Global Electronic Commerce - Técnica Administrativa

619 Pages·1999·2.43 MB·English

Global Electronic Commerce
Global Electronic Commerce
Theory and Case Studies
J. Christopher Westland
Theodore H. K. Clark
The MIT Press
Cambridge, Massachusetts
London, England
(1999MassachusettsInstituteofTechnology
Allrightsreserved.Nopartofthisbookmaybereproducedinanyformbyanyelectronicormechanical
means (including photocopying, recording, or information storage and retrieval) without permission in
writingfromthepublisher.
ThisbookwassetinTimesNewRomanbyAscoTypesetters,HongKong.
PrintedandboundintheUnitedStatesofAmerica.
LibraryofCongressCataloging-in-PublicationData
Westland,J.Christopher.
Globalelectroniccommerce:theoryandcasestudies/J.
ChristopherWestland,TheodoreH.K.Clark.
p. cm.
Includesbibliographicalreferences(p. )andindex.
ISBN0-262-23205-7(hc:alk.paper)
1.Electroniccommerce. I.Clark,TheodoreH.K. II.Title.
HF5548.32.W47 1999
658.8000285—dc21 99-38199
CIP
Preface
There are already good books on the technical structure of the Internet and other
network architectures. There have also been a large number of books giving advice
on Internet retailing: the ‘‘how to make money on the Internet’’ genre of trade press
publications.
We have,in contrast, tried to fill a niche where the o¤erings are not as rich: a text
on the business models that make sense in a globally networked world. We assume
that our audience has a basic familiarity with Internet technologies and has spent
some time surfing the Web for retailing examples. We are interested in the myriad
ways that the Web’s capabilities can been made to support, alter, and expand the
ways we do business—the business models that underlie commerce in the late 20th
century.
We have sought, in writing this book, to synthesize current thought and practice
intoacomprehensivereviewofelectroniccommerce.Ourchoiceoftopics,ingeneral,
reflects the economic importance of specific electronic commerce implementations,
vertical markets, and core competencies in the commercial sector. Chronicles of new
technology,sentimentsonevolutionandgrowthofdigitaltechnology,andadviceon
how to make money on the Internet provide attractive copy and have sold well. We
haveresistedtheallureofthesetopics,andinsteadhavefocusedourattentiononthe
revolution in industrial organizationthat e-commerce has made possible.
Material in the book is presented in twelve chapters, consistent with covering a
chapter per week in a typical semester-long university class, with some flexibility
providedforaddressingafewtopicsinmoredepthorforsupplementingthetextwith
additional materials. The chapters also include case studies to illustrate e-commerce
management issues and currentpractices.
For all of the promise and appeal of electronic commerce in revolutionizing the
way we promote, conduct business, sell, and distribute, we still chose to release this
material in the time-honored format popularized five centuries ago by Aldus Manu-
tius:theprintedtext.Why?Wearecertainlynotaversetonewtechnology.However,
digital media has yet to surpass the printed book in at least three ways. First, com-
puter screens have only around 1% of the resolution of the printed page. Thus read-
ingrequiressignificantlymorevisuale¤ortonacomputerscreen.Second,thequality
of computer screens tends to be proportional to their power requirements. This
requirement at least intermittently tethers them to an electrical source, which is a
detriment to portability. Third, computer screens, with the exception of those of
extremely light laptops, are considerably heavier and bulkier than books, a further
deterrent tocarrying reading material around.
Of more immediate concern to us, as authors, is that the technologies of digi-
tal production and distribution have greatly outpaced the legal and economic
x Preface
framework in which these technologies operate. Despite years of experimentation by
several large publishing houses, it is not yet clear how to package digital textbooks
properly. Publishers suspect (perhaps rightly so) that digital texts are even more
prone to piracy than existing paper media. Contracts and revenue streams for book
publishing assume that the information for which consumers pay is indelibly inked
into paper. It is the paper that is counted in determining the sales volume, and thus
thebookrevenue.Therearemanyadhocwaysofmodulatingqualityofinformation
in a book—selection of authors and limits on length, audience, and money. Yet
publishers have not fully solved the problem of charging for the utility of the infor-
mationrather than the quantity of the paper.
The greatest novelty of the Web is its worldwide tra‰c in information unbound
to any particular medium—paper, CD, or magnetic. Frictionless, spontaneous, and
almost limitless flow of information on the Web can be called upon to bolster argu-
ments, flexibly demonstrate points, and expand on issues raised in the text. For
authors, there are features in the Web’shypertext medium that we wish we could in-
corporateintoourbook:hyperlinking,interactivechatandpaging,colorfulgraphics,
sound and other multimedia objects, and so forth. We will be experimenting with
new formats for presentation and distribution of material over the coming years as
ways of extending the utility of ourtext.
For now, our ideas are indelibly bound to paper, but we have provided a partial
compromiseinthistextbyreferringtocasesinsomeofthechaptersthatareprovided
in electronic format on the Web. In addition, many Web references are provided
throughout thetext and casesto enable thereaderto explore topics presented within
the worldof cyberspace aswellas through the printed media.
No one particular medium can convey everything we would like to present in a
classroom.Wehavepresentedthematerialinthisbookoverthepastseveralyearsin
our classes, and have found that a mixture of modes—videos, Web displays, class-
room discussion, software, and corporate visits—best supports discussion of the rich
set of ideas presented in electronic commerce. The reader should experiment, and
definitely take time out to explore the Web sites to which we refer in the text, and
thenmove onto the hyperlinks to broaden their horizons.
