This exciting new text provides a strategic marketing and managerial perspective of electronic commerce. The research of the four highly-qualified authors provides the basis for the book, allowing for first-hand experience, varied viewpoints, and relevance. (Amazon.com)

Preface:

Electronic edition:

When the print edition became out-of-print, we applied for the return of copyright and released the book in this electronic format. We removed the more dated material, such as boxed insert examples of the use of the Internet, but otherwise essentially left the book as is because we believe the fundamental ideas are still relevant.

We seek the support of the adopting community to refresh this book. If you have some suggestions for revision, then please contact the chapter editor.

Print edition:

Since 1995, the four of us have had a very active program of research on electronic commerce. We have published more than 20 refereed articles on this topic and have collectively given dozens of seminars on electronic commerce in more than 20 countries for a wide range of corporations and universities. We have tested and refined our ideas by working with corporations to develop electronic commerce strategies. The focus of our work has been to address fundamental issues that are common to many business practitioners. Thus, we have frequently emphasized the strategic elements of electronic commerce. In particular, we have explored the impact that Internet technology has on marketing strategy and practice. We have reflected on the feedback provided by many who have attended our seminars, workshops, and classes, and commented on our publications. As a result, we have refined and honed our thinking, and this book represents the culmination of these efforts.

This book reports the results of our research. It is written both for practitioners and business students. Managers wishing to understand how electronic commerce is revolutionizing business will find that our comprehensive coverage of essential business issues (e.g., pricing and distribution) answers many of their questions. Advanced business students (junior, seniors, and graduate students) will find that the blend of academic structure and practical examples provides an engaging formula for learning.

The book's title reflects some key themes that we develop. First, we are primarily concerned with electronic commerce, which we define as using technology (e.g., the Internet) to communicate or transact with stakeholders (e.g., customers). Second, we discuss how organizations must change in order to take advantage of electronic commerce opportunities. In this sense, our book offers the strategic perspective (i.e., the best way to operate a successful business in the 21st century). Third, with the growing importance of the Internet and related technologies, organizations must take electronic commerce into account when they are creating strategic plans.

Thus, electronic commerce is a strategic perspective that all firms must adopt, both in the present and in the future. In other words, an organization that does not explicitly consider electronic commerce as a strategic imperative is probably making a crucial error. Here, we focus primarily on the opportunities and tactics that can lead to success in the electronic marketplace.

We live in exciting times. It is a rare event for an economy to move from one form to another. We are participating in the transition from the industrial to the information age. We all have an opportunity to participate in this historic event. The extent to which you partake in this revolution is determined, in part, by your desire to facilitate change and your understanding of how the new economy operates. We hope this book inspires you to become an electronic commerce change agent and also provides the wherewithal to understand what can be changed and how it can be changed.

Download Electronic Commerce: The Strategic Perspective

PDF format, 823KB, 100Pages.

Richard T. Watson - University of Georgia
Pierre Berthon - Bentley College
Leyland F. Pitt – Simon Fraser University
George M. Zinkhan - University of Georgia

Copyright © 2007 by Richard T. Watson, Pierre Berthon, Leyland F. Pitt, and George M. Zinkhan.
This book is licensed under a Creative Commons Attribution 3.0 License.

1. Electronic commerce: An Introduction
Editor: Richard T. Watson (University of Georgia, USA)

Introduction:

Electronic commerce is a revolution in business practices. If organizations are going to take advantage of new Internet technologies, then they must take a strategic perspective. That is, care must be taken to make a close link between corporate strategy and electronic commerce strategy.

In this chapter, we address some essential strategic issues, describe the major themes tackled by this book, and outline the other chapters. Among the central issues we discuss are defining electronic commerce, identifying the extent of a firm's Internet usage, explaining how electronic commerce can address the three strategic challenges facing all firms, and understanding the parameters of disintermediation. Consequently, we start with these issues.

Electronic commerce defined:

Electronic commerce, in a broad sense, is the use of computer networks to improve organizational performance. Increasing profitability, gaining market share, improving customer service, and delivering products faster are some of the organizational performance gains possible with electronic commerce. Electronic commerce is more than ordering goods from an on-line catalog. It involves all aspects of an organization's electronic interactions with its stakeholders, the people who determine the future of the organization.

Thus, electronic commerce includes activities such as establishing a Web page to support investor relations or communicating electronically with college students who are potential employees. In brief, electronic commerce involves the use of information technology to enhance communications and transactions with all of an organization's stakeholders. Such stakeholders include customers, suppliers, government regulators, financial institutions, mangers, employees, and the public at large.

Who should use the Internet?

Every organization needs to consider whether it should have an Internet presence and, if so, what should be the extent of its involvement. There are two key factors to be considered in answering these questions.

First, how many existing or potential customers are likely to be Internet users? If a significant proportion of a firm's customers are Internet users, and the search costs for the product or service are reasonably (even moderately) high, then an organization should have a presence; otherwise, it is missing an opportunity to inform and interact with its customers. The Web is a friendly and extremely convenient source of information for many customers. If a firm does not have a Web site, then there is the risk that potential customers, who are Web savvy, will flow to competitors who have a Web presence.

Second, what is the information intensity of a company's products and services? An information-intense product is one that requires considerable information to describe it completely. For example, what is the best way to describe a CD to a potential customer? Ideally, text would be used for the album notes listing the tunes, artists, and playing time; graphics would be used to display the CD cover; sound would provide a sample of the music; and a video clip would show the artist performing. Thus, a CD is information intensive; multimedia are useful for describing it.

Consequently, Sony Music provides an image of a CD's cover, the liner notes, a list of tracks, and 30-second samples of some tracks. It also provides photos and details of the studio session.

The two parameters, number of customers on the Web and product information intensity, can be combined to provide a straightforward model (see Exhibit 1) for determining which companies should be using the Internet. Organizations falling in the top right quadrant are prime candidates because many of their customers have Internet access and their products have a high information content. Firms in the other quadrants, particularly the low-low quadrant, have less need to invest in a Web site. ...

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