Entire course Flashcards
What are the different management philosophies that have preceded the evolution towards our digital economy? What stage do we find ourselves in at this very moment?
60's: Product efficiency 70's: Strategic planning 80's: Total quality management 90's: Creating value and relationships 00's: Customer co-creation (passive customers --> active customers) 10's: Social networks 10's-20's: Content marketing 20's: On-demand economy --> We now find ourselves in between the content marketing and on-demand economy stages
Explain the major implications of our emerging digital economy!
- Paradox: speed vs knowledge
- Globalization due to internet leads to global comptetion (especially for products or services with a 100% digital fit like movies or music)
- Virtual marketplaces replace the physical ones. This leads to greater transparancy, which makes it so that competitors can learn from eachother very rapidly which leads to shorter product/service life cycle.
- High emphasis on relationship building, networking and partnering.
- Creation of ecosystems
- New business models
- More efficient business processes (value chain needs to be more streamlined in order to shorten the time between purchase and reception of the product.
How would you define one-to-one versus many-to-many marketing? How do they represent major marketing opportunities?
One-to-one marketing = traditional mass communication where everyone gets the same message. There is also lower targeting or focus possibilities.
–> Opportunity: you reach a large number of people.
One-to-one internet marketing = personalized messages to specifically targeted customers in stead of the mass.
–> Opportunity: greater cost efficiency for the campaign + More targeting.
Many-to-many marketing = all activities on social networks and media. Customers and organizations are all present on these social networks and create content.
–> Opportunity: interaction and engagement + personalized messages + targeting
Provide a brief history on E-commerce thereby distinguishing 3 stages! Moreover, what were some of the early visions on E-commerce that were not fulfilled? Explain!
- 1995 - 2000: Invention
= simple websites and web applications. Euphoric visions of: friction-free commerce and first-mover advantages. –> no strategy, companies just did things because they could.
= primairly retail
2000: dot-com crash = overvaluation of online companies. - 2001 - 2006: Consolidation
= Companies gained strategic vision –> Higher focus –> More sophisticated products. Search Engine Advertising became more and more important.
= Retail, but also services now - 2007 - Present: Reinvention due to mobile
= Smartphones created an app economy that sparked rapid growth of:
- Social networks
- Mobile platforms
- Local commerce
- On demand services
–> Transformation of internet use, but also marketing
= Retail, services, and content
Some early visions that weren’t fulfilled:
- Friction-free commerce: considerable price dispersion and less price sensitivity
- Perfect competition: information asymmetries still persist, blocking perfect competition.
- Disintermediation did occur
- First mover advantages: they weren’t as large. The followers usually overtake the first mover, since the latter makes all the mistakes that the former can learn from.
- -> Suprise: the rise of mobile.
Describe the unique features of E-commerce technology!
Unique features of e-commerce consist of:
- Ubiquity = available anytime, any place
- Global reach
- Universal standards = standards in use of technology to make it possible for devices to communicate (ex. coding language).
- Information richness
- Interactivity
- Information density = cost of information is low, while quality is high.
- Personalization/customization
- Social technology
Describe the different types of E-commerce and provide an example for each!
Different types of E-commerce consists of:
Classification based on the market:
- B2C –> ex. Bol.com
- B2B –> ex. Exact online
- C2C –> ex. Ebay
Classification based on the used technology:
- Social e-commerce –> ex. Facebook marketplace
- Mobile e-commerce –> ex. App store, mobile apps of e-commerce firms, …
- Local e-commerce –> ex. Groupon (= you get certain discounts based on your location)
Explain the concept of packet switching ? Why was it important as a building block for the internet ?
Packet switching is the concept of breaking down binary datastrings into packages in order send them to other devices more easily. The proces goes as follows:
- Linear text message
- Breakdown into binary code
- Breakdown into packages
- a binary string is attached that contains information indicating destination, how many bits are in the total message and how many packets.
It was an important development because before, computers were only able to connect one-to-one and not simultaneous. So if one computer was connected with another, a third wouldn’t be able to connect to any of the 2 first. Packet switching enabled this. Now, computers are able to connect with each other simultaneously, which pushed the internet development forward.
