Presentation on theme: "Internet & e-commerce. LEARNING OBJECTIVES Web 1.0 - Ebusiness – Disruptive Technologies and Web 1.0 – Advantages of Ebusiness – Ebusiness Models – The."— Presentation transcript:
Internet & e-commerce
LEARNING OBJECTIVES Web Ebusiness – Disruptive Technologies and Web 1.0 – Advantages of Ebusiness – Ebusiness Models – The Challenges of Ebusiness Web 2.0 – Business 2.0 – Web 2.0: Advantages of Business 2.0 – Networking Communities with Business 2.0 – Business 2.0 Tools for Collaborating – The Challenges of Business 2.0 Internet Basics
Disruptive Technologies 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 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
Examples GREAT BUSINESS DECISIONS – Edwin Land Develops the Polaroid Camera In 1937, Edwin Land started a company that made a polarizing plastic and named it Polaroid. The business boomed. Land was taking family pictures on his vacation in 1943 when his three-year-old daughter asked why they had to wait so long to see the developed photographs. Land was struck with the idea of combining the polarization technology with developing films. By 1950, Land had a camera that produced black-and-white images and by 1963, he released a camera that produced color pictures. The Polaroid camera took off and by the late 1960s, it was estimated that 50 percent of American households owned one.
If Polaroid executives had used Porter’s Five Forces analysis would they have discovered the threat of substitute products of the digital camera?
Disruptive Vs. Sustaining Technology
Innovator’s Dilemma: how established companies can take advantage of disruptive technologies without hindering existing relationships with customers, partners, and stakeholders
Disruptive Vs. Sustaining Technology
The Internet And World Wide Web The Ultimate Business Disruptors One of the biggest forces changing business is the Internet – A massive network that connects computers all over the world and allows them to communicate with one another Organizations must be able to transform as markets, economic environments, and technologies change Focusing on the unexpected allows an organization to capitalize on the opportunity for new business growth from a disruptive technology
Reasons for Growth of the WWW – Microcomputer revolution – Advancements in networking – Easy browser software – Speed, convenience, and low cost of – Web pages easy to create and flexible
What are the two primary reasons for growth of the WWW? Two events changed the history of the Internet On August 6, 1991 Tim Berners- Lee built the first website Marc Andreesen built and distributed Mosaic
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
WEB 1.0 – THE CATALYST FOR EBUSINESS The Internet has had an impact on almost every industry including – Travel – Entertainment – Electronics – Financial services – Retail – Automobiles – Education and training
Industry Business Changes Due to Technology Travel Travel site Expedia.com is now the biggest leisure-travel agency, with higher profit margins than even American Express. Thirteen percent of traditional travel agencies closed in 2002 because of their inability to compete with online travel. Entertainment The music industry has kept Napster and others from operating, but $35 billion annual online downloads are wrecking the traditional music business. U.S. music unit sales are down 20 percent since The next big entertainment industry to feel the effects of ebusiness will be the $67 billion movie business. Electronics Using the Internet to link suppliers and customers, Dell dictates industry profits. Its operating margins have risen from 7.3 percent in 2002 to 8 percent in 2003, even as it takes prices to levels where rivals cannot make money.
Financial services Nearly every public e-finance company left makes money, with online mortgage service Lending Tree growing 70 percent a year. Processing online mortgage applications is now 40 percent cheaper for customers. Retail Less than 5 percent of retail sales occur online. eBay is on track this year to become one of the nation’s top 15 retailers, and Amazon.com will join the top 40. Wal-Mart’s ebusiness strategy is forcing rivals to make heavy investments in technology. Automobiles The cost of producing vehicles is down because of SCM and Web-based purchasing. eBay has become the leading U.S. used-car dealer, and most major car sites are profitable. Education and training Cisco saved $133 million last year by moving training sessions to the Internet, and the University of Phoenix online college classes please investors.
Advantages Of Ebusiness
Expanding Global Reach The Internet’s impact on information – Easy to compile – Increased richness – Increased reach – Improved content
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
Opening New Markets Intermediary – Agents, software, or businesses that provide a trading infrastructure to bring buyers and sellers together – Disintermediation: eliminate intermediaries – Reintermediation: add values to the chain – Cybermediation: new kinds of intermediary
Business Value of Disintermediation
Improving Effectiveness Clickstream data tracks the exact pattern of a consumer’s navigation through a website Clickstream data can reveal – Number of page views – Pattern of websites visited – Length of stay on a website – Date and time visited – Number of customers with shopping carts – Number of abandoned shopping carts
Marketing/Sales 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 – Viral marketing - A technique that induces websites or users to pass on a marketing message
Improving Effectiveness Website metrics include – Visitor metrics – Exposure metrics – Visit metrics – Hit metrics
EBUSINESS FORMS Common ebusiness forms – Content providers – Informediaries – Online marketplaces – Portals – Service providers – Transaction brokers