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THE DIGITAL FIRM: ELECTRONIC COMMERCE AND ELECTRONIC BUSINESS

THE DIGITAL FIRM: ELECTRONIC COMMERCE AND ELECTRONIC BUSINESS. Internet Technology and The Digital Firm. Information technology infrastructure: Provides a universal and easy-to-use set of technologies and technology standards that can be adopted by all organizations

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THE DIGITAL FIRM: ELECTRONIC COMMERCE AND ELECTRONIC BUSINESS

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  1. THE DIGITAL FIRM: ELECTRONIC COMMERCE AND ELECTRONIC BUSINESS

  2. Internet Technology and The Digital Firm • Information technology infrastructure: Provides a universal and easy-to-use set of technologies and technology standards that can be adopted by all organizations • Direct communication between trading partners: Disintermediation removes intermediate layers, streamlines process

  3. Internet Technology and the Digital Firm • Round-the-clock service: Web sites available to consumers 24 hours a day • Extended distribution channels: Outlets created for attracting customers who otherwise would not patronize • Reduced transaction costs: Costs of searching for buyers, sellers, etc. reduced

  4. New Business Models and Value Propositions Business Model: • Defines an enterprise • Describes how the enterprise delivers a product or service • Shows how the enterprise creates wealth

  5. The Changing Economies of Information • Information asymmetry: One party in a transaction has more information than the other • Increases richness: Depth and detail of information • Increases reach: Number of people contacted

  6. Internet Business Models • Information broker: Provide info on products, pricing, etc. • Transaction broker: Buyers view rates, terms from various sources • OnlineMarketplace: Concentrates information from several providers • Content provider: Creates revenue through providing client for a fee, and advertising

  7. Internet Business Models • On-line service provider: Provides service, support for hardware, software products • Virtual community: Chat room, on-line meeting place • Portal: Initial point of entry to Web, specialized content, services • Virtual storefront: Sells goods, services on-line

  8. Internet Business Models • Syndicator: Aggregate information from several sources sold to other companies • Auction: Electronic clearinghouse products, prices, change in response to demand • Dynamic pricing: real-time interactions betweenbuyers and sellersdetermine worth of items • Banner ad: Graphic advertising display, linked to the advertiser’s Web site

  9. ELECTRONIC COMMERCE Categories of Electronic Commerce • Business-to-customer (B2C): Retailing of products and services directly to individual customers • Business-to-business (B2B): Sales of goods and services among businesses • Consumer-to-consumer (C2C): Individuals use Web for private sales or exchange

  10. ELECTRONIC COMMERCE Business-To-Consumer • Customer-centered retailing: Closer, yet more cost-effective relationship with customers • Web sites: Provide information on products, services, prices, orders

  11. ELECTRONIC COMMERCE Business-To-Consumer • Disintermediation:The removal of organizations or business process layers responsible for certain intermediary steps in a value chain • Reintermediation:The shifting of the intermediary role in a value chain to a new source

  12. Cost/ Sweater Distributor Retailer Manufacturer Customer $48.50 $40.34 Manufacturer Retailer Customer Manufacturer $20.45 Customer ELECTRONIC COMMERCE Benefits of Disintermediation to the Consumer

  13. ELECTRONIC COMMERCE Interactive Marketing and Personalization • Web personalization: • Benefits of using individual sales people • Dramatically lower costs

  14. ELECTRONIC COMMERCE M-Commerce and Next Generation Marketing • Mobile commerce (m-commerce): • Wireless devices used to conduct both business-to-consumer and business-to-business e-commerce transactions over the Internet • Extend personalization by delivering new value-added services directly to customers at any time and place

  15. ELECTRONIC COMMERCE Customer Personalization

  16. ELECTRONIC COMMERCE Business-To-Business Electronic Commerce • Automation of purchase, sale transactions from business to business • Private industrial networks: Coordination between companies for efficient supply chain management and collaborative activities • Electronic hubs: On-line marketplaces, point-to-point connections, integrated information

  17. ELECTRONIC COMMERCE A Private Industrial Network

  18. ELECTRONIC COMMERCE A Net Marketplace

  19. ELECTRONIC COMMERCE • Exchanges: Third-party net marketplace • Primarily transaction oriented • Connects buyers and suppliers for spot purchasing

  20. ELECTRONIC COMMERCE Electronic Commerce Payment Systems

  21. ELECTRONIC COMMERCE Electronic Commerce Information Flows

  22. ELECTRONIC BUSINESS AND THE DIGITAL FIRM How Intranets Support Electronic Business • Benefits • Functional applications • Supply chain management

