電子商務(wù)課件(英文版)

ElectronicManagementSchoolofTJNU

1ElectronicManagementSchooloChapter1IntroductiontoElectronicCommerceEC2EC2ContentsofChapter1ECElectronicCommerce:TheSecondWave1BusinessModels,RevenueModels,andBusinessProcesses2EconomicForcesandElectronicCommerce3IdentifyingElectronicCommerceopportunities4InternationalNatureofElectronicCommerce53ContentsofChapter1ECEleLearningObjectives:Inthischapter,youwilllearnabout:(1)Whatelectroniccommerceisandhowitisexperiencingasecondwaveofgrowthwithanewfocusonprofitability

(2)Whycompaniesnowconcentrateonrevenuemodelsandtheanalysisofbusinessprocessesinsteadofbusinessmodelswhentheyundertakeelectroniccommerceinitiatives(3)Howeconomicforceshavecreatedabusinessenvironmentthatisfosteringthesecondwaveofelectroniccommerce

(4)HowbusinessesusevaluechainsandSWOTanalysistoidentifyelectroniccommerceopportunities

(5)TheinternationalnatureofelectroniccommerceandthechallengesthatariseinengaginginelectroniccommerceonaglobalscaleEC4LearningObjectives:Inthisch1.1ElectronicCommerce:TheSecondWaveEC5EC5Fromhumblebeginningsinthemid-1990s,electroniccommercegrewrapidlyuntil2000,whenamajordownturnoccurred.Manypeoplehaveseennewsstoriesaboutthe“dot-comboom”followedbythe“dot-comburst”orthe“dot-bomb.”Inthe2000to2003period,manyindustryobserverswerewritingobituaries(訃告)forelectroniccommerce.Justastheunreasonableexpectationsforimmediatesuccessfueledthehighexpectationsduringtheboomyears,overlygloomynewsreportscoloredperceptionsduringthistime.Beginningin2003,withthegeneraleconomystillinthedoldrums,electroniccommercebegantoshowsignsofnewlife.Companiesthathadsurvivedthedownturnwerenotonlyseeinggrowthinsalesagain,butmanyofthemwereshowingprofits.Althoughtherapidexpansionandhighlevelsofinvestmentoftheboomyearsarenotlikelytoberepeated,thesecondwaveofelectroniccommerceiswellunderway.6FromhumblebeginningsintheContentsElectroniccommerceandElectronicbusiness12ECCategoriesofElectronicCommerce3TheDevelopmentandGrowthofE-Commerce45Thedot-comboom,bust,andrebirthTheSecondWaveofElectronicCommerce7ContentsElectroniccommerceanElectronicCommerce:

TheSecondWave(cont.)1ElectroniccommerceandElectronicbusinessECElectronicbusiness(e-business)-broadersenseTermusedinterchangeablywithe-commerceThetransformationofkeybusinessprocessesthroughtheuseofInternettechnologies（IBM’sdefinition）Electroniccommerce(e-commerce)-narrowersenseshoppingonthepartoftheInternetcalledtheWorldWideWeb(theWeb).alsoincludesmanyotheractivities,suchasbusinessestradingwithotherbusinessesandinternalprocessesthatcompaniesusetosupporttheirbuying,selling,hiring,planning,andotheractivities.BusinessactivitiesconductedusingelectronicdatatransmissionovertheInternetandtheWorldWideWeb.8ElectronicCommerce:

TheSeco2CategoriesofElectronicCommerceBusiness-to-business(B2B):請看中國新能源網(wǎng)2)Businessprocesses:見ElementofElectronicCommerce3)Business-to-consumer(B2C):請看當(dāng)當(dāng)網(wǎng)(B2C)Fivegenerale-commercecategories4)Business-to-government(B2G):請看握奇信安網(wǎng)(B2G)ElectronicCommerce:

