eBusiness & eCommerce: Managing the Digital Value Chain

222 Pages·2009·2.954 MB·English

by  Prof. Dr. Andreas Meier, Dr. Henrik Stormer (auth.)

eBusiness & eCommerce
Andreas Meier • Henrik Stormer
eBusiness & eCommerce
Managing the Digital Value Chain
Translated by Elizabeth Gosselin
ABC
Prof.Dr.AndreasMeier Dr.HenrikStormer
UniversityofFribourg EdorexAG
BoulevarddePérolles90 Oberfeldweg16
1700Fribourg 3072Ostermundigen
Switzerland Switzerland
[email protected] [email protected]
OriginalGermanEditionPublishedbySpringer978-3-540-85016-8
ISBN978-3-540-89327-1 e-ISBN978-3-540-89328-8
DOI10.1007/978-3-540-89328-8
LibraryofCongressControlNumber:2008943075
(cid:2)c Springer-VerlagBerlinHeidelberg2009
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Foreword
Overadecadeago,theEuropeanUnionadopteda“planofactionforaEuropean
information society.” Internet technologies should broaden the capacity to act of
organizations and of individuals, promote transnational contact and exchange
relationships, and lead to an open society with cultural originality and variety.
To achieve this, the opportunities and risks of utilizing electronic means of com-
munication must be weighed against each other, and privacy and intellectual
property rights must be protected.
Due to technological development and the use of Internet technology, the
productionofinformationhasgainedeconomicsignificance.Aninformationcom-
pany creates value primarily by designing, processing, and relaying information;
in other words, through the exchange of digital products and services.
Thistextbookprogressivelydescribesalloftheelementsofthevaluechainfor
electronicbusinessandelectroniccommerce.Aprocess-orientedapproachisused
to present the electronic business transactions that occur between companies,
consumers,andpublicadministration,andtheseareillustratedwithcasestudies.
Along with the organization of digital products and services, special attention is
paid to marketing, distribution, and customer relationship care.
This textbook is intended for students of economics at universities and tech-
nical colleges who would like an overview of the state of the art in electronic
business and electronic commerce. It is also suitable for executives, project lead-
ers, and company experts who deal with the digital value chain.
The book focuses on the members of value chains in electronic business rela-
tionships. Each of these members has a chapter devoted to it:
Chapter 1 describesthetermsofelectronicbusiness,electroniccommerce,and
electronic government, and gives meaningful examples of their application.
Chapter 2 presents the organization of electronic products and services using
suitable forms of cooperation or business webs.
Chapter 3 is dedicated to the strategic and operational procurement process
performed using electronic means.
Chapter 4 examines marketing for electronic markets and shows possible busi-
ness relationships with online customers.
Chapter 5 deals with coding procedures, digital signatures, and certification
sites associated with the receipt of legal contract work.
vi Foreword
Chapter 6 describes the distribution of digital products and services as part of
a comprehensive supply chain.
Chapter 7 discusses different electronic currencies, including small-sum or pi-
copayment accounting schemes.
Chapter 8 illustrates computer-supported procedures like multichannel man-
agement for the acquisition, connection, and retention of customers, as well as
the customer data warehouse.
Chapter 9 describes basic characteristics of portable devices and network ar-
chitecture, including mobile applications.
Chapter 10 discussesopportunitiesforandriskstotheindividualandthecom-
panywhenmarketparticipantsengageinelectronicbusinessindependentoftime
and location.
This textbook came into being as a result of Bachelor’s-level and Master’s-level
courses run at the Technical College of Northwest Switzerland, at the University
of Fribourg, and at the University of Economics in Ho Chi Minh City. Parts of
it are used regularly in practicum courses. The eDVDShop electronic trade case
study (http://www.edvdshop.ch) developed in each chapter of this textbook
is based on experience with the electronic shop system eSarine (http://www.
esarine.ch), which is marketed through the eTorrent Company (http://www.
etorrent.com).
At this point we would like to thank all of the students and colleagues who
critically reviewed and added to our lecture documents and case studies. This
textbook would not exist without the talents of Elizabeth Gosselin from Fair-
banks, Alaska, who translated it from German to English. In addition, we would
liketothankthepublisherstaffatSpringerandSPiforthepleasantcooperation.
