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Mis10 ch10 ppt Mis10 ch10 ppt Presentation Transcript

  • Chapter 10 Electronic Business and E-Commerce Digital Markets,Digital Goods 4.1 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce OBJECTIVES • Analyze how Internet technology has changed value propositions and business models • Define electronic commerce and describe how it has changed consumer retailing and business-tobusiness transactions • Compare the principal payment systems for electronic commerce 4.2 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.1 ELECTRONIC BUSINESS, ELECTRONIC COMMERCE, AND THE INTERNET Internet Technology and the Digital Firm • Information technology infrastructure: The Internet 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 and streamlines processes. 4.3 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.1 ELECTRONIC BUSINESS, ELECTRONIC COMMERCE, AND THE INTERNET Internet Technology and the Digital Firm (Continued) • Round the clock service: Web sites available to consumers 24 hours • Extended distribution channels: Outlets created for attracting customers who otherwise would not patronize a firm • Reduced transaction costs: Costs of searching for buyers declines 4.4 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.1 ELECTRONIC BUSINESS, ELECTRONIC COMMERCE, AND THE INTERNET New Business Models and Value Propositions Business Model: • Defines an enterprise • Describes how the enterprise delivers a product or service • Shows how the enterprise creates wealth 4.5 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.1 ELECTRONIC BUSINESS, ELECTRONIC COMMERCE, AND THE INTERNET New Business Models and Value Propositions New Business Model: • In the past information about the products tightly bundled with physical store value chain • Because of internet, information is available to everyone. Customers can buy directly from internet bypassing retails stores. • This unbundling of information creates new business model 4.6 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.1 ELECTRONIC BUSINESS, ELECTRONIC COMMERCE, AND THE INTERNET The Changing Economies of Information • Information asymmetry: One party in a transaction has more information than the other. The Internet decreases information asymmetry. • Increases richness: The Internet increases the depth, detail, and scope of information. • Increases reach: The Internet increases the number of people who can be contacted efficiently. 4.7 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.1 ELECTRONIC BUSINESS, ELECTRONIC COMMERCE, AND THE INTERNET The Changing Economics of Information 4.8 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.1 ELECTRONIC BUSINESS, ELECTRONIC COMMERCE, AND THE INTERNET Internet Business Models – (pure play ) • Virtual storefront: Sells goods or services online (Amazon.com) • Information broker: Provides information on products or services (Edmunds.com,Insweb.com,Kbb.com,Realtor.com • Transaction broker: Provides online transaction facility (eTrade.com, Expedia.com) 4.9 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.1 ELECTRONIC BUSINESS, ELECTRONIC COMMERCE, AND THE INTERNET Internet Business Models (Continued) • Online marketplace: Provides a trading platform for individuals and firms (eBay.com,priceline.com,ChemConnect.com) • Content provider: Creates revenue by providing content (WSJ.com, TheStreet.com,GettyImages.com) • