Creating a Winning E-Business Second Edition

1. Creating a Winning E-BusinessSecond Edition Understanding E-Business Chapter 1

2. Learning Objectives • Discuss e-business basics • Describe the Internet and World Wide Web • Discuss the role of e-business in the global economy • List e-business advantages and disadvantages Creating a Winning E-Business Second Edition, Chapter 1

3. Learning Objectives (continued) • Explain e-business value chains and value activities • Identify e-business models Creating a Winning E-Business Second Edition, Chapter 1

4. E-Business Basics • E-commerce – Process of buying or selling goods or services across a telecommunications network • E-business – Widest spectrum of business activities using Internet and Web technologies • Many technologies facilitate e-business • Electronic funds transfer (EFT) • Electronic data interchange (EDI) • Internet / World Wide Web Creating a Winning E-Business Second Edition, Chapter 1

5. The Internet andWorld Wide Web • Network • Group of two or more computers • Linked by communication media • Cable • Telephone lines • Wireless connections • Networks servers • Give users access to shared network resources • Printers, files, telecommunication lines Creating a Winning E-Business Second Edition, Chapter 1

6. The Internet andWorld Wide Web (continued) Creating a Winning E-Business Second Edition, Chapter 1

7. The Internet andWorld Wide Web (continued) • Internet • A worldwide public network that connects private networks • Originated in the late 1960s as ARPANET • Managed by the National Science Foundation in the 1980s and early 1990s as NSFnet • Connected colleges, universities, and research centers • Commercial activity was prohibited until 1991 Creating a Winning E-Business Second Edition, Chapter 1

8. The Internet andWorld Wide Web (continued) • Internet (continued) • Replaced by commercial high-speed telecommunications backbones in 1995 • Individuals and SMBs connect via an Internet Service Provider (ISP) • Large businesses, colleges, and universities may have direct connection Creating a Winning E-Business Second Edition, Chapter 1

9. The Internet andWorld Wide Web (continued) Creating a Winning E-Business Second Edition, Chapter 1

10. The Internet andWorld Wide Web (continued) Creating a Winning E-Business Second Edition, Chapter 1

11. The Internet andWorld Wide Web (continued) Creating a Winning E-Business Second Edition, Chapter 1

12. The Internet andWorld Wide Web (continued) • World Wide Web (Web) • A subset of the Internet • Built on the concept of hypertext • System of linked pages called Web pages • Related Web pages are called a Web site • Viewed in a Web browser • Stored on Web servers • Millions of people around the world access the Internet and Web daily Creating a Winning E-Business Second Edition, Chapter 1

13. E-Business and theGlobal Economy • Widespread linking of individuals and businesses has changed global economy • Time and space are no longer limiting factors • Business value of information is greater • Information is more accessible • Traditional intermediaries have been replaced by new types of intermediaries Creating a Winning E-Business Second Edition, Chapter 1

14. E-Business and theGlobal Economy (continued) • Buyers are growing more powerful • Internet and Web access has changed buyers expectations • Information on competing products • Transaction speed and convenience Creating a Winning E-Business Second Edition, Chapter 1

15. E-Business and theGlobal Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

16. E-Business and theGlobal Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

17. E-Business and theGlobal Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

18. E-Business and theGlobal Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

19. E-Business and theGlobal Economy (continued) • Value chain or value network • Activities involved in the production of goods or services • Internet and Web technologies facilitate value chains and networks • Improve communication • Improve transaction speed • Internet and Web access allows businesses to rethink their value chains Creating a Winning E-Business Second Edition, Chapter 1

20. E-Business and theGlobal Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

21. E-Business and theGlobal Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

22. E-Commerce and E-Business • Electronic commerce is the use of technology, in particular the Internet, to conduct business • e-commerce generally refers to buying or selling electronically, usually interactively • e-business refers to conducting business activities, including business to business activities, using electronic communication • e-[you fill in the blank] Creating a Winning E-Business Second Edition, Chapter 1

23. E-COMMERCE TECHNOLOGIES • Will we see continued growth in e-commerce (Internet) applications? • Consider Metcalfe’s Law: The value of a network to each of its members is proportional to the number of other users, expressed as (n2 – n) / 2 • There are increasing returns to be gained as more organizations and people use the Web Creating a Winning E-Business Second Edition, Chapter 1 Page 240

24. The Nature of Markets • In a free market economy, transactions take place where the downward sloping demand curve intersects the upward sloping supply curve. • The intersection of these two curves determines both the price and the quantity sold Creating a Winning E-Business Second Edition, Chapter 1

