Today’s Strategic Imperative: E-Business Jeremy Malley BSAD – 145 Ch February 2002

Table of Contents Business-To-Consumer e-commerce (B2C) Business-To-Consumer e-commerce (B2C) Business-To-Business e-commerce (B2B) Business-To-Business e-commerce (B2B) Security Security CLJ CLJ CTQ CTQ

Business-To-Consumer (B2C) Business to consumer e-business is the most widely reported form of e-business. Business to consumer e-business is the most widely reported form of e-business. $38.5 billion dollar industry in $38.5 billion dollar industry in million Internet users by million Internet users by % of those users will shop online. 50% of those users will shop online. B2C Advantages B2C Advantages Global accessibility, Reduced order processing, Greater availability, Closer customer relationships, Increased customer loyalty, New products and services, Direct Marketing Global accessibility, Reduced order processing, Greater availability, Closer customer relationships, Increased customer loyalty, New products and services, Direct Marketing

B2C (cont.) Disintermediation- the elimination of intermediaries (distributors and resellers, for example) in the chain. Disintermediation- the elimination of intermediaries (distributors and resellers, for example) in the chain. Customers have access to wide range of competitive prices and sellers for products, driving down profit margins and the price for products. Customers have access to wide range of competitive prices and sellers for products, driving down profit margins and the price for products.

Business-To-Business (B2B) B2B is doing business electronically over the Internet, intranets, or private networks. B2B is doing business electronically over the Internet, intranets, or private networks. Automate the trading process in order to improve it. Automate the trading process in order to improve it. It can be conducted directly between a buyer and a seller or through an online intermediary. It can be conducted directly between a buyer and a seller or through an online intermediary. Use a more efficient chain, or sell direct to retailers and or businesses. (Dell) Use a more efficient chain, or sell direct to retailers and or businesses. (Dell) Management and redesign of the supply chain has become a major strategic issue Management and redesign of the supply chain has become a major strategic issue

B2B (cont.) Businesses can use B2B to eliminate paper based systems, speed up cycle time, reduce errors, reduce costs, and increase customer service. Businesses can use B2B to eliminate paper based systems, speed up cycle time, reduce errors, reduce costs, and increase customer service.

Security Security ranks as one of the top management and consumer concerns about e-business. Security ranks as one of the top management and consumer concerns about e-business. Concerned about protecting company assets and information and ensuring the integrity of e-business transactions. Concerned about protecting company assets and information and ensuring the integrity of e-business transactions. Sniffing- the interception and reading of electronic messages. Sniffing- the interception and reading of electronic messages. Spoofing- the assumption of a false identity and the execution of fraudulent transactions. Spoofing- the assumption of a false identity and the execution of fraudulent transactions. Hacking- the unauthorized access to a host computer. Hacking- the unauthorized access to a host computer.

Security (cont.) Security has become increasingly important with the amount of business that takes place on the Internet. Security has become increasingly important with the amount of business that takes place on the Internet. Cyber attacks are on the increase; in % of businesses experienced unauthorized use. Cyber attacks are on the increase; in % of businesses experienced unauthorized use. 71% of businesses experienced unauthorized use of by insiders, and 79% experienced employee abuse of internet privileges. 71% of businesses experienced unauthorized use of by insiders, and 79% experienced employee abuse of internet privileges. Managers need to understand the risks of poor security. Managers need to understand the risks of poor security. Attacks can result in damage to technical and information assets. Attacks can result in damage to technical and information assets. Temporary loss of Web site and Internet access, which can result in loss of income. Temporary loss of Web site and Internet access, which can result in loss of income. Internal breaches are more prevalent than external breaches, so management must take measure to address these inside threats. Internal breaches are more prevalent than external breaches, so management must take measure to address these inside threats.

CLJ “Disintermediation: is e-business a danger for the channel?” “Disintermediation: is e-business a danger for the channel?” By Paul Shearstone, 18 April, 2001 By Paul Shearstone, 18 April, New direct commerce empowered by technology means manufacturers will no longer require services of either reseller or distributor middlemen to reach end-user customers, but…… New direct commerce empowered by technology means manufacturers will no longer require services of either reseller or distributor middlemen to reach end-user customers, but…… Limits of e-commerce (present form) Limits of e-commerce (present form) Still not prefered way of doing business Still not prefered way of doing business Not replaced or reduced traditional operations to any significant extent. Not replaced or reduced traditional operations to any significant extent. Comfort level. Comfort level. Nor the evironment for skilled sales persons to sell. Nor the evironment for skilled sales persons to sell.

CTQ What do you feel the role of disintermediation will be in the future of e- commerce as far as strategic advantages are concerned? (p.87) What do you feel the role of disintermediation will be in the future of e- commerce as far as strategic advantages are concerned? (p.87)