FROM BOOK

CHAPTER 6

6-1 What are the problems of managing data resources in a traditional file
environment?

Components in the Data Hierarchy:

• Bit: Smallest unit of data.

• Byte: Group of bits representing a single character.
• Field: Group of bytes representing a characteristic of an entity.
• Record: Group of related fields.
• File: Group of related records.
• Database: Group of related files.

Entities, Attributes, and Key Fields:

• Entity: A person, place, thing, or event about which information is maintained (e.g.,
customers, employees).
• Attributes: Characteristics of entities (e.g., customer name, employee ID).
• Key Fields: Unique identifiers for records in a table (e.g., customer ID).

Problems of the Traditional File Environment:

• Data Redundancy and Inconsistency: Multiple copies of the same data, leading to
inconsistencies.
• Program-Data Dependence: Changes in data require changes to the application
program.
• Inflexibility: Difficulty in adapting to new information needs.
• Poor Security: Hard to enforce security standards across different systems.
• Lack of Data Sharing and Availability: Data is isolated in separate files and not easily
accessible across the organization.

6-2 What are the major capabilities of database management systems (DBMS),
and why is a relational DBMS so powerful?

Database: A collection of organized data that allows for easy access, management, and updating.

Capabilities of a DBMS:

1. Data Definition Capability: Defines the structure of the database.

2. Data Dictionary Capability: Stores information about data elements, such as names,
definitions, formats, and descriptions.
 3. Data Manipulation Language: Allows data retrieval, insertion, deletion, and
modification (e.g., SQL).

Relational DBMS (RDBMS):

• Organizes data into two-dimensional tables (relations) consisting of rows (records) and
columns (attributes).
• Supports easy data retrieval and manipulation using key fields.
• Allows combining tables through shared data elements (e.g., foreign keys).

Three Operations of a Relational DBMS:

1. Select: Retrieves specific records from a table.

2. Join: Combines data from different tables.
3. Project: Extracts certain columns from a table.

Normalization: Process of organizing data to minimize redundancy and dependency.

Referential Integrity: Ensures that relationships between tables are consistent. Entity-
Relationship Diagram: Graphically represents the relationships between entities in a database.

6-3 What are the principal tools and technologies for accessing information from
databases to improve business performance and decision making?

Big Data: Large volumes of structured, unstructured, and semi-structured data that businesses
analyze for insights.

Data Mart: A smaller, more focused subset of a data warehouse used for specific business units
or functions.

Hadoop: A framework that allows the distributed processing of large data sets across clusters of
computers using a simple programming model.

In-Memory Computing: Stores data in the computer's RAM, enabling faster data processing
and analysis.

Clustering (in Data Mining): Grouping a set of objects in such a way that objects in the same
group (called a cluster) are more similar to each other than to those in other groups.

Sentiment Analysis: Technique used to determine the emotional tone behind a body of text,
often used by businesses to gauge customer feedback.
6-4 Why are data governance and data quality assurance essential for managing
the firm’s data resources?

Data Governance: The policies and procedures used to manage the availability, usability,
integrity, and security of the data in an organization.

Important Data Quality Problems:

1. Inaccuracy: Incorrect data (e.g., wrong customer address).

2. Incompleteness: Missing data (e.g., no phone number listed).
3. Inconsistency: Conflicting data across systems.
4. Duplication: Same data entered multiple times.

Tools and Techniques for Assuring Data Quality:

• Data Quality Audits: Review data to assess accuracy and consistency.

• Data Cleansing Software: Corrects or removes inaccurate, incomplete, or duplicate data.

CHAPTER 7

7-1 What are the principal components of telecommunications networks and key
networking technologies?

• Features of a simple network:

o A simple network consists of two or more connected computers.
o Basic components: Computers, network interfaces, a connection medium,
network operating system software, and either a hub or a switch.
• Network infrastructure for a large company includes:
o Traditional telephone system, mobile cellular communication, wireless local area
networks, videoconferencing systems, corporate website, intranets, extranets,
local area networks (LANs), wide area networks (WANs), and the Internet.
• Principal technologies and trends shaping telecommunications systems:
o Client/server computing
o Packet switching
o TCP/IP protocol as a universal communications standard.