Fribourg,February2009 AndreasMeierandHenrikStormer
Contents
1 eBusiness Framework 1
1.1 Defining Electronic Business . . . . . . . . . . . . . . . . . . . . . 2
1.2 Case Studies on Electronic Business . . . . . . . . . . . . . . . . 4
1.2.1 Electronic Shop (B2C) . . . . . . . . . . . . . . . . . . . . 4
1.2.2 Electronic Health Market (B2B) . . . . . . . . . . . . . . 7
1.2.3 Electronic Voting and Elections (A2C) . . . . . . . . . . . 9
1.2.4 Knowledge Exchange via Electronic Books (C2C) . . . . . 11
1.3 Arguments for Internet Economics . . . . . . . . . . . . . . . . . 12
1.4 Value Chain and Chapter Overview. . . . . . . . . . . . . . . . . 14
1.5 Literary References . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2 eProducts and eServices 19
2.1 Components of a Business Model . . . . . . . . . . . . . . . . . . 20
2.2 Anatomy of an Electronic Marketplace . . . . . . . . . . . . . . . 22
2.2.1 Horizontal Integration . . . . . . . . . . . . . . . . . . . . 23
2.2.2 Vertical Integration . . . . . . . . . . . . . . . . . . . . . 24
2.3 Classification of Business Webs According to Tapscott . . . . . . 26
2.3.1 Agora B-Web . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.3.2 Aggregator B-Web . . . . . . . . . . . . . . . . . . . . . . 28
2.3.3 Integrator B-Web . . . . . . . . . . . . . . . . . . . . . . . 30
2.3.4 Alliance B-Web . . . . . . . . . . . . . . . . . . . . . . . . 32
2.3.5 Distributor B-Web . . . . . . . . . . . . . . . . . . . . . . 35
2.4 Comparison and Valuation of Networks . . . . . . . . . . . . . . 37
2.5 The Price Formation Process . . . . . . . . . . . . . . . . . . . . 39
2.5.1 Options for Price Differentiation . . . . . . . . . . . . . . 39
2.5.2 Linear and Nonlinear Price Formation . . . . . . . . . . . 41
2.5.3 Forms of Price Bundling . . . . . . . . . . . . . . . . . . . 42
2.5.4 Dynamic Price Formation . . . . . . . . . . . . . . . . . . 43
2.6 Profit Models for Electronic Markets . . . . . . . . . . . . . . . . 45
2.7 Literary References . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3 eProcurement 49
3.1 Strategic and Operational Procurement . . . . . . . . . . . . . . 50
3.2 Information Support for Procurement . . . . . . . . . . . . . . . 51
viii Contents
3.3 Basic Types of eProcurement Solutions. . . . . . . . . . . . . . . 53
3.3.1 Market Models for eProcurement . . . . . . . . . . . . . . 53
3.3.2 Sell-Side Model . . . . . . . . . . . . . . . . . . . . . . . . 55
3.3.3 Buy-Side Model . . . . . . . . . . . . . . . . . . . . . . . 57
3.3.4 Marketplace . . . . . . . . . . . . . . . . . . . . . . . . . . 58
3.4 Catalog Management . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.5 Standard Software for Desktop Purchasing . . . . . . . . . . . . . 65
3.6 Market for eProcurement Service Provider . . . . . . . . . . . . . 67
3.7 Literary References . . . . . . . . . . . . . . . . . . . . . . . . . . 68
4 eMarketing 69
4.1 The Path to Individual Marketing . . . . . . . . . . . . . . . . . 70
4.2 Comparison of the Communications Media . . . . . . . . . . . . 72
4.3 The Development Model for Online Customers . . . . . . . . . . 73
4.3.1 The Online Surfer . . . . . . . . . . . . . . . . . . . . . . 73
4.3.2 The Online Consumer . . . . . . . . . . . . . . . . . . . . 74
4.3.3 The Online Prosumer . . . . . . . . . . . . . . . . . . . . 75
4.3.4 The Online Buyer . . . . . . . . . . . . . . . . . . . . . . 76
4.3.5 The Key Online Customer . . . . . . . . . . . . . . . . . . 77
4.3.6 Measuring Success with Online Customers . . . . . . . . . 78
4.4 Online Promotion. . . . . . . . . . . . . . . . . . . . . . . . . . . 80
4.4.1 Push Principle vs. Pull Principle . . . . . . . . . . . . . . 80
4.4.2 Content Management . . . . . . . . . . . . . . . . . . . . 81
