Information Management – Terms & Definitions
Chapter 1 – The revolution is just beginning
E-commerce The use of the Internet, the Web, and mobile apps and browsers running
on mobile devices to transact business. More formally, digitally enabled
commercial transactions between and among organizations and
individuals
E-business The digital enabling of transactions and processes within a firm, involving
information systems under the control of the firm
Internet Worldwide network of computer networks built on common standards
World Wide Web An information system running on Internet infra-structure that provides
access to billions of web pages
Mobile platform Provides the ability to access the Internet from a variety of mobile
devices such as smartphones, tablets, and other ultra-lightweight laptop
computers
Information asymmetry Any disparity in relevant market information among parties in a
transaction
Marketplace Physical space you visit in order to transact
Ubiquity Available just about every-where, at all times
Marketspace Marketplace extended beyond traditional boundaries and removed from
a temporal and geographic location
Reach The total number of users or customers an E-commerce business can
obtain
Universal standards Standards that are shared by all nations around the world
Richness The complexity and content of a message
Interactivity Technology that allows for two-way communication between merchant
and consumer
Information density The total amount and quality of information available to all market
participants
Personalization The targeting of marketing messages to specific individuals by adjusting
the message to a person’s name, interests, and past purchases
Customization Changing the delivered product or service based on a user’s preferences
or prior behavior
Business-to-consumer (B2C) e-commerce Changing the delivered product or service based on a user’s preferences
or prior behavior
Business-to-businesss (B2B) e-commerce Online businesses selling to other businesses
Consumer-to-consumer (C2C) e- Consumers selling to other consumers
commerce
Mobile e-commerce (M-commerce) Use of mobile devices to enable online transactions
Social e-commerce E-commerce enabled by social networks and online social relationships
Local e-commerce E-commerce that is focused on engaging the consumer based on his or
her current geographic location
Disintermediation Displacement of market middlemen who tradition-ally are intermediaries
between producers and consumers by a new direct relationship between
producers and consumers
Friction-free commerce A vision of commerce in which information is equally distributed, trans-
action costs are low, prices can be dynamically adjusted to reflect actual
demand, intermediaries decline, and unfair competitive advantages are
eliminated
First mover A firm that is first to market in a particular area and that moves quickly to
gather market share
,Network effect Occurs where users receive value from the fact that everyone else uses
the same tool or product
Web 2.0 Set of applications and technologies that enable user-generated content
Chapter 2 – E-Commerce Business Models and Concepts
Business model A set of planned activities designed to result in a profit in a marketplace
Business plan A document that describes a firm’s business model
E-commerce business model A business model that aims to use and leverage the unique qualities of
the Internet, the Web, and the mobile platform
Value proposition Defines how a company’s product or service fulfills the needs of
customers
Revenue model Describes how the firm will earn revenue, produce profits, and produce a
superior return on invested capital
Advertising revenue model A company provides a forum for advertisements and receives fees from
advertisers
Subscription revenue model A company offers its users content or services and charges a subscription
fee for access to some or all of its offerings
Freemium strategy Companies give away a certain level of product or services for free, but
then charge a subscription fee for premium levels of the product or
service
Transaction fee revenue model A company receives a fee for enabling or executing a transaction
Sales revenue model A company derives revenue by selling goods, information, or services
Affiliate revenue model A company steers business to an affiliate and receives a referral fee or
percentage of the revenue from any resulting sales
Market opportunity Refers to the company’s intended marketspace and the overall potential
financial opportunities available to the firm in that marketspace
Marketspace The area of actual or potential commercial value in which a company
intends to operate
Competitive environment Refers to the other companies operating in the same marketspace selling
similar products
Competitive advantage Achieved by a firm when it can produce a superior product and/or bring
the product to market at a lower price than most, or all, of its
competitors
Asymmetry Exists whenever one participant in a market has more resources than
other participants
First-mover advantage A competitive market advantage for a firm that results from being the
first into a marketplace with a serviceable product or service
Complementary resources Resources and assets not directly involved in the production of the
product but required for success, such as marketing, management,
financial assets, and reputation
Unfair competitive advantage Occurs when one firm develops an advantage based on a factor that
other firms cannot purchase
Perfect market A market in which there are no competitive advantages or asymmetries
because all firms have equal access to all the factors of production
Leverage When a company uses its competitive advantages to achieve more
advantage in surrounding markets
Market strategy The plan you put together that details exactly how you intend to enter a
new market and attract new customers
Organizational development Plan that describes how the company will organize the work that needs
to be accomplished
Management team Employees of the company responsible for making the business model
work
Seed capital Typically, an entrepreneur’s personal funds derived from savings, credit
card advances, home equity loans, or from family and friends
, Elevator pitch Short two-to-three minute presentation aimed at convincing investors to
invest
Incubators Typically provide a small amount of funding and also an array of services
to start-up companies
Angel investors Typically wealthy individuals or a group of individuals who invest their
own money in exchange for an equity share in the stock of a business;
often are the first outside investors in a start-up
Venture capital investors Typically invest funds they manage for other investors; usually later-stage
investors
Crowdfunding Involves using the Internet to enable individuals to collectively contribute
money to support a project
E-tailer Online retail store
Barriers to entry The total cost of entering a new marketplace
Community provider Creates an online environment where people with similar interests can
transact (buy and sell goods); share interests, photos, and videos;
communicate with like-minded people; and receive interest-related
information
Content provider Distributes information content, such as digital news, music, photos,
video, and artwork
Portal Offers users powerful search tools as well as an integrated package of
content and services all in one place
Transaction broker Processes transactions for consumers that are normally handled in
person, by phone, or by mail
Market creator Builds a digital environment where buyers and sellers can meet, display
products, search for products, and establish a price for products
Service provider Offers services online
E-distributor A company that supplies products and services directly to individual
businesses
E-procurement firm Creates and sells access to digital markets
B2B service provider Sells business services to other firms
Exchange An independent digital marketplace where suppliers and commercial
purchasers can conduct transactions
Industry consortia Industry-owned vertical marketplaces that serve specific industries
Private industrial network Digital network designed to coordinate the flow of communications
among firms engaged in business together
Industry structure Refers to the nature of the players in an industry and their relative
bargaining power
Industry structural analysis And describe the nature of competition in an industry, the nature of
substitute products, the barriers to entry, and the relative strength of
consumers and suppliers
Value chain The set of activitiesPerformed in an industry or in a firm that transforms
raw inputs into final products and services
Firm value chain The set of activities a firm engages in to create final products from raw
inputs
Value web Networked business ecosystem that coordinates the value chains of
several firms
Business strategy A set of plans for achieving superior long-term returns on the capital
invested in a business firm
Profit The difference between the price a firm is able to charge for its products
and the cost of producing and distributing goods
Differentiation Refers to all the ways producers can make their products or services
unique and different to distinguish them from those of competitors
Commoditization A situation where there are no differences among products or services,
and the only basis of choosing is price