7-2 What are the different types of networks?

• Analog signal: Continuous waves that transmit information by altering the amplitude and
frequency of the waves.
• Digital signal: Discrete, binary pulses used for communication, representing data as 0s
and 1s.
• Types of networks:
 o Local Area Network (LAN): Connects PCs and other devices within a 500-meter
radius.
o Metropolitan Area Network (MAN): Spans a single urban area.
o Wide Area Network (WAN): Spans broad geographical distances, often
managed privately.

7-3 How do the Internet and Internet technology work, and how do they support
communication and e-business?

• Internet definition: A worldwide network of networks using the client/server model and
TCP/IP.
• How it works: Every computer on the Internet has a unique numeric IP address, and the
Domain Name System (DNS) converts these IP addresses into user-friendly domain
names.
• Principal Internet services:
o Email, newsgroups, chatting, instant messaging, Telnet, FTP, and the web.
• VoIP (Voice over IP): Technology for voice transmission over the Internet.
• Virtual Private Networks (VPNs): Low-cost alternatives to private WANs, allowing
secure communication over the public Internet.
• Ways of locating information on the web:
o Search engines, website directories, and RSS technology.

7-4 What are the principal technologies and standards for wireless networking,
communication, and Internet access?

• Bluetooth (802.15): Standard for small personal area networks (PANs).

• Wi-Fi (802.11): Standard for local area networks (LANs).
• WiMax (802.16): Standard for metropolitan area networks (MANs).
• 3G networks: Data transmission speeds of 144 Kbps to more than 2 Mbps.
• 4G networks: Transmission speeds of 100 Mbps.
• 5G networks: Capable of transmitting gigabits of data, with high bandwidth and low
latency, connecting many devices.
• RFID (Radio Frequency Identification): Technology used for tracking goods via tags
that contain data about an item and its location.
• Near Field Communication (NFC): Short-range wireless technology for communication
between devices within a few centimeters.
• Wireless Sensor Networks (WSNs): Networks of wireless devices that provide
environmental measurements over large areas, used in applications like environmental
monitoring.

CHAPTER 8
8-1 Why are information systems vulnerable to destruction, error, and abuse?

• Common threats against contemporary information systems:

o Destruction, misuse, error, fraud, and hardware/software failures.
o The open design of the Internet increases vulnerability to outside threats like
hackers, DoS attacks, and Wi-Fi penetration.
o Malware and mobile device threats can disable systems.
o Cloud computing's distributed nature complicates control and monitoring of
unauthorized activities.
o Software bugs and vulnerabilities can be exploited.
o End users often introduce errors.
• Malware:
o Malware refers to malicious software designed to disrupt, damage, or gain
unauthorized access to a system.
 Virus: A malicious program that attaches itself to other programs and
spreads when executed.
 Worm: A self-replicating malware that spreads without user intervention.
 Trojan horse: A program that appears harmless but secretly performs
malicious actions when executed.
• Hacker:
o A hacker is an individual who uses technical skills to gain unauthorized access to
systems or data, often causing harm or disruption.
• Computer Crime:
o Examples of crime where computers are targets:
 Data breaches.
 Financial fraud via online transactions.
o Examples of crimes using computers as instruments:
 Hacking.
 Identity theft.
• Identity Theft and Phishing:
o Identity Theft: A crime where someone steals personal information to commit
fraud, such as using someone else's identity for financial gain.
o Phishing: A method where attackers impersonate legitimate organizations to steal
sensitive information like usernames and passwords.
o Identity theft is a significant issue today because of the widespread availability of
personal information online and the increasing sophistication of phishing attacks.
• Employee Security Problems:
o Employees can inadvertently create security risks by mismanaging passwords,
clicking on phishing emails, or exposing systems to vulnerabilities through
negligent behavior.
• Software Defects and System Reliability:
o Software defects can create vulnerabilities that hackers exploit, leading to system
failures, security breaches, or loss of data.
8-2 What is the business value of security and control?