TheSecondWave(cont.)EC5)Consumer-to-consumer(C2C):請看淘寶網(wǎng)(C2C)mostcommonlyused92CategoriesofElectronicCGlossaryActivityataskperformedbyaworkerinthecourseofdoinghisorherjobTransactionAnexchangeofvaluesuchasapurchase,asale,ortheconversionofrawmaterialsintoafinishedproductAtransactionalwayshasoneormoreactivitiesassociatedwithit,butanactivitymightnotberelatedtoatransaction.BusinessprocessesThegroupoflogical,related,andsequentialactivitiesandtransactionsinwhichbusinessesengageEg.Thebusinessprocessofshippinggoodstocustomers:inspectingthegoods,packingthegoods,negotiatingwithafreightcompanytodeliverthegoods,creatingandprintingtheshippingdocuments,loadingthegoodsontothetruck,sendingachecktothefreightcompany.TelecommutingorteleworkEmployeeslogintocompanycomputersthroughtheInternetinsteadoftravelingtotheoffice.10GlossaryActivity10CategoriesofElectronicCommerceThethreecategoriesthataremostcommonlyusedare:ConsumershoppingontheWeb,oftencalledbusiness-to-consumer(orB2C)TransactionsconductedbetweenbusinessesontheWeb,oftencalledbusiness-to-business(orB2B,sometimescallede-procurement)Transactionsandbusinessprocessesinwhichcompanies,governments,andotherorganizationsuseInternettechnologiestosupportsellingandpurchasingactivities11CategoriesofElectronicCommeEXAMPLEConsideracompanythatmanufacturesstereospeakers.ThecompanymightsellitsfinishedproducttoconsumersontheWeb(B2C).ItmightalsopurchasethematerialsitusestomakethespeakersfromothercompaniesontheWeb(B2B).Thecompanymustalsoundertakemanyotheractivitiestoconvertthepurchasedmaterialsintospeakers.Theseactivitiesmightinclude:hiringandmanagingthepeoplewhomakethespeakers,rentingorbuyingthefacilitiesinwhichthespeakersaremadeandstored,shippingthespeakers,maintainingaccountingrecords,purchasinginsurance,developingadvertisingcampaigns,designingnewversionsofthespeakers.AnincreasingnumberofthesetransactionsandbusinessprocessescanbedoneontheWeb.Manufacturingprocesses(suchasthefabricationofthespeakers)canbecontrolledusingInternettechnologieswithinthebusiness.12EXAMPLEConsideracompanythat13131414ClassificationofECbyTransactionsorInteractions（fromTurban）business-to-consumer(B2C):onlinetransactionsaremadebetweenbusinessesandindividualconsumersbusiness-to-business(B2B):businessesmakeonlinetransactionswithotherbusinesses

e-tailing:

onlineretailing,usuallyB2Cconsumer-to-business(C2B):

e-commercemodelinwhichindividualsusetheInternettosell

productsorservicestoorganizationsorindividualsseeksellerstobid

onproductsorservicestheyneedconsumer-to-consumer(C2C):

e-commercemodelinwhichconsumersselldirectlytootherconsumers15ClassificationofECbyTransaClassificationofECbyTransactionsorInteractions(cont.)mobilecommerce(m-commerce):

e-commercetransactionsandactivitiesconductedinawirelessenvironmentintrabusinessEC:

e-commercecategorythatincludesallinternalorganizationalactivitiesthatinvolvetheexchangeofgoods,services,orinformationamongvariousunitsandindividualsinanorganizationbusiness-to-employees(B2E):

e-commercemodelinwhichanorganizationdeliversservices,information,orproductstoitsindividualemployees16ClassificationofECbyTransaClassificationofECbyTransactionsorInteractionscollaborativecommerce(c-commerce):

e-commercemodelinwhichindividualsorgroupscommunicateorcollaborateonlinee-learning:

theonlinedeliveryofinformationforpurposesoftrainingoreducatione-government:e-commercemodelinwhichagovernmententitybuysorprovidesgoods,services,orinformationtobusinessesorindividualcitizens*17ClassificationofECbyTransaElectronicCommerce:

TheSecondWave(cont.)EC3TheDevelopmentandGrowthofElectronicCommerce(1)Electronicfundstransfers(EFTs)(電子資金轉(zhuǎn)賬)AlthoughtheWebhasmadeonlineshoppingpossibleformanybusinessesandindividuals,inabroadersense,electroniccommercehasexistedformanyyears.Formorethan30years,bankshavebeenusingelectronicfundstransfers.AlsocalledwiretransfersElectronictransmissionsofaccountexchangeinformationoverprivatecommunicationsnetworks

18ElectronicCommerce:

TheSeco(2)Electronicdatainterchange(EDI)(電子數(shù)據(jù)交換)Businessesalsohavebeenengaginginatypeofelectroniccommerce,knownaselectronicdatainterchange,formanyyears.Transmittingcomputer-readabledatainastandardformattoanotherbusinessBycreatingasetofstandardformatsfortransmittingthatinformationelectronically,businesseswereabletoreduceerrors,avoidprintingandmailingcosts,andeliminatetheneedtoreenterthedata.ThestandardformatsusedinEDIcontainthesameinformationthatbusinesshavealwaysincludedintheirstandardpaperinvoices,purchaseorders,andshippingdocuments. (cont.)ElectronicCommerce:

TheSecondWave(cont.)19(2)ElectronicdatainterchangElectronicdatainterchange(EDI)TradingpartnersBusinessesthatengageinEDIwitheachotherOneseriousproblemthatpotentialadoptersofEDIfacedwasthehighcostofimplementation.TouseEDI:buyingexpensivecomputerhardwareandsoftware;establishingdirectnetworkconnectionstoalltradingpartnersorsubscribingtoaVAN.Value-addednetwork(VAN)Independentfirmthatoffersconnectionandtransaction-forwardingservicestobuyersandsellersengagedinEDI20Electronicdatainterchange(EElectronicCommerce:

TheSecondWave(cont.)EC4Thedot-comboom,bust,andrebirthBetween1997and2000,morethan12,000internet-relatedbusinesseswerestartedwithmorethan$100billionofinvestors’money(Dot-ComBoom).Morethan5000ofthesecompanieswentoutofbusinessorwereacquiredinthedownturnthatbeganin2000(Dot-ComBust).Between2000and2003:morethan$200billionwasinvestedinpurchasingelectroniccommercebusinessesthatwereintroubleandstartingnewonlineventures.Thissecondwaveoffinancialinvestmenthasnotbeenreportedextensivelyineitherthegeneralorbusinessmedia,butitisfuelingarebirthofgrowthinonlinebusinessactivity(Dot-ComRebirth).21ElectronicCommerce:

TheSecoElectronicCommerce:

TheSecondWave(cont.)EC5TheSecondWaveofElectronicCommerceEconomistsChrisFreemanandFranciscoLou??describefourwavesthatoccurredintheIndustrialRevolutionintheirbookAsTimeGoesBy.ManyresearcherspredictthatelectroniccommerceandtheinformationrevolutionbroughtaboutbytheInternetwillgothroughsimilarwaves.Thoseresearchersagreethatthesecondwaveofelectroniccommercehasbegun22ElectronicCommerce:

TheSecoTheSecondWaveofElectronicCommerce（continued)Secondwave:GlobalenterprisesinmanycountriesareparticipatinginelectroniccommerceManyECwebsitesavailableinmultiplelanguagesEstablishedcompaniesfundelectroniccommerceinitiativeswiththeirowncapitalRapidlyincreasinguseofbroadbandtechnologiesforinternetconnectionsB2BECincreasinglyareintegratedwithradio-frequencyidentification(RFID)

