 251
References ...................................................................................... 252
Part III Emerging EC Delivery Platforms
6 Mobile Commerce and Ubiquitous Computing ........................... 257
Opening Case Hertz Goes Mobile All the Way ............................. 258
6.1 Mobile Commerce: Concepts, Landscape, Attributes,
Drivers, Applications, and Benefi ts ...................................... 259
Basic Concepts, Magnitude, and the Landscape ................... 260
The Attributes of M-Commerce ............................................ 261
An Overview of the Applications of M-Commerce ................... 262
The Benefi ts of M-Commerce .............................................. 264
6.2 The Enabling Infrastructure: Components
and Services of Mobile Computing ...................................... 265
Overview of Mobile Computing ........................................... 265
Mobile Devices ..................................................................... 265
Mobile Computing Software and Services ........................... 267
Wireless Telecommunications Networks .............................. 268
Putting It All Together .......................................................... 271
6.3 Mobile Financial Applications .............................................. 271
Mobile Banking .................................................................... 271
Other Mobile Finance Applications ...................................... 272
6.4 Mobile Enterprise Solutions: From Supporting
the Workforce to Improving Internal Operations.................. 273
Defi ning Mobile Enterprise (Enterprise Mobility) ................ 273
The Framework and Content
of Mobile Enterprise Applications ........................................ 274
Mobile Workers ..................................................................... 274
Other Enterprise Mobile Applications .................................. 274
6.5 Mobile Entertainment, Gaming, Consumer Services,
and Mobile Shopping ............................................................ 275
Overview of Mobile Entertainment ....................................... 275
Mobile Streaming Music and Video Providers ..................... 276
Entertainment in Cars ............................................................ 276
Mobile Games ....................................................................... 276
Mobile Gambling .................................................................. 277
Mobility and Sports ............................................................... 277
Service Industry Consumer Applications.............................. 278
Mobile Shopping and Advertising ........................................ 279
6.6 Location-Based Mobile Commerce
and Mobile Social Networks ................................................ 280
Basic Concepts in L−Commerce ........................................... 281
L-Commerce Infrastructure ................................................... 281
Barriers to Location-Based M-commerce ............................. 285
6.7 Ubiquitous (Pervasive) Computing and Sensory
Networks ............................................................................... 285
Overview of Ubiquitous Computing ..................................... 286
Smart Application: Grid, Homes, Cars, and More ................ 287
Wireless Sensor Networks..................................................... 289
Case 6.1: EC Application: Sensors at INRIX Help
People Avoid Traffi c Jams ............................................................. 290
Implementation Issues in Ubiquitous Computing...................... 291
6.8 Emerging Topics: From Wearables and Google Glass
to Smart Cities ...................................................................... 291
Wearable Computing Devices ............................................... 291
Google Glass ......................................................................... 292
Smart Cities ........................................................................... 293
6.9 Implementation Issues in Mobile Commerce:
From Security and Privacy to Barriers to M-commerce ....... 293
M-commerce Security and Privacy Issues ............................ 293
Technological Barriers to M-commerce ................................ 294
Failures in Mobile Computing and M-commerce ................. 294
Ethical, Legal, Privacy, and Health Issues
in M-commerce ..................................................................... 294
Enterprise Mobility Management ......................................... 295
Managerial Issues........................................................................... 296
Closing Case: Motorola Enterprise: Wireless Solutions
for a Hospital and a Manufacturer ................................................. 301
Glossary ......................................................................................... 303
References ...................................................................................... 305
7 Social Commerce: Foundations, Social Marketing,
and Advertising ............................................................................ 309
Opening Case: How Sony Uses Social Media
for Improving CRM ....................................................................... 309
The Problem ............................................................................... 309
The Solution: Social Media Projects .......................................... 310
The Results ................................................................................. 310
7.1 Social Commerce: Defi nitions and Evolution ....................... 311
Defi nitions and Characteristics ............................................. 311
The Evolution of Social Commerce ...................................... 312
7.2 The Content of the Social Commerce Field .......................... 313
The Landscape and Major Components of the Field ............ 314
Social Media Marketing ........................................................ 314
Enterprise 2.0 ........................................................................ 317
7.3 The Benefi ts and Limitations of Social Commerce .............. 318
Benefi ts to Customers ........................................................... 318
Benefi ts to Retailers .............................................................. 318
Benefi ts to Other Types of Enterprises ................................. 319
The Social Business: An IBM Approach .............................. 319
New or Improved Business Models ...................................... 320
Concerns and Limitations of Conducting
Social Commerce .................................................................. 321
7.4 Social Shopping: Concepts, Benefi ts, and Models ............... 321
Defi nitions, and Drivers of Social Shopping ........................ 321
Traditional E-Commerce Sites
with Social Media Additions ................................................. 323
The Major Types and Models of Social Shopping ................ 324
Case 7.1: Polyvore: A Trendsetter in Social Shopping .................. 327
Kaboodle: A Unique Social Shopping Community ................... 328
Other Innovative Models ............................................................ 328
Social Shopping Aids: From Recommendations
to Reviews, Ratings, and Marketplaces ..................................... 330