• Inadequate Security and Legal Liability:

o Poor security can lead to legal actions if sensitive information is exposed, causing
reputational damage and financial loss. Companies can face penalties for non-
compliance with laws such as HIPAA, the Sarbanes-Oxley Act, and the Gramm-
Leach-Bliley Act.
• Electronic Evidence:
o Electronic evidence refers to any data stored or transmitted in digital form that
may be used in legal proceedings. It is critical in providing proof for cases
involving data breaches, fraud, or other cybercrimes.

8-3 What are the components of an organizational framework for security and
control?

• General Controls:
o General controls include policies, procedures, and activities that provide overall
security for the organization’s IT infrastructure. Types of general controls:
 Access controls: Ensuring only authorized users have access to systems.
 Backup and recovery procedures: Ensuring data can be restored after a
disaster.
 Security monitoring: Ongoing surveillance to detect and respond to
threats.
• Application Controls:
o These are specific to software applications and aim to ensure the accuracy,
integrity, and security of data. Types of application controls:
 Input controls: Ensuring data entered into a system is accurate.
 Processing controls: Ensuring data is processed correctly.
 Output controls: Ensuring outputs are valid and secure.
• Risk Assessment:
o Risk assessment evaluates the security of information systems by identifying
potential vulnerabilities, control points, and weaknesses, and determines the most
cost-effective security measures to mitigate risks.
• Security Policy, Acceptable Use Policy, and Identity Management:
o Security Policy: A document outlining an organization's security goals,
strategies, and rules for protecting information assets.
o Acceptable Use Policy: A set of rules defining acceptable behaviors and
activities for users of the organization's IT systems.
o Identity Management: A system for identifying and authenticating users to
ensure they have appropriate access to resources.
• Information Systems Auditing:
o Information systems auditing involves reviewing and evaluating an organization's
security practices and controls to ensure their effectiveness.
8-4 What are the most important tools and technologies for safeguarding
information resources?

• Tokens in Authentication:
o Tokens are physical devices (or software-based) used to authenticate users by
providing a unique identifier or password.
• Two-Factor Authentication:
o Two-factor authentication (2FA) improves security by requiring two forms of
verification: something the user knows (password) and something the user has
(token or smartphone).
• Intrusion Detection System (IDS):
o An IDS monitors network traffic for suspicious activity or potential threats and
alerts administrators when an intrusion attempt is detected.
• Unified Threat Management System:
o A unified threat management (UTM) system integrates multiple security functions
(firewall, antivirus, intrusion detection, etc.) into a single platform to provide
comprehensive protection against threats.
• Digital Certificates:
o Digital certificates authenticate a user's identity and are used to establish secure,
encrypted communications, ensuring data integrity and trustworthiness in
transactions.
• Managed Security Service Providers (MSSPs):
o MSSPs offer outsourced security services, which is particularly beneficial for
small businesses that may lack the resources to maintain an in-house security
team.
• Software Metrics:
o Software metrics help improve software reliability and quality by measuring
performance, identifying bugs, and guiding development efforts to create secure,
high-quality systems.

CHAPTER 9

9-1 How do enterprise systems help businesses achieve operational excellence?

Six financial and accounting processes supported by enterprise systems:

1. Accounts Payable: Managing payments owed to suppliers and vendors.

2. Accounts Receivable: Managing money owed to the company by customers.
3. Payroll: Handling employee compensation and related taxes.
4. General Ledger: Recording all financial transactions for accounting purposes.
5. Financial Reporting: Generating reports for financial performance analysis.
6. Cost Accounting: Tracking and managing costs related to production and operations.
How enterprise systems provide valuable information for improving management decision-
making:

• Real-time data availability: Enterprise systems provide real-time data that supports
immediate decision-making and enhances visibility across different departments.
• Improved data accuracy: With standardized data management across departments,
decision-making becomes more reliable and effective.
• Performance evaluation: The firm-wide data generated by enterprise systems enables
managers to evaluate organizational performance, identify inefficiencies, and make
informed strategic decisions.

9-2 How do supply chain management systems coordinate planning, production,

and logistics with suppliers?