andbiometric

devicestomanageinformationandproductflowseffectivelyUseofmultiplesophisticatedadvertisingapproachesandbetterintegrationofECwithexistingbusinessprocessesandstrategiesNewapproachestothesaleanddistributionofdigitalproductsCustomizede-mailstrategiesarenowintegraltocustomercontactRealizethatfirst-moveradvantageleadstosuccessonlyforsomecompaniesincertainspecificmarketsandindustriesthefirstwave:DominantinfluenceofU.S.businessesExtensiveuseoftheEnglishlanguageManynewcompaniesstartedwithoutsideinvestormoneyManyECparticipantsusedslowinternetconnectionsB2BECreliedonapatchworkofdisparatecommunicationandinventorymanagementtechnologiesUnstructureduseofe-mailOver-relianceonsimpleformsofonlineadvertisingasarevenuesourceWidespreadpiracy

duetoineffectivedistributionofdigitalproductsRelyonfirst-moveradvantagetoensuresuccessinalltypesofmarketsandindustries23TheSecondWaveofElectronicNotallofthefutureofECisbasedinit’ssecondwave.Someofthefirstwavecompaniesweresuccessful,suchasA,eBay,andYahoo.ThesecondwaveofECwillprovidenewopportunitiesforthesebusiness.P13TheSecondWaveofElectronicCommerce(continued)*24NotallofthefutureofECis1.2BusinessModels(交易模式),RevenueModels(盈利模式),BusinessProcesses(交易流程)EC25EC25BusinessmodelAsetofprocessesthatcombinetoyieldaprofitAgoodbusinessmodelwasexpectedtoleadtorapidsalesgrowthandmarketdominance.Theideathatthekeytosuccesswassimplytocopythebusiness

modelofasuccessfuldot-combusinessledthewaytomanybusinessfailures,someofthemquitedramatic.

HarvardBusinessSchoolprofessorMichaelPorter,arguedthatbusinessmodelsnotonlydidnotmatter,theyprobablydidnotexist.copyingoradaptingsomeoneelse’sbusinessmodelisneitheraneasynorwiseroadmaptosuccess.Instead,companiesshouldexaminetheelementsoftheirbusiness;thatis,theyshouldidentifybusinessprocessesthattheycanstreamline,enhance,orreplacewithprocessesdrivenbyInternettechnologies.26BusinessmodelAsetofprocessRevenuemodelRevenuemodelAspecificcollectionofbusinessprocessesusedto:IdentifycustomersMarkettothosecustomersGeneratesalestothosecustomersTherevenuemodelideaishelpfulforclassifyingrevenuegeneratingactivitiesforcommunicationandanalysispurposes.27RevenuemodelRevenuemodel271.2.1RoleofMerchandisingMerchandising（零售推銷）Combinationofstoredesign,layout,andproductdisplayknowledgeInaddition,manysalespeoplehavedevelopedskillsthatallowthemtoidentifycustomerneedsandfindproductsorservicesthatmeetthoseneeds.Theskillsofmerchandisingandpersonalsellingcanbedifficulttopracticeremotely.However,companiesmustbeabletotransfertheirmerchandisingskillstotheWebfortheirWebsitestobesuccessful.SomeproductsareeasiertosellontheInternetthanothersbecausethemerchandisingskillsrelatedtothoseproductsareeasiertotransfertotheWeb.281.2.1RoleofMerchandisingMer29291.2.2Product/ProcessSuitabilitytoElectronicCommerceCommodityitem（日用品、商品）HardtodistinguishfromthesameproductsorservicesprovidedbyothersellersIt‘sfeatureshavebecomestandardizedandwellknownGasoline,officesupplies,soap,computers,andairlinetransportationareallexamplesofcommodityproductsorservices,asarethebooksandCDssoldbyA.wellsuitedtoelectroniccommerce301.2.2Product/ProcessSuitabilProduct/ProcessSuitabilitytoElectronicCommerce(continued)Shippingprofile