Other Shopping Aids and Services ............................................ 333
Social Marketplaces and Direct Sales ........................................ 334
Shopping for Virtual Goods in a Virtual Economy .................... 336
Real-Time Online Shopping ...................................................... 336
Social Shopping in the Near Future ........................................... 337
7.5 Social Advertising: From Viral Advertising
to Location-Based Advertisement/Marketing ....................... 338
Social Ads and Social Apps .................................................. 338
Viral (Word-of-Mouth) Marketing
and Social Networking .......................................................... 338
Location-Based Advertisement and Social Networks ........... 339
Using YouTube and Other Social Presentation
Sites for Advertising ............................................................. 340
Using Twitter as an Advertising and Marketing Tool ........... 341
Other Innovative Ways to Advertise in Social Media ........... 342
7.6 Social Customer Service and CRM ...................................... 343
How Does Social Networking Empower Customers? .......... 343
How to Serve the Social Customers ...................................... 344
The Benefi ts of Social CRM ................................................. 345
Case 7.2: iRobot Uses Social Media for Multichannel CRM ........ 346
Social CRM: Serve the Customers
While Learning from Them ....................................................... 346
The Evolution of Social CRM ................................................... 347
Cipriani’s Multidimensional Presentation.................................. 347
Implementation of Social Customer
Service and CRM ....................................................................... 350
Some Recent Applications ......................................................... 351
Reputation Management System ............................................... 352
Managerial Issues........................................................................... 353
Closing Case: Groupon: Will the Company Prosper?.................... 357
The Opportunity ......................................................................... 357
The Solution ............................................................................... 357
The Results ................................................................................. 360
Glossary ......................................................................................... 361
References ...................................................................................... 361
8 Social Enterprise and Other Social Commerce Topics ............. 367
Opening Case: How a Private Enterprise Network
Transformed CEMEX into a Social Business ................................ 368
8.1 Social Business and Social Enterprise .................................. 369
Defi nitions: Social Business and Social Enterprise .............. 369
Business Networks ................................................................ 370
The Benefi ts and Limitations of Enterprise
Social Networking ................................................................. 371
How Web 2.0 Tools Are Used by Enterprises ....................... 371
8.2 Business-Oriented Public Social Networking ....................... 372
Entrepreneur Networks ......................................................... 372
8.3 Enterprise Social Networks ................................................... 373
Taxonomy of Social Enterprise Applications ....................... 373
How Enterprise Social Networking Helps
Employees and Organizations ............................................... 374
Support Services for Enterprise Social Networks ................. 375
How Companies Interface with Social Networking ............. 376
8.4 Social Commerce: Applications in Virtual Worlds ............... 377
The Features of Virtual Worlds ............................................. 377
The Major Categories of Virtual World Applications ........... 378
The Landscape of Virtual World Commercial Applications ... 380
The Major Drivers of Social Commerce in Virtual Worlds ..... 381
Concerns and Limitations of Commercial
Activities in Virtual Worlds ................................................... 382
8.5 Social Entertainment ............................................................. 383
Entertainment and Social Networks ...................................... 383
Multimedia Presentation and Sharing Sites .......................... 384
8.6 Social Games and Gamifi cation ............................................ 385
Games on Social Networks ................................................... 385
The Business Aspects of Social Games ................................ 386
Educational Social Games .................................................... 386
Gamifi cation .......................................................................... 387
8.7 Crowdsourcing for Problem Solving
and Content Creation ............................................................ 387
Crowdsourcing as a Distributed Problem Solving Enabler ..... 387
The Process of Crowdsourcing ............................................. 388
Successfully Deployed Crowdsourcing Systems:
Some Representative Examples ............................................ 389
Tools for Crowdsourcing ...................................................... 389
8.8 Social Collaboration (Collaboration 2.0) .............................. 390
Supporting Social Collaboration ........................................... 390
The Future of Social Commerce ........................................... 393
Managerial Issues........................................................................... 394
Closing Case: EC Application: Linkedin:
The Premier Public Business-Oriented Social Network ................ 398
Smart Ways to Use Linkedin ..................................................... 399
Mobile Applications ................................................................... 399
Some Resources for Linkedin .................................................... 400
Glossary ......................................................................................... 400
References ...................................................................................... 400
Part IV EC Support Services
9 Marketing and Advertising in E-Commerce ............................. 405
Opening Case: Market Research Helps Del Monte
Improve Dog Food ......................................................................... 406
9.1 Learning About Online Consumer Behavior ...................... 407
A Model of Online Consumer Behavior ............................. 407
The Major Infl uential Factors .............................................. 408
9.2 The Consumer Purchasing Decision Process ...................... 409
A Generic Purchasing-Decision Model .............................. 410
Players in the Consumer Decision Making Process ............ 411
Shopping Cart Abandonment .............................................. 411
9.3 Loyalty, Satisfaction, and Trust in E-Commerce ................ 411
Customer Loyalty ................................................................ 412
Satisfaction in EC ................................................................ 413