With Thanks
Finally, and with gratitude, we state our customary acknowledgments for the physi-
cal realization of this book. What was once a loose amalgam of concepts, theories,
and ideas jotted down on scraps of paper has finally come together in what we hope
Preface xi
is an interesting and informative text that goes partway to covering one of the most
excitingdevelopments ofthis century.Who knowswhatlies ahead,but this willbe a
consideration for the millennium andsubject of furtherresearch and perhaps.
Inthesedaysofspecialization,notevenapairofauthorscanhopetocoverallthe
subjects within the book. We extend our thanks to all of those who have written
and co-authored the case studies that have enabled the subject to come alive with
practical examples. We must also thank all of those who have given generously of
theirknowledgein specific areas, and in particular,thefour anonymousreviewers of
this work who helped us improve the final text.
We also want to express appreciation for funding provided by the Hong Kong
Government Research Grant Council for research and development of the case
studies.
Lastly,enormousthanksmustbegiventoresearchassistantsSarahCookandDee
Conway, who have nursed the project from its infancy to final fruition, with much
e¤ort and through manydrafts.
Contents
Preface ix
1 Introduction to Electronic Commerce 1
The Foundationsof Electronic Commerce 4
ElectronicCommerce Infrastructure 6
ElectronicMarkets 6
ElectronicCommerce Supporting Functions 7
ElectronicCommerce Opportunities: Today and Tomorrow 7
Notes 8
2 Information Technology in thePost-IndustrialRevolution 9
Digital Railroads 12
Channelsand Intermediaries 15
ElectronicChannels 22
Notes 24
Case Studies
Andersen Consulting:The Asia IntranetOpportunity, Peter Lovelock
and Theodore H. Clark 27
3 Redefining theGeography ofSpace, Time, and Money 53
The Hard Middle 62
The Problem with Innovation 63
Jobs and the Internet 64
Recommended Reading 69
Notes 69
Case Studies
Financial Times Syndication Services: Making Money on the Web,
Peter Lovelock and Theodore H. Clark 71
SecurityFirst NetworkBank: The World’s First Internet Bank,
http://www.sfnb.com, Theodore H. Clarkand John J.Sviokla 91
Global Electronics Manufacturing (HK) Ltd., Theodore H. Clark and
Alvin Chu 121
4 SupplyChain Management and Information Alliances 141
Transforming the Value ChainUsing InformationTechnology 141
Strategic IT and the Value Chain beyond the Firm 145
The Beer Game and the Value of Information 146
Benefits and Challenges of SharingInformation 151
Interorganizational Systems and BPR 152
vi Contents
Developing and Maintaining IOS Partnerships 153
Wholesale ElectronicCommerce: IOSand the Internet 154
Notes 155
Case Studies
H. E. Butt GroceryCompany:A Leaderin ECR Implementation,
TheodoreH. Clark, David C. Croson,James L. McKenney, and
Richard L. Nolan 157
Procter &Gamble:Improving ConsumerValue through Process
Redesign, Theodore H. Clarkand James L. McKenney 197
5 Telecommunications Infrastructure in Transition 221
Telecommunications Technology 221
Communications Mediaand Bandwidth 222
Telecommunications for Voice and Modems 223
ISDN and Packet-Switched Services 225
Synchronousand Asynchronous Transmission 228
Declining Costs of Digital Communications 228
The Rise of Computer Networks 229
The World Wide Web 232
Notes 233
Case Studies
China’sGolden Projects: Reengineering the National Economy,
Peter Lovelock, Ben A.Petrazzini, Theodore H. Clark, and
John J.Sviokla 235
Philippines Telephone and Telegraph, J.Christopher Westland 259
6 Accessto Electronic CommerceServices 273
The Roots ofElectronic Commerce 273
The Internet 275
ISP BusinessModels 278
Notes 280
Case Studies
Asia Online:The Online Service forAsia,Theodore H. Clark 281
China Internet Corporation: http://www.China.Com, Theodore H. Clark
and John J.Sviokla 299
HongKong SuperNet, TheodoreH. Clark and Sarah Cook 315
7 Electronic Auctions andIntermediaries 343
MarketModels 344
Contents vii
InternetAuctions 353
Notes 353
Case Studies
Experiences with ElectronicAuctionsin the Dutch Flower Industry,
Eric van Heck and Pieter M.Ribbers 355
E*Trade Securities,Inc., Rajiv Lal 367
8 Electronic FinancialMarkets 385
Financial Markets: First Movers in ElectronicCommerce 385
Basics 387
Matchingand Price Discovery 389
Notes 396
Case Studies
On-Line Trading attheShanghaiStock Exchange,
J.Christopher Westland 399
The Moscow Stock Exchange,Martin Mendelson and
J.Christopher Westland 417
ElectronicSecurities Trading atthe Bolsade Comercio de Santiago,
J.Christopher Westland 429
9 Digital Storefronts 445
Digital Storefrontson the Web 447
Search Engines 449
The Web as an Advertisingand Marketing Channel 452
InternetDynamics 460
Integration 462
Notes 462
10 SecureDigital Payments 465
The Origin and Developmentof Cash 465
Microtransactions 470
The Resurgence of Barter 474
Authentication of E-Commerce Payments 474
Identification of Individuals 477
Privacy 479
Controls 480
Encryption and Password Controls 484
Notes 490