Electronic Commerce, Sixth Edition

by Schneider, Gary P.

• ISBN13: 9780619217044
• ISBN10: 0619217049
• Edition: 6th
• Format: Paperback
• Copyright: 2005-04-04
• Publisher: Course Technology

Summary

Electronic Commerce, Sixth Edition, by Gary Schneider, builds on the success of previous editions by detailing how the landscape of online commerce is changing and evolving. Reflecting changes in the economy and how businesses are responding, this text emphasizes revenue and transaction cost reduction models as an alternative to the older ideas of business models. Readers become aware of the latest technological developments, including increased coverage of wireless technology (m-commerce). The pedagogical value of this new edition is enhanced through a fresh 2-color interior, new and updated material that balances the technological with the strategic aspects of successful e-commerce, and a new, real-world case study, maintaining a clear business focus.

Author Biography

Gary Schneider is an Associate Professor of Accounting and Information Systems at the University of San Diego School of Business.

Table of Contents

Preface	xvii
Introduction to Electronic Commerce	2	(51)
Electronic Commerce: The Second Wave	4	(9)
Electronic Commerce and Electronic Business	5	(1)
Categories of Electronic Commerce	5	(3)
The Development and Growth of Electronic Commerce	8	(1)
The Dot-Com Boom, Bust, and Rebirth	9	(2)
The Second Wave of Electronic Commerce	11	(2)
Business Models, Revenue Models, and Business Processes	13	(7)
Focus on Specific Business Processes	14	(1)
Role of Merchandising	14	(1)
Product/Process Suitability to Electronic Commerce	15	(1)
Advantages of Electronic Commerce	16	(2)
Disadvantages of Electronic Commerce	18	(2)
Economic Forces and Electronic Commerce	20	(6)
Transaction Costs	21	(1)
Markets and Hierarchies	22	(2)
Using Electronic Commerce to Reduce Transaction Costs	24	(1)
Network Economic Structures	24	(1)
Network Effects	25	(1)
Using Electronic Commerce to Create Network Effects	26	(1)
Identifying Electronic Commerce Opportunities	26	(5)
Strategic Business Unit Value Chains	26	(2)
Industry Value Chains	28	(2)
SWOT Analysis: Evaluating Business Unit Opportunities	30	(1)
International Nature of Electronic Commerce	31	(12)
Trust Issues on the Web	32	(1)
Language Issues	33	(1)
Culture Issues	34	(4)
Culture and Government	38	(2)
Infrastructure Issues	40	(3)
Summary	43	(1)
Key Terms	43	(1)
Review Questions	44	(1)
Exercises	44	(1)
Cases	45	(4)
For Further Study and Research	49	(4)
Technology Infrastructure: The Internet and the World Wide Web	53	(53)
The Internet and the World Wide Web	55	(7)
Origins of the Internet	56	(1)
New Uses for the Internet	56	(1)
Commercial Use of the Internet	57	(1)
Growth of the Internet	58	(1)
Emergence of the World Wide Web	59	(3)
Packet-Switched Networks	62	(2)
Routing Packets	62	(2)
Internet Protocols	64	(5)
TCP/IP	64	(1)
IP Addressing	65	(1)
Domain Names	66	(1)
Web Page Request and Delivery Protocols	67	(1)
Electronic Mail Protocols	68	(1)
Markup Languages and the Web	69	(15)
Standard Generalized Markup Language	70	(1)
Hypertext Markup Language (HTML)	71	(6)
Extensible Markup Language (XML)	77	(5)
HTML and XML Editors	82	(2)
Intranets and Extranets	84	(2)
Intranets	84	(1)
Extranets	84	(1)
Public and Private Networks	85	(1)
Virtual Private Network (VPN)	85	(1)
Internet Connection Options	86	(1)
Connectivity Overview	87	(1)
Voice-Grade Telephone Connections	87	(6)
Broadband Connections	87	(2)
Leased-Line Connections	89	(1)
Wireless Connections	90	(3)
Internet2 and the Semantic Web	93	(2)
Summary	95	(1)
Key Terms	96	(2)
Review Questions	98	(1)
Exercises	98	(1)
Cases	99	(3)
For Further Study and Research	102	(4)
Selling on the Web: Revenue Models and Building a Web Presence	106	(59)
Revenue Models	107	(25)
Web Catalog Revenue Model	108	(8)
Digital Content Revenue Models	116	(1)
Advertising-Supported Revenue Models	117	(4)
Advertising-Subscription Mixed Revenue Models	121	(1)
Fee-for-Transaction Revenue Models	122	(7)
