Chapter 8 Flashcards
The process of distributing, buying, selling, servicing, and marketing products and services over computer networks such as the internet
An online exchange of value
Electronic commerce (e-commerce)
The use of internet technologies and other advanced IT to enable and support business processes and operations
Includes ecommerce activities
Electronic business (e-business)
Business to consumer (B2C)
Transactions involve a for-profit organization on one side and the end consumers on the other - basically retail
Ex. Amazon, Netflix, Best Buy
The most visible kind of e-commerce
Business to business (B2B)
Two or more business entities take part in transaction
Can range from one-time interactions to unique and highly tailored relationships between two firms
Consumer to consumer (C2C) platforms
Enable individual consumers to interact and transact directly
Asset owners use digital clearing houses to capitalize on the unused capacity of things they already have, and customers rent from their peers rather than renting or buying from a company
Ex. Airbnb, Lyft, Uber
Sharing economy
Customer to business (C2B) transactions
Individuals transact with business organizations not as buyers of goods and services, but as suppliers
The value derived from network effects comes from what three sources
Exchange, staying power, and complementary benefits
A market exhibits network effects if
The value for (some of) the participants is linked in some way to the market size (or the size of a portion of the market)
Two types of network effects
Direct (one sided)
Indirect (cross sided)
Direct (same side) network effects
When the value from product/service A is impacted by how many people use A (effect of A On A)
Indirect (cross-side) network effects
The value of the network to one type of participants A depends on the number of participants of another type B that participate (effect of B on A)
Occur in two sided markets
Supply side economies of scale
Average production/service costs per unit decrease as the scale of production or consumer base increases
May not be sustainable after a certain size because of coordination costs, among other things
Supply side diseconomies of scale
Average unit costs increase when scale increases (ex. Perhaps due to increased coordination costs and limited resources)
Tippy market
Subject to strong positive feedback
Tips in favor of the girl that first reaches critical mass
Winner takes all outcome
Emergence of strong monopolies