Four likely parts of a retailer's supply chain:

1. Suppliers: Provide raw materials or products for retail.

2. Manufacturers: Transform raw materials into finished products.
3. Warehouses: Store products for distribution.
4. Retailers: Sell the products to consumers.

Distinction between upstream and downstream portions of the supply chain:

• Upstream: Involves the processes related to obtaining raw materials, parts, and
components needed for production (e.g., suppliers, manufacturers).
• Downstream: Focuses on the distribution and delivery of finished products to the end
customer (e.g., retailers, logistics, customers).

Supply system likely to be used by a manufacturer with perfect information on future

orders:

• A demand-driven supply system where production can be aligned precisely with

customer demand without the uncertainty typically associated with forecasting.

One of the most important and complex aspects of supply chain planning:

• Inventory management: Balancing the right amount of inventory to meet customer

demand while avoiding excess stock and associated costs.

How supply chain costs can impact an organization's profitability:

• Supply chain costs, such as production, logistics, inventory management, and

procurement, significantly impact an organization’s profitability. Efficient supply chain
 management reduces costs and ensures timely delivery, which can increase profit margins
and customer satisfaction.

9-3 How do customer relationship management systems help firms achieve

customer intimacy?

Three potential touchpoints for a retailer and explanation of a touchpoint:

1. In-store interactions: Customers interacting directly with retail staff during a visit.
2. Website or mobile app: Online platform where customers can browse, order, and
interact with services.
3. Customer service calls: Phone or chat support for customer inquiries or complaints.

A touchpoint is any interaction a customer has with a business, whether it be direct or indirect,
that provides an opportunity to gather insights or enhance the customer experience.

Nature and purpose of sales force automation:

• Sales Force Automation (SFA) is a system that automates sales processes like lead
management, order processing, and customer interactions. It helps sales teams be more
efficient and effective by providing them with the tools to track customer interactions,
improve lead conversion, and manage relationships.

Cross-selling and its importance to a business:

• Cross-selling involves offering additional products or services to existing customers

based on their previous purchases or preferences. It is important because it helps increase
revenue from existing customers and builds stronger customer relationships by providing
more value.

Distinction between operational and analytical CRM:

• Operational CRM focuses on automating and improving customer-facing processes like

sales, marketing, and service.
• Analytical CRM focuses on analyzing customer data to understand customer behavior
and preferences, enabling businesses to make data-driven decisions.

9-4 What are the challenges that enterprise applications pose, and how are
enterprise applications taking advantage of new technologies?

Challenges enterprise applications pose:

 1. High implementation costs: Enterprise applications often require significant investment
in terms of time, money, and resources for proper implementation.
2. Organizational change: Implementing enterprise systems often necessitates significant
changes in business processes and employee roles.
3. Data management: Ensuring data accuracy, consistency, and integration across various
applications is complex and time-consuming.
4. Employee training: Employees must be trained to adapt to new systems, processes, and
workflows.
5. Integration issues: Integrating new enterprise applications with existing systems or
legacy systems can be challenging.

How these challenges can be addressed:

• Effective change management: Clear communication, training, and support structures

can help employees adapt to the new systems and processes.
• Data governance and management: Ensuring robust data management policies and
practices to maintain data integrity.
• Phased implementation: Gradually implementing enterprise systems to reduce
disruption and allow for adjustments as needed.

How enterprise applications are taking advantage of cloud computing and business
intelligence:

• Cloud computing allows businesses to deploy enterprise applications on-demand, which

reduces infrastructure costs, enhances scalability, and enables remote access to
applications and data.
• Business intelligence capabilities embedded within enterprise applications enable real-
time data analysis, reporting, and decision support, helping businesses identify trends,
opportunities, and areas for improvement.

Social CRM and its use of social networking:

• Social CRM involves using social media platforms to engage with customers, build
relationships, and gain insights. CRM systems are integrating with social media tools to
track customer interactions, respond to inquiries, and tailor marketing and service
strategies based on customer feedback from social networks.

CHAPTER 10

10-1: What are the unique features of e-commerce, digital markets, and digital
goods?

