Evolution of E-Commerce
E-Commerce I
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E-Commerce II
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Technology driven
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Business driven
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Venture capital financing
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Traditional financing
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Emphasis on revenue growth
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Emphasis on earnings and profits
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Ungoverned
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Stronger regulation and governance
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Entrepreneurial
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Large traditional firms
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Disintermediation
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Strengthen intermediaries
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Perfect markets
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Imperfect markets, brands and
network effects
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Pure Online strategies
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Mixed ‘brick s and clicks’ strategies
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First mover advantage
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Strategic follower strength and
complimentary assets
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Eg: Autoweb, iVillage ,
Drugstore.com, Amazon.com, eToys, Eve.com
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Eg: Amazon.com, Dell.com, Wal-Mart stores
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E-Commerce I: It was traditional and failed drastically as there was less awareness
about internet and online transactions, security was a biggest issue as earlier
online frauds were easier and difficult to track, IT was very expensive and was
just a luxury of high class allied society.
Three major
characteristics are:
a. Friction
free commerce: The prices of products and services is low and information is
same for all that is it is equally distributed and it eliminates unfair
competitive advantage. Eg: Online passport application
b. First
movers: A firm that is first to market in a particular area and that moves
quickly to get the market share, builds brand name, customer share, recognition
etc. Eg: Amazon
c. Network
effect: It occurs when all participants receive value from a fact that all
other are using the same tool or product. Eg: Microsoft Office, Facebook
E-Commerce II: It was more secure and gained popularity among
people as there was more awareness, IT became very cheap and became a necessity
for a common man and strategies like creativity and cash on delivery(COD) made it
more successful.
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