CollectionofattributesthataffecthoweasilyaproductcanbepackagedanddeliveredHighvalue-to-weightratioCanhelpbymakingoverallshippingcostasmallfractionofthesellingpriceAnairlineticketisanexcellentexampleofanitemthathasahighvalue-to-weightratio.Expensivejewelryhasahighvalue-to-weightratio,butmanypeoplearereluctanttobuyitwithoutexaminingitinpersonunlessthejewelryissoldunderawell-knownbrandnameandwithagenerousreturnpolicy.Aproductthathasastrongbrandidentity—suchasaKodakcamera—iseasiertosellontheWebthananunbrandeditem,becausethebrand’sreputationreducesthebuyer’sconcernsaboutqualitywhenbuyingthatitemsightunseen.Otheritemsthatarewellsuitedtoelectroniccommercearethosethatappealtosmall(銷量不大),butgeographicallydispersedgroupsofcustomers.Collectiblecomicbooksareanexampleofthistypeofproduct.31Product/ProcessSuitabilitytoWhenpersonalsellingskillsareafactor,asincommercialrealestatesales,orwhentheconditionoftheproductsisdifficulttodeterminewithoutmakingapersonalinspection,asinpurchasesofhigh-fashionclothing,antiques,orperishablefoodproducts,traditionalcommerceoracombinationoftraditionalcommerce(fortheinspection)andelectroniccommercecanbeabetterwaytoselltheitemsorservices.Acombinationofelectronicandtraditionalcommercestrategiesworksbestwhenthebusinessprocessincludesbothcommodityandpersonalinspectionelements.ManypeoplearefindinginformationontheWebaboutnewandusedautomobiles.Autobytelhashadmuchsuccesshandlingnewcartransactions.PeoplearewillingtotakedeliveryofaparticularmakeandmodelofanewvehicleeveniftheydidnottestdrivethespecificcartheyarepurchasingthroughAutobytel.Fewerpeoplearewillingtobuyausedcarwithoutdrivingthatspecificcarandpersonallyinspectingit.Inthecaseofusedcars,electroniccommerceprovidesagoodwayforbuyerstoobtaininformationaboutavailablemodels,features,reliability,prices,anddealerships;butthevariability（可變性）intheconditionofusedcarsmakesthetraditionalcommercecomponentofpersonalinspectionakeypartofthetransactionnegotiation.32Whenpersonalsellingskillsa1.2.3AdvantagesofE-CommerceAlltheadvantagesofelectroniccommerceforbusinessescanbesummarizedinonestatement:ElectroniccommercecanincreasesalesanddecreasecostsIfadvertisingisdonewellontheWeb,itcangetafirm’spromotionalmessageouttopotentialcustomersineverycountryAfirmcanuseelectroniccommercetoreachsmallgroupsofcustomersthataregeographicallyscattered.TheWebisparticularlyusefulincreatingvirtualcommunitiesthatbecomeidealtargetmarketsforspecifictypesofproductsorservices.virtualcommunity

is

agatheringofpeoplewhoshareacommoninterest,butinsteadofthisgatheringoccurringinthephysicalworld,ittakesplaceontheInternet.Usinge-commercesalessupportandorder-takingprocesses,abusinesscan:ReducecostsofhandlingsalesinquiriesProvidepricequotesdetermineproductavailability331.2.3AdvantagesofE-CommerceAdvantagesofE-Commerce（continued)Advantages:Electroniccommerceprovidesbuyerswithawiderrangeofchoicesthantraditionalcommerce.Electroniccommerceprovidesbuyerswithaneasywaytocustomizethelevelofdetailintheinformationtheyobtainaboutaprospectivepurchase.BuyerscanhaveinstantaccesstodetailedinformationontheWeb.Somedigitalproducts,suchassoftware,musicandvideofiles,orimages,canevenbedeliveredthroughtheInternet,whichreducesthetimebuyersmustwaittobeginenjoyingtheirpurchases.Theabilitytodeliverdigitalproductsonlineisnotjustacost-reductionopportunity.Itcanincreasesales,too.Electronicpaymentsoftaxrefunds,publicretirement,andwelfare

