Topics in EBusiness New x Economy Business Rules Business Models etc'

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Topics in E-Business New x (Economy
Business Rules Business Models etc.)

• Sule Özmen
• Marmara University
• Department of Business Administration
• ozmens_at_yore.com sozmen_at_e-dersane.com
  URLwww.feas.marun.edu.tr/business/homepages/su
  leozmen
• www.e-dersane.com/suleozmen

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AGENDA

• New (Digital) Economy
• New Business Rules
• E-Business, e-commerce
• Redefining Business
• New Business Models (e-business models)
• First movers in e-world
• E-Marketing
• QA

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The New Economy Digital Economy

• Industry era Information era Biological
  era
• Information economy
• First stage (based on computers)
• Data processing, spreadsheets, word processing
• Second stage ( based on networks)
• Connectivitiy, networks and teradata

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Business Rules in New Economy

• Time Speed
• Time between business processes gets shorter
• real time responses
• Space - Distance
• Connectivity decreased the importance of
  locations
• Value Intangibles
• Economic value shifted from tangibles to
  intangibles value is added by information
  (CRM,SCM)
• Consumers are empowered

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Business Rules in New Economy(continued)

• Value comes from abundance rather than scarcity
  (ecomomic value was stemming from scarcity in old
  economy). The more connection the more value
  gained.
• Factors of production
• Talent, innovation also become the factors of
  production

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INTERNET GLOBALIZATION

• Geographical distances have been overcome by the
  internet technologies
• (Neither central management nor ownership)
• Markets expanded. Global Markets.
• Purchasing manufacturing marketing can be
  achieved at any convenient places.
• Global competition. Global markets changed who
  are the competitors.

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E-conomy, e-business e-commerce, e-competition

• Sense
• Process
• Respond

WHY??? Traditional Make and sell New Sense and
respond
HOW ????? By e-commerce, by e-business, by new
business models CRM, SCM, ERP, Data Warehousing
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Definition of e-business

• e-business is a new way of doing business on the
  e-economy.
• Key business processes are transformed for this
  new way of doing business through the extensive
  use of computer and internet technologies
• e - business involves openness, connectivity and
  integration
• Saying electronic commerce is merely buying and
  selling products on the World Wide Web is like
  arguing the PC makes a good typewriter

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Transformation of business to e-business

• Changing the way of doing business, business
  tasks
• Changing the organizations business model
• Changing the way of performing the managerial
  functions and activities
• Key success factors
• Vision, leadership, commitment
• Strategy and management
• It is both cheaper and profitable to absolete
  yourself than it is to let your competitor do it
  for you
• Peter Drucker

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e-business reconstruct value chains

• e-business adds value for everyone involved in
  all the way throughout the chain. what we call
  the value chain, which is the interconnection of
  raw materials suppliers, through manufacturers,
  all the way out to the retailers and the
  consumers.
• Businesses, customers, producers, suppliers,
  employees, managers,
• Suppliers, suppliers supplier, customers,
  customers customer
• Benefits, ease, convenience, timely, cheaper,
  higher quality, etc.

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Impact of e-economy, e-business e-commerce on
consumers and marketers

• What do you propose to marketers to do?
• ?
• ?
• ?

• What type of changes are you expecting in
  purchasing behavior of consumers
• ?
• ?
• ?

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Who is your customer in digital economy?

• Who doesnt buy every product or service you
  offer like in old good days

• Equipped with information

Less brand loyal, runs away to your rival by a
click But when? if not satisfied
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Redefinition of business

• Products and services (offers) are redefined
  (info. about the product or the service can be
  more valuable than the product itself)
• Market (buyers) are redefined
• Relationships are redefined
• B2B (Supply Chain Management)
• B2C (Customer Relationship Management)
• C2C (Web borned business models)

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E-Business Models(Purpose of Interaction)

• Agora - eBay priceline
• Aggregations (Portal) (Infomediary)
• Yahoo, Amozon, Travelocity, Expedia
• Value Chains Cisco, Dell, Intel, AutoXchange
• Alliances MP3, Linux, Java
• Distributive Networks (enabler) AOL, Fed Ex

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E-Business Models (Participants)

• B2B www.cisco.com
• www.autoXchange.com
• www.dell.com
• B2C www.amazon.com
• Yahoo, Msn
  www.yahoo.com www.msn.con
  Travelocity, expedia
• Msnbc www.msnbc.com (Online
  Media)
• C2B Priceline www.priceline.com
• C2C www.eBay.com

