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McGraw-Hill-Ryerson©2015 The McGraw-Hill Companies, All Rights Reserved Opening Case: Pinterest: Billboards for the Internet.

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Presentation on theme: "McGraw-Hill-Ryerson©2015 The McGraw-Hill Companies, All Rights Reserved Opening Case: Pinterest: Billboards for the Internet."— Presentation transcript:

1 McGraw-Hill-Ryerson©2015 The McGraw-Hill Companies, All Rights Reserved Opening Case: Pinterest: Billboards for the Internet

2 5-2 Copyright © 2015 McGraw-Hill Ryerson Limited Chapter Five Overview SECTION 5.1 – BUSINESS & THE INTERNET – Introduction – Web 1.0: Disruptive Technology – The Internet and World Wide Web—Business Disruptors – E-Business Basics – Advantages of E-Business – E-Business Models – Organizational Strategies for E-Business – E-Business Benefits and Challenges SECTION 5.2 – WEB 2.0 & BEYOND – Web 2.0 – The Future—Web 3.0 – Accessing Internet Information – New Trends in E-Business: E-Government & M-Commerce

3 5-3 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcomes 1.Explain the differences between disruptive technologies and sustaining technologies. 2.Explain how the Internet and the World Wide Web have evolved over the years and disrupted traditional ways of doing business. 3.Describe how an organization’s various departments can use e-business to increase revenues or reduce costs, and how organizations can measure e-business success. 4.Compare the four types of e-business models. 5.Describe the benefits and challenges of Web 2.0, and the new trends happening in e-business today.

4 McGraw-Hill-Ryerson©2015 The McGraw-Hill Companies, All Rights Reserved BUSINESS AND THE INTERNET

5 5-5 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome How can a company like Polaroid go bankrupt? 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 opens new markets and destroys old ones Sustaining Technologies – Provides improved products in an established market Web 1.0: Disruptive Technology 5.1

6 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-6 Disruptive versus Sustaining Technologies 5.1 Figure 5.1 Expected Returns on Disruptive and Sustaining Technologies

7 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-7 Disruptive versus Sustaining Technologies 5.1 Figure 5.2 Companies That Capitalized on Disruptive Technologies CompanyDisruptive Technology AppleiPod, iPhone, iPad Charles SchwabOnline brokerage Hewlett-PackardMicroprocessor-based computers, inkjet printers IBMMinicomputers and personal computers IntelLow-end microprocessors IntuitDigitized accounting software MicrosoftOperating system software OracleDatabase software SonyTransistor-based consumer electronics

8 5-8 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome ARPANET – A bomb-proof communications network – Operated by the U.S. Department of Defense & academia – Difficult to access and operate Internet – Global public network of computer networks – Data is transmitted by use of Protocols: standards specifying format and transmission rules World Wide Web – Global communications application using the Internet – Uses HTTP protocol to link resources anywhere on the Internet The Internet & the World Wide Web 5.2

9 5-9 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome No one entity operates the Internet Setting Standards and Guidelines Internet Engineering Task Force (IETF) – Protocol Engineering and Development Internet Architecture Board (IAB) – Defines the configuration of the Internet infrastructure – Provides broad directions to the IETF Internet Engineering Steering Group (IESG) – Technical management of IETF and Internet standards process Guiding the Internet 5.2

10 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-10 Disruptive versus Sustaining Technologies 5.2 Figure 5.3 World Internet Growth and Penetration

11 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-11 Mobile Penetration 5.2 See Figure 5.4 World Mobile Broadband Subscriptions Penetration & Growth

12 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-12 Mobile Penetration 5.2 See Figure 5.4 World Mobile Broadband Subscriptions Penetration & Growth

13 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-13 Internet as a Business Disruptor See Figure 5.5 for more details E-Business Changes Due to Technology IndustryBusiness Changes Due to Technology AutoAutoTrader.ca is Canada’s largest used car market. PublishingLulu.com provides self-publishing Education & TrainingEducation is moving on-line. 50% of doctors will be maintaining their skills through on-line training. EntertainmentBillions of downloads from music sites. Television series and movies streamed through HULU and Netflix. RetailOn-line annual compound growth at 10%. TravelBy mid-2013, 57% of travel sales were done on-line. 5.2