25. Economics of E-Marketplaces Creating a Winning E-Business Second Edition, Chapter 1

26. Economics of E-Marketplaces Creating a Winning E-Business Second Edition, Chapter 1

27. Electronic Marketplaces What are the functions of markets? • matching buyers and sellers • facilitating the exchange of information, goods, services, and payments associated with market transactions • providing an institutional infrastructure, such as a legal and regulatory framework, that enables the efficient functioning of the market Creating a Winning E-Business Second Edition, Chapter 1

28. E-Business Models • Business models • How a company conducts business in order to generate revenue • Widespread access to the Internet and Web allows companies to adapt old models and create new ones • E-business models are often categorized by type of customer Creating a Winning E-Business Second Edition, Chapter 1

29. E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

30. E-Business Models (continued) • Business-to-consumer (B2C) • Retail sales (e-retail) including airline tickets, entertainment venue tickets, hotel rooms, stock purchases, diet and fitness programs • Brick-and-mortar companies are moving to brick-and click companies • Sears, Best Buy, Barnes & Noble, the Gap • Pure-play e-retailers and catalog merchants • Amazon.com, eBags, Harry and David Creating a Winning E-Business Second Edition, Chapter 1

31. E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

32. E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

33. E-Business Models (continued) • Business-to-business (B2B) • Businesses selling to other businesses • Online stores, such as Office Depot, Staples • Internet and Web technologies • Web hosting • Web design • Hardware and software • Consulting Creating a Winning E-Business Second Edition, Chapter 1

34. E-Business Models (continued) • Business-to-business (B2B) • Online trading communities for vertical markets • Exchanges, aggregators, auctions • Virtual marketspaces for buyers and sellers • Elance, ATLA Exchange, Business.com, HedgeHog Creating a Winning E-Business Second Edition, Chapter 1

35. E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

36. E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

37. E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

38. E-Business Models (continued) • Business-to-government (B2G) • Businesses provide a marketspace for other businesses and government agencies • Bidmain, B2GMarkets Creating a Winning E-Business Second Edition, Chapter 1

39. E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

40. E-Business Models (continued) • Consumer-to-consumer (C2C) • Consumers sell or exchange products and services directly with other consumers • Auctions, online classified ads, expert information exchanges • eBay, American Boat Listing, TraderOnline.com, AllExperts Creating a Winning E-Business Second Edition, Chapter 1

41. E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

42. E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

43. E-Business Models (continued) • Consumer-to-business (C2B) • Reverse auctions in which a single consumer names his or her own price for products or services • Consumer’s offer made to multiple businesses, which can accept or decline offer • Priceline.com Creating a Winning E-Business Second Edition, Chapter 1

44. E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

45. Online direct marketing Electronic tendering systems (e.g., reverse auction) Name your own price Affiliate marketing Viral marketing Group purchasing Online auctions Product and service customization customization Electronic marketplaces and exchanges Value-chain integrators Value-chain service providers Information brokers Bartering Deep discounting Membership Supply chain improvers Typical Business Modelsin EC Creating a Winning E-Business Second Edition, Chapter 1

46. Porter’s Competitive Forces Model: How the Internet Influences Industry Structure Creating a Winning E-Business Second Edition, Chapter 1

47. Organizational Hierarchy Business Team Organization Personal Computing Work-Group Computing Emphasis on the individual Emphasis on the group Designing Technology Redesigning the entire system Taylorism The new work reengineering Technical Users Direct support of all personnel Leadership for evolving work Installing Technology Summary of Work-Group Computing Shifts Creating a Winning E-Business Second Edition, Chapter 1

48. Islands of Technology • Technology is implemented to manage three resources: • Physical Assets • Human Resources • Financial Assets • What if they are not speaking to one another??? Creating a Winning E-Business Second Edition, Chapter 1

49. Problems With Enterprises that aren’t speaking… • Redundancy of Functionality • Miscommunications due to lack of integration • Poor quality customer service • Operational inefficiencies due to miscommunications and redundant processing • Internal Focus Creating a Winning E-Business Second Edition, Chapter 1

50. Problems With Enterprises that aren’t speaking… • Systems are perpetuated in order to treat operational symptoms without recognizing fundamental problems • Organizational conflict and ‘turf’ battles erupt due to the historical creation of data processing developing financial solutions, engineering developing physical assets, and administrative groups to manage human resources Creating a Winning E-Business Second Edition, Chapter 1