Trust in EC .......................................................................... 413
9.4 Mass Marketing, Market Segmentation,
and Relationship Marketing ................................................ 414
From Mass Marketing to One-to-One Marketing ............... 415
How One-to-One Relationships are Practiced .................... 416
9.5 Personalization and Behavioral Marketing ......................... 418
Personalization in E-Commerce .......................................... 418
Behavioral Marketing and Collaborative Filtering ............. 419
9.6 Market Research for E-Commerce ...................................... 420
Objectives and Concepts of Online Market Research ......... 421
Representative Market Research Approaches .................... 421
Limitations of Online Market Research
and How to Overcome Them .............................................. 424
Biometric and Smartphone Marketing
Helps Market Research ....................................................... 425
9.7 Web Advertising .................................................................. 426
Overview of Web Advertising ............................................. 426
Basic Internet Advertising Terminology ............................. 426
Why Internet Advertising? .................................................. 427
9.8 Online Advertising Methods: From E-Mail to SEO
and Video Ads ..................................................................... 428
Major Categories of Ads ..................................................... 428
Banners ............................................................................... 429
Pop-Up and Similar Type Ads ............................................ 430
E-Mail Advertising .............................................................. 430
Search Engine Advertisement and Optimization .................. 431
Google: The Online Advertising King ................................ 432
Viral Marketing (Advertising) ............................................. 434
Video Advertising ............................................................... 435
Augmented Reality in Advertising ...................................... 438
Advertising in Chat Rooms and Forums ............................. 438
9.9 Mobile Marketing and Advertising ..................................... 438
Mobile Marketing and Mobile Commerce .......................... 439
Mobile Marketing Implementation Guidelines ................... 441
Tools to Support Mobile Advertisement ............................. 441
Mobile Ad Trends ............................................................... 442
9.10 Advertising Strategies and Promotions ............................... 442
Permission Advertising ....................................................... 442
Other Advertising Strategies ............................................... 442
Online Events, Promotions, and Attractions ....................... 444
Localization in Advertising ................................................. 444
Developing an Online Advertising Plan .............................. 445
Advertising on Facebook .................................................... 446
Managerial Issues........................................................................... 446
Closing Case: Johnson & Johnson Uses New Media Marketing ...... 452
Glossary ......................................................................................... 454
References ...................................................................................... 456
10 E-Commerce Security and Fraud Issues and Protections ........ 459
Opening Case: How State University of New York
College at Old Westbury Controls Its Internet Use ........................ 460
10.1 The Information Security Problem...................................... 461
What Is EC Security? .......................................................... 461
Cyberwars and Cyberespionage Across Borders ................ 463
The Drivers of EC Security Problems ................................. 465
10.2 Basic E-Commerce Security Issues and Landscape............ 467
Basic Security Terminology ................................................ 468
The EC Security Battleground ............................................ 468
The Threats, Attacks, and Attackers ................................... 468
The Targets of the Attacks in Vulnerable Areas ..................... 470
EC Security Requirements .................................................. 471
The Defense: Defenders, Strategy, and Methods ................ 472
Recovery.............................................................................. 473
10.3 Technical Malware Attack Methods: From Viruses
to Denial of Service ............................................................. 473
Technical and Nontechnical Attacks: An Overview ........... 473
The Major Technical Attack Methods ................................. 474
Malware (Malicious Code): Viruses, Worms,
and Trojan Horses ............................................................... 474
10.4 Nontechnical Methods: From Phishing to Spam
and Fraud ............................................................................. 478
Social Engineering and Fraud ............................................. 478
Social Phishing .................................................................... 478
Fraud and Scams on the Internet ......................................... 480
Case 10.1 Anyone Can Be a Victim (from Students
to Lawyers to Textbook Authors) .................................................. 482
Cyber Bank Robberies ............................................................... 483
Spam Attacks ............................................................................. 483
Case 10.2: Internet Stock Fraud Aided by Spam ........................... 484
Social Networking Makes Social Engineering Easy.................. 485
Data Breach (Leak) .................................................................... 486
10.5 The Information Assurance Model and Defense
Strategy ............................................................................... 486
Confi dentiality, Integrity, and Availability .......................... 486
Authentication, Authorization, and Nonrepudiation ........... 487
E-Commerce Security Strategy ........................................... 487
The Defense Side EC Systems ............................................ 489
10.6 The Defense I: Access Control, Encryption, and PKI ........ 490
Access Control .................................................................... 490
Encryption and the One-Key (Symmetric) System ............. 492
Public Key Infrastructure .................................................... 492
Other Topics and Methods of Defense ................................ 495
10.7 The Defense II: Securing E-Commerce Networks .............. 496
Firewalls .............................................................................. 496
Intrusion Detection Systems (IDS) ..................................... 497
Honeynets and Honeypots ................................................... 498
10.8 The Defense III: General Controls, Spam, Pop Ups,
Fraud, and Social Engineering Controls ............................. 499
General, Administrative, and Other Controls ...................... 500
Protecting Against Spam ..................................................... 500
