E-Commerce Midterm 1

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e-commerce

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The use of the internet and the web to transact business

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e-business

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the digital enabling of transactions and processes within a firm, involving IS under the control of the firm

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information asymmetry

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any disparity in relevant market information among parties in a transaction

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marketspace

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marketplace extended beyond traditional boundaries and removed from a temporal and geographic location

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ubiquity

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available just about everywhere, at all times

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marketplace

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physical space you visit in order to transact

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reach

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the total number of users or customers an e-commerce business can obtain

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richness

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the complexity and content of a message

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interactivity

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technology that allows for two-way communication between merchant and consumer

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information density

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the total amount and quality of information available to all market participants

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Web 2.0

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a set of applications and technologies that allows users to create, edit, and distribute content; and do a shitload of other interconnected things

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disintermediation

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displacement of market middlemen who traditionally are intermediaries between producers and consumers by a new direct relationship between manufacturers and content originators with their customers

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friction-free commerce

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a vision of commerce in which information is equally distributed, transaction costs are low, prices can be dynamically adjusted to reflect actual demand, intermediaries decline, and unfair competitive advantages are eliminated

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first mover

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a firm that is first to market in a particular area and that moves quickly to gather market share

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network effect

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occurs where users receive value from the fact that everyone else uses the same tool or product

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value proposition

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defines how a company's product or service fulfills the needs of customers

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revenue model

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describes how the firm will earn revenue, product profits, and produce a superior return on invested capital

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Types of revenue models

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advertising revenue mode, subscription revenue model, transaction revenue model, sales revenue model, affiliate revenue model

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asymmetry

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exists whenever one participant in a market has more resources than other participants

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first-mover advantage

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a competitive market advantage for a firm that results from being the first into a marketplace with a serviceable product or service

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complementary resources

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resources and assets not directly involved in the production of the product but required for success, such as marketing, management, financial assets, and reputation

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perfect market

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a market in which there are no competitive advantages or asymmetries because all firms have equal access to all the factors of production

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market strategy

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the plan you put together that details exactly how you intend to enter a new market and attract new customers

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organizational development

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plan describes how the company will organize the work that needs to be accomplished

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portal

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offers users powerful web search tools as well as an integrated package of content and services all in one place

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intellectual property

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refers to all forms of human expression that can be put into a tangible medium such as text, CDs or on the Web

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transaction broker

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site that processes transactions for consumers that are normally handled in person, by phone, or by mail

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application service provider (ASP)

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a company that sells access to internet-based software applications to other companies

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scale economies

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efficiencies that arise from increasing the size of a business

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industry consortia

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industry-owned vertical marketplaces that serve specific industries

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private industrial networks

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digital network designed to coordinate the flow of communications among firms engaged in business together

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industry structure

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refers to the nature of the players in an industry and their relative bargaining power

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industry structural analysis

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an effort to understand and describe the nature of competition in an industry, the nature of substitute products, the barriers to entry, and the relative strength of consumers and suppliers

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value chain

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the set of activities performed in an industry or in a firm that transforms raw inputs into final products and services

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firm value chain

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the set of activities a firm engages in to create final products from raw inputs

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value web

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networked trans-business system that coordinates the value chains of several firms

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profit

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the difference between the price a firm is able to charge for its products and the cost of producing and distributing goods

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commoditization

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a situation where there are no differences among products or services, and the only basis of choosing products is price

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packet switching

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a method of slicing pakcets, sending the packets along different communicatino paths as they become available, and then reassembling the packets once they arrive at their destination

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packet

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the discrete units into which digital messages are sliced for transmission over the internet

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routing algorithm

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computer program that ensures that packets take the best available path toward their destination

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protocol

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a set of rules and standards for data transfer

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transmission control protocol/internet protocol (TCP/IP)

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the core communications protocol for the internet

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TCP

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protocol that establishes the connections among sending and receiving web computers and handles the assembly of packets at the point of transmission, and their re-assembly at the receiving end

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IP

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protocol that provides the internet's addressing scheme and is responsible for the actual delivery of the packets

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domain name

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IP address expressed in natural language

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domain name system (DNS)

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system for expressing numeric IP addresses in natural language

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Uniform Resource Locator (URL)

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the address used by a Web browser to identify the location of content on the web

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HyperText Transfer Protocol (HTTP)

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the internet protocol used for transferring web pages

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Secure Sockets Layer (SSL)

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a protocol that secures communications between the client and the server

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Network Service Provider (NSP)

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owns and controls one of the major networks comprising the Internet's bacbone

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backbone

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high-bandwidth fiber-optic cable that transports data across the internet

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bandwidth

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measures how much data can be transferred over a communications medium within a fixed period of time

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redundancy

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multiple duplicate services and paths in a network

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Internet Exchange Point (IXP)

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hub where the backbone intersects with local and regional networks and where backbone owners connect with one another

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narrowband

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the traditional telephone modem connection

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broadband

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refers to any communication technology that permits clients to play streaming audio and video files at acceptable speeds--generally anything above 100Kbps

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latency

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delays in messages caused by uneven flow of information packets through the network

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Internet2

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a consortium of more than 200 universities, government agencies, and private businesses that are collaboration to find ways to make the internet more efficient

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fiber-optic cable

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consists of up to hundreds of strands of glass or plastic that use light to transmit data

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Hypertext

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a way of formatting pages with embedded links that connect documents to one another, and that also link pages to other objects such as sound, video, or animation files

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eXtensible Markup Language (XML)

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a markup language specification developed by the World Wide Web Consortium (w3C) that is designed to describe data and information

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intelligent agent

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software program that gathers and/or filters information on a specific topic and then provides a list of results for the user

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cookie

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a tool used by Web sites to store information about a user. When a visitor enters a Web site, the site sends a small text file (the cookie) to the user's computer so that information from the site can be loaded more quickly on future visits. The cookie can contain any information desired by the site designers.

