BUSINESS PLUG-IN B11 E-Business

LEARNING OUTCOMES Describe the four common tools an organization can use to access Internet information Compare ISPs, OSPs, and ASPs. Be sure to include an overview of common services provided by each Describe how marketing, sales, financial services, and customer service departments can use ebusiness to increase revenues or reduce costs

LEARNING OUTCOMES Explain why an organization would use metrics to determine a Web site’s success Identify the different types of egovernment business models Define m-commerce and explain how an egovernment could use it to increase its efficiency and effectiveness

INTRODUCTION Pure play – an Internet retailer that has no physical store, such as Expedia.com and Amazon.com Ebusiness – conducting business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners Ebusiness model – an approach to conducting electronic business through which a company can become a profitable business on the Internet

Accessing Internet Information Four tools for accessing Internet information Intranet – internalized portion of the Internet, protected from outside access, for employees Extranet – an intranet that is available to strategic allies Portal – Web site that offers a broad array of resources and services Kiosk – publicly accessible computer system that allows interactive information browsing

Providing Internet Information Three common forms of service providers Internet service provider (ISP) –provides individuals and other companies access to the Internet Online service provider (OSP) – offers an extensive array of unique Web services Application service provider (ASP) – offers access over the Internet to systems and related services that would otherwise have to be located in organizational computers

Providing Internet Information Common ISP services include: Web hosting Hard-disk storage space Availability Support

Providing Internet Information Wireless Internet service provider (WISP)

Providing Internet Information ISPs, OSPs, and ASPs use service level agreements (SLA) which define the specific responsibilities of the service provider and set the customer expectations Review Figure B11.3 for a listing of the top ISPs, OSPs, and ASPs

Organizational Strategies for Ebusiness Primary business areas taking advantage of ebusiness include: Marketing/sales Financial services Procurement Customer service Intermediaries

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 programs (affiliate programs) - businesses generate commissions or royalties Viral marketing - a technique that induces Web sites or users to pass on a marketing message Mass customization - gives customers the opportunity to tailor products or services

MARKETING/SALES Generating revenue on the Internet: Personalization - occurs when a Web site can fashion offers that are more likely to appeal to that person Blog - Web site in which items are posted on a regular basis and displayed in reverse chronological order Real simple syndications (RSS) - a Web feed format used for Web syndication of content Podcasting - the distribution of audio or video files, such as radio programs or music videos, over the Internet to play on mobile devices

MARKETING/SALES Generating revenue on the Internet: Search engine optimization (SEO) - a set of methods aimed at improving the ranking of a Web site in search engine listings Spamdexing - uses a variety of deceptive techniques in an attempt to manipulate search engine rankings, whereas legitimate SEO focuses on building better sites and using honest methods of promotion

FINANCIAL SERVICES Online consumer payments include: Financial cybermediary Electronic check Electronic bill presentment and payment (EBPP) Digital wallet

FINANCIAL SERVICES Online business payments include: Electronic data interchange (EDI) Value-added network (VAN) Financial EDI (financial electronic data interchange)

Electronic Trading Network FINANCIAL SERVICES Electronic Trading Network

PROCURMENT Maintenance, repair, and operations (MRO) materials (also called indirect materials) – materials necessary for running an organization but do not relate to the company’s primary business activities Eprocurement - the B2B purchase and sale of supplies and services over the Internet Electronic catalog - presents customers with information about goods and services offered for sale, bid, or auction on the Internet

CUSTOMER SERVICE Customer service is the business process where the most human contact occurs between a buyer and a seller Ebusiness strategists are finding that customer service via the Web is one of the most challenging and potentially lucrative areas of ebusiness The primary issue facing customer service departments using ebusiness is consumer protection

Consumer Protection

Consumer Protection Ebusiness security Encryption Secure socket layer (SSL) Secure electronic transaction (SET)

INTERMEDIARIES Intermediaries – agents, software, or businesses that bring buyers and sellers together that provide a trading infrastructure to enhance ebusiness Reintermediation – using the Internet to reassemble buyers, sellers, and other partners in a traditional supply chain in new ways

Measuring Ebusiness Success Most companies measure the traffic on a Web site as the primary determinant of the Web site’s success However, a large amount of Web site traffic does not necessarily equate to large sales Many organizations with high Web site traffic have low sales volumes

Measuring Ebusiness Success Web site traffic analysis can include: Cookie Click-through Banner ad Interactivity

Behavioral Metrics Clickstream data tracks the exact pattern of a consumer’s navigation through a Web site Clickstream data can reveal: Number of pageviews Pattern of Web sites visited Length of stay on a Web site Date and time visited Number of customers with shopping carts Number of abandoned shopping carts

Behavioral Metrics Web site metrics include Visitor metrics Exposure metrics Visit metrics Hit metrics

New Trends in Ebusiness: Egovernment and Mcommerce Egovernment - involves the use of strategies and technologies to transform government(s) by improving the delivery of services and enhancing the quality of interaction between the citizen-consumer within all branches of government

New Trends in Ebusiness: Egovernment and Mcommerce

New Trends in Ebusiness: Egovernment and Mcommerce Mobile commerce - the ability to purchase goods and services through a wireless Internet-enabled device.

CLOSING CASE ONE Mail with PostalOne United States Postal Service’s (USPS) productivity has grown by only 11 percent over the past three decades USPS is pursuing several ebusiness projects to help increase growth including: NetPost Mailing Online Post Electronic Courier Service NetPost.Certified EBillPay

CLOSING CASE ONE QUESTIONS Do you think the USPS’s steps are far-reaching enough to ensure its relevance in ebusiness? What other strategic alliances, akin to its partnership with CheckFree, can the Postal Service develop to stay competitive? Why would the USPS compete in a market that private companies already serve well?

CLOSING CASE ONE QUESTIONS How can the USPS use portals to help grow its business? How can the USPS use ebusiness sales and marketing techniques such as blogs, podcasts, and SEO to improve its business? How can the USPS use ASPs to improve its business?

CLOSING CASE TWO Made-To-Order Businesses Mass customization is a new trend in the retail business Lands’ End, Nike, and Stamps.com are a few of the companies using mass customization to enhance the way they do business

CLOSING CASE TWO QUESTIONS What role does ebusiness play in a mass customization business strategy? How can Lands’ End use additional sales and marketing ebusiness techniques to improve its business? How can Nike use ebusiness financial services to improve its business?

CLOSING CASE TWO QUESTIONS How can Stamps.com use ASPs and electronic bill payment to improve its business? Choose one of the examples above and analyze its ebusiness approach. Would you invest $20,000 in the company? Choose one of the examples above and explain how the company is attempting to gain a competitive advantage with mass customization and personalization. How could this company use podcasts, blogs, and SEO to improve its business?