Protecting Your Computer from Pop-Up Ads ..................... 501
Protecting Against Spyware ................................................ 501
10.9 Implementing Enterprisewide E-Commerce Security......... 502
The Drivers of EC Security Management ........................... 502
Senior Management Commitment and Support .................. 503
EC Security Policies and Training ...................................... 504
EC Risk Analysis and Ethical Issues .................................. 504
Why Is It Diffi cult to Stop Internet Crime? ........................ 505
Managerial Issues ........................................................................... 506
Closing Case: How One Bank Stopped Scams,
Spams, and Cybercriminals ........................................................... 511
Glossary ......................................................................................... 513
References ...................................................................................... 516
11 Electronic Commerce Payment Systems .................................... 521
Opening Case: Pay-per-Page: Alternatives
to E-Micropayments ....................................................................... 522
11.1 The Payment Revolution ..................................................... 524
The PayPal Alternative ........................................................ 525
Digital Currencies ............................................................... 526
11.2 Using Payment Cards Online .............................................. 527
Processing Cards Online ..................................................... 528
Fraudulent Card Transactions ............................................. 529
11.3 Smart Cards ......................................................................... 531
Types of Smart Cards .......................................................... 532
Stored-Value Cards.............................................................. 532
Applications of Smart Cards ............................................... 533
11.4 Micropayments .................................................................... 534
11.5 E-Checking .......................................................................... 536
11.6 Mobile Payments ................................................................. 538
Mobile Proximity Payments ................................................ 538
Mobile Remote Payments ................................................... 539
Case 11.1: EC Application: Crutchfi eld Goes Mobile ................... 540
Mobile Payment Participants and Issues .................................... 541
Mobile POS Payments ............................................................... 542
MasterPass™: Automating the Shopping
and Payment Processes .............................................................. 543
11.7 B2B and International Electronic Payments ....................... 544
B2B Payment Practices in the Financial Supply Chain ...... 544
Enterprise Invoice Presentment and Payment ..................... 544
International Payments ........................................................ 546
11.8 Emerging EC Payment Systems and Issues ........................ 547
Bitcoin: Ups and Down but Alive ....................................... 547
Other Interesting Systems ................................................... 548
Managerial Issues ........................................................................... 550
Closing Case: Innovative Credit Card Micropayments
for the Korean Metropolitan Unifi ed Fare System ......................... 555
Glossary ......................................................................................... 557
References ...................................................................................... 558
12 Order Fulfillment Along the Supply Chain ............................... 561
Opening Case: How Amazon.com Fulfi lls Orders ........................ 561
12.1 Order Fulfi llment and Logistics: An Overview ................... 563
Basic Concepts of Order Fulfi llment and Logistics ............ 563
Overview of Logistics ......................................................... 564
Traditional Versus EC Logistics .......................................... 564
The EC Order Fulfi llment Process ...................................... 564
The Importance of Order Fulfi llment .................................. 566
12.2 Problems in Order Fulfi llment Along Supply Chains ......... 567
Uncertainties in Demand ..................................................... 567
Inadequate Logistical Infrastructure ................................... 568
Ineffi cient Financial Flows .................................................. 568
Lack of Information Sharing ............................................... 568
12.3 Solutions to Order Fulfi llment Problems
Along the Supply Chain ...................................................... 569
Improvements in the Order-Taking Activity ....................... 569
Warehousing and Inventory Management
Improvements ...................................................................... 569
Changing the Structure and Process
of the Supply Chain ............................................................. 570
Speeding Deliveries: From Same Day
to a Few Minutes ................................................................. 570
Partnering Efforts and Outsourcing Logistics ..................... 572
Case 12.1: UPS Provides Broad EC Services ................................ 572
Integrated Global Logistics Program ......................................... 574
Order Fulfi llment in Make-to-Order
and Mass Customization ............................................................ 574
Handling Returns (Reverse Logistics) ....................................... 575
Order Fulfi llment in B2B ........................................................... 576
Innovative E-Fulfi llment Strategies ........................................... 577
Case 12.2: Dell’s World-Class Supply Chain and Order
Fulfi llment System ......................................................................... 578
Integration and Enterprise Resource Planning .............................. 579
12.4 RFID and CPFR as Key Enablers in Supply
Chain Management ............................................................. 580
The Essentials of RFID ....................................................... 580
RFID Applications in the Supply Chain
Around the Globe ................................................................ 581
Collaborative Planning, Forecasting,
and Replenishment .............................................................. 583
Case 12.3: Stanley Black & Decker’s Collaborative Success
with Lowe’s and Home Depot ....................................................... 583
12.5 Other E-Commerce Support Services ................................. 585
Consulting Services ............................................................. 585
Directory Services, Newsletters, and Search Engines......... 585
More EC Support Services .................................................. 586
Outsourcing EC Support Services ....................................... 587
Managerial Issues ........................................................................... 588
Closing Case: Multichannel Retailers – Experiences
of Nordstrom and REI .................................................................... 592