supportcostlesstoissueandarrivesecurelyandquicklywhentransmittedovertheInternet.Electronicpaymentscanbeeasiertoauditandmonitorthanpaymentsmadebycheck,providingprotectionagainstfraudandtheftlosses.Electroniccommercecanalsomakeproductsandservicesavailableinremoteareas.34AdvantagesofE-Commerce（cont1.2.4DisadvantagesofECSomebusinessprocessesmayneverlendthemselvestoelectroniccommerce.PerishablefoodsHigh-cost,uniqueitemssuchascustom-designedjewelry(impossibletoinspectadequatelyfromaremotelocation)351.2.4DisadvantagesofECSomeDisadvantages:Return-on-investment

isdifficulttocalculate.Costs,whichareafunction（函數(shù)）oftechnology,canchangedramaticallyevenduringshort-livedelectroniccommerceimplementationprojectsbecausetheunderlyingtechnologiesarechangingsorapidly.Manyfirmshavehadtroublerecruitingandretainingemployees

withthetechnological,design,andbusinessprocessskillsneededtocreateaneffectiveelectroniccommercepresence.Difficultyofintegratingexistingdatabasesandtransaction-processingsoftwaredesignedfortraditionalcommerceintothesoftwarethatenableselectroniccommerce.Althoughanumberofcompaniesoffersoftwaredesignandconsultingservicesthatpromisetotieexistingsystemsintonewonlinebusinesssystems,theseservicescanbeexpensive.Manybusinessesfaceculturalandlegalobstaclestoconductingelectroniccommerce.1.2.4DisadvantagesofEC36Disadvantages:Return-on-invesQuickQuizThegroupoflogical,related,andsequentialactivitiesandtransactionsinwhichbusinessesengageareoftencollectively

referredtoas().()occurswhenonebusinesstransmitscomputer-readabledatainastandardformattoanotherbusiness.BusinessesthatengageinEDIwitheachotherarecalled().Thecombinationofstoredesign,layout,andproductdisplayknowledgeiscalled().37QuickQuizThegroupoflogical1.3EconomicForcesandElectronicCommerce3838Contents:1.3.2TheroleofElectronicCommerce1.3.3NetworkEconomicStructures1.3.1TransactionCosts1.3.4NetworkEffects39Contents:1.3.2TheroleofElEconomicForcesEconomicsisthestudyofhowpeopleallocatescarceresources.2waysofresourcesallocating:Oneimportantwaythatpeopleallocateresourcesisthroughcommercetheothermajorwayisthroughgovernmentactions,suchastaxesorsubsidiesManyeconomistsareinterestedinhowpeopleorganizetheircommerceactivities.OnewaypeopledothisistoparticipateinmarketsTwoconditionsofamarket:PotentialsellersofagoodcomeintocontactwithpotentialbuyersAmediumofexchangeisavailable(currencyorbarter).40EconomicForcesEconomics40Mosteconomistsagreethatmarketsarestrongandeffectivemechanismsforallocatingscarceresources.Thus,onewouldexpectmostbusinesstransactionstooccurwithinmarkets.However,muchbusinessactivitytodayoccurswithinlargehierarchicalbusinessorganizations,whicheconomistsgenerallyrefertoasfirms,orcompanies.Theselargefirmsoftenconductmanydifferentbusinessactivitiesentirelywithintheorganizationalstructureofthefirmandparticipateinmarketsonlyforpurchasingrawmaterialsandsellingfinishedproducts.EconomicForces41MosteconomistsagreethatmarIfmarketsareindeedhighlyeffectivemechanismsforallocatingscarceresources,theselargecorporationsshouldparticipateinmarketsateverystageoftheirproductionandvalue-generationprocesses.Nobellaureate（戴桂冠的人）

