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14-1 Chapter 13 Creating Innovative Organizations 13-1.

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Presentation on theme: "14-1 Chapter 13 Creating Innovative Organizations 13-1."— Presentation transcript:

1 14-1 Chapter 13 Creating Innovative Organizations 13-1

2 14-2 LEARNING OUTCOMES 1.Compare disruptive and sustaining technologies and explain how the Internet and WWW caused business disruption 2.Describe Web 1.0 along with ebusiness and its associated advantages 13-2

3 14-3 DISRUPTIVE TECHNOLOGIES AND WEB 1.0 Digital Darwinism – Implies that organizations which cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction How can a company like Polaroid go bankrupt? 13-3

4 14-4 Disruptive versus Sustaining Technology What do steamboats, transistor radios, and Intel’s processors all have in common? –Disruptive technology – A new way of doing things that initially does not meet the needs of existing customers –Sustaining technology – Produces an improved product customers are eager to buy 13-4

5 14-5 Disruptive versus Sustaining Technology 13-5

6 14-6 Disruptive versus Sustaining Technology Innovator’s Dilemma discusses how established companies can take advantage of disruptive technologies without hindering existing relationships with customers, partners, and stakeholders 13-6

7 13-7 Disruptive Versus Sustaining Technology Companies that capitalized on disruptive technology

8 13-8 The Internet – Business Disruption One of the biggest forces changing business is the Internet Organizations must be able to transform as markets, economic environments, and technologies change

9 13-9 Evolution of the Internet The Internet began as an emergency military communications system operated by the US Department of Defense Gradually the Internet moved from a military pipeline to a communication tool for scientists to businesses

10 13-10 What is the Internet? - A world-wide network of computer networks (some are not computer at all, like network printers) TCP IP - Since 1982, all connections between computers use a low-level communication protocol called TCP( Transmission Control Protocol )/IP( Internet Protocol ) -TCP/IP hides the differences among devices connected to the Internet -In most cases a higher level protocol runs on top of TCP/IP

11 13-11 Internet network architecture

12 13-12 No one owns the Internet. It has no formal management organization.

13 14-13 The Internet and World Wide Web – The Ultimate Business Disruptors World Wide Web (WWW) – Provides access to Internet information through documents including text, graphics, audio, and video files that use a special formatting language called HTML – hypertext markup language Hypertext Transport Protocol (HTTP) – The Internet protocol Web browsers use to request and display Web pages using URL – universal resource locator or web address Web browser – Allows users to access the WWW 13-13

14 13-14 The Internet and World Wide Web The Ultimate Business Disruptors

15 13-15 Evolution of the Internet

16 13-16 Internet Growth Trends 1977: 111 hosts on Internet 1981: 213 hosts 1983: 562 hosts 1984: 1,000 hosts 1986: 5,000 hosts 1987: 10,000 hosts 1989: 100,000 hosts 1992: 1,000,000 hosts 2001: 150 – 175 million hosts 2002: over 200 million hosts 2004: over 800 million hosts 2010, about 80% of the planet are on the Internet

17 13-17 What is the difference between the Internet and the Web? The Internet is a physical network The World Wide Web is an Internet Application

18 13-18 Web or Internet? The Internet supports variety of protocols, but the most common one is HyperText Transfer Protocol (HTTP) There are several others application and protocols (telnet, FTP, mailto, file, news, VoIP etc.)

19 13-19 The WWW: What and How Like all Internet applications, WWW is fundamentally made up of two components: A Client (Web Browser) A Server (Web Server)

20 13-20 The Browser and The Server The original static model of Web Serving: The HyperText Transfer Protocol (HTTP) enables web pages to be requested and transferred between the browser and server Web Browser Web Server HTTP Request Web Page File System

21 13-21 Evolution of The World Wide Web File formats offered over the WWW

22 13-22 Web Browsers Web Browsers are clients - always initiate, servers react First browsers were text-based Mosaic - in early 1993 –First to use a Graphical User Interface (GUI), led to explosion of Web use Most common Web browsers are: MS Internet Explorer, Google Chrome, and Mozilla FireFox

23 13-23 Web Servers They are computers running programs that provide documents to requesting browsers. They are slave programs. Provide responses to browser requests, either existing documents or dynamically built documents The most commonly used Web servers are Apache, MS Internet Information Server (IIS) Other servers include FTP server, Telnet server, e- mail server.

