E-Commerce at Hochschule Worms | Flashcards & Summaries

Lernmaterialien für E-Commerce an der Hochschule Worms

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TESTE DEIN WISSEN
What is Circuit-switching vs. Packet-switching?
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TESTE DEIN WISSEN
Circuit-switching:
  • Shorter links
  • Centralized network with direct connection between two devices (e.g. phones)
Packet-switching:
  • Point-to-point connection
  • Decentralized network, where every datagram is treated independently from all others = more reliable
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TESTE DEIN WISSEN
What changes do you see for the next decade with regard to the internet and e-commerce?
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TESTE DEIN WISSEN
  • E-commerce might be dominated by one or two platforms (market places) like in China (90% Tencent + Alibaba)
  • New shopping behaviour through spontaneity and mobility provided by smartphones. Also increase in Mobile Commerce because of ultra convenience in buying
  • Product costumization by collecting real consumer feedback (Big Data - targeting+analyzing) and then designing product ideas. The production takes place in microstudios (local areas). Big advantage because customized pieces are highly responsive to the markets
  • Online retail grocery stores (e.g. Hema by Alibaba-Shanghai) with a few physical stores and high speed delivery generating higher revenues.
  • Social shopping through QR-code (links) connecting directly to the shop page (WeChat - 1click buy), therefore social media redefines relationship between brand, retailer, consumer. Provided with Online Shop Assistance 24/7 and marketing opportunities through ads.
  • Future? Might be the focus to more sustainability and quality over quantity because of changing preferences. We can see a huge transformation because companies are trading up the needs of consumers and the e-commerce market is constantly evolving and reinventing itself. The evolution of ecosystems are reforming suppy chain, distribution, marketing and product innovation. Platform firms have to deal with challenges and face a variety of opportunities.
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TESTE DEIN WISSEN
Which advantages do platforms have over pipeline business models?
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TESTE DEIN WISSEN
Examples mobile service providers:
  • Platform approach by NTT DoCoMo (Japan) making some money with data transfer on their platform iMode, which is a very playful environment made by app developers
  • Pipeline approach by Telekom (Germany) as they stood in the service position they wanted to make some money by offering applications instead of just providing the environment to stay in control. But this didn't work out well
Lösung ausblenden
TESTE DEIN WISSEN
Platforms beat Pipelines. Why?
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TESTE DEIN WISSEN
1. Platforms scale more efficiently by eliminating gatekeepers (Kindle)
  • Because pipelines rely on inefficient gatekeepers to manage the flow of value from producer to consumer as we can see at the traditional publishing industry where editors (gatekeepers) select books compared to Kindle from Amazon which scales more efficiently through open participation (everyone can publish). That's why traditional gatekeepers are replaced by market signals from community
2. Platforms unlock new sources of value creation and supply (AirBnb)
  • By using spare capacity and utilizing contribution from the community which applied AirBnb's platform model to the hotel business
  • AirBnb created and maintains the platform that allows individual participants to provide rooms/apartments directly to customers, therefore growing much faster than traditional hotel companies since growth is no longer dependent by the ability to deplay capital and manage physical assets
3. Platforms use data-based tools to create community feedback loops (Wikipedia)
  • by gathering community signals about the quality or content or reputation of service providers, their market interaction become increasingly efficient.
  • For example Wikipedia leveraged a community of external contributors to grow and control the content whereas traditional pipeline firms like Encyclopaedia Britannica relied on costly inefficient control mechanisms and gatekeeping
4. Platforms invert the firm (Google)
  • because the mass of value  is created by users, the platform business must shift its focus from internal activities to external ones (from control of assets to managing assets that are not under direct control of the company).
  • In the process, the firm inverts. For example Google's page rank algorithm which uses links as key sorting tool in comparison to Yahoo's inefficient employee-edited hierarchical database
Lösung ausblenden
TESTE DEIN WISSEN
What are network-effects? (Briefly)
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TESTE DEIN WISSEN
Network-effect = Network externality = Demand-side economy of scale
  • Effect that user creates on the other users when joining the platform  (value grows convex) by creating self-reinforcing feedback loops
  • Direct network effects = same side
  • Indirect network effects = cross side
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TESTE DEIN WISSEN
Four kinds of network effects - Explain?
Lösung anzeigen
TESTE DEIN WISSEN
Positive same side effects
  • are positive benefits received by users when the number of the same kind increases
  • E.g. first telephone because first users had small network but with every additional user the others benefit due to more connections
  • Adobe with its PDF standard where producers benefits
Negative same side effects
  • Are negative externalities on users (reducing value) when the number of users of the same kind increases
  • E.g. on eBay because an increase of buyers (users) lead to negative effect on other buyers due to more competition 
Positive cross side effects
  • Occur when users benefit from an increase of the number of users on the other side of the market/platform e.g. Visa when more merchants (producers) agree to accept the Visa card, the flexibility and convenience (benefits) for the shoppers increases
  • Or positive feedback loop: On Paypal --> sellers attract buyers and buyers attract sellers. On Uber --> drivers attract riders and riders attract drivers
Negative cross side effects
  • Are negative externalities on users from an increase in the number of users on the other side of the platform/market
  • E.g. OkCupid dating site because cross-side effects are not necessarily symmetrical, therefore the tendency of men is to approach the most beautiful women which leads to wrong matching and women leaving the platform
  • Or on Chatroulette (negative feedback loop) where an increasing number of unfiltered hairy naked men led to the leaving of normal users, eventually the platform collapsed
Lösung ausblenden
TESTE DEIN WISSEN
How to deal with negative network effects on a two-sided market?
Lösung anzeigen
TESTE DEIN WISSEN
The key is quality curation by which a platform filters, controls and limits the access of users to the platform, the activities they participate in and the connections they form with other users. Effectively curated, users find it easy to make matches that produce significant value for them
  • E.g. OkCupid implemented a curation strategy involving multiple levels of network matching where an algorithm allocates comparable matches in attractiveness which increases happiness on both sides eventually leading to positive network effects
  • Or Chatroulette effectively curated by providing users a filter tool and using algorithms to screen callers with undesirable images
Lösung ausblenden
TESTE DEIN WISSEN
How do network effects work as inhibitors of growth?
Lösung anzeigen
TESTE DEIN WISSEN
  • At the beginning, network effects inhibit growth because an user is only adopting if others adopt but if others have not adopted yet, a new user doesn't adopt ("Chicken-Egg" - problem)
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TESTE DEIN WISSEN
How do network effects work as facilitators of Lock-Ins?
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TESTE DEIN WISSEN
If a platform has already grown big, network effects lock-in their users because even if some users are not active anymore, they don't leave because the other users don't leave
Lösung ausblenden
TESTE DEIN WISSEN
Which types of interaction do platforms facilitate?
Lösung anzeigen
TESTE DEIN WISSEN
Direct (one to one):
  • Exchange of value between users e.g. social networks
Indirect (one to many):
  • Platform establishes value exchange e.g. YouTube
                                                                               