Fee-for-Service Revenue Models	129	(3)
Revenue Models in Transition	132	(4)
Subscription to Advertising-Supported Model	133	(1)
Advertising-Supported to Advertising-Subscription Mixed Model	133	(1)
Advertising-Supported to Fee-for-Services Model	133	(1)
Advertising-Supported to Subscription Model	134	(1)
Multiple Transitions	134	(2)
Revenue Strategy Issues	136	(4)
Channel Conflict and Cannibalization	136	(2)
Strategic Alliances and Channel Distribution Management	138	(1)
Mobile Commerce	139	(1)
Creating an Effective Web Presence	140	(6)
Identifying Web Presence Goals	140	(1)
Achieving Web Presence Goals	141	(5)
Web Site Usability	146	(6)
How the Web Is Different	146	(1)
Meeting the Needs of Web Site Visitors	147	(2)
Trust and Loyalty	149	(1)
Rating Electronic Commerce Web Sites	150	(1)
Usability Testing	150	(1)
Customer-Centric Web Site Design	151	(1)
Connecting With Customers	152	(3)
The Nature of Communication on the Web	152	(3)
Summary	155	(1)
Key Terms	155	(1)
Review Questions	156	(1)
Exercises	156	(1)
Cases	157	(4)
For Further Study and Research	161	(4)
Marketing on the Web	165	(53)
Web Marketing Strategies	167	(5)
Product-Based Marketing Strategies	168	(2)
Customer-Based Marketing Strategies	170	(2)
Communicating with Different Market Segments	172	(6)
Trust and Media Choice	172	(1)
Market Segmentation	173	(2)
Market Segmentation on the Web	175	(2)
Offering Customers a Choice on the Web	177	(1)
Beyong Market Segmentation: Customer Behavior and Relationship Intensity	178	(8)
Segmentation Using Customer Behavior	178	(3)
Customer Relationship Intensity and Life-Cycle Segmentation	181	(2)
Acquisition, Conversion, and Retention of Customers	183	(2)
Customer Acquisition, Conversion, and Retention: The Funnel Model	185	(1)
Advertising on the Web	186	(8)
Banner Ads	187	(4)
Other Web Ad Formats	191	(1)
Site Sponsorships	192	(1)
Effectiveness of Online Advertising	193	(1)
E-Mail Marketing	194	(1)
Permission Marketing	194	(1)
Combining Content and Advertising	195	(1)
Outsourcing E-Mail Processing	195	(1)
Technology-Enabled Customer Relationship Management	195	(2)
CRM as a Source of Value in the Marketspace	196	(1)
Creating and Maintaining Brands on the Web	197	(6)
Elements of Branding	197	(2)
Emotional Branding vs. Rational Branding	199	(1)
Brand Leveraging Strategies	199	(1)
Brand Consolidation Strategies	199	(1)
Costs of Branding	200	(1)
Affiliate Marketing Strategies	200	(2)
Viral Marketing Strategies	202	(1)
Search Engine Positioning and Domain Names	203	(6)
Search Engines and Web Directories	203	(1)
Paid Search Engine Inclusion and Placement	204	(2)
Web Site Naming Issues	206	(3)
Summary	209	(1)
Key Terms	209	(2)
Review Questions	211	(1)
Exercises	211	(1)
Cases	212	(3)
For Further Study and Research	215	(3)
Business-to-Business Strategies: From Electronic Data Interchange to Electronic Commerce	218	(45)
Purchasing, Logistics, and Support Activities	220	(10)
Purchasing Activities	221	(2)
Direct vs. Indirect Materials Purchasing	223	(2)
Logistics Activities	225	(1)
Support Activities	226	(1)
E-Government	227	(2)
Network Model of Economic Organization	229	(1)
Electronic Data Interchange	230	(10)
Early Business Information Interchange Efforts	231	(1)
Emergence of Broader EDI Standards	232	(2)
How EDI Works	234	(3)
Value-Added Networks	237	(3)
EDI on the Internet	240	(2)
Open Architecture of the Internet	240	(1)
Financial EDI	241	(1)
Supply Chain Management Using Internet Technologies	242	(6)
Value Creation in the Supply Chain	242	(2)
Increasing Supply Chain Efficiencies	244	(1)
Using Materials-Tracking Technologies with EDI and Electronic Commerce	245	(2)
Creating an Ultimate Consumer Orientation in the Supply Chain	247	(1)
Building and Maintaining Trust in the Supply Chain	247	(1)
Electronic Marketplaces and Portals	248	(6)
Independent Industry Marketplaces	248	(3)
Private Stores and Customer Portals	251	(1)
Private Company Marketplaces	251	(1)
Industry Consortia-Sponsored Marketplaces	252	(2)
Summary	254	(1)
Key Terms	254	(1)
