© 2005 Prentice Hall 17-1 Chapter 17 The Digital Revolution and Global Electronic Marketplace PowerPoint By Kristopher Blanchard North Central University

© 2005 Prentice Hall17-2 The Digital Revolution: A Brief History 1937 to 1942 world’s first electronic digital computer was developed at Iowa State University 1947 the transistor was invented 1950’s saw the invention of the silicon chip 1970’s was the decade for companies like Atari, Commodore and Apple

© 2005 Prentice Hall17-3 The Digital Revolution: A Brief History 1981 IBM introduced is first Personal Computer (PC) 1984 Apple introduced the Macintosh 1982 the 286 microprocessor was unveiled 1993 was the creation of the Pentium

© 2005 Prentice Hall17-4 The Digital Revolution: A Brief History

© 2005 Prentice Hall17-5 The Digital Revolution: A Brief History 1969 is where the Internet can trace its origins (Defense Advanced Research Projects Agency) was sent for the first time 1973 saw the creation of a cross-network protocol; the true birth of a network of networks or the Internet 1993 Tim Berners-Lee invented URL, HTML and Http. Also the first commercial browser was created In 1993 there were 600,000 web users; in 2003 there are an estimated 580 million PCs accessing the Internet

© 2005 Prentice Hall17-6 Convergence A term that refers to the coming together of previously separate industries and product categories

© 2005 Prentice Hall17-7 Value Networks and Disruptive Technologies Innovator’s Dilemma Value Network Sustaining Technologies Disruptive Technologies

© 2005 Prentice Hall17-8 Global E-Commerce In 2003, global e-commerce revenues stood at $1.6 trillion and growing According to a report released by the University of California-Berkeley, in 2002, five exabytes of information—an amount equal to every word spoken by humans—were generated worldwide. China has more than 68 million Internet users; in Shanghai, Beijing and Guangzhou, one-third of all residents use the Internet. Japan has about 60 million Internet users, and Japan accounted for $1.6 billion in online revenue in 2004.

© 2005 Prentice Hall17-9 Global E-Commerce Can be divided into 3 broad categories –Business to Business (B2B) –Business to Consumer (B2C) –Consumer to Consumer (Peer-to-Peer)

© 2005 Prentice Hall17-10 Web Sites Classified by Purpose –Promotion sites to promote goods or services –Content sites that provide new and entertainment –Transaction sites allow consumers to purchase goods and services

© 2005 Prentice Hall17-11 Web Sites Companies must be willing to integrate interactive media into the marketing mix Can be developed in house or by an outside firm

© 2005 Prentice Hall17-12 Web Sites “Shopping on the Internet is no different than traditional sales channels. It’s all about trusting the brand and having a strong relationship with one’s customers.” —Ron Fry, Internet Business Manager, Lands’ End

© 2005 Prentice Hall17-13 Web Sites Things to consider when creating a global Web Site –Localize the Web site in the native language and business nomenclature of the target market –Should reflect local culture, customs, and aesthetic preferences –Privacy

© 2005 Prentice Hall17-14 Web Sites What makes a ‘good’ Web site? – Technology and functionality. This category includes layout, ease of navigation, and print-out opportunities. Does the site offer interactive functions such as order forms and subscriptions? – Content. This category includes address information for key people or corporate functions; corporate information such as mission, vision, and company history; and financial information such as quarterly reports in PDF or HTML format.

© 2005 Prentice Hall17-15 Broadband Has sufficient capacity to carry multiple voice, data, or video channels simultaneously Bandwidth determines the range of frequencies that can pass over a transmission channel

© 2005 Prentice Hall17-16 Broadband Creates opportunities for streaming audio, video, and media On-line gaming Online education Medical diagnosis and treatment E-Commerce

© 2005 Prentice Hall17-17 Mobile Commerce and Wireless Connectivity Mobile commerce or M-commerce is the term for conducting commercial transactions using wireless handheld devices such as PDA’s Wi-fi – (Wireless Fidelity) permits laptop and PDA users to establish high-speed wireless Internet connections Bluetooth – uses less power than wi-fi, works well with cell phones and covers shorter distances than wi-fi

© 2005 Prentice Hall17-18 Smart Cell Phones 400 million cellular handsets are sold annually Smart phones give users some of the capabilities of computers – currently 5% of the market Cell phone users bought 5 million ring tones in 2003

© 2005 Prentice Hall17-19 Technology Forecast By 2008, the global market for cell phone games could reach $7 million. - Strategy Analytics

© 2005 Prentice Hall17-20 Internet Phone Service The next big thing for the telecommunications industry Has the potential to render the current telecommunications infrastructure obsolete Currently only accounts for 3% of total global calling

© 2005 Prentice Hall17-21 Global Marketing End of Chapter 17

© 2005 Prentice Hall17-22 Innovator’s Dilemma –Staying committed to a current, profitable technology –Failing to provide adequate levels of investment to new and riskier technologies –Company is responding to the needs of established customers Return

© 2005 Prentice Hall17-23 Value Network Found in every industry Cost structure that dictates the margins needed to achieve profitability Boundaries are defined by the unique rank ordering of the importance of various product attributes Each network has its own metrics of value Return

© 2005 Prentice Hall17-24 Sustaining Technologies Incremental or radical innovations that improve product performance Most new technologies developed by established companies are sustaining in nature The vast majority of innovations are sustaining in nature Return

© 2005 Prentice Hall17-25 Disruptive Technologies Redefine performance New entrants to an industry Enable something to be done that was previously deemed impossible Enable new markets to emerge Return