Glossary ......................................................................................... 594
References ...................................................................................... 594
Part V E-Commerce Strategy and Implementation
13 EC Strategy, Globalization, and SMEs ...................................... 599
Opening Case: Procter & Gamble’s E-Commerce Strategy .......... 599
13.1 Organizational Strategy: Concepts and Overview .............. 602
Strategy in the Web Environment........................................ 602
Porter’s Five Forces Model and Strategies
as Infl uenced by the Internet and EC .................................. 602
The Impact of the Internet ................................................... 603
Strategic Planning for IT and EC ........................................ 604
13.2 The Strategy and Performance Cycle and Tools ................. 605
Strategy and Performance Cycle and Tools ........................ 605
Strategy Initiation ................................................................ 605
Strategy Formulation ........................................................... 606
Strategy Implentation .......................................................... 607
Strategy Assessment ............................................................ 607
Performance Improvement and Innovations ....................... 607
Case 13.1: EC Application: Warner Music Group’s
Digital Strategy .............................................................................. 607
The Opportunity ......................................................................... 608
The Results ................................................................................. 608
Major Tools for Strategic Planning ............................................ 608
13.3 E-Commerce Strategy Initiation ......................................... 608
Representative Issues in E-Strategy Initiation
in E-Commerce ................................................................... 609
Strategy in the Web 2.0 Environment
and in Social Networking .................................................... 611
13.4 E-Commerce Strategy Formulation .................................... 612
Selecting E-Commerce Opportunities................................. 612
Determining an Appropriate EC Application
Portfolio Mix ....................................................................... 612
Risk Analysis in Strategy Formulation ............................... 613
Collaborative Efforts in Strategy Formulation .................... 614
Case 13.2: EC Application: Red Hat: Collaborative
Strategic Planning .......................................................................... 614
Security Issues to Consider During Strategy
Formulation ................................................................................ 615
Other Issues in E-Commerce Strategy
Formulation ................................................................................ 615
13.5 E-Commerce Strategy Implementation ............................... 617
E-Commerce Strategy Implementation Process ....................... 617
E-Commerce Strategy Implementation Issues ....................... 618
Redesigning Business Processes: BPR and BPM ............... 619
13.6 E-Commerce Performance Assessment .............................. 620
The Objectives of Assessment ............................................ 620
The Performance Assessment Process ................................ 620
Establish Metrics ................................................................. 621
Monitoring Performance ..................................................... 623
Analyzing Performance Data .............................................. 623
Defi ning EC Analytics ........................................................ 624
Web Analytics and Its Major Tools ..................................... 624
13.7 Performance Improvement and Innovation ......................... 625
An Overview of Performance Improvement ....................... 625
Dashboards in E-Commerce ............................................... 626
Innovation for Performance Improvement .......................... 626
Innovative Strategies: Some Illustrative Examples ............. 627
13.8 A Strategy for Global E-Commerce .................................... 628
Benefi ts and Extent of Global Operations ........................... 629
Barriers to Global E-Commerce.......................................... 629
Breaking Down the Barriers to Global E-Commerce ......... 632
13.9 E-Commerce Strategy for Small and Medium-Sized
Enterprises ........................................................................... 633
If Judy Can – You Can Too!: The Story
of Blissful Tones Webstore ................................................. 634
Globalization and SMEs ..................................................... 635
Resources to Support SME Activities in EC ....................... 635
SMEs and Social Networks ................................................. 636
Managerial Issues ........................................................................... 636
Closing Case: Innovative Web Auction Strategy Nets
Higher Productivity for Portland Fish Exchange ........................... 641
The Problem ............................................................................... 641
The Solution ............................................................................... 641
The Results ................................................................................. 642
Glossary ......................................................................................... 642
References ...................................................................................... 643
14 Implementing EC Systems: From Justification
to Successful Performance .......................................................... 647
Opening Case: Telstra Corporation Helps Its Corporate
Customers Justify EC Initiatives .................................................... 648
The Problem ............................................................................... 648
The Solution ............................................................................... 648
The Results ................................................................................. 649
14.1 The Implementation Landscape .......................................... 649
The Major Implementation Factors ..................................... 649
14.2 Why Justify E-Commerce Investments? How Can
They Be Justifi ed? ............................................................... 650
Increased Pressure for Financial Justifi cation ..................... 650
Other Reasons Why EC Justifi cation Is Needed ................. 651
EC Investment Categories and Benefi ts .............................. 651
How Is An EC Investment Justifi ed?................................... 652
What Needs to Be Justifi ed? When Should
Justifi cation Take Place? ..................................................... 652
Using Metrics in EC Justifi cation ....................................... 652
Web Analytics ..................................................................... 653
14.3 Diffi culties in Measuring and Justifying E-Commerce
Investments .......................................................................... 654