• Eyeballs: The term "eyeballs" refers to the number of people viewing a website or
advertisement. However, it is no longer an effective way of engaging customers because
simply attracting viewers doesn’t guarantee that they will take action or make a purchase.
• Two areas of traditional media losing ground:
 1. Print advertising (newspapers, magazines)
2. Television advertising
• Marketplace vs. Marketspace:
o Marketplace: Traditional physical or digital venues where buyers and sellers
engage in transactions (e.g., physical stores).
o Marketspace: A virtual marketplace where buyers and sellers meet online (e.g.,
Amazon, eBay).

10-2: What are the principal e-commerce business and revenue models?

• Portals: Portals are more than just gateways because they provide integrated services like
search engines, email, news, and other resources, which make them valuable hubs for
users to access a variety of content and services.
• Value proposition of e-tailers: E-tailers offer convenience, a wide selection of products,
and often lower prices compared to traditional retail stores. They provide an accessible,
24/7 shopping experience.
• Importance of micropayment systems: Micropayment systems are important because
they allow businesses to process small transactions (such as paying for digital content)
that would otherwise be too costly to handle using traditional payment systems.

10-3: How has e-commerce transformed marketing?

• Two places where behavioral targeting takes place:

1. On websites through tracking cookies and browsing behavior.
2. On social media platforms based on users' interactions and preferences.
• How online businesses can take advantage of interconnectedness: Online businesses
can use interconnectedness to connect with customers across multiple devices and
platforms, gather real-time data, and integrate their operations for more efficient
marketing and customer service.
• Purpose and value of social shopping sites: Social shopping sites provide users with the
ability to share product recommendations, reviews, and opinions with others. This
enhances the shopping experience by incorporating social influence, which can lead to
increased trust and sales.

10-4: How has e-commerce affected business-to-business transactions?

• Electronic Data Interchange (EDI): EDI refers to the electronic exchange of business
documents between companies in a standardized format. It continues to be important
because it increases efficiency, reduces errors, and speeds up transactions.
 • Private Industrial Networks: These are private networks that link a firm with its
suppliers and other strategic business partners. They are used to develop highly efficient
and responsive supply chains, facilitating real-time communication and collaboration.

10-5: What is the role of m-commerce in business, and what are the most
important m-commerce applications?

• Important types of m-commerce services and applications:

1. Location-based services (e.g., finding local hotels, restaurants).
2. Mobile bill payment (e.g., paying utility bills via mobile apps).
3. Mobile banking and securities trading (e.g., managing finances and
investments).
4. Mobile content downloads (e.g., music, games, videos).
• Three types of mobile app payment systems:
1. Near Field Communication (NFC): Enables payments through physical
proximity to a point-of-sale terminal.
2. QR Codes: Scanning QR codes to initiate payments.
3. Peer-to-Peer Payments: Allowing users to send money to others via mobile apps
(e.g., PayPal, Venmo).

10-6: What issues must be addressed when building an e-commerce presence?

• Four types of e-commerce presence:

1. Corporate Website: The company’s primary online presence, where they offer
product information and online purchasing options.
2. Social Media Presence: Platforms like Facebook, Instagram, Twitter, used for
marketing, customer engagement, and promotion.
3. Mobile Apps: Specific applications designed for smartphones, providing
personalized customer experiences and on-the-go access to services.
4. Third-party E-commerce Platforms: These include marketplaces like Amazon,
eBay, and Etsy, where businesses can sell their products.
BONUS FROM ONLINE

Chapter 6: Foundations of Business Intelligence: Databases and Information

Management

Problems of Managing Data Resources in a Traditional File Environment

In traditional file environments, data is often stored in separate files managed by different
departments, which can lead to several issues:

• Data Redundancy and Inconsistency: The same piece of data may be duplicated across
different files, leading to inconsistencies and errors when updates are not uniformly
applied.
• Lack of Data Integration: Separate files are not connected, which makes it hard to
integrate data from various sources.
• Data Isolation: Data cannot be easily accessed or combined across systems due to
differences in file formats and storage methods.
• Program-Data Dependence: Programs are closely tied to the structure of the data,
meaning any changes to data structure require program modifications.
• Limited Data Sharing: In traditional environments, sharing data between departments is
challenging, reducing overall efficiency and collaboration.
• Poor Security: Managing security across multiple systems increases the likelihood of
unauthorized access or loss of data.