Explain the difference between the internet and the world wide web ?
The internet is the infrastructure used that enables the connection of multiple devices, while the world wide web is an internet application.
What are the major building blocks of the internet ? Explain ?
The major building blocks of the internet are:
- Client/Server computing: personal computers (clients) are connected in network with one or more servers that perform common functions for the clients such as storing files, software applications, …
- Packet switching
- TCP/IP communications protocol
- Routers = connect Local Area Networks (LANs) and Wide Area Networks (WANs) to eachother.
- -> LAN are local and more restricted in geograpich distance, while WANs are networks of LANs
Explain the components that represent the basic technology of the internet and the worldwide web!
The major building blocks of the internet are:
- Client/Server computing: personal computers (clients) are connected in network with one or more servers that perform common functions for the clients such as storing files, software applications, …
- Packet switching
- TCP/IP communications protocol
The world wide web also uses technology protocols such as:
- IP addresses
- Domain names: IP addresses expressed in natural language
- Uniform Resource Locator (URL): address used by web browser to identify location of certain content on the web.
- Hyper Text Transmision Protocol (HTTP): protocol for communication between client and server –> For the worldwide web, if hypertext is used in local networks (LANs) it is called intranet.
Other technologies that make the web work are:
- browsers
- Servers
- Routers: connect Local Area Networks (LANs) and Wide Area Networks (WANs) to eachother.
- -> LAN are local and more restricted in geograpich distance, while WANs are networks of LANs
What is meant by TCP/IP ? Explain!
TCP = Establishes connections between sending and receiving web computers. Also handles assembly of packets at point of transmission, and reassembly at receiving end. IP = Set of digits that identifies a certain device on the internet. This is the internet's addressing scheme.
Describe the 6 most important E-commerce security dimensions and explain both from a customer and from a merchant´s perspective! Provide 4 examples of the most common security threats!
- Integrity:
Customer = Has information been altered?
Merchant = Has the site been altered? - Nonrepudiation:
Customer = can a party take action with me to later deny taking the action? (ex. saying they didn’t receive payment).
Merchant = Can a customer deny ordering products? - Authenticity:
Customer = Who am I dealing with? Are they who they say they are?
Merchant = What is the real identity of customers? - Confidentiality:
Customer = Can someone else read my messages?
Merchant = Does anyone without authorization access to confidential information? - Privacy:
Customer = Can I control the use of my information by the merchant?
Merchant = What use (if any) can be made with the personal information collected in a transaction? - Availibility:
Customer = can I get access to the site?
Merchant = Is the site operational?
Provide 4 examples of malicious code and explain what they may do!
- Ransomware = a type of malware from cryptovirology that threatens to publish the victim’s data or perpetually block access to it unless a ransom is paid.
- Exploits and exploit kits = worms and virusses that target the vulnerable points of the system, eploit kits are a collection of several worms and virusses of different exploits.
- Maladvertising = advertisements that contain malware.
- Trojan Horse = malware that misleads the users of its intents.
- Backdoors = features of virusses and worms that makes it so that hackers can have remote access to your computer
Explain the concepts of spoofing, pharming and “hactivism” ? How are they related to one another ?
Spoofing = Attempting to hide true identity by using someone else’s e-mail or IP address.
Pharming = Automatically redirecting a web link to a different address, to benefit the hacker.
Hacktivism = Hacking as a form of civil disobedience to promote a political agenda or social change.
Spoofing and pharming are generally more directed to benefit the hacker directly, while hacktivism has a more public concern.
Explain the concept of Trojan horses, exploits and Distributed denial of Service Attacks ? What type of e-commerce security dimension(s) could be impacted here ?
Trojan Horse = malware that misleads the users of its intents.
–> Security dimension hit: integrity, nonrepudiation, authenticity, confidentiality, (privacy depending on the intents of the hackers)
Exploits and exploit kits = worms and virusses that attack the vital parts of the system, eploit kits are a collection of several worms and virusses of different exploits. Exploits themselves aren’t really malware
–> Security dimension hit: integrity, nonrepudiation, authenticity, confidentiality, (privacy depending on the intents of the hackers)
Distributed denials of service (DDOS) = Meerdere computers vallen tegelijk een doelwit aan met het doel een computer of netwerk van computers niet of moeilijk bereikbaar te maken voor bedoelde klanten.
