Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 7-1 MANAGING INFORMATION TECHNOLOGY 7 th EDITION CHAPTER 7 E- BUSINESS SYSTEMS

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 7-1

MANAGING INFORMATION TECHNOLOGY7th EDITION

CHAPTER 7

E- BUSINESS SYSTEMS


SOME DEFINITIONS.

E-Business Systems Enable the electronic transmission of business transactions or other related information between a buyer and seller

Dot-Com (pure-play)A business that conducts business solely through their Web site (single channel)

Bricks and Clicks (click-and-mortar)A company that uses Internet sales as an additional channel to an offline business (multichannel)


SOME DEFINITIONS.

InternetA worldwide network of networks, accessible to the public, that employs the TCP/IP protocol

Intranet A private network operating within an organization that employs the TCP/IP protocol, to provide information, applications, and other tools for use by the organization’s employees

Extranet A portion of a company’s private intranet that is accessible via the internet to authorized organizations that are business partners (such as customers or suppliers)


E-BUSINESS GROWTH

• Metcalfe’s Law is a theoretical explanation for continued e-business growth

• Metcalfe’s Law: The value of a network to each of its members is proportional to the number of other connected users in the network

• By this law, the network on the right has a value that is 15 times that of the network on the left


E-BUSINESS FRAMEWORK

Internet Applications and Services are built upon two types of pillars

TECHNOLOGY PILLAR

LEGAL AND REGULATORY PILLAR


LEGAL AND REGULATORY ENVIRONMENT

Environmental influences on Internet growth:

• Sales tax policies- For example: Sales taxes in U.S. at State level, but “location”

of purchase not clear via Internet and federal government chose not to implement an Internet sales tax

• Laws to protect Individual Privacy

• Antitrust laws


E-BUSINESS TECHNOLOGIES: FIRST DECADE.


E-BUSINESS TECHNOLOGIES

• Pre-Internet B2B electronic commerce used EDI

EDI (Electronic Data Interchange): Proprietary applications for communicating with trading partners based on agreed-upon standards for business document transmission



• XML enables B2B electronic commerce via the Internet

XML (Extensible Markup Language): A markup language standard to facilitate data interchange across applications on the Web

XML specification: Tags to convey the meaning of data


XML EXAMPLE.

<?xml version="1.0" ?> <NetworkTypes>

<type visibility="public"> <name>Internet</name> <definition>

A worldwide network of networks, accessible to the public, that employs the TCP/IP protocol

</definition> </type>

<type visibility="private"> <name>Intranet</name> <definition>

A private network operating within an organization that employs the TCP/IP protocol, to provide information, applications, and other tools (such as

collaboration tools), for use by the organization’s employees</definition>

</type><type visibility="private">

<name>Intranet</name> <definition>

A private network that is a portion of a company’s Intranet, which is made accessible (normally over the Internet) to business partners outside of the

company (such as customers or suppliers)</definition>

</type> </NetworkTypes>



• The availability of broadband increased user access to different types of file content from their homes



• Digital Signatures

Used to authenticate the sender of a digital message

Digital Signature: A type of asymmetric cryptography that provides message authentication by utilizing a public-private key pair


STRATEGIC E-BUSINESS OPPORTUNITIES (AND THREATS)

• Porter’s Competitive Forces Model can be used to assess the opportunities and threats on pre-existing companies due to the influence of the Internet


STRATEGIC E-BUSINESS OPPORTUNITIES (AND THREATS)

• Examples of potential Internet opportunities for existing companies:

- Procurement of supplies via Internet can increase company’s power over suppliers

- Size of potential market is expanded

- Distribution channels between traditional company and customer can be eliminated


STRATEGIC E-BUINESS OPPORTUNITIES (AND THREATS)

• Examples of threats to existing companies:

- Migration to price competition – difficult to keep offerings proprietary

- Increased number of potential competitors

- Internet reduces some traditional barriers (such as in-person sales force)

- Customers increase their bargaining power – Internet reduces customer’s switching costs


THE DOT-COM MELTDOWN

• E-business changes after the “dot-com meltdown”


B2B APPLICATIONS

• If buyers and sellers are fragmented markets, Independent intermediaries are more likely to be needed


B2B APPLICATIONS

• If sellers are concentrated, sellers are likely to dominate


B2B APPLICATIONS

• If buyers are concentrated, buyers are likely to dominate


B2B APPLICATIONS-

• Reverse Auctions

Suppliers bid online in real time for a customer contract. They lower their prices to out bid their competitors.