  • Exchange of Information directly/indirectly through the platform e.g. eBay search results displaying goods available or Uber providing driver information.
  • Exchange of Goods and Services (value unit/core entity) e.g. within the platform: YouTube, Facebook , and outside of platform: Yelp, Uber
  • Exchange of Currency (payment) e.g. traditional currency like cash or via PayPal, Visa, Bitcoin and alternative currency like followers, influence, attention
Lösung ausblenden
TESTE DEIN WISSEN
What are key components of Core Interaction?
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TESTE DEIN WISSEN
  • Participants like consumers/producers (users can be both) --> AirBnb
  • Value Unit created by participants (eBay Product-Listing)
  • Filter as an algorithmic, software based tool which ensures that platform users receive only valuable, relevant value units through search query or search feed algorithm (AirBnb Big Data)

Core Interaction = Participants + Value Unit + Filters
  • Only with valuable core interaction the emergence of positive network effects is possible



Lösung ausblenden
TESTE DEIN WISSEN
Name 3 key events in historical e-commerce
Lösung anzeigen
TESTE DEIN WISSEN
  • 1982: Standardization of TCP/IP (transmission control/internet protocol) which enabled communication between computers on the internet and is considered as a pocket-switching technology
  • 1993: Introduction of the Mosaic-Web-Browser (www.) which interlinks HTML pages that can be accessed over the Internet = helped to make the web much more usable
  • 2004: Web 2.0 as a series of technological improvements which enabled the two-way-internet and triggered the emergence of social media and platform business models
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Q:
What is Circuit-switching vs. Packet-switching?
A:
Circuit-switching:
  • Shorter links
  • Centralized network with direct connection between two devices (e.g. phones)
Packet-switching:
  • Point-to-point connection
  • Decentralized network, where every datagram is treated independently from all others = more reliable
Q:
What changes do you see for the next decade with regard to the internet and e-commerce?
A:
  • E-commerce might be dominated by one or two platforms (market places) like in China (90% Tencent + Alibaba)
  • New shopping behaviour through spontaneity and mobility provided by smartphones. Also increase in Mobile Commerce because of ultra convenience in buying
  • Product costumization by collecting real consumer feedback (Big Data - targeting+analyzing) and then designing product ideas. The production takes place in microstudios (local areas). Big advantage because customized pieces are highly responsive to the markets
  • Online retail grocery stores (e.g. Hema by Alibaba-Shanghai) with a few physical stores and high speed delivery generating higher revenues.
  • Social shopping through QR-code (links) connecting directly to the shop page (WeChat - 1click buy), therefore social media redefines relationship between brand, retailer, consumer. Provided with Online Shop Assistance 24/7 and marketing opportunities through ads.
  • Future? Might be the focus to more sustainability and quality over quantity because of changing preferences. We can see a huge transformation because companies are trading up the needs of consumers and the e-commerce market is constantly evolving and reinventing itself. The evolution of ecosystems are reforming suppy chain, distribution, marketing and product innovation. Platform firms have to deal with challenges and face a variety of opportunities.
Q:
Which advantages do platforms have over pipeline business models?
A:
Examples mobile service providers:
  • Platform approach by NTT DoCoMo (Japan) making some money with data transfer on their platform iMode, which is a very playful environment made by app developers
  • Pipeline approach by Telekom (Germany) as they stood in the service position they wanted to make some money by offering applications instead of just providing the environment to stay in control. But this didn't work out well
Q:
Platforms beat Pipelines. Why?
A:
1. Platforms scale more efficiently by eliminating gatekeepers (Kindle)
  • Because pipelines rely on inefficient gatekeepers to manage the flow of value from producer to consumer as we can see at the traditional publishing industry where editors (gatekeepers) select books compared to Kindle from Amazon which scales more efficiently through open participation (everyone can publish). That's why traditional gatekeepers are replaced by market signals from community
2. Platforms unlock new sources of value creation and supply (AirBnb)
  • By using spare capacity and utilizing contribution from the community which applied AirBnb's platform model to the hotel business