Security dimension hit:
Primairly availibility.
Describe the tradeoff between information richness and reach and how it was affected by the internet. What are the implications of the effect of the internet on this trade-off?
There used to be a clear trade-off between richness and reach –> Marketers had to decide which one they prefered since both couldn’t really co-exist. Internet shifted this relationship upwards: reach and richness are more compatible due to the existence of the internet. This is because the internet grants access to a large number of people while also delivering rich information.
Implications:
- Accesibility = a lot more people have access to rich information
- Entry barriers lowered or disappeared.
- Disintermediation
- Buyer search costs reduced
- Mass customization = No longer standard messages for the mass.
- Relationship marketing
Describe e-commerce and e-business. What is there relationship to eachother?
E-commerce = Digitally enabled commercial transactions between and among organizations and individuals.
E-business = the use of internet technology for the implementation of business processes, electronic commerce and communication and cooperation within the company, between company & customer, supplier & other business partners.
E-commerce is a part of E-business.
What is a business strategy? And what are some strategies that an e-commerce/e-business firm can adopt?
Business strategy = plan for achieving superior long-term returns on capital invested.
There are 5 generic strategies that a firm can adopt:
1. Product/service differentiation = distinguishing a product or service from others. The internet has made it possible for companies to differentiate as wel (ex. made.com)
- Cost competition = big companies can achieve economies of scale because of their size.
- Scope = companies that want to be worldwide and available for everyone can do this very easily through the internet.
- Focus = companies can also focus on certain countries, market, groups, … way more easily thanks to the internet.
- Customer intimacy = companies look to create intimacy with their customers through studying their behavior, attitude, preferences, …
- -> Ecosystem creation.
What elements should be defined within a web business model?
Describe the sub-components of a value proposition and the types of revenue models.
The components of a web business model consist of:
- Value propositions = Why should customers buy from you? What value do you ad?
- Revenue models = How will the firm earn revenue, generate profits, and produce a superior return on invested capital?
- Online offering = what is the online product, service or information offering?
- Resource system = How does the company need to align its resources to fulfill the value proposition? Does the company have the capabilities to deliver the value that it describes in the value proposition.
The value proposition consists of 3 core parts:
- Target segments/target groups
- Benefits that the company will offer, that customers expect.
- Unique/core capabilities or competences.
There are 5 major revenue models:
- Advertising revenue models
- Subscription revenue model ( + freemium strategy)
- Transaction fee revenue model
- Sales revenue model
- Affiliate revenue model
What different types of E-commerce business models exist within a B2C setting?
There are several types of e-commerce business models in the B2C setting:
1. E-tailer
Online version of traditional retailers:
- Virtual merchant = sell exclusively online
- Brick and clicks = traditional brick and mortar retailers that have extended online
- Catalog merchant = companies that sell exclusively out of an online catalog
- Manufacturer-direct = manufacturer eliminates the intermediary and sells directly to customers
–> Dominant revenue model is sales
- Community provider
= Provide online environments where people with similar interests can transact, share content, and communicate. (social networks)
–> Multiple revenue models at play
- Content provider
= Provide several forms of information (content): news, music, video, text, artwork.
There are several variations of this business model:
- Syndication = all content used and showed on the site is their own (ex. News sites)
- Aggregator = almost all content shown on the site comes from other parties, there is no content creation from the company itself. They add value in the way that the content is shown and provided (ex. Youtube).
–> Several revenue models
- Portal
= Search plus an integrated package of content and services.
The variations of portals include:
- Horizontal portal = general portal that enables you to look up a variety of information (ex. msn)
- Vertical portal = specialized portal that goes more in dept about certain topics (ex. Sailnet gives you all possible information about sailing)
- Pure search = portals that enable you to look up all possible information (ex. Google, bing, …)
–> Revenue models usually consist of advertising, subscription fees, and transaction fees.
