1 Managing Information Technology

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6. th. Edition. CHAPTER 8. E-BUSINESS SYSTEMS. 2. E-Business Systems. 3. E-Business Systems. Explosive growth in demand for e-business systems in the 1990s. Forecasts predict continued growth in e-business systems. ID: 274171 Download Presentation

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1 Managing Information Technology




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Managing Information Technology6th Edition

CHAPTER 8

E-BUSINESS SYSTEMS

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E-Business Systems

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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

Metcalfe’s Law is a possible theoretical reason for e-business growthBy this law, the network on the right has a value that is 15 times that of the network on the left.

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E-Business Systems

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E-Business Framework

IT Applications and services are built upon two types of pillarsLegal and Regulatory PillarTechnology Pillar

Figure 8.1

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E-Business Technologies

1994 1995 1996 1997 1998

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E-Business Technologies

1999 2000 2001 2002

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E-Business Technologies

Traditional B2B electronic commerce used EDI

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E-Business Technologies

XML provides the opportunity of lower-cost, flexible B2B transactions

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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>

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E-Business Technologies

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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E-Business Technologies

Legal and Regulatory Environment

Limited legal intervention

Tax policies

Sales taxes in US

Privacy issues

Antitrust laws

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E-Business Technologies

Digital signatures can be used to authenticate the message sender in digital transactions, much like an actual signature

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Strategic E-Business Opportunities (and Threats)

Porter’s 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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Strategic E-Business Opportunities (and Threats)

Opportunities due to the Internet:

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

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Strategic E-Business Opportunities (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 customer’s switching costs

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Strategic E-Business Opportunities (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 AuctionsSellers 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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Dot-com Intermediaries

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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Dot-com Intermediaries

Google

Leading online search engine

99% of revenue from targeted advertising

Growing through innovation and acquisition

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7 C’s

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Designing for mobile devices

Smaller displays

Limited attention of users

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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 © 2009 Pearson Education, Inc.  

Publishing as Prentice Hall

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