Capabilities of Database Management Systems (DBMS)

DBMS are software systems that handle the creation, storage, retrieval, and updating of data in a
structured way. They provide:

• Data Abstraction and Independence: DBMS abstracts the details of data storage,
allowing users to interact with data without knowing the underlying file structure.
• Reduced Data Redundancy: DBMS centralize data storage, minimizing duplication
across different departments.
• Data Integrity and Consistency: The use of constraints and rules helps ensure that the
data remains accurate and consistent across the organization.
• Improved Data Security: Centralized control allows for robust security measures to be
put in place.
• Backup and Recovery: Most DBMS include backup and recovery tools to protect
against data loss.
• Concurrency Control: DBMS allow multiple users to access data concurrently without
compromising the integrity of the data.

Relational DBMS

A relational DBMS (RDBMS) organizes data into tables (or relations) that can be linked based
on common data points. It is powerful due to:
 • Simple Data Structure: Data is represented in rows and columns, which is intuitive and
flexible.
• Data Independence: Users can query the data using SQL without knowing the physical
layout of the data.
• Data Integrity: RDBMS enforce integrity constraints, such as primary keys and foreign
keys, to maintain consistent and accurate data relationships.
• Powerful Querying Capabilities: SQL (Structured Query Language) allows complex
queries to retrieve, insert, update, and delete data efficiently.

Tools and Technologies for Accessing Information from Databases

To support business performance and decision-making, businesses use:

• Business Intelligence (BI) Infrastructure: This includes databases, data warehouses,

and data marts that store large amounts of data for analysis.
• Analytical Tools: Tools like data mining, online analytical processing (OLAP), and data
visualization help identify trends, relationships, and patterns in the data.
• Big Data Technologies: Hadoop and NoSQL databases enable businesses to process and
analyze massive datasets.
• Web Integration: Databases can be integrated with web technologies, enabling real-time
data access and updates through web applications.

Data Governance and Data Quality Assurance

• Data Governance: Establishes policies and procedures to manage data within an

organization, ensuring proper data usage and compliance with regulations.
• Data Quality Assurance: This process ensures that data is accurate, complete, and
reliable, essential for effective decision-making. It involves regular audits, cleansing, and
validation of data.

Chapter 7: Telecommunications, the Internet, and Wireless Technology

Principal Components of Telecommunications Networks

Key components of telecommunications networks include:

• Switches: Devices that connect multiple communication paths and route information.
• Routers: Devices that manage traffic between networks by directing data packets.
• Transmission Media: Physical media like copper wires, fiber-optic cables, and wireless
signals transmit data across networks.

Types of Networks
 • LAN (Local Area Network): A network covering a small geographic area, such as a
building or campus.
• WAN (Wide Area Network): A network that spans large geographic areas, often linking
multiple LANs.
• MAN (Metropolitan Area Network): A network that covers a city or a large campus.
• PAN (Personal Area Network): A network for individual devices like smartphones and
laptops.

Internet Technologies and Standards for Wireless Networking

• Wi-Fi: A wireless networking standard allowing devices to communicate without direct

cabling.
• 4G/5G: Mobile communication standards that enable high-speed internet access on
mobile devices.
• Bluetooth: A short-range wireless communication technology used for exchanging data
between devices.

Chapter 8: Securing Information Systems

Information System Vulnerabilities

Information systems are vulnerable to various threats:

• Malicious Software: Viruses, worms, trojans, and spyware can damage systems or steal
sensitive data.
• Hackers and Cybercrime: Unauthorized individuals may exploit system weaknesses to
access or manipulate data.
• Internal Threats: Employees may intentionally or unintentionally cause data breaches.
• Software Vulnerabilities: Bugs and flaws in software can be exploited by attackers to
gain access to systems.