RonaldCoasewroteanessayin1937inwhichhequestionedwhyindividualswhoengagedincommerceoftencreatedfirmstoorganizetheiractivities.Hewasparticularlyinterestedinthehierarchicalstructureofthesebusinessorganizations.Coaseconcludedthattransactioncostswerethemainmotivationformovingeconomicactivityfrommarketstohierarchicallystructuredfirms.EconomicForces42Ifmarketsareindeedhighlye1.3.1TransactionCostsTransactioncostsarethetotalcoststhatabuyerandsellerincurastheygatherinformationandnegotiateapurchase-saletransaction.Significantcomponentsoftransactioncosts:CostofinformationsearchandacquisitionbrokeragefeesandsalescommissionsInvestmentofthesellerinequipmentorinthehiringofskilledemployeestosupplyproductsorservicestothebuyer431.3.1TransactionCostsTransaHowtransactioncostsoccurinmarkets?44HowtransactioncostsoccurinMarketsandHierarchiesThepracticeofanexistingfirmreplacingoneormoreofitssuppliermarketswithitsownhierarchicalstructureforcreatingthesuppliedproductiscalledverticalintegration(垂直統(tǒng)一管理).45MarketsandHierarchiesThepraMarketsandHierarchiesOliverWilliamson:Industrieswithcomplexmanufacturingandassemblyoperationstendedtoincludemanyfirmsthatusedhierarchicalstructuresandthatweresubstantially

verticallyintegrated.Manyofthemanufacturingandadministrativeinnovationsthatoccurredinbusinessesduringthe20thcenturyincreasedtheefficiencyandeffectivenessofhierarchicalmonitoringactivities.Assemblylinesandothermassproductiontechnologiesallowedworktobebrokendownintosmall,easilysupervisedprocedures.Theadvent

ofcomputersbroughttremendousincreasesintheabilityofupper-levelmanagerstomonitorandcontrolthedetailedactivitiesoftheirsubordinates.

46MarketsandHierarchiesOliverMarketsandHierarchiesDuringtheyearsfromtheIndustrialRevolutionthroughthepresent,thesizeandlevelofverticalintegrationoffirmshaveincreased.Insomeverylargeorganizations,however,monitoringsystemshavenotkeptpacewiththeorganization’sincreaseinsize.Thishascreatedproblemsbecausetheeconomicviability（生存能力）ofafirmdependsonitsabilitytotrackoperationalactivitieseffectivelyatthelowestlevelsofthefirm.Thesefirmshaveinstituteddecentralizationprogramsthatallowbusinessunitstofunctionasseparateorganizations,negotiatingtransactionswithotherbusinessunitsasiftheywereoperatinginamarketratherthanaspartofthesamefirm.47MarketsandHierarchiesDuringMarketsandHierarchiesAstrategicbusinessunit,orsimplybusinessunit,isoneparticularcombinationofproduct,distributionchannel,andcustomertype.Exceptionstothegeneraltrendtowardhierarchiesdoexist.Manycommodities,suchaswheat,sugar,andcrudeoil,arestilltradedinmarkets.Thecommoditynatureoftheproductstradedinthesemarketssignificantlyreducestransactioncosts.Therearealargenumberofpotentialbuyersforanagriculturalcommoditysuchaswheat,andthefarmerdoesnotmakeanyspecialinvestmentincustomizingormodifyingtheproductforaparticularcustomer.Thus,neitherbuyersnorsellersincommoditymarketsexperiencesignificanttransactioncosts.48MarketsandHierarchiesAstrat

1.3.2UsingElectronicCommerceto

ReduceTransactionCostsBusinessesandindividualscanuseelectroniccommercetoreducetransactioncostsby:ImprovingtheflowofinformationIncreasingcoordinationofactionsReducingthecostofsearchingforpotentialbuyersandsellersincreasingthenumberofpotentialmarketparticipants491.3.2UsingElectronicCommer

UsingElectronicCommercetoReduceTransactionCostsConsideranemploymenttransaction.Theemployee’stransactioncostsincludeacommitment

toforego

otheremploymentandcareerdevelopmentopportunities.Individualsmakeahighinvestmentinlearningandadaptingtothecultureoftheiremployers.Ifacceptingthejobinvolvesamove,theemployeecanincurveryhighcosts,includingactualcostsofthemoveandrelatedcosts,suchasthelossofaspouse’sjob.Muchoftheemployee’sinvestmentisspecifictoaparticularjobandlocation;theemployeecannottransfertheinvestm