Review Questions	255	(1)
Exercises	255	(1)
Cases	256	(3)
For Further Study and Research	259	(4)
Online Auctions, Virtual Communities, and Web Portals	263	(41)
Auction Overview	264	(5)
Origins of Auctions	265	(1)
English Auctions	265	(1)
Dutch Auctions	266	(1)
First-Price Sealed-Bid Auctions	267	(1)
Second-Price Sealed-Bid Auctions	267	(1)
Open-Outcry Double Auctions	267	(1)
Sealed-Bid Double Auctions	268	(1)
Reverse (Seller-Bid) Auctions	268	(1)
Online Auctions and Related Businesses	269	(17)
General Consumer Auctions	270	(5)
Specialty Consumer Auctions	275	(1)
Consumer Reverse Auctions and Group Purchasing Sites	276	(2)
Business-to-Business Auctions	278	(3)
Business-to-Business Reverse Auctions	281	(1)
Auction-Related Services	282	(4)
Virtual Communities and Web Portals	286	(10)
Mobile Communications Technology	286	(1)
Electronic Marketplaces	287	(1)
Intelligent Software Agents	288	(1)
Virtual Communities	289	(1)
Early Web Communities	289	(2)
Web Community Consolidation	291	(1)
Web Communities in the Second Wave of Electronic Commerce	291	(1)
Web Portal Revenue Models	292	(4)
Summary	296	(1)
Key Terms	296	(1)
Review Questions	297	(1)
Exercises	297	(1)
Cases	298	(3)
For Further Study and Research	301	(3)
The Environment of Electronic Commerce: Legal, Ethical, and Tax Issues	304	(46)
The Legal Environment of Electronic Commerce	306	(12)
Borders and Jurisdiction	306	(3)
Jurisdiction on the Internet	309	(3)
Contracting and Contract Enforcement in Electronic Commerce	312	(6)
Use and Protection of Intellectual Property in Online Business	318	(9)
Web Site Content Issues	318	(3)
Domain Names, Cybersquatting, and Name Stealing	321	(1)
Protecting Intellectual Property Online	322	(1)
Defamation	323	(1)
Deceptive Trade Practices	324	(1)
Advertising Regulation	324	(3)
Online Crime, Terrorism, and Warfare	327	(1)
Online Crime	327	(1)
Online Warfare and Terrorism	328	(1)
Ethical Issues	328	(7)
Ethics and Web Business Policies	328	(1)
Privacy Rights and Obligations	329	(4)
Communications with Children	333	(2)
Taxation and Electronic Commerce	335	(4)
Nexus	335	(1)
U.S. Income Taxes	336	(1)
U.S. State Sales Taxes	337	(1)
European Union Value Added Taxes	338	(1)
Summary	339	(1)
Key Terms	340	(1)
Review Questions	340	(1)
Exercises	341	(1)
Cases	341	(3)
For Further Study and Research	344	(6)
Web Server Hardware and Software	350	(43)
Web Server Basics	352	(7)
Types of Web Sites	352	(1)
Web Clients and Web Servers	353	(1)
Dynamic Content	354	(2)
Various Meanings of ``Server''	356	(1)
Web Client/Server Communication	356	(1)
Two-Tier Client/Server Architecture	357	(1)
Three-Tier and N-Tier Client/Server Architectures	358	(1)
Software for Web Servers	359	(3)
Operating Systems for Web Servers	359	(1)
Web Server Software	360	(2)
Finding Web Server Software Information	362	(1)
Electronic Mail (E-Mail)	362	(11)
E-mail Benefits	362	(1)
E-mail Drawbacks	363	(1)
Unsolicited Commercial E-Mail (UCE, Spam)	363	(1)
Solutions to the Spam Problem	364	(9)
Web Site and Internet Utility Programs	373	(5)
Finger and Ping Utilities	373	(1)
Tracert and Other Route-Tracing Programs	373	(1)
Telnet and FTP Utilities	374	(1)
Indexing and Searching Utility Programs	375	(1)
Data Analysis Software	375	(1)
Link-Checking Utilities	376	(1)
Remote Server Administration	377	(1)
Web Server Hardware	378	(6)
Server Computers	378	(1)
Web Server Performance Evaluation	379	(1)
Web Server Hardware Architectures	380	(4)
Summary	384	(1)
Key Terms	384	(1)
Review Questions	385	(1)
Exercises	385	(1)
Cases	386	(4)
For Further Study and Research	390	(3)
Electronic Commerce Software	393	(42)
Web Hosting Alternatives	394	(2)
Basic Functions of Electronic Commerce Software	396	(7)
Catalog Display	397	(1)
Shopping Cart	398	(4)
Transaction Processing	402	(1)
Advanced Functions of Electronic Commerce Software	403	(8)
Middleware	403	(1)
Enterprise Application Integration and Databases	404	(2)
Web Services	406	(4)
Integration with ERP Systems	410	(1)
Electronic Commerce Software for Small and Midsize Companies	411	(7)