Business Value of Security and Control

Security and control of information systems are critical to:

• Compliance with Regulations: Legal requirements demand secure handling of data,

especially in industries like finance and healthcare.
• Preventing Data Loss: Proper security reduces the likelihood of data breaches and
protects intellectual property.
• Maintaining Customer Trust: Securing customer data fosters trust and loyalty.

Chapter 9: Enterprise Applications

Enterprise Systems

Enterprise systems integrate core business processes, allowing departments to share data and
improve decision-making. These systems include:

• Enterprise Resource Planning (ERP): Integrates functions such as finance, HR, and
production into a unified system.
• Supply Chain Management (SCM): Coordinates the flow of goods, information, and
finances between suppliers, manufacturers, and customers.
• Customer Relationship Management (CRM): Helps manage customer interactions to
improve satisfaction and retention.

Supply Chain Management Systems

These systems help businesses:

• Optimize Inventory: By coordinating with suppliers, businesses can minimize stock

levels while avoiding shortages.
• Improve Forecasting: SCM software enables more accurate demand predictions,
reducing waste and increasing efficiency.

Customer Relationship Management Systems

CRM systems help businesses:

• Improve Customer Service: CRM tracks customer interactions, enabling personalized

responses.
• Increase Sales: By understanding customer behavior, businesses can target them with
relevant products or services.

Chapter 10: E-commerce: Digital Markets, Digital Goods

Unique Features of E-commerce, Digital Markets, and Digital Goods

E-commerce has several unique characteristics compared to traditional commerce:

• Ubiquity: E-commerce is accessible anywhere and anytime via the internet, removing
geographic limitations.
• Global Reach: E-commerce technology allows transactions across national boundaries,
creating a global market.
• Interactivity: E-commerce platforms allow real-time interaction between the business
and the customer, improving engagement.
• Personalization and Customization: E-commerce systems can tailor marketing
messages and products based on user preferences and behaviors.
• Information Density: The internet reduces information costs and increases the richness
of available information for both buyers and sellers.
 • Social Technology: Social media platforms play a significant role in influencing buying
decisions and promoting products.

Principal E-commerce Business and Revenue Models

E-commerce businesses use various models to generate revenue:

• B2C (Business-to-Consumer): Businesses sell products or services directly to

consumers, like Amazon or eBay.
• B2B (Business-to-Business): Businesses conduct transactions with other businesses,
such as suppliers or distributors.
• C2C (Consumer-to-Consumer): Consumers sell to other consumers, often through
platforms like eBay or Craigslist.
• E-commerce Revenue Models: These include advertising, subscription fees, transaction
fees, sales, and affiliate marketing.

Transformation of Marketing by E-commerce

• Behavioral Targeting: Businesses use data about a customer’s online behavior to target
ads and promotions effectively.
• Social E-commerce: Social networks are integral to e-commerce, allowing businesses to
market directly through platforms like Facebook and Instagram, leveraging user
interactions and recommendations.
• Personalization: E-commerce platforms personalize shopping experiences based on
browsing history and past purchases.

Effect of E-commerce on Business-to-Business Transactions

E-commerce has streamlined B2B interactions:

• Electronic Data Interchange (EDI): This allows businesses to exchange documents like
invoices and purchase orders electronically.
• New B2B Models: Marketplaces and platforms facilitate procurement and reduce
transaction costs for businesses.

Role of M-commerce (Mobile Commerce)

M-commerce refers to transactions conducted on mobile devices. Key m-commerce applications

include:

• Location-Based Services: Apps use GPS to provide services such as nearby store
locations, promotions, and local offers.
• Mobile Payment Systems: Technologies like Apple Pay and Google Wallet allow users
to make purchases directly from their phones.
• Other M-commerce Services: Mobile banking, ticket purchases, and on-demand
services (like Uber) are also key parts of m-commerce.
Building an E-commerce Presence

To create a successful e-commerce presence, businesses must address several factors:

• E-commerce Presence Map: This involves planning for web presence across different
platforms like mobile, social media, and traditional websites.
• Timeline and Milestones: Developing an e-commerce site involves a structured timeline
with phases such as planning, design, development, testing, and launch.