The Digital Firm: Electronic Business and Electronic Commerce 4.1 2006 by Prentice Hall
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. 4.2 2006 by Prentice Hall
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 4.3 2006 by Prentice Hall
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 4.4 2006 by Prentice Hall
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. 4.5 2006 by Prentice Hall
The Changing Economics of Information Figure 4-1 4.6 2006 by Prentice Hall
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) 4.7 2006 by Prentice Hall
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) 4.8 2006 by Prentice Hall
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 ) 4.9 2006 by Prentice Hall
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 4.10 2006 by Prentice Hall
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 4.11 2006 by Prentice Hall
The Benefits of Disintermediation to the Consumer Figure 4-2 4.12 2006 by Prentice Hall
Interactive Marketing and Personalization Clickstream tracking tools: Collect data on customer activities at Web sites and store them in a log 4.13 2006 by Prentice Hall
Web Site Visitor Tracking Figure 4-3 4.14 2006 by Prentice Hall
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 4.15 2006 by Prentice Hall
Web Site Personalization Figure 4-4 4.16 2006 by Prentice Hall
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. 4.17 2006 by Prentice Hall
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 4.18 2006 by Prentice Hall
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. 4.19 2006 by Prentice Hall
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) 4.20 2006 by Prentice Hall
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) 4.21 2006 by Prentice Hall
Electronic Data Interchange (EDI) Figure 4-5 4.22 2006 by Prentice Hall
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. 4.23 2006 by Prentice Hall
A Private Industrial Network Figure 4-6 4.24 2006 by Prentice Hall
A Net Marketplace Figure 4-7 4.25 2006 by Prentice Hall
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. 4.26 2006 by Prentice Hall
How Intranets Support Electronic Business Benefits Functional applications Good examples: CARE and Mitre Corporation 4.27 2006 by Prentice Hall
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 4.28 2006 by Prentice Hall
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 4.29 2006 by Prentice Hall
Functional Applications of Intranets Finance and accounting Human resources Sales and marketing Manufacturing and production 4.30 2006 by Prentice Hall
Functional Applications of Intranets Figure 4-8 4.31 2006 by Prentice Hall
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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. 4.39 2006 by Prentice Hall
Collaborative Commerce Figure 4-9 4.40 2006 by Prentice Hall
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. 4.41 2006 by Prentice Hall
Management Challenges: Finding a successful Internet business model Organizational change challenges Trust, Security, and Privacy 4.42 2006 by Prentice Hall
Solution Guidelines: Determining how Internet technology can provide value for the business Managing business process changes Safeguarding security and privacy 4.43 2006 by Prentice Hall