24 14-24 Web 1.0 – The Catalyst For Ebusiness Web 1.0 – A term to refer to the WWW during its first few years of operation between 1991 and 2003 Ecommerce – Buying and selling of goods and services over the Internet Ebusiness – Includes ecommerce along with all activities related to internal and external business operations ( ex. Web- based CRM, SCM, ERP,…) 13-24

25 14-25 Web 1.0 – The Catalyst For Ebusiness The Internet has had an impact on almost every industry including –Travel (Travelocity) –Entertainment (iTunes) –Publishing (LuLu) –Financial services –Retail (Amazon) –Automobiles ( Auto-trader) –Education and training (Cisco) 13-25


27 13-27 Expanding Global Reach The Internet’s impact on information –Increased richness –Increased reach

28 13-28 Expanding Global Reach Richness: The amount and quality of information that a business can supply to and collected from customers Reach: Measure of how many people a business can connect and how many products it can offer those people. There are tradeoffs between Richness and Reach The Internet eliminates the tradeoff between richness and reach of information

29 13-29 Reach & Richness

30 14-30 Opening New Markets Intermediary – Agents, software, or businesses that provide a trading infrastructure to bring buyers and sellers together –Disintermediation –Reintermediation 13-30

31 14-31 Opening New Markets Disintermediation: the removal of organizations or business process layers 13-31

32 14-32 Reintermediation Reintermediation – using the Internet to reassemble buyers, sellers, and other partners in a traditional supply chain in new ways

33 INFORMATION X Reintermediation Reintermediation: The shifting of the intermediary role to a new source ( e.g. Information Brokers)Reintermediation: The shifting of the intermediary role to a new source ( e.g. Information Brokers) Auto Dealer Info Broker ( Consumer Auto Dealer Consumer

34 14-34 Generating revenue on the Internet –Online ad (banner ad) - Box running across a web page that contains advertisements –Pop-up ad - A small web page containing an advertisement –Associate program (affiliate program) - Businesses generate commissions or royalties (Google) –Viral marketing - A technique that induces websites or users to pass on a marketing message (Hotmail) 13-34

35 14-35 Measuring E-Business Success Most companies measure the traffic on a Web site as the primary determinant of the Web site’s success However, a large amount of Web site traffic does not necessarily equate to large sales Many organizations with high Web site traffic have low sales volumes

36 14-36 Measuring E-Business Success Web site traffic analysis can also include: –Clickstream Counts the number of users visited a website and clicked on an ad –Cookie Small file saved on local client machine sent by the business server

37 14-37 Measuring E-Business Success Clickstream data tracks the exact pattern of a consumer’s navigation through a Web site Clickstream data can reveal: –Number of page views –Pattern of Web sites visited –Length of stay on a Web site –Date and time visited –Number of customers with shopping carts –Number of abandoned shopping carts

38 14-38 Website Visitor Tracking

39 14-39 Opening New Markets Mass customization – The ability of an organization to tailor its products or services to the customers’ specifications Personalization – Occurs when a company knows enough about a customer’s likes and dislikes that it can fashion offers more likely to appeal to that person 13-39

40 14-40 Web Site Personalization

41 14-41 More web personalization

42 14-42 Interactive Marketing/Personalization How do web sites know it’s you? Answer: using a “cookie”

43 14-43 How a cookie works A cookie is a tiny file deposited on the user’s computer hard drive when an individual visits certain Web sites; used to identify the visitor and track visits to the Web sites.

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