Creating a Winning E-BusinessSecond Edition

Understanding E-Business

Chapter 1

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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

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Learning Objectives (continued)

Explain e-business value chains and value

activities

Identify e-business models

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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

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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

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The Internet andWorld Wide Web (continued)

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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

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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

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The Internet andWorld Wide Web (continued)

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The Internet andWorld Wide Web (continued)

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The Internet andWorld Wide Web (continued)

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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

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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

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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

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E-Business and the Global Economy (continued)

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E-Business and theGlobal Economy (continued)

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E-Business and theGlobal Economy (continued)

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E-Business and theGlobal Economy (continued)

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E-Business and theGlobal Economy (continued)

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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

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E-Business and theGlobal Economy (continued)

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E-Business and theGlobal Economy (continued)

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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

E-Business Models

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E-Business Models (continued)

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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

E-Business Models (continued)

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E-Business Models (continued)

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E-Business Models (continued)

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E-Business Models (continued)

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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

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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

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E-Business Models (continued)

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E-Business Models (continued)

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E-Business Models (continued)

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E-Business Models (continued)

Business-to-government (B2G)– Businesses provide a marketspace for other

businesses and government agencies

– Bidmain, B2GMarkets

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E-Business Models (continued)

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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

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E-Business Models (continued)

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E-Business Models (continued)

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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

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E-Business Models (continued)

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Chapter Summary

E-business – Conducting a broad spectrum of business activities over a telecommunications network

Internet – A worldwide public network that connects private networks

World Wide Web – A subset of the Internet Time, space, and geographic location no longer

limiting factors

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Chapter Summary(continued)

Buyers are growing more powerful Businesses are rethinking their value chains Business model – The way a company conducts

its activities in order to generate revenue Businesses are adapting old business models

and creating new ones E-business models – B2C, B2B, B2G, C2C, C2B