4.4.3 Types of Promotion . . . . . . . . . . . . . . . . . . . . . 83
4.5 Prospects for eMarketing . . . . . . . . . . . . . . . . . . . . . . 85
4.6 Literary References . . . . . . . . . . . . . . . . . . . . . . . . . . 87
5 eContracting 89
5.1 The Electronic Negotiation Process . . . . . . . . . . . . . . . . . 90
5.2 Generic Services for the Negotiation Process . . . . . . . . . . . . 91
5.3 The Digital Signature . . . . . . . . . . . . . . . . . . . . . . . . 93
5.3.1 Asymmetric Coding Procedures . . . . . . . . . . . . . . . 93
5.3.2 Generating Digital Signatures . . . . . . . . . . . . . . . . 94
5.3.3 Tasks of the Certification Site . . . . . . . . . . . . . . . . 96
5.3.4 Verification of Certificates . . . . . . . . . . . . . . . . . 97
5.4 XML and Electronic Contracts . . . . . . . . . . . . . . . . . . . 100
5.5 Legal Rights of the Information Society . . . . . . . . . . . . . . 101
5.6 Literary References . . . . . . . . . . . . . . . . . . . . . . . . . . 103
6 eDistribution 105
6.1 Components of a Distribution System . . . . . . . . . . . . . . . 106
6.2 Types of Distribution Logistics . . . . . . . . . . . . . . . . . . . 107
6.2.1 Online Distribution. . . . . . . . . . . . . . . . . . . . . . 107
6.2.2 Offline Distribution. . . . . . . . . . . . . . . . . . . . . . 109
6.2.3 Hybrid Distribution . . . . . . . . . . . . . . . . . . . . . 111
Contents ix
6.3 Supply Chain Management . . . . . . . . . . . . . . . . . . . . . 112
6.3.1 Cycles Within the Sales Chain . . . . . . . . . . . . . . . 112
6.3.2 The SCOR Reference Model . . . . . . . . . . . . . . . . 114
6.3.3 On-Demand Production . . . . . . . . . . . . . . . . . . . 116
6.4 Electronic Software Distribution (ESD) . . . . . . . . . . . . . . 118
6.4.1 Architecture for Software Distribution . . . . . . . . . . . 118
6.4.2 ESD Functions and Services . . . . . . . . . . . . . . . . . 119
6.5 Protection Through Digital Watermarks . . . . . . . . . . . . . . 121
6.6 Literary References . . . . . . . . . . . . . . . . . . . . . . . . . . 123
7 ePayment 125
7.1 Overview and Classification . . . . . . . . . . . . . . . . . . . . . 126
7.2 Credit Card-Based Procedures . . . . . . . . . . . . . . . . . . . 126
7.2.1 Credit Cards with Secure Sockets Layer . . . . . . . . . . 127
7.2.2 PayPal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
7.2.3 Secure Electronic Transaction (SET) . . . . . . . . . . . . 130
7.2.4 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 132
7.3 Asset-Based Procedures . . . . . . . . . . . . . . . . . . . . . . . 132
7.3.1 CASH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
7.3.2 Geldkarte . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
7.3.3 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 133
7.4 Innovative ePayment Solutions . . . . . . . . . . . . . . . . . . . 134
7.4.1 eCash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
7.4.2 Millicent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
7.4.3 PayWord and MicroMint . . . . . . . . . . . . . . . . . . 136
7.4.4 Random Payment . . . . . . . . . . . . . . . . . . . . . . 136
7.4.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 137
7.5 Solutions for Fee-Based Web Sites . . . . . . . . . . . . . . . . . 137
7.5.1 Firstgate Click & Buy . . . . . . . . . . . . . . . . . . . . 137
7.5.2 Allopass . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
7.5.3 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 138
7.6 Comparison of ePayment Solutions . . . . . . . . . . . . . . . . . 138
7.7 Literary References . . . . . . . . . . . . . . . . . . . . . . . . . . 139
8 eCustomer Relationship Management 141
8.1 From Product Orientation to Customer Orientation . . . . . . . 142
