Chapter 2
E-Marketplaces:
Structures, Mechanisms,
Economics, and Impacts
Learning Objectives
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5.
7.
8.
Define e-marketplaces and list their components.
List the major types of e-marketplaces and describe their
features.
Describe the various types of EC intermediaries and
their roles.
Describe electronic catalogs, shopping carts, and search
engines.
Describe the various types of auctions and list their
characteristics.
Discuss competition in the digital economy.
Describe the impact of e-marketplaces on organizations.
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E-Marketplaces
•
Markets (electronic or otherwise) have three
main functions. What are they?
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E-Marketplaces
•
How do Electronic marketplaces change processes
used in trading and supply chains?
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E-Marketplaces
•
What are E-Marketspace components?
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Types of E-Marketplaces:
From Storefronts to Portals
• Electronic Storefronts
What are the most common
mechanisms/components of a on-line storefront?
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electronic catalog
search engine
electronic cart
e-auction facilities
payment gateway
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Types of E-Marketplaces:
From Storefronts to Portals
• Types of E-Marketplaces
who owns private e-marketplaces?
who owns public e-marketplaces?
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Types of E-Marketplaces:
From Storefronts to Portals
• What are major types of portals?
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Commercial (public) portals
Corporate portals
Publishing portals
Personal portals
Mobile portals
Voice portals
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Intermediation in EC
Who are intermediaries in physical world?
• What are the limitations of direct interaction?
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Search costs
Lack of privacy
Incomplete information
Contract risk
Pricing inefficiencies
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Intermediation in EC
what is disintermediation?
when does it happen?
how can an intermediary protect itself from
it?
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Electronic Catalogs and
Other Market Mechanisms
•
online catalogs vs. paper catalogs
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Electronic Catalogs and
Other Market Mechanisms
•
Two approaches to creating customized catalogs
and other on-line experience
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Direct action by customer
Based on customer’s transaction records
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Electronic Catalogs and
Other Market Mechanisms
search engine
software (intelligent) agent
shopping cart
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Auctions As EC
Market Mechanisms
• Auctions are characterized by dynamic pricing, as
opposed to conventional, posted (fixed) price
selling of goods and services
• What are the Limitations of Traditional Off-line
Auctions?
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Auctions As EC
Market Mechanisms
• Types of auctions
• One seller, many buyers: forward auction
– An auction in which one seller entertains bids from multiple
potential buyers: price goes up
• One Buyer, Many Sellers
– reverse auction (bidding or tendering system)
• Auction in which the buyer places an item for bid (tender) on a
request for quote (RFQ) system, potential suppliers bid on the
job, with the price reducing sequentially, and the lowest bid wins;
primarily a B2B or G2B mechanism
– Sealed bid
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Exhibit 2.5 The Reverse Auction
Process
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Auctions As EC
Market Mechanisms
what is a “name-your-own-price” model?
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Auctions As EC
Market Mechanisms
• Impacts of E-Auctions
– Auctions as a coordination mechanism to determine an equilibrium
price
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Competition in the Digital Economy
•
Competitive Factors in the Internet Economy
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Lower prices
Customer service
Barriers to entry are reduced
Virtual partnerships multiply
Market niches abound
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Competition in the Digital Economy
competitive forces model
Porter’s model highlights five major forces of
competition determine industry structure and how
economic value is divided among the industry
players in an industry; Analysis of these forces helps
companies develop their competitive strategy
What are the Five Porter’s Forces?
How does EC and the Internet affect them?
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Exhibit 2.6 Porter’s Competitive
Forces Model
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Impacts of EC on
Business Processes and Organizations
•
Transforming Organizations
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Concentrate on core competences, outsource
everything else
Few truly secure jobs
Flexibility of workforce is crucial
For more see T. Friedman “The World is Flat”
What are the impacts of EC on Human Resource
Management and Training?
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Managerial Issues
1.
2.
3.
4.
What about intermediaries?
Should we auction?
Should we barter?
What m-commerce opportunities are
available?
5. How do we compete in the digital economy?
6. What organizational changes will be needed?
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Summary
1.
2.
3.
4.
E-marketplaces and their components.
The role of intermediaries.
The major types of e-marketplaces.
Electronic catalogs, search engines, and
shopping carts.
5. Types of auctions and their characteristics.
6. Competition in the digital economy.
7. The impact of e-markets on organizations.
Electronic Commerce
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