1. 4.1 © 2003 by Prentice Hall 4 4 THE DIGITAL FIRM: ELECTRONIC COMMERCE AND ELECTRONIC BUSINESS Chapter

2. 4.2 © 2003 by Prentice Hall Internet Technology and The Digital Firm Information technology infrastructure: Provides a universal and easy-to-use set of technologies and technology standards that can be adopted by all organizationsInformation technology infrastructure: Provides a universal and easy-to-use set of technologies and technology standards that can be adopted by all organizations Direct communication between trading partners: Disintermediation removes intermediate layers, streamlines processDirect communication between trading partners: Disintermediation removes intermediate layers, streamlines process Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM

3. 4.3 © 2003 by Prentice Hall Round-the-clock service: Web sites available to consumers 24 hours a dayRound-the-clock service: Web sites available to consumers 24 hours a day Extended distribution channels: Outlets created for attracting customers who otherwise would not patronizeExtended distribution channels: Outlets created for attracting customers who otherwise would not patronize Reduced transaction costs: Costs of searching for buyers, sellers, etc. reducedReduced transaction costs: Costs of searching for buyers, sellers, etc. reduced Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Internet Technology and the Digital Firm ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM

4. 4.4 © 2003 by Prentice Hall Business Model: Defines an enterpriseDefines an enterprise Describes how the enterprise delivers a product or serviceDescribes how the enterprise delivers a product or service Shows how the enterprise creates wealthShows how the enterprise creates wealth Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business New Business Models and Value Propositions ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM

5. 4.5 © 2003 by Prentice Hall Information asymmetry: One party in a transaction has more information than the otherInformation asymmetry: One party in a transaction has more information than the other Increases richness: Depth and detail of informationIncreases richness: Depth and detail of information Increases reach: Number of people contactedIncreases reach: Number of people contacted Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business The Changing Economies of Information ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM

6. 4.6 © 2003 by Prentice Hall Internet Business Models Virtual storefront: Sells goods, services on-lineVirtual storefront: Sells goods, services on-line Information broker: Provide info on products, pricing, etc.Information broker: Provide info on products, pricing, etc. Transaction broker: Buyers view rates, terms from various sourcesTransaction broker: Buyers view rates, terms from various sources Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM

7. 4.7 © 2003 by Prentice Hall Online Marketplace: Concentrates information from several providersOnline Marketplace: Concentrates information from several providers Content provider: Creates revenue through providing client for a fee, and advertisingContent provider: Creates revenue through providing client for a fee, and advertising Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Internet Business Models ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM

8. 4.8 © 2003 by Prentice Hall On-line service provider: Provides service, support for hardware, software productsOn-line service provider: Provides service, support for hardware, software products Virtual community: Chat room, on-line meeting placeVirtual community: Chat room, on-line meeting place Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Internet Business Models ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM

9. 4.9 © 2003 by Prentice Hall Portal: Initial point of entry to Web, specialized content, servicesPortal: Initial point of entry to Web, specialized content, services Syndicator: Aggregate information from several sources sold to other companiesSyndicator: Aggregate information from several sources sold to other companies Auction: Electronic clearinghouse products, prices, change in response to demandAuction: Electronic clearinghouse products, prices, change in response to demand Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Internet Business Models ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM

10. 4.10 © 2003 by Prentice Hall Dynamic pricing: real-time interactions between buyers and sellers determine worth of itemsDynamic pricing: real-time interactions between buyers and sellers determine worth of items Banner ad: Graphic display used for advertising, linked to the advertiser’s Web siteBanner ad: Graphic display used for advertising, linked to the advertiser’s Web site Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Internet Business Models ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM

11. 4.11 © 2003 by Prentice Hall Categories of Electronic Commerce Business-to-customer (B2C): Retailing of products and services directly to individual customersBusiness-to-customer (B2C): Retailing of products and services directly to individual customers Business-to-business (B2B): Sales of goods and services among businessesBusiness-to-business (B2B): Sales of goods and services among businesses Consumer-to-consumer (C2C): Individuals use Web for private sales or exchangeConsumer-to-consumer (C2C): Individuals use Web for private sales or exchange Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE

12. 4.12 © 2003 by Prentice Hall Business-To-Consumer Customer-centered retailing: Closer, yet more cost-effective relationship with customersCustomer-centered retailing: Closer, yet more cost-effective relationship with customers Web sites: Provide information on products, services, prices, ordersWeb sites: Provide information on products, services, prices, orders Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE

13. 4.13 © 2003 by Prentice Hall Business-To-Consumer Disintermediation: The removal of organizations or business process layers responsible for certain intermediary steps in a value chainDisintermediation: The removal of organizations or business process layers responsible for certain intermediary steps in a value chain Reintermediation: The shifting of the intermediary role in a value chain to a new sourceReintermediation: The shifting of the intermediary role in a value chain to a new source Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE

14. 4.14 © 2003 by Prentice Hall Benefits of Disintermediation to the Consumer Figure 4-2 Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Manufacturer DistributorRetailer Customer Cost/ Sweate r $48.50 $40.34 $20.45 ELECTRONIC COMMERCE

15. 4.15 © 2003 by Prentice Hall Web Site Personalization Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE

16. 4.16 © 2003 by Prentice Hall M-Commerce and Next Generation Marketing Mobile commerce (m-commerce): Wireless devices used to conduct both business-to-consumer and business-to- business e-commerce transactions over the InternetWireless devices used to conduct both business-to-consumer and business-to- business e-commerce transactions over the Internet Extend personalization by delivering new value-added services directly to customers at any time and placeExtend personalization by delivering new value-added services directly to customers at any time and place Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE

17. 4.17 © 2003 by Prentice Hall Customer Personalization Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Figure 4-4 ELECTRONIC COMMERCE

18. 4.18 © 2003 by Prentice Hall Business-To-Business Electronic Commerce Automation of purchase, sale transactions from business to business Private industrial networks: Coordination between companies for efficient supply chain management and collaborative activitiesPrivate industrial networks: Coordination between companies for efficient supply chain management and collaborative activities Electronic hubs: On-line marketplaces, point-to-point connections, integrated informationElectronic hubs: On-line marketplaces, point-to-point connections, integrated information Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE

19. 4.19 © 2003 by Prentice Hall A Net Marketplace Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Figure 4-6 ELECTRONIC COMMERCE

20. 4.20 © 2003 by Prentice Hall Electronic Commerce Payment Systems Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE

21. 4.21 © 2003 by Prentice Hall Electronic Commerce Information Flows Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Figure 4-7 ELECTRONIC COMMERCE

22. 4.22 © 2003 by Prentice Hall BenefitsBenefits Functional applicationsFunctional applications Supply chain managementSupply chain management How Intranets Support Electronic Business Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM

23. 4.23 © 2003 by Prentice Hall Connectivity: accessible from most computing platformsConnectivity: accessible from most computing platforms Can be tied to internal corporate systems and core transaction databasesCan be tied to internal corporate systems and core transaction databases Can create interactive applicationsCan create interactive applications Scalable to larger or smaller computing platformsScalable to larger or smaller computing platforms Benefits of Intranets Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM

24. 4.24 © 2003 by Prentice Hall Easy-to-use, universal Web interfaceEasy-to-use, universal Web interface Low start-up costsLow start-up costs Richer, more responsive information environmentRicher, more responsive information environment Reduced information distribution costsReduced information distribution costs Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Benefits of Intranets ELECTRONIC BUSINESS AND THE DIGITAL FIRM

25. 4.25 © 2003 by Prentice Hall Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Figure 4-8 Functional Applications of Intranets ELECTRONIC BUSINESS AND THE DIGITAL FIRM

26. 4.26 © 2003 by Prentice Hall Finance and Accounting General ledger reportingGeneral ledger reporting Project costingProject costing Annual reportsAnnual reports BudgetingBudgeting Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM

27. 4.27 © 2003 by Prentice Hall Human Resources Company On-line publishing of corporate policyOn-line publishing of corporate policy Job postings and internal job transfersJob postings and internal job transfers Company telephone directories, and trainingCompany telephone directories, and trainingEmployees HealthcareHealthcare Employee savingsEmployee savings Competency testsCompetency tests Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM

28. 4.28 © 2003 by Prentice Hall Sales and Marketing Competitor analysisCompetitor analysis Price updatesPrice updates Promotional campaignsPromotional campaigns Sales presentationsSales presentations Sales contractsSales contracts Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM

29. 4.29 © 2003 by Prentice Hall Manufacturing and Production Quality measurementsQuality measurements Maintenance schedulesMaintenance schedules Design specificationsDesign specifications Machine outputsMachine outputs Order trackingOrder tracking Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM

30. 4.30 © 2003 by Prentice Hall The Future Internet-Driven Supply Chain Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business Figure 4-9 ELECTRONIC BUSINESS AND THE DIGITAL FIRM

31. 4.31 © 2003 by Prentice Hall Unproven business modelsUnproven business models Business process change requirementsBusiness process change requirements Channel conflictsChannel conflicts Legal issuesLegal issues Security and privacySecurity and privacy MANGEMENT CHALLENGES & OPPORTUNITIES Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business

32. 4.32 © 2003 by Prentice Hall 4 4 ELECTRONIC COMMERCE & ELECTRONIC BUSINESS ELECTRONIC COMMERCE & ELECTRONIC BUSINESS Chapter