  • AirBnb created and maintains the platform that allows individual participants to provide rooms/apartments directly to customers, therefore growing much faster than traditional hotel companies since growth is no longer dependent by the ability to deplay capital and manage physical assets
3. Platforms use data-based tools to create community feedback loops (Wikipedia)
  • by gathering community signals about the quality or content or reputation of service providers, their market interaction become increasingly efficient.
  • For example Wikipedia leveraged a community of external contributors to grow and control the content whereas traditional pipeline firms like Encyclopaedia Britannica relied on costly inefficient control mechanisms and gatekeeping
4. Platforms invert the firm (Google)
  • because the mass of value  is created by users, the platform business must shift its focus from internal activities to external ones (from control of assets to managing assets that are not under direct control of the company).
  • In the process, the firm inverts. For example Google's page rank algorithm which uses links as key sorting tool in comparison to Yahoo's inefficient employee-edited hierarchical database
Q:
What are network-effects? (Briefly)
A:
Network-effect = Network externality = Demand-side economy of scale
  • Effect that user creates on the other users when joining the platform  (value grows convex) by creating self-reinforcing feedback loops
  • Direct network effects = same side
  • Indirect network effects = cross side
Mehr Karteikarten anzeigen
Q:
Four kinds of network effects - Explain?
A:
Positive same side effects
  • are positive benefits received by users when the number of the same kind increases
  • E.g. first telephone because first users had small network but with every additional user the others benefit due to more connections
  • Adobe with its PDF standard where producers benefits
Negative same side effects
  • Are negative externalities on users (reducing value) when the number of users of the same kind increases
  • E.g. on eBay because an increase of buyers (users) lead to negative effect on other buyers due to more competition 
Positive cross side effects
  • Occur when users benefit from an increase of the number of users on the other side of the market/platform e.g. Visa when more merchants (producers) agree to accept the Visa card, the flexibility and convenience (benefits) for the shoppers increases
  • Or positive feedback loop: On Paypal --> sellers attract buyers and buyers attract sellers. On Uber --> drivers attract riders and riders attract drivers
Negative cross side effects
  • Are negative externalities on users from an increase in the number of users on the other side of the platform/market
  • E.g. OkCupid dating site because cross-side effects are not necessarily symmetrical, therefore the tendency of men is to approach the most beautiful women which leads to wrong matching and women leaving the platform
  • Or on Chatroulette (negative feedback loop) where an increasing number of unfiltered hairy naked men led to the leaving of normal users, eventually the platform collapsed
Q:
How to deal with negative network effects on a two-sided market?
A:
The key is quality curation by which a platform filters, controls and limits the access of users to the platform, the activities they participate in and the connections they form with other users. Effectively curated, users find it easy to make matches that produce significant value for them
  • E.g. OkCupid implemented a curation strategy involving multiple levels of network matching where an algorithm allocates comparable matches in attractiveness which increases happiness on both sides eventually leading to positive network effects
  • Or Chatroulette effectively curated by providing users a filter tool and using algorithms to screen callers with undesirable images
Q:
How do network effects work as inhibitors of growth?
A:
  • At the beginning, network effects inhibit growth because an user is only adopting if others adopt but if others have not adopted yet, a new user doesn't adopt ("Chicken-Egg" - problem)
Q:
How do network effects work as facilitators of Lock-Ins?
A:
If a platform has already grown big, network effects lock-in their users because even if some users are not active anymore, they don't leave because the other users don't leave
Q:
Which types of interaction do platforms facilitate?
A:
Direct (one to one):
  • Exchange of value between users e.g. social networks
Indirect (one to many):
  • Platform establishes value exchange e.g. YouTube
                                                                               