INTERNET USAGE ACROSS THE GLOBE.


B2C APPLICATIONS

• Benefits to Sellers

Seller Benefits:

• 24/7 access to customer for sales and support• Lower costs from online channel• Multimedia opportunities for marketing• New ways to research potential markets• New ways to distribute (if product/service can be digitized)• Global reach to buyers

Fig 7.9: Potential B2C benefits to Sellers


B2C APPLICATIONS FOR RETAILERS

• Dot-com

- Amazon.com

- Netflix.com

• Traditional Catalog

- Dell

- Lands’ End

• Traditional Store

- Staples

- Tesco


DOT-COM RETAILERS

• AMAZON

• Dot-com pioneer in online retailing of third-party products• Began as bookseller• Superior online shopping experiences for millions of customers

• By 1999: Competitor to Wal-Mart• 2003: First year profitable• 2007: Proprietary E-Book reader (Kindle)• 2008: Most popular shopping site worldwide

AMAZON

http://www.amazon.com/


DOT-COM RETAILERS

• NETFLIX

- Established in 1998- DVD rentals mailed to members

- 2007: Proprietary video streaming

- 2010: Greater market share than Blockbuster

Netflix

http://www.netflix.com/Default?mqso=80026981


CATALOG RETAILERS

• DELL

- Traditional direct seller- Early market leader of made-to-order PCs

- Developed custom software to support “mass customization” strategy

- Took advantage of early Internet-savvy users

- By 2010: Increased focus on Business customers

DELL

http://www.netflix.com/

http://www.dell.com/


CATALOG RETAILERS

• LANDS’ END

- Traditional catalog seller

- Developed capability for online sales of custom–crafted clothing

- Acquired by Sears in 2002

Landsend.com

http://www.landsend.com/


STORE RETAILERS

• STAPLES

- Superstore retailer of office products

- Launched online site in 1998

- Web site designed for online order efficiency

- By 2006: 25% of revenues from online sales; world’s largest office products company

Staples

http://www.staples.com/


STORE RETAILERS

• TESCO

- Grocery supermarket, based in England- Launched online site after Y2K

- Delivery challenges due to perishable goods

- By 2009: One of four successful multichannel grocery retailers in the world

TESCO

http://www.tesco.com/


DOT-COM INTERMEDIARIES

• eBay

- Launched in 1995- Pioneer in electronic auctions (C2C)- Evolved to also be B2C and B2B intermediary- One of first dot-com’s to achieve profitability

- By 2000: 80% of online auctions worldwide- 2003: purchased PayPal for payment capability

eBay

http://www.ebay.com/



• Google

- Founded in 1998 by Stanford University students

- Leading online search engine- Current world leader in online advertising revenues

- 2010: Renewed compromise agreement with China for censorship compliance

Google

http://www.google.com/



• Facebook

- Founded in 2004 by Harvard students- Social Networking site- Major challenge: User privacy versus revenue

- By 2010: 70% of users were outside of the U.S.- In 2010: Somewhat fictional account of startup days became

award-winning movie

Facebook

http://www.facebook.com/


WHAT MAKES A GOOD WEBSITE FOR CONSUMERS.CContext: Site layout and design - functionally vs. aesthetically dominant or both (integrated)

Content: Text, pictures, sound, and video that Web site contains, including dominant “store types”

Commerce: Site’s capabilities to enable commercial transactions - functional tools and pricing

Community: Ways that the site utilizes user-to-user communication to enable feelings of membership and shared common interests

Connection: Extent to which the site is linked to other sites

Customization: Site’s ability to tailor itself to different users or to allow users to personalize the site


WHAT MAKES A GOOD B2C SOCIAL MEDIA PLATFORM

.

• Capabilities to: Brand the company or its products/servicesSupport for sales and customer servicesLeverage consumers for product development and

marketing

• Usage goals aligned with business strategy

• Providing users control over their privacy settings


COPYRIGHT

• Copyright notice

• All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or

transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or

otherwise, without the prior written permission of the publisher. Printed in the United States of

America.

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Documents

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 7-1 MANAGING INFORMATION TECHNOLOGY 7 th EDITION CHAPTER 7 E- BUSINESS SYSTEMS