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Value Chains Cisco a winner in e-business

• Sells 80 of its products on line (about a
  million dollars a month)
• Reduced its operating costs
• Communication among all the participants is
  encouraged
• order to - delivery cycle times are reduced

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Value Chains Intel a winner in e-business

• Sells more than 1 billion worth of product per
  month
• Sales intermediaries are able to check prices,
  view product road maps and buy products through a
  password protected, customized Web site
• Reduction in transaction costs of products sold
• Fewer errors in order processing
• Reduced order to delivery cycle

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B2B Models

• What to do
• Connecting the participants (other businesses) in
  the supply chain
• Make all parties win
• Costs Reduced operating costs
• Ordering
• Transaction
• Time
• Reduced order to delivery cycle time
• Efficiency
• Increased efficiency in resource utilization.
• Elimination of errors like order processing
  errors

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B2C Models Objectives and Strategies

• What to do Driving customers to your sites
• About 1000s of web page, customer will find you,
  more than that they will bookmark you, more than
  that make a transaction from your site!!!!!
• How to do
• Know your customer (target your customer, niche
  market)
• Understand your customer (data warehouse
  management, data mining)
• Retain your customer (loyalty programs)

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First Mover AdvantagesFirst and different

• Capturing most profitable customers Higher
  margin, higher market share
• Exploit the value of their brands early
• Pick the best partners, participants before
  competitors enter
• Attract most talented and innovative human
  resource
• Media and academic coverage referring the first
  movers as examples of e-business winners
• Building trust - security

You can be a first mover without having to invent
something new. Offer differentiated services with
greater convenience and lower cost Different
isnt always better, but the best is always
different Net Ready by Hartman Sifonis
2000Mc Graw Hill
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Market Adoption Sequence Traditional and
Internet Life Cycles
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MARKETING PROCESS New and Traditional
Identifying the needs, wants, desires
Buyer
Seller
Product / service design
Search
promote
Order and payment
Delivery
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Technology is enabler in new marketing process

• Collect teradata amounts of data to identify
  their needs. Current and potential needs.
• Offer the products or service faster through
  alternative distribution channels
• Receive orders and accept payment through
  internet
• Follow your customer after delivery
• Dont lose contact with your customer once
  interacted you
• Communicate with your customer on the basis of
  the knowledge obtained from the data warehouse

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It is now possible to

• Know who your customers are and who your best
  customers are
• Stimulate what they buy or know what they wont
  buy
• Know the time when and how they buy
• Learn customers preferences and shape the offer
  accordingly
• Formulate strategies to make your customers
  loyal customers to keep your customers for many
  years
• Define characteristics that make up a
  great/profitable customer
• Model channels best to address a customers need
• Predict what they may or will buy in the future

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E-Marketing Process

• There are some specific on line marketing
  strategies to increase
• Number of customers visiting web site
• Purchases from web site
• in B2C models
• ? Use non-internet marketing media
• ? Co-operative marketing (exchanging links and
  banner advertisement)
• ? Place web store within a search engine
• Place web store within a virtual mall

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e-business opportunities

• Reduced Costs
• General and administrative expenses decrease
• Marketing and selling expenses decrease
• Cost of goods sold decrease
• Revenue enhancement
• New markets, new customers, new products
• Fast and efficient information flow- near real
  time decision making.
• Faster time to market
• Access to global market
• Improved customer satisfaction- CRM
• Loyal and profitable customers

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e-business threats

• Lack of technical knowledge and experience
  (before initiating)
• Lack of support from senior management - (during
  transformation)
• Technology- user friendly interfaces, fast access
  and speedy transactions (after transformation)
• Security concerns - (after transformation)
• Ignoring e-business threat of losing
  competitive position threat for survival

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MYTHS AND REALITIES

• MYTH NO. 1 It's Easy.
• MYTH NO. 2 It's cheap.
• MMYTH NO. 3 Everyone's doing it.
• MYTH NO. 4 It's lucrative.
• MYTH NO. 5 The Web levels the playing field.
• MYTH NO. 6 It leads to disintermediation.
• MYTH NO. 7 It means the end of mass marketing.
• MYTH NO. 8 It leads to product commodization.