The Digital Firm: Electronic Business and Electronic Commerce by Prentice Hall

Transcription

1 The Digital Firm: Electronic Business and Electronic Commerce by Prentice Hall

2 Internet Technology and the Digital Firm Information technology infrastructure: The Internet 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 and streamlines processes by Prentice Hall

3 Internet Technology and the Digital Firm (Continued) Round the clock service: Web sites available to consumers 24 hours Extended distribution channels: Outlets created for attracting customers who otherwise would not patronize a firm Reduced transaction costs: Costs of searching for buyers declines by Prentice Hall

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 by Prentice Hall

5 The Changing Economies of Information Information asymmetry: One party in a transaction has more information than the other. The Internet decreases information asymmetry. Increases richness: The Internet increases the depth, detail, and scope of information. Increases reach: The Internet increases the number of people who can be contacted efficiently by Prentice Hall

6 The Changing Economics of Information Figure by Prentice Hall

7 Internet Business Models Virtual storefront: Sells goods or services online (Amazon.com) Information broker: Provides information on products or services (Edmunds.com) Transaction broker: Provides online transaction facility (etrade.com, Expedia.com) Online marketplace: Provides a trading platform for individuals and firms (ebay.com) by Prentice Hall

8 Internet Business Models (Continued) Content provider: Creates revenue by providing content (WSJ.com, TheStreet.com) Online service provider: Provides online services, including search service. (Google.com, Xdrive.com) Virtual community: Provides an online community to focused groups (Friendster.com, ivillage.com) Portal: Provides initial point of entry to Web, specialized content, services (Yahoo.com, MSN.com) by Prentice Hall

9 Categories of Electronic Commerce Business-to-customer (B2C): Retailing of products and services directly to individual customers (Wal-Mart.com) Business-to-business (B2B): Sales of goods and services to other businesses (Grainger.com, Ariba.com) Consumer-to-consumer (C2C): Individuals using the Web for private sales or exchange (ebay.com ) by Prentice Hall

10 Business-To-Consumer Advantages of E-commerce: Customer-centered retailing: Closer and more personalized relationship with customers is possible Web sites: Provide a corporate-centered portal for the consumer to quickly find information on products, services, prices, orders by Prentice Hall

11 Business-To-Consumer Advantages of E-Commerce: (Continued) Disintermediation: The elimination of organizations or business process layers responsible for certain intermediary steps in a value chain, reducing costs to the consumer Reintermediation: The shifting of the intermediary role in a value chain to a new source, adding additional value to the consumer by Prentice Hall

12 The Benefits of Disintermediation to the Consumer Figure by Prentice Hall

13 Interactive Marketing and Personalization Clickstream tracking tools: Collect data on customer activities at Web sites and store them in a log by Prentice Hall

14 Web Site Visitor Tracking Figure by Prentice Hall

15 Web Personalization Create unique personalized Web pages for each customer Increased closeness to customer increases value to the customer, while reducing costs of interacting with the customer by Prentice Hall

16 Web Site Personalization Figure by Prentice Hall

17 Collaborative filtering: Compares information gathered about a specific user s behavior at a Web site to data about other customers with similar interests to predict what the user would like to see next. The software then makes recommendations to users based on their assumed interests by Prentice Hall

18 Customer self-service: The use of Web sites to provide customers with access to information and answers to questions Replacing human call center operators and clerks UPS.com: Customer tracking of packages Orbitz.com: Customer self-help for organizing and managing a trip Dell.com: My Order Status facility by Prentice Hall

19 Business-to-Business Electronic Commerce: New Efficiencies and Relationships Electronic Data Interchange (EDI): Enables the computer-to-computer exchange between two organizations of standard transactions. Currently 80% of B2B e-commerce uses this system. EDI is being replaced by more powerful Webbased alternatives by Prentice Hall

20 Net Marketplaces (1) Four different types of Net Marketplaces: Distributors: B2B online catalogs provide buyers with access to thousands of parts and other goods (Grainger.com) Procurement platforms: Platforms for purchasing goods and materials and also sourcing, negotiating with suppliers, paying for goods, and making delivery arrangements (Ariba.com) by Prentice Hall

21 Net Marketplaces (2) Four different types of Net Marketplaces: (Continued) Independent exchanges: Third-party Net marketplace that is primarily transaction-oriented and that connects many buyers and suppliers for spot purchasing (Freemarkets.com, GEPolymerland.com) Industry consortia: Industry-owned Net marketplaces used primarily for long-term sourcing of direct inputs to production (ChemConnect.com) by Prentice Hall

22 Electronic Data Interchange (EDI) Figure by Prentice Hall

23 Private Industrial Networks The largest Web-based form of B2B commerce Private B2B extranets that focus on continuous business process coordination between a small group of companies for collaboration and supply chain management. Wal-Mart uses its own private network to coordinate more than 15,000 suppliers to its stores by Prentice Hall

24 A Private Industrial Network Figure by Prentice Hall

25 A Net Marketplace Figure by Prentice Hall

26 Electronic Commerce Payment Systems Credit cards Digital wallets The most common form of payment. $50 Limited customer liability. Electronic storage of I.D. and digital cash. Not widely used. Accumulated balance Used for micro payments. Similar to monthly telephone bills. Stored value Used for micro payments. Pre-payment of funds, debited on use. Smart Cards I.D. and credit information stored on a chip attached to a card. Used in Europe. Digital cash Electronic currency that can be transferred over the Web. Peer-to-Peer payment Interpersonal transfer of funds such as PayPal. Digital checking Electronic checks with digital signatures, used most often in B2B commerce. Electronic billing presentment and payment Used by consumers to pay bills online, provided by many banks by Prentice Hall

27 How Intranets Support Electronic Business Benefits Functional applications Good examples: CARE and Mitre Corporation by Prentice Hall

28 Benefits of Intranets Connectivity: Accessible from most computing platforms Can be tied to internal corporate systems and core transaction databases Platforms for interactive applications Scalable to larger or smaller computing platforms by Prentice Hall

29 Benefits of Intranets (Continued) Easy to use, universal standard Web interface Low start-up costs Richer, more responsive information environment than corporate manuals Reduced information distribution costs by Prentice Hall

30 Functional Applications of Intranets Finance and accounting Human resources Sales and marketing Manufacturing and production by Prentice Hall

31 Functional Applications of Intranets Figure by Prentice Hall

32 by Prentice Hall

33 by Prentice Hall

34 Business Process Integration The Internet and collaborative commerce: Collaborative commerce: When firms use the Internet to cooperate closely in the development, production, and distribution of products and services GE Plastics maintains an Intranet where its customers (selected fabricators) can find information on product design and new developments by Prentice Hall

35 Collaborative Commerce Figure by Prentice Hall

36 Management Opportunities: The Internet provides firms with extraordinary opportunities to develop new products and services, new distribution channels, new avenues for marketing and sales, and even entirely new business models by Prentice Hall

37 Management Challenges: Finding a successful Internet business model Organizational change challenges Trust, Security, and Privacy by Prentice Hall

38 Solution Guidelines: Determining how Internet technology can provide value for the business Managing business process changes Safeguarding security and privacy by Prentice Hall