  • Exchange of Information directly/indirectly through the platform e.g. eBay search results displaying goods available or Uber providing driver information.
  • Exchange of Goods and Services (value unit/core entity) e.g. within the platform: YouTube, Facebook , and outside of platform: Yelp, Uber
  • Exchange of Currency (payment) e.g. traditional currency like cash or via PayPal, Visa, Bitcoin and alternative currency like followers, influence, attention
Q:
What are key components of Core Interaction?
A:
  • Participants like consumers/producers (users can be both) --> AirBnb
  • Value Unit created by participants (eBay Product-Listing)
  • Filter as an algorithmic, software based tool which ensures that platform users receive only valuable, relevant value units through search query or search feed algorithm (AirBnb Big Data)

Core Interaction = Participants + Value Unit + Filters
  • Only with valuable core interaction the emergence of positive network effects is possible



Q:
Name 3 key events in historical e-commerce
A:
  • 1982: Standardization of TCP/IP (transmission control/internet protocol) which enabled communication between computers on the internet and is considered as a pocket-switching technology
  • 1993: Introduction of the Mosaic-Web-Browser (www.) which interlinks HTML pages that can be accessed over the Internet = helped to make the web much more usable
  • 2004: Web 2.0 as a series of technological improvements which enabled the two-way-internet and triggered the emergence of social media and platform business models
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