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Really Simple Syndication (RSS)

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program that allows users to have digital content including text, articles, blogs, and podcast audio files, automatically sent to their computers over the internet

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integrity

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the ability to ensure that information being displayed on a web site or transmitted or received over the Internet has not been altered in any way by an unauthorized party

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non-repudiation

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the ability to ensure that e-commerce participants do not deny (i.e. repudiate) their online actions

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malicious code (malware)

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includes a variety of threats such as viruses, worms, trojan horses, and bots

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virus

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a computer program that has the ability to replicate or make copies of itself, and spread to other files

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worm

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malware that is designed to spread from computer to computer

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trojan horse

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appears to be benign, but then does something other than expected. Often a way for viruses or other malicious code to be introduced into a computer system

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bot

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type of malicious code that can be covertly installed on a computer when attached to the internet. Once installed, the bot responds to external commands sent by the attacker.

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botnet

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collection of captured bot computers

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spyware

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a program used to obtain information such as a user's keystrokes, e-mail, instant messages, and so on

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phishing

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any deceptive, online attempt by a third party to obtain confidential information for financial gain

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white hats

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"good" hackers who help organizations locate and fix security flaws

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black hats

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hackers who act with the intention of causing harm

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grey hats

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hackers who believe they are pursuing some greater good by breaking in and revealing system flaws

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spoof

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to misrepresent oneself by using fake e-mail addresses or masquerading as someone else

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Denial of Service (DoS) attack

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flooding a web site with useless traffic to inundate and overwhelm the network

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Distributed Denial of Service (DDoS) attack

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using numerous computers to attack the target network from launch points

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sniffer

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a type of eavesdropping program that monitors information traveling over a network

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cipher text

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text that has been encrypted and thus cannot be read by anyone other than the sender and the receiver

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key (cipher)

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any method for transforming plain text to cipher text

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digital signature (e-signature)

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"signed" cipher text that can be sent over the internet

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digital envelope

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a technique that uses symmetric encryption for large documents, but public key encryption to encrypt and send the symmetric key

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digital certificate

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a digital document issued by a certification authority that contains the name of the subject or company, the subject's public key, a digital certificate serial number, an expiration date, an issuance date, the digital signature of the certification authority, and other identifying information

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certification authority (CA)

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a trusted third party that issues digital certificates

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public key infrastructure (PKI)

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CAs and digital certificate procedures

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session key

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a unique symmetric encryption key chosen for a single secure session

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virtual private network (VPN)

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allows remote users to securely access internal networks via the internet, using the Point-to-Point Tunneling Protocol (PPTP)

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firewall

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refers to either hardware or software that filters communication packets and prevents some packets from entering the network based on security policy

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proxy server (proxy)

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software server that handles all communications originating from or being sent to the internet, acting as a spokesperson or bodyguard for the organization

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risk assessment

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an assessment of the risks and points of vulnerability

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processing center (clearinghouse)

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institution that handles verification of accounts and balances

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stored value payment system

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account created by depositing funds into an account and which funds are paid out or withdrawn as needed

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merchant account

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a bank account that allows companies to process credit card payments and receive funds from those transactions

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smart card

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a credit-card sized plastic cards with an embedded chip that stores personal information; can be used to support mobie wireless e-commerce payments

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radio frequency identification (RFID)

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a method of automatic identification that uses short range radio signals to identify objects and users

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consumer behavior

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a social science discipline that attempts to model and understand the behavior of humans in a marketplace

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direct reference groups

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one's family, profession or occupation, religion, neighborhood, and schools

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indirect reference groups

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one's life-cycle stage, social class, and lifestyle group

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psychographic research

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divides a market into different groups based on social class, lifestyle, and/or personality characteristics

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clickstream behavior

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the transaction log that consumers establish as they move about the web

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core product

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the core benefit the customer receives from the product

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actual product

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the set of characteristics designed to deliver the product's core benefits

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augmented product

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a product with additional benefits to customers beyond the core benefits embodied in the actual product

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brand

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a set of expectations that consumers have when consuming, or thinking about consuming, a product or service from a specific company

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closed loop marketing

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when marketers are able to directly influence the design of the core product based on market research and feedback from the market

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brand strategy

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a set of plans for differentiating a product from its competitors, and communicating these differences effectively to the marketplace

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brand equity

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the estimated value of the premium customers are willing to pay for using a branded product when compared to unbranded competitors

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Law of One Price

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with complete price transparency in a perfect information marketplace, there will be one world price for every product

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price dispersion

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the difference between the highest and lowest prices in a market

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library effect

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an attempt to appeal to consumers on the basis of the total number of products offered

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data warehouse

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a database that collects a firm's transactional and customer data in a single location for offline analysis

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data mining

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a set of analytical techniques that look for patterns in the data of a database or data warehouse, or seek to model the behavior of customers

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Customer relationship management (CRM) system

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a repository of customer information that records all of the contacts that a customer has with a firm and generates a customer profile available to everyone in the firm with a need to "know the customer"

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advertising networks

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present users with banner advertisements based on a database of user behavioral data

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permission marketing

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marketing strategy in which companies obtain permission from consumers before sending them information or promotional messages

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affiliate marketing

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one web site agrees to pay another web site a commission for new business opportunities it refers to the site

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viral marketing

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the process of getting customers to pass along a company's marketing message to friends, family, and colleagues

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one-to-one marketing

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segmenting the market based on a precise and timely understanding of an individual's needs, targeting specific marketing messages to these individuals, and the positioning the product vis-a-vis competitors to be truly unique