The EC Justifi cation Process ............................................... 654
Diffi culties in Measuring Productivity
and Performance Gains ....................................................... 655
Relating EC and Its Expenditures
to Organizational Performance............................................ 655
Intangible Costs and Benefi ts .............................................. 655
The Process of Justifying EC and IT Projects ..................... 656
The Use of Gartner’s Hype Cycle ....................................... 656
14.4 Methods and Tools for Evaluating and Justifying
E-Commerce Investments ................................................... 658
Opportunities and Revenue Generated
by EC Investments............................................................... 658
Methodological Aspects of Justifying
EC Investments.................................................................... 658
Traditional Methods for Evaluating EC Investments .......... 658
ROI Calculators ................................................................... 659
Advanced Methods for Evaluating IT
and EC Investments ............................................................. 660
14.5 Examples of E-Commerce Metrics and Project
Justifi cation ......................................................................... 661
Justifying E-procurement .................................................... 661
Justifying Social Networking and the Use
of Web 2.0 Tools ................................................................. 662
Justifying an Investment in Mobile Computing
and in RFID ......................................................................... 662
Justifying Security Projects ................................................. 662
Justifying Buying Products or Services from Vendors ....... 663
14.6 The Economics of E-Commerce ......................................... 663
Reducing Production Costs ................................................. 663
Increased Revenues ............................................................. 665
Facilitating Product Differentiation .................................... 666
EC Increases Agility ........................................................... 666
Valuation of EC Companies ................................................ 666
14.7 A Five-Step Approach to Developing
an E-Commerce System ...................................................... 667
The Essentials of the SDLC: An EC Application ............... 668
Managing the Development Process ................................... 669
14.8 Development Strategies for E-Commerce Projects ............. 670
In-House Development: Insourcing .................................... 671
Buy the Applications (Off-the-Shelf Approach) ................. 671
Outsourcing EC Systems Development
and Applications.................................................................. 672
Leasing EC Applications: Cloud Computing
and Software as a Service (SAAS) .................................... 672
Other Development Options .............................................. 673
Selecting a Development Option ....................................... 673
14.9 Organizational Impacts of E-Commerce ........................... 674
Improving Direct Marketing and Sales ............................. 674
Transforming Organizations and Work ............................. 674
Redefi ning Organizations .................................................. 675
Change Management ......................................................... 677
How to Organize an EC Unit in a Company ..................... 677
14.10 Opportunities for Success in E-Commerce
and Avoiding Failure ......................................................... 678
Factors that Determine E-Commerce Success ..................... 678
E-Commerce Successes .................................................... 678
Cultural Differences in EC Successes
and Failures ....................................................................... 680
Managerial Issues ........................................................................... 681
Closing Case: Memphis Invest Excels Thanks to E-Commerce .... 686
The Problem ............................................................................... 686
The Solution ............................................................................... 686
The Results ................................................................................. 686
Glossary ......................................................................................... 687
References ...................................................................................... 688
15 E-Commerce: Regulatory, Ethical, and Social
Environments ............................................................................... 691
Opening Case: Why Was Disney Funding Chinese Pirates? ......... 691
The Problem ............................................................................... 691
The Solution ............................................................................... 692
The Results ................................................................................. 692
15.1 Ethical Challenges and Guidelines...................................... 693
Ethical Principles and Guidelines ....................................... 693
Business Ethics.................................................................... 693
EC Ethical and Legal Issues ................................................ 694
15.2 Intellectual Property Law and Copyright Infringement ...... 696
Intellectual Property in E-Commerce.................................. 696
Fan and Hate Sites ............................................................... 699
15.3 Privacy Rights, Protection, and Free Speech ...................... 699
Social Networks Changing the Landscape
of Privacy and Its Protection ............................................... 700
Privacy Rights and Protection ............................................. 700
Free Speech Online Versus Privacy Protection ................... 701
The Price of Protecting an Individual’s Privacy .................. 702
Case 15.1: EC Application: School Administrators
Used Webcams to Spy on Students at Home ................................. 703
How Information About Individuals Is Collected
and Used Online ......................................................................... 703
Privacy Protection by Information Technologies ....................... 706
Privacy Issues in Web 2.0 Tools and Social Networks .............. 706
Privacy Protection by Ethical Principles .................................... 707
Privacy Protection in Countries Other than
the United States ........................................................................ 707
15.4 Other EC Legal Issues ......................................................... 708
Selected Legal and Regulatory Environment:
E-Discovery and Cyberbullying .......................................... 708
15.5 Consumer and Seller Protection from Online Fraud ........... 709
Consumer (Buyer) Protection ............................................. 709
Seller Protection .................................................................. 712
Protecting Both Buyers and Sellers: Using Electronic
Signatures and Other Security Features .............................. 713
15.6 Public Policy, Taxation, and Political Environments .......... 713
