Mit6e Ch08 by Firli

8/6/2019 Mit6e Ch08 by Firli

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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 1

Managing Information Technology

6th Edition

CHAPTER 8

E-BUSINESS SYSTEMS


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E-Business Systems

Enable the electronic transmission of business transactions or otherrelated information between a buyer and seller

E-business systems

A business that conducts business solely through their Web site(single channel)

Dot-com (pure-play)

A company uses Internet sales as an additional channel to an offlinebusiness (multichannel)

Bricks-and-clicks (click-and-mortar)


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E-Business Systems

Explosive growth in demand for e-business

systems in the 1990s

Forecasts predict continued growth in e-business systems


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E-Business Systems Metcalfes Law is a possible theoretical reason for e-business growth

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

the network on the left.

The value of a network to each of its members is

proportional to the number of other users,expressed as (n2 - n)/2

Metcalfes Law


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E-Business Systems

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

Internet

A private network operating within an organization that employs theTCP/IP protocol, to provide information, applications, and other tools(such as collaboration tools), for use by the organizations employees

Intranet

A private network that is a portion of a companys Intranet, which is madeaccessible (normally over the Internet) to business partners outside of thecompany (such as customers or suppliers)

Extranet


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E-Business Framework

IT Applications and services are built upon two

types of pillars

Legal and Regulatory Pillar

Technology Pillar Figure 8.1


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E-Business Technologies

Browser

Web content(without

interactivity)

SearchEngines,Agents

PushTechnology,Java Applets

Portal, Credit

CardProcessing

1994 1995 1996 1997 1998


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Customization,Tracking

XML, DigitalSignature, Peer-to-Peer

Broadband DSLand CableModems

WirelessApplications forHandhelds

1999 2000 2001 2002


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Traditional B2B electronic commerce used EDI

Proprietary applications forcommunicating with trading partners

based on agreed-upon standards forbusiness document transmission

EDI (Electronic Data Interchange)


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XML provides the opportunity of lower-cost,

flexible B2B transactions

standard in which additional infor ation,

such as structure, can be added to data todata through the use of custo izableele ents

XML (Extensible Markup Language)


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XML Example

Internet

A 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 (such as

collaboration tools), for use by the organizations employees

Intranet

A private network that is a portion of a companys Intranet, which is made

accessible (normally over the Internet) to business partners outside of the company

(such as customers or suppliers)


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While XML does provide some advantages

over traditional EDI, many large retailers are

still using EDI for business transactions

Wal-Mart still requires suppliers to use EDI


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Legal and Regulatory Environment

Limited legal intervention

Tax policies Sales taxes in US

Privacy issues

Antitrust laws


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Digital signatures can be used to authenticate

the message sender in digital transactions,

much like an actual signature

A type of asymmetric cryptography thatprovides message authentication by utilizinga public-private key pair

Digital Signature


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Strategic E-Business Opportunities

(and Threats)

Porters Competitive Forces Model can be

used to assess the opportunities and threats

due to the influence of the Internet


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Figure 8.4


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(and Threats)

Opportunities due to the Internet:

Procurement of supplies via Internet can increase

companys power over suppliers

Size of potential market is expanded

Distribution channels between traditional

company and customer can be eliminated


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(and Threats)

Threats to traditional companies due to the

Internet:

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 customers switching costs


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(and Threats)

Since the dot-com meltdown e-business has

changed in many ways

Figure 8.5


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B2B Applications

If buyers and sellers are fragmented,

Independent Intermediaries are likely to be

successful

Figure 8.6


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B2B Applications

If sellers are concentrated, sellers are likely to

dominate

Figure 8.6


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B2B Applications

If buyers are concentrated, buyers are likely to

dominate

Figure 8.6


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B2B Applications

B2B Intermediaries

Converge

Virtual Chip Exchange

Alibaba.com


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B2B Applications

Reverse Auctions

Sellers sequentially lower their bid to provide

goods to a single buyer Figure 8.3


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Internet Statistics

Figure 8.7


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Internet Statistics

Figure 8.8


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B2C Applications

Dot-com retailers

Amazon.com

Netflix

Traditional Catalog Retailers

Dell

Lands End

Traditional Store Retailers Staples

Blockbuster


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Dot-Com Retailers

Amazon Dot-com pioneer in online retailing of third-party products

Began as bookseller competitor

Now a multi-store, online mall

First profitable year 2003

Provides excellent online shopping experiences for millions

of customers


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Dot-Com Retailers

Netflix

Relatively late pure-play

Online movie rental business

Social recommendation system


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Catalog Retailers

Dell

Traditional direct seller and market leader of

made-to-order PCs

Developed custom software to support mass

customization strategy

Took advantage of early penetration of Internet

market Moved to multichannel (partnering with Wal-

Mart) after losing market share to HP


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Catalog Retailers

Lands End

Traditional catalog company

Developed capability for customers to make

orders for new custom clothing via its Web site


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Store Retailers

Staples

Traditional office products retailer

Built separate Web sites for business procurement

Focuses on efficiency, not aesthetic appeal

By 2006, over 25% of revenues were e-business


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Store Retailers

Blockbuster

Traditional retail movie rental business

Added online rentals like Netflix

Late in adding multichannel

In 2007, purchased Movielink to add online

download service


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Dot-com Intermediaries

eBay

A dot-com pioneer in electronic auctions

One of first dot-coms to achieve profitability

Purchased PayPal in 2003 for payment capability

Risks with transactions

Now is a C2C, B2B, and B2C intermediary


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Autobytel

A dot-com pioneer as intermediary between

automotive dealers and buyers

Provides leads to dealerships

Fills niche created by US state laws which prohibit

manufacturers to sell cars directly to consumers


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Google

Leading online search engine

99% of revenue from targeted advertising

Growing through innovation and acquisition


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What makes a good web site?Special Issue

7 Cs

Sites layout and designfunctionally vs. aesthetically dominant orboth (integrated)Context

Text, pictures, sound, and video that Web site contains, includingdominant store typesContent

Sites capabilities to enable commercial transactionsfunctionaltools and pricingCommerce

Ways that the site utilizes user-to-user communication to enablefeelings of membership and shared common interestsCommunity

Extent to which the site is linked to other siteslinks out and inConnection

Sites ability to tailor itself to different users or to allow users topersonalize the siteCustomization


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What makes a good web site?Special Issue

Designing for mobile devices

Smaller displays

Limited attention of users


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mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

Copyright 2009 Pearson Education, Inc.Publishing as Prentice Hall

Mit6e Ch08 by Firli

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