Electronic Commerce and Electronic Business Part 1

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Electronic Commerce and Electronic BusinessPart
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Where are we?

• Looking at enterprise systems
• Span business functions
• May span organization boundaries
• Last class ERP
• Today and Monday eCommerce and eBusiness
• Next Thursday Supply Chain Management and
  Customer Relationship Management
• Feb 9 Quiz 1 review next Thurs.

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One last thing on ERP.

• If not properly implemented, what can happen to
  an organization?
• What did Fox Meyer do wrong?

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A few questions.

• Internet WWW?
• If Internet ltgt WWW, how are they different?
• What is it about the Internet that makes it so
  powerful?
• What is e-Commerce? E-Business?

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Objectives

• Rise of the Internet and the WWW
• The dot com bubble
• Explain how Internet technology transforms
  organizations and business models
• Discuss electronic commerce business models
• Discuss e-Business

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Rise of the Internet / e-business

• 1957 ARPA Authorized
• 1969 ARPANET
• 1989 NSFNET
• 1991 WWW Released
• 1993 Mosaic Introduced
• 1995 Netscape Goes Public
• 1995-2001 dot-com Bubble
• 2001 e-Business Models

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e-Commerce

• With the rise of the internet as a marketing
  tool, the internet became a medium for selling
  goods
• e-Commerce is the buying or selling of goods over
  the internet
• Example from former StFX student
• http//www.lollygaggeru.com/

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Management Challenges

• Internet provides many opportunities, but also
  challenges, such as
• Electronic commerce electronic business require
  a new way of thinking
• Finding a successful Internet business model
• The .com bubble burst
• Most eCommerce efforts have not returned
  significant profits Amazon.com
• Internet flops
• what were they thinking?

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Why did dot-com companies fail In 2000-2001?

• Pre 2001
• View that old economy business models were no
  longer applicable (napster)
• New Economy and irrational exuberance
• Dot-com companies could go to the stock market
  and raise large amounts of capital without ever
  turning a profit
• Investors lured by future profits
• Post 2001
• Need a solid business model to survive
• Businesses (even dot-coms) must make money in the
  long run

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Before the Internet

• Organizations attempted to integrate information
  systems with those of suppliers and customers
• Organizations have been trying to become digital
  for a long time.
• Used proprietary technology (non-standard)
• Difficult, time consuming and expensive
• EDI

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The Internet

• The Internet is
• A universal, inexpensive and easy to use set of
  technologies and technology standards
  transporting information
• http//www.isc.org/

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Internet Technology affects Relationships

• Information flows seamlessly
• Throughout the organization
• With trading partners, suppliers distributors
• To and from customers
• Information flows 24 hours per day, 7 days per
  week

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Internet Technology affects the Organization

• Internet technology allows organizations to
  communicate directly with their constituents at a
  very low cost
• Removes layers between the organization and its
  partners (disintermediation)
• Reduces transaction costs

Transaction Costs
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Business Model

• Defines an enterprise
• Describes how the enterprise delivers a product
  or service
• Shows how the enterprise creates wealth and value
• St FX
• Amazon.com
• St Marthas Hospital

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New Business Models and Value Propositions

• The internet changes economics related to access
  to information
• The Internet reduces information asymmetry and
  search costs
• one party involved in a transaction has more
  information that the other
• costs other much more to search for information.
  
• Example buying a car
• http//www.edmunds.com/
• The Internet eliminates the tradeoff between
  richness and reach of information

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New Business Models and Value Propositions

• Prior to the Internet firms had to trade off
  information richness and information reach WHY?
• Richness The amount and quality of information
  that can be exchanged with a constituent
• Reach The number of constituents that can be
  contacted
• The Internet eliminates the tradeoff

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Internet Business Models

• Aggregator
• Content provider
• On-line service provider
• Virtual Community
• Portal
• Syndicator

• Virtual Storefront
• Information Broker
• Transaction Broker
• Auction
• Reverse Auction

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Internet Business Models Selling

• Virtual Storefront
• Your website is your store
• Sells goods and /or services online
• www.chaptersindigo.ca
• www.amazon.ca
• www.freshdirect.com
• Itunes

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Internet Business Models Auctions

• Auction
• Dynamic pricing
• www.eBay.com
• Reverse Auction
• Consumers submit a bid to multiple sellers
• www.priceline.com

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Business Models Online Delivery, Products
Services

• Digital Product Delivery
• Sell and deliver software, multimedia, etc.
• www.Compusmart.com
• www.apple.com/itunes
• Content provider
• creates revenue through providing content and
  getting revenue for through advertising
• www.yahoo.com
• www.google.ca
• www.youtube.com

• On-line service provider
• provides service support for hardware, software
  products
• www.PCSupport.com
• www.salesforce.com

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Internet Business Models Brokers Syndicators

• Information Broker
• Provides information about products
• www.edmunds.com
• www.xe.com
• Transaction Broker
• Buyers view rates and terms completes
  transaction
• www.TDWaterhouse.com
• www.expedia.ca

• Syndicator
• Aggregate information or applications from
  several sources, sell to other companies
• www.doubleclick.com

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Internet Business Models Web Entries
Communities

• Virtual community
• Provides an online meeting place for people with
  common interests
• www.kidshelp.sympatico.ca
• www.ivillage.com
• www.myspace.com
• Portal
• Initial point of entry to Web, specialized
  content, services
• www.yahoo.com
• www.msn.ca

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Advertising

• Huge source of revenue on the web
• Banner
• Pop up
• Google
• 5.1 billion in revenues in 2008

http//www.thestandard.com/news/2008/07/15/picture
-where-does-googles-revenue-come