5. Transaction broker = Process online transactions for consumers. Their primary value proposition is that they save their customers time and money. Industries using this model include: - Financial services - Travel services - Job placement services
–> Primary revenue model: transaction fees
- Market creator
= Create digital environment where buyers and sellers can meet and transact (examples: Priceline, eBay). There are also on-demand service companies (sharing economy): platforms that allow people to sell services (examples: Uber, Airbnb).
–> Revenue models include transaction fees, and fees to merchants for access.
- Service provider
= Online services (e.g., Google: Google Maps, Google Docs, and so on). Their value proposition consists of the fact that they are valuable, convenient, time-saving, low-cost alternatives to traditional service providers.
–> Revenue models that include: sales of services, subscription fees, advertising, and sales of marketing data
Through what methods can capital be raised for e-commerce businesses ?
The primary sources of capital in e-commerce are:
1. Seed capital = Any form of capital that is invested in the company. The money can come from anywhere.
- the Elevator pitch
- Traditional sources
- Incubators = initiatives or organizations that partly fund startups, but mostly provide necessary services to them.
- Commercial banks
- Venture capital = venture capitalists manage money of other people and actively look out investment opportunities to make a return on their money
- Angel investors
- Venture capital firms
- Strategic partners - Crowdfunding
What types of online business models exist? Describe their components & provide examples.
There are several types of e-commerce business models in the B2B setting:
- Net marketplaces: includes businesses such as:
- E-distributor = Version of retail and wholesale store, MRO goods, and indirect goods
- E-procurement = Creates digital markets where participants transact for indirect goods. Examples: B2B service providers, SaaS (Servises as a Service) and PaaS (Platform as a Service) providers
- Exchange = Independently owned vertical (= specialized) digital marketplace for direct inputs
- Industry consortium = Industry-owned vertical marketplaces that serve specific industries (e.g., automobile, chemical) - Private industrial network = Digital network used to coordinate among firms engaged in business together. These typically evolve out of company’s internal enterprise system. Example: Walmart’s network for suppliers.
There are several types of e-commerce business models in the B2C setting:
1. E-tailer
Online version of traditional retailers:
- Virtual merchant = sell exclusively online
- Brick and clicks = traditional brick and mortar retailers that have extended online
- Catalog merchant = companies that sell exclusively out of an online catalog
- Manufacturer-direct = manufacturer eliminates the intermediary and sells directly to customers
–> Dominant revenue model is sales
- Community provider
= Provide online environments where people with similar interests can transact, share content, and communicate. (social networks)
–> Multiple revenue models at play
- Content provider
= Provide several forms of information (content): news, music, video, text, artwork.
There are several variations of this business model:
- Syndication = all content used and showed on the site is their own (ex. News sites)
- Aggregator = almost all content shown on the site comes from other parties, there is no content creation from the company itself. They add value in the way that the content is shown and provided (ex. Youtube).
–> Several revenue models
- Portal
= Search plus an integrated package of content and services.
The variations of portals include:
- Horizontal portal = general portal that enables you to look up a variety of information (ex. msn)
- Vertical portal = specialized portal that goes more in dept about certain topics (ex. Sailnet gives you all possible information about sailing)
- Pure search = portals that enable you to look up all possible information (ex. Google, bing, …)
–> Revenue models usually consist of advertising, subscription fees, and transaction fees.
5. Transaction broker = Process online transactions for consumers. Their primary value proposition is that they save their customers time and money. Industries using this model include: - Financial services - Travel services - Job placement services
–> Primary revenue model: transaction fees
- Market creator
= Create digital environment where buyers and sellers can meet and transact (examples: Priceline, eBay). There are also on-demand service companies (sharing economy): platforms that allow people to sell services (examples: Uber, Airbnb).
–> Revenue models include transaction fees, and fees to merchants for access.
- Service provider
= Online services (e.g., Google: Google Maps, Google Docs, and so on). Their value proposition consists of the fact that they are valuable, convenient, time-saving, low-cost alternatives to traditional service providers.
–> Revenue models that include: sales of services, subscription fees, advertising, and sales of marketing data