14 5-14 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome The Web is the medium for publishing information on the Internet and serves as a platform for the electronic economy. Growth of the World Wide Web 5.2 Figure 5.6 Reasons for Growth of the World Wide Web

15 5-15 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Primarily text-based until 1991 Two innovations that established the WWW of today: – Tim Berners-Lee Developed HTML markup language that allowed links to other Internet resources to be built into a Web page Created the first web page with instructions on setting up a browser & a web server – Marc Andreessen Developed Mosaic, browser software – Digital Divide Identifies the social and economic disadvantage to those without Internet technology versus those who have it Development of the WWW 5.2

16 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-16 Internet’s Impact on Information See Figure 5.7 for more details Easy to CompileFaster to search, organize, and track information on customers, suppliers and partners. Increased richnessGreater breadth and depth of information can be transferred between business and customers. Increased ReachThe number of people businesses can communicate with all over the world has risen dramatically. Improved ContentThe ability to get dynamic and relevant information so that buyers can make informed decisions and sellers differentiate themselves from the competiton. 5.2

17 5-17 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome E-commerce – The buying and selling of goods and services over the Internet E-Business – The conducting of business on the Internet including not only buying and selling, but also serving customers and collaborating with business partners E-Business 5.3

18 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-18 E-business Basics Figure Overview of Industries Using E-Business

19 5-19 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Information Reach – Expand the number of people a business can target Information Richness – Increase the depth and breadth of details in communications Mass Customization – Provide a range of features in standard products that can be altered to customer specifics Personalization – Understand customers sufficiently to provide not only products but ways of doing business specifically suited to them Advantages of E-Business 5.3

20 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-20 Advantages of E-Business 5.3 The Long Tail Figure 5.9 Because E-businesses are not limited by shelf space, they can offer a far wider selection of products that may suit only a few customers.

21 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-21 Advantages of E-Business Figure 5.10 Business Value of Disintermediation 5.3

22 5-22 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Intermediaries – Agents, business or software which provides an infrastructure to bring buyers and sellers together Disintermediation – Occurs when business use the Web to connect directly to customers and by-pass intermediaries – Reduces costs & often improves responsiveness Reintermediation – The addition of entities into the value chain to improve the business process Cybermediation – The creation of new types of intermediation as a result of the Internet and the World Wide Web Opening New Markets 5.3

23 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-23 E-Business Forms 5.3 Figure 5.11

24 5-24 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Reducing Costs – Business processes that take less time and human effor t. Improving Operations – Communications customized to meet consumer needs and available 24/7. Improving Effectiveness— – Web sites must increase revenue and new customers and reduce service calls – Interactivity metrics measure E-business success: number of repeat visits, times spent on site and number of pages viewed among other activities. Further Advantages of E-business 5.3

25 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-25 Types of E-Business Marketing Initiatives See Figure 5.12 for more details ActivityDescription Associate (affiliate program) Provides commissions or referral fees when a customer at one site clicks through to a link to another merchant’s site. Banner AdA box running across the top of a website advertising the products and services of another business. Click-throughA count of a visitor to a site when the visitor clicked on an advertisement linked to the advertiser. CookieA small file deposited in the browser’s computer. Cookies perform legitimate services to foster transactions. Others illegally track customer activities without their permission. Pop-up AdA promotional web page appears in front of the current site. Pop under appears after the original web page is closed. Viral MarketingWord-of-mouth advertising. 5.2

26 5-26 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Clickstream Data can observe the pattern of customer navigation through a site. Analysis can provide information on: Marketing via E-Business 5.3 Figure 5.13 Clickstream Data Metrics

27 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-27 Metrics Measuring Website Success 5.3 Figure 5.14

28 5-28 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Are approaches to conducting business on-line. Basic E-Business Models 5.4 Figure 5.15

29 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-29 E-business Models Figure

30 5-30 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome On-line access to data: – Shipping date, delivery date, shipping status Electronic marketplace or e- marketplace – Interactive communities provide a central market for multiple buyers and sellers – Provide market efficiencies by automating relationships between buyers and sellers Business-to-Business E-Marketplace Advantages 5.4 Figure 5.17