  23. ELECTRONIC BUSINESS AND THE DIGITAL FIRM Benefits of Intranets • Connectivity: accessible from most computing platforms • Can be tied to internal corporate systems and core transaction databases • Can create interactive applications • Scalable to larger or smaller computing platforms

  24. ELECTRONIC BUSINESS AND THE DIGITAL FIRM Benefits of Intranets • Easy-to-use, universal Web interface • Low start-up costs • Richer, more responsive information environment • Reduced information distribution costs

  25. ELECTRONIC BUSINESS AND THE DIGITAL FIRM Functional Applications of Intranet • Finance and accounting • Human resources • Sales and marketing • Manufacturing and production

  26. ELECTRONIC BUSINESS AND THE DIGITAL FIRM Functional Applications of Intranets

  27. MANGEMENT CHALLENGES & OPPORTUNITIES • Unproven business models • Business process change requirements • Channel conflicts • Legal issues • Security and privacy

  28. TELECOMMUNICATIONS AND NETWORKS

  29. THE TELECOMMUNICATIONS REVOLUTION • Telecommunications: Communication of information by electronic means • The marriage of computers and communications: The 1996 Telecommunications Deregulation and Reform Act • The Information Superhighway: High-speed digital telecommunications networks, accessible by the general public

  30. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Telecommunications System Components • Computers to process information • Terminals or any input/output devices that send or receive data • Communications processors • Communications software

  31. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Components of a Telecommunications System

  32. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Functions of Telecommunications Systems • Transmit information • Establish interface between sender and the receiver • Route messages along most efficient paths • Perform elementary processing of information • Perform editorial tasks on data • Convert message speed or format • Control flow of information

  33. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Types of Signals: Analog and Digital Analog signal • Continuous waveform • Passes through communications medium • Used for voice communications

  34. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Types of Signals: Analog and Digital Digital signal • Discrete waveform • Transmits data coded into two discrete states as 1-bits and 0-bits • Used for data communications Modem • Translates computer’s digital signals into analog and vice versa

  35. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Functions of the Modem

  36. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Communications Channels • Twisted wire:Telephone systems • Coaxial cable:Cable television • Fiber optics and optical networks:Dense wave division multiplexing (DWDM)

  37. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Communications Channels • Wireless transmission: Microwave, Satellites, Paging systems, Cellular telephones, Personal communication Services, Personal digital assistants, Mobile data networks • Transmission: Baud, bandwidth

  38. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Frequency Ranges for Communications Media and Devices

  39. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Amoco’s Satellite Transmission System

  40. COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Communications Processors and Software • Front-end processor: Manages communications for the host computer • Concentrator: Collects and temporarily stores messages • Controller: Supervises communication traffic • Multiplexer: Enables single communication channel to carry data transmissions

  41. COMMUNICATIONS NETWORKS Network Topologies • Star Network: All computers and other devices are connected to a central host computer • Bus Network: Links a number of computers by a single circuit • Ring Network: All computers are linked by a closed loop

  42. COMMUNICATIONS NETWORKS A Star Network Topology

  43. COMMUNICATIONS NETWORKS A Bus Network Topology

  44. COMMUNICATIONS NETWORKS A Ring Network Topology

  45. COMMUNICATIONS NETWORKS Private Branch Exchanges, Local Area Networks (LANs), and Wide Area Networks (WANs) Private Branch Exchanges • Central switching system • Handle firm’s voice and digital communications

  46. COMMUNICATIONS NETWORKS Private Branch Exchanges, Local Area Networks (LANs), and Wide Area Networks (WANs) Local Area Networks • Telecommunication network • Require its own dedicated channels • Encompass a limited distance • Gateway, router, Network Operating System (NOS), peer-to-peer

  47. COMMUNICATIONS NETWORKS A Local Area Network (LAN)

  48. COMMUNICATIONS NETWORKS Private Branch Exchanges, Local Area Networks (LANs), and Wide Area Networks (WANs) Wide Area Networks (WANs) • Telecommunication network • Span large geographical distance • Consist of variety of cable, satellite, and microwave technologies • Switched lines, dedicated lines

  49. COMMUNICATIONS NETWORKS Network Services and Broadband Technologies Value-Added Networks (VANs) • Private, multipath, data-only, third-party-managed network Other Network Services • Packet switching, Frame Relay, Asynchronous transfer mode (ATM) • Integrated Services Digital Network (ISDN), Digital subscriber line (DSL), Cable modems, T1 line, Broadband

  50. COMMUNICATIONS NETWORKS Packed-Switched Networks and Packet Communications

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