Net Neutrality ...................................................................... 713
Taxation of EC Transactions and Digital Content ............... 714
Internet Censorship by Countries ........................................ 715
15.7 Societal Issues and Green EC ............................................. 715
The Digital Divide ............................................................... 715
Telecommuting .................................................................... 715
Green EC and IT ................................................................. 716
Other Societal Issues ........................................................... 718
15.8 The Future of E-Commerce ................................................ 719
Integrating the Marketplace with the Marketspace ............. 720
M-Commerce ...................................................................... 720
Social Commerce ................................................................ 720
Future Technological Trends that May
Accelerate the Speed of E-Commerce ................................ 720
Future Trends That Are Limiting EC Spread ...................... 720
Enjoy Some Interesting Videos About the Future
of E-Commerce ................................................................... 721
Managerial Issues ........................................................................... 721
Closing Case: The Pirate Bay and the Future of File Sharing ....... 726
An Overview .............................................................................. 727
The Legal Situation .................................................................... 727
Current Operation ...................................................................... 727
Discussion .................................................................................. 728
Glossary ......................................................................................... 729
References ...................................................................................... 730
16 Launching a Successful Online Business and EC Projects ...... 733
Opening Case: I Am Hungry: Cheap Eats Is Not the Solution ...... 734
The Problem and Opportunity ................................................... 734
The Solution ............................................................................... 734
The Results ................................................................................. 735
16.1 Getting into E-Commerce and Starting
a New Online Business ....................................................... 736
Getting into E-Commerce ................................................... 736
Starting a New Online Business .......................................... 736
An E-Startup Is a Startup .................................................... 736
Creating a New Company or Adding an Online Project ..... 737
Case 16.1 ........................................................................................ 737
Innovation and Creativity at Amazon. Com .............................. 737
Planning Online Businesses ....................................................... 739
Funding a New Online Business ................................................ 740
16.2 Adding E-Commerce Initiatives or Transforming
to an E-Business .................................................................. 742
Adding EC Initiatives to an Existing Business ......................... 742
Transformation to an E-Business and Social Business ....... 743
16.3 Building or Acquiring a Website ......................................... 744
Classifi cation of Websites ................................................... 744
Building a Website .............................................................. 745
16.4 Website Hosting and Obtaining a Domain Name ............... 747
Web Hosting Options .......................................................... 747
Selecting and Registering a Domain Name ........................ 748
Case 16.2 ........................................................................................ 748
Alibaba.Com Open Doors to E-Commerce Entrepreneurs ........ 748
Where Technology Meets Business ............................................... 748
An Inspiration to SMEs ............................................................. 748
16.5 Web Content Creation and Management ............................ 749
Categories and Types of Content ........................................ 749
Content Management and Maintenance .............................. 750
Catalog Content and Its Management ................................. 750
16.6 Website Design .................................................................... 751
Information Architecture for a Website .............................. 751
Site Navigation .................................................................... 752
Performance (Speed) ........................................................... 753
Colors and Graphics ............................................................ 753
Website Usability ................................................................ 753
Software for Helping Web Designers .................................. 754
16.7 Providing E-Commerce Support Services .......................... 754
Who Builds the Website? .................................................... 754
Payments: Accepting Credit Cards ..................................... 754
Website Promotion .............................................................. 755
An Example: How Does Baidu Succeeds? ......................... 755
Case 16.3: EC Application ............................................................. 755
Baidu’s Strategies for Success ................................................... 755
The Business Model ................................................................... 755
Competitiveness and Constraints ............................................... 756
Customer Relationship Management (CRM) ............................ 757
16.8 Opening a Webstore ............................................................ 757
Options For Acquiring Webstores ....................................... 757
Yahoo! Small Business ........................................................ 759
Using Templates .................................................................. 759
Managerial Issues ........................................................................... 759
Closing Case: Facebook: A College Project
that Took the World by Storm ........................................................ 763
The Startup ................................................................................. 763
The Solution ............................................................................... 764
Facebook IPO ............................................................................. 764
Lessons Learned ......................................................................... 764
Glossary ......................................................................................... 765
References ...................................................................................... 766
Index ...................................................................................................... 769

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The Book’s Learning Objectives (Learning Outcomes)
Upon completion of this book, the reader will be able to:
1. Defi ne all types of e-commerce systems and describe their major business and revenue models.
2. Describe all the major mechanisms that are used in e-commerce.
3. Describe all methods and models of selling products and services online.
4. Understand all online business-to-business activities, including selling,
procurement, auctions, and collaboration.
5. Describe EC activities other than selling online, such as e-government,
e-learning/training, and e-collaboration.
6. Describe the importance of mobile commerce, its content, and implementation.
7. Describe social networks, social customers, virtual worlds, and social
software as facilitators of e-commerce.
8. Describe the landscape of social commerce applications, including social
shopping and advertising, social CRM, social entertainment, and crowdsourcing.
9. Describe social enterprise systems.
10. Understand online consumer behavior.
11. Describe marketing and advertising in the Web environment.
12. Describe security issues and their solutions in e-commerce.
13. Describe the use of e-payments, including mobile payments, in e-commerce.
14. Understand order fulfi llment in e-commerce and its relationship to supply
chain management.
15. Understand e-commerce strategy and describe its process and steps,
including justifi cation, planning, implementation, and assessment.
16. Describe the global aspects of e-commerce.
17. Explain the issues of using e-commerce by small- and medium-sized companies.
18. Understand the ethical, legal, social, and business environments within
which e-commerce operates.
19. Describe the options of acquiring or building EC systems.

Features of This Book
Several features are unique to this book.
Most Comprehensive EC Textbook
This is the most comprehensive EC textbook available. It covers more topics
than any other text and it provides numerous examples and case studies as
well as links to resources and references.
Managerial Orientation
E-commerce can be approached from two major perspectives: technological
and managerial. This text uses the second approach. Most of the presentations
are about EC applications and their implementation. However, we do recognize
the importance of the technology; therefore, we present the essentials of
security in Chapter 10 and the essentials of infrastructure and systems development
in Chapter 16 . We also provide some detailed technology material in
the fi ve online tutorials on the book’s website ( affordable-ecommerce-textbook.
com/turban ). Managerial issues are also provided at the end of each chapter.
Experienced Co-authors and Contributors
In contrast to other EC books written by one or two authors who claim to be
polymaths, we have a diversifi ed team of authors who are experts in a variety
of fi elds, including a senior vice president of an e-commerce-related company.
All contributions were copyedited to assure quality and uniformity.
Real-World Orientation
Extensive, vivid examples from large corporations, small businesses from
different industries and services, governments, and nonprofi t agencies from
all over the world make concepts come alive. These examples, which were
collected by both academicians and practitioners, show the students the capabilities
of EC, its cost and justifi cation, and the innovative ways corporations
are using EC in their operations.
Solid Theoretical Background and Research Suggestions
Throughout the book, we present the theoretical foundations necessary for
understanding EC, ranging from consumer behavior to the economic theory
of competition. Furthermore, we provide website resources, numerous exercises,
and extensive references to supplement the theoretical presentations.
At the end of each chapter, we provide a list of online resources with links to
their websites.
Most Up-to-Date and Current Topics
This book presents the most current topics relating to EC, as evidenced by the
many citations from 2013 to 2014. Finally, we introduce some of the most
promising newcomers to e-commerce such as Pinterest, Instagram, Volusion, and Shopify.
Integrated Systems
In contrast to other EC books that highlight isolated Internet-based systems,
we emphasize integrated systems that support the entire life cycle of
e- commerce. Social network-based systems are highlighted, as are the latest
developments in global EC, mobile commerce, and in Web-based Apps.

Other Outstanding Features
1. Five to ten topics for individual discussions, seven to twelve class discussion
and debate issues are available in each chapter.
2. A class assignment that involves the opening case is available in each chapter.
3. A class assignment that requires watching one or more short videos (3–10
minutes) about a certain technology or a mini case, followed by questions
or some other student engagement are included.
4. Videos related to specific topics are suggested in the text, some related to cases.
5. Over 75 real-world examples on specific topics and subtopics are used.
6. Learning objectives for the entire book are provided in this preface.
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