8.2 The Customer Equity Model by Blattberg et al.. . . . . . . . . . 144
8.3 Analytical Customer Relationship Management . . . . . . . . . . 146
8.3.1 Rough Architecture of a Customer Data Warehouse . . . 146
8.3.2 Evaluation of a Multidimensional Data Cube . . . . . . . 148
8.3.3 Steps Involved in Outlining a Data Cube . . . . . . . . . 149
8.3.4 Data Mining Procedure . . . . . . . . . . . . . . . . . . . 151
8.3.5 Decision Trees for Customer Classification . . . . . . . . . 152
x Contents
8.4 Operational Customer Relationship Management . . . . . . . . . 154
8.4.1 Customer Buying Cycle . . . . . . . . . . . . . . . . . . . 154
8.4.2 Multichannel Management. . . . . . . . . . . . . . . . . . 157
8.4.3 Inbound and Outbound Customer Processes . . . . . . . 159
8.5 Use of CRM Systems . . . . . . . . . . . . . . . . . . . . . . . . . 160
8.6 Controlling Customer Relationship Management . . . . . . . . . 162
8.7 Literary References . . . . . . . . . . . . . . . . . . . . . . . . . . 163
9 mBusiness 165
9.1 Mobile Devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
9.2 Mobile Communication . . . . . . . . . . . . . . . . . . . . . . . 167
9.2.1 The GSM Cell Phone Network . . . . . . . . . . . . . . . 167
9.2.2 Local Communication with Bluetooth . . . . . . . . . . . 169
9.3 Mobile Applications . . . . . . . . . . . . . . . . . . . . . . . . . 171
9.3.1 Mobile Payment . . . . . . . . . . . . . . . . . . . . . . . 171
9.3.2 Mobile Ticketing . . . . . . . . . . . . . . . . . . . . . . . 174
9.3.3 Mobile Web Sites . . . . . . . . . . . . . . . . . . . . . . . 176
9.3.4 Location-Dependent Services . . . . . . . . . . . . . . . . 181
9.3.5 Mobile Devices in the Medical Field . . . . . . . . . . . . 182
9.4 Literary References . . . . . . . . . . . . . . . . . . . . . . . . . . 183
10 eSociety 185
10.1 Change in the Working World . . . . . . . . . . . . . . . . . . . . 186
10.2 Changing Organizational and Work Structures . . . . . . . . . . 188
10.2.1 Virtual Organizations . . . . . . . . . . . . . . . . . . . . 188
10.2.2 Work Organization in eTeams . . . . . . . . . . . . . . . . 189
10.3 The Knowledge Worker in a Knowledge Society . . . . . . . . . . 191
10.4 Measuring the Success of Intellectual Capital . . . . . . . . . . . 192
10.5 Ethical Maxim for eTeams . . . . . . . . . . . . . . . . . . . . . . 194
10.6 Literary References . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Glossary 199
Bibliography 209
Index 219
About the Authors 221
1 eBusiness Framework
IndividualandSociety(eSociety)
eBusinessFramework
StrategicPlanning
nges OrganizationandHumanResources
ortiess SecurityManagement
pc
SupPro Controlling
CulturalAdministration
eCustomer
eProducts eProcure-
&eServices ment eMarketing eContracting eDistribution ePayment Relationship
Management
Value Chain
TechnologyandInnovationManagement(mBusiness)
IndustrialSolutions
Thisintroductorychapterclarifiesterms,presentsfundamentalconceptsofInter-
net economics, and provides an overview of the chapters. Section 1.1 explains the
various electronic business connections encountered in eBusiness, eCommerce,
and eGovernment. In Sect.1.2, case studies illustrate some of the options for
electronic business; applications include eShopping, eHealth, eVoting, and eCol-
laboration. Section 1.3 states the most important arguments for Internet eco-
nomics and gives a long-range overview of the structural changes in this sector.
Section 1.4 describes the digital value chain, defining relevant terms and using
examples, and it provides an overview of the chapters based on this explanation.
Literary references follow in Sect.1.5.
A.MeierandH.Stormer,eBusiness & eCommerce: Managing the Digital Value Chain, 1
(cid:2)c Springer-VerlagBerlinHeidelberg2009