13-4 Learning Outcomes 13.1 Compare disruptive and sustaining technologies 13.2 Explain how the Internet caused disruption among businesses
13-5 Learning Outcomes 13.3 Define the relationship between the Internet and the World Wide Web 13.4 Describe the Internet’s impact on information along with how these changes are affecting business
13-6 Disruptive Technology 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
13-7 Disruptive Versus Sustaining Technology What do steamboats, transistor radios, and Intel’s 8088 processor all have in common? –Disruptive technology – a new way of doing things that initially does not meet the needs of customers –Sustaining technology – produces an improved product customers are eager to buy
13-9 Disruptive Versus Sustaining Technology The Innovator’s Dilemma discusses how established companies can take advantage of disruptive technologies without hindering existing relationships with customers, partners, and stakeholders
13-10 Disruptive Versus Sustaining Technology Companies that capitalized on disruptive technology
13-11 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 Focusing on the unexpected allows an organization to capitalize on the opportunity for new business growth from a disruptive technology
13-12 The Internet – Business Disruption Estimates predict more than 3 billion Internet users by 2010
13-13 Evolution of the Internet The Internet began as an emergency military communications system operated by the Department of Defense Gradually the Internet moved from a military pipeline to a communication tool for scientists to businesses –Internet – computer networks that pass information from one to another using common computer protocols –Protocol – standards that specify the format of data as well as the rules to be followed during transmission
13-14 Evolution of The World Wide Web World Wide Web (WWW) – a global hypertext system that uses the Internet as its transport mechanism Hypertext transport protocol (HTTP) – the Internet standard that supports the exchange of information on the WWW
13-16 Evolution of the World Wide Web The Internet’s impact on information –Easy to compile –Increased richness –Increased reach –Improved content
13-17 Evolution of The World Wide Web File formats offered over the WWW
13-18 Evolution of The World Wide Web The Internet makes it possible to perform business in ways not previously imaginable It can also cause a digital divide –Digital divide – when those with access to technology have great advantages over those without access to technology
13-19 CHAPTER THIRTEEN Opening Case Study Questions 1.Do you agree that eBay founder Pierre Omidyar used disruptive technology to change the auction business? Why or why not? 2.Create a Porter’s Five Forces analysis highlighting eBay’s market position. Be sure to highlight any new technologies that have the potential to disruptive eBay’s business 3.What types of ethical dilemmas will an online business such as eBay face that a traditional company would not face? 4. What types of security issues will an online business such as eBay face that a traditional company would not face?
13-20 CHAPTER THIRTEEN CASE Direct Groceries FreshDirect made its first delivery in July 2002 The online grocer, which began in New York metropolitan area and has expanded slowly and cautiously from Brooklyn to Queens to Manhattan, now has annual revenues of $150 million
13-21 Chapter Thirteen Case Questions 1.What type of technology is FreshDirect using - disruptive or sustaining? 2.How did Fresh Direct use the Internet to improve its business? 3.How has the Internet’s impact on information helped FreshDirect’s business? 4.What type of ethical and security concerns does FreshDirect face that a traditional grocery store does not face?