31 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-31 Forms of B2C Operations 5.4 Figure 5.18

32 5-32 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome C2C applies to sites where consumers interact with each other over the internet. – Offering goods and services as on eBay – Web-based discussion forums or chat rooms. Community of Interest where people interact on the basis of specific topics Communities of Relations where people come together to share life experiences: cancer patients, car enthusiasts Communities of Fantasy where people create imaginary environments Types of C2C Communities 5.4

33 5-33 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Marketing/Sales – Direct selling, earliest type of e-business – Now integrating 360-degree rotating product view, interactive customization of products and live video streaming Customer Service – Use of traditional and interactive communication tools connects the consumers in the way they prefer – Cost per on-line contact can approach zero – Challenge is privacy and consumer protection Organizational Strategies for E-business 5.4

34 5-34 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Encompass facilitating payments and sales of financial products and services. Consumer Financial Services Types of Online Consumer Payments Financial CybermediaryA web-based company facilitating payments on-line. Electronic Funds Transfer (EFT) Mechanism for sending payment from a chequing or savings account. Electronic bill presentment and payment (EBPP) System sends bills over the Web. Facilitates payment with a click of a button. Digital WalletSoftware for secure transactions and includes transactions information such as delivery date. See Figure 5.20 for more details 5.4

35 5-35 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Electronic Data Interchange (EDI) – Computer to computer data exchange – Provided through a VAN (value-added network), private network providing high capacity data exchange Financial EDI (financial electronic data exchange) – Standard process for business-to-business payments Financial Services for Business 5.4

36 5-36 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Support business-to-business provide network services, information exchange, improved security and guaranteed service levels. Electronic Trading Network Figure 5.22 Diagram of an Electronic Trading Network 5.4

37 5-37 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Maintenance, Repair & Operations (MRO) – Relate to running the business, not primary inputs to operations – Often processing these purchases cost more than the value of the purchase E-procurement – B2B purchase and sale of supplies over the Internet – Direct computer-to-computer links with suppliers – Electronic catalogue reduce cost of search & ordering Procurement 5.4

38 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-38 E-Business Benefits Figure

39 5-39 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Protecting Consumers – Against unsolicited communication, illegal or harmful goods, insufficient information, cyberfraud Leveraging Existing Systems – Integrating systems across business to avoid duplicate functionality and maintain performance & reliability. Providing Security – Against accidental or malicious misuse without restricting flexibility. – Protecting privacy and ensuring continuous service. Adhering to Taxation Rules – As e-business expands new policies and law must be established. E-Business Challenges 5.4

40 5-40 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Encryption – Scrambles information into a secure form requiring a decoding key to enable reading. Secure Socket Layer (SSL) – Creates a secure and private connection between sender and receiver and encrypts the information – Identified by a URL beginning with https Secure Electronic Transaction (SET) – Encrypted information sent over a secure connection – Enables customer authentication for credit card purchases E-Business Security Methods 5.4

41 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-41 Benefits & Challenges of Revenue Models Figure

42 5-42 Copyright © 2015 McGraw-Hill Ryerson Limited OPENING CASE QUESTIONS Pinterest – Billboard for the Internet 1.Do you consider Pinterest a form of disruptive or sustaining technology? 2.Describe the e-business model and revenue model for Pinterest? 3.What is open source software and how could Pinterest take advantage of it?

43 McGraw-Hill-Ryerson©2015 The McGraw-Hill Companies, All Rights Reserved Data Warehousing

44 5-44 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Economic, social, and technology trends forming the basis for the next generation of the Internet – Refers not to a new WWW but to how it will be used by software developers and end users – Changes initiated by: Billions of people who have access More mobile devices than laptops Wide availability of broadband Web

45 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-45 Web 2.0 The Move from Web 1.0 to Web 2.0 Figure

46 5-46 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Website or Web application that uses content from more than one source to create a completely new product or service Application programming interface (API) – Set of routines or protocols for building software applications Mashup editor – Allows users to mix data from a wide range of sources Mashups 5.5

47 5-47 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Provides a way of describing relationships between web pages so that machines understand the meaning of hyperlinked information Transforming the web into a database – Emergence of a data-driven web where structured records can be reusable and queried remotely – Allows unparalleled information sharing because communication forms and files have common formats Web 3.0, the Semantic Web 5.5

48 5-48 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome An Evolutionary Path to artificial intelligence – Learning systems (artificial intelligence) use large data sets to make predictions, discover new patterns in behaviour and provide insight into problem diagnosis The Realization of the Semantic Web & SOA – SOA (service –oriented architecture) is a collection of digital on-line services that communicate with each other. – Goal is to integrate existing systems in order to support end-to-end business processes across the value chain Evolution to 3D – Multi-dimensional data visualization – Supports 3D graphics, animation, physical simulations and real time communication, among others Web 3.0, the Semantic Web 5.5

49 5-49 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Four tools for accessing Internet information: Intranet – Internalized portion of the Internet – Protected from outside access, for employees’ use – Host a variety of internal information & resources Extranet – An intranet that is available to strategic allies from their sites – Often used when there are shared initiatives Portal – Password protected web site – Offers links to a broad array of resources Kiosk – Publicly accessible computer – Often designed for a specific purpose Accessing Internet Information 5.5

50 5-50 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome 5.5 Figure 5.29 Uses strategies & technologies to improve services and communication with the citizen-consumer E-government Models

51 Learning Outcome Copyright © 2015 McGraw-Hill Ryerson Limited 5-51 E-government 5.5 Extended E-business Models Figure 5.31`

52 5-52 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Ability to purchase goods and services through a wireless Internet-enabled device. M-Commerce 5.5 M-Commerce Technology Overview Figure 5.30

53 5-53 Copyright © 2015 McGraw-Hill Ryerson Limited Learning Outcome Growth of social media makes it a viable medium for communication Business host their own Facebook & Twitter and other social media sites Trustworthiness of messages judged by viewers by: transparency Engagement Profit Advantages: Social customer support Provide leadership Drives reputation Social Media & Business 5.5

54 5-54 Copyright © 2015 McGraw-Hill Ryerson Limited OPENING CASE QUESTIONS The Case for Business Intelligence at NetFlix 4.Categorize Pinterest as an example of Web 1.0 (e- business) or Web Create a plan for how a startup company could take advantage of Web 3.0 and generate the idea for the next great website that would be similar to Pinterest. 6.Evaluate the challenges facing Pinterest and identify ways the company can prepare to face these issues. 7.How have social networking sites used technology to change how people communicate with each other?

55 5-55 Copyright © 2015 McGraw-Hill Ryerson Limited CLOSING CASE ONE: The Rise and Fall and Rise of Canadian Tire’s Website Ordering 1.How could Canadian Tire use e-business metrics to monitor its B2C Web site’s performance? 2.What was Canadian Tire’s original strategy for its B2C Web site? 3.Why did this strategy fail? 4.What is Canadian Tire’s current strategy? Why is this strategy more conducive to the Canadian marketplace? 5.Explain the e-business benefits and challenges facing Canadian Tire.

56 5-56 Copyright © 2015 McGraw-Hill Ryerson Limited CLOSING CASE TWO Hamilton’s GIS-Enhanced Web Site 1.How is technology being used by the City to support its strategic goals and operations? 2.What barriers likely exist in rolling out these technologies and securing their successful use and adoption? 3.How can the City leverage its GIS functionality for m-commerce? 4.What performance metrics should the City collect to assess the viability and robustness of its maps Web site (map.hamilton.ca)? Its City of Hamilton site (hamilton.ca)? 5.Why would the City want to develop a Web strategy that adheres to broad citizen services delivery guidelines that deal with non- Web channels?

57 5-57 Copyright © 2015 McGraw-Hill Ryerson Limited CLOSING CASE THREE eBay – The Ultimate E-Business 1.What is eBay’s e-business model and why has it been so successful? 2.How has eBay’s strategy changed of the years? 3.eBay has long been an e-marketplace for used goods and collectibles. Today, it is increasingly a place where major businesses come to auction their wares. Why would a brand name vendor set up shop on eBay? 4.What are the three different types of online auctions and which one is eBay using? 5.What are the different forms of online payment methods for consumers and business? How might eBay’s customers benefit from the different payment methods? 6.Which metrics would you use if you were hired to assess the efficiency and effectiveness of eBay’s Web site?


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