Basic Commerce Service Providers	411	(2)
Mall-Style Commerce Service Providers	413	(3)
Estimated Operating Expenses for a Small Web Business	416	(2)
Electronic Commerce Software for Midsize to Large Businesses	418	(2)
Web Site Development Tools	418	(2)
Electronic Commerce Software for Large Businesses	420	(7)
Enterprise-Class Electronic Commerce Software	421	(1)
Customer Relationship Management Software	422	(2)
Supply Chain Management Software	424	(1)
Content Management Software	424	(1)
Knowledge Management Software	425	(2)
Summary	427	(1)
Key Terms	427	(1)
Review Questions	428	(1)
Exercises	428	(2)
Cases	430	(2)
For Further Study and Research	432	(3)
Electronic Commerce Security	435	(54)
Online Security Issues Overview	437	(4)
Managing Risk	438	(1)
Computer Security Classifications	439	(1)
Security Policy and Integrated Security	439	(2)
Security for Client Computers	441	(13)
Cookies	441	(3)
Web Bugs	444	(1)
Active Content	444	(2)
Java Applets	446	(1)
JavaScript	446	(1)
ActiveX Controls	447	(1)
Graphics and Plug-Ins	447	(1)
Viruses, Worms, and Antivirus Software	448	(2)
Digital Certificates	450	(3)
Steganography	453	(1)
Physical Security for Clients	453	(1)
Communication Channel Security	454	(15)
Secrecy Threats	454	(2)
Integrity Threats	456	(1)
Necessity Threats	457	(1)
Threats to the Physical Security of Internet Communications Channels	458	(1)
Threats to Wireless Networks	458	(1)
Encryption Solutions	459	(7)
Ensuring Transaction Integrity with Hash Functions	466	(1)
Ensuring Transaction Integrity with Digital Signatures	467	(2)
Guaranteeing Transaction Delivery	469	(1)
Security for Server Computers	469	(8)
Web Server Threats	469	(1)
Database Threats	470	(1)
Other Programming Threats	470	(1)
Threats to the Physical Security of Web Servers	471	(2)
Access Control and Authentication	473	(2)
Firewalls	475	(2)
Organizations that Promote Computer Security	477	(2)
CERT	477	(1)
Other Organizations	478	(1)
Computer Forensics and Ethical Hacking	478	(1)
Summary	479	(1)
Key Terms	480	(1)
Review Questions	481	(1)
Exercises	482	(1)
Cases	483	(3)
For Further Study and Research	486	(3)
Payment Systems For Electronic Commerce	489	(43)
Online Payment Basics	491	(3)
Payment Cards	494	(5)
Advantages and Disadvantages of Payment Cards	495	(1)
Payment Acceptance and Processing	496	(3)
Electronic Cash	499	(9)
Micropayments and Small Payments	500	(1)
Privacy and Security of Electronic Cash	501	(1)
Holding Electronic Cash: Online and Offline Cash	501	(1)
Advantages and Disadvantages of Electronic Cash	502	(1)
How Electronic Cash Works	503	(1)
Providing Security for Electronic Cash	503	(2)
Electronic Cash Systems	505	(3)
Electronic Wallets	508	(7)
Microsoft .NET Passport	510	(1)
Yahoo! Wallet	511	(1)
W3C Micropayment Standards Development Activity	512	(1)
The ECML Standard	513	(2)
Stored-Value Cards	515	(3)
Magnetic Strip Cards	515	(1)
Smart Cards	516	(2)
Internet Technologies and the Banking Industry	518	(5)
Check Processing	518	(1)
Phishing Attacks	519	(2)
Phishing Attack Countermeasures	521	(2)
Summary	523	(1)
Key Terms	523	(1)
Review Questions	524	(1)
Exercises	524	(1)
Cases	525	(3)
For Further Study and Research	528	(4)
Planning for Electronic Commerce	532	(32)
Planning Electronic Commerce Initiatives	533	(10)
Identifying Objectives	534	(1)
Linking Objectives to Business Strategies	534	(1)
Measuring Benefits	535	(1)
Managing Costs	536	(5)
Comparing Benefits to Costs	541	(1)
Return on Investment (ROI)	542	(1)
Strategies for Developing Electronic Commerce Web Sites	543	(7)
Internal Development vs. Outsourcing	544	(4)
Selecting a Hosting Service	548	(1)
New Methods for Implementing Partial Outsourcing	548	(2)
Managing Electronic Commerce Implementations	550	(6)
Project Management	550	(1)
Project Portfolio Management	551	(1)
Staffing for Electronic Commerce	552	(3)
Postimplementation Audits	555	(1)
Summary	556	(1)
Key Terms	556	(1)
Review Questions	557	(1)
Exercises	557	(1)
Cases	558	(3)
For Further Study and Research	561	(3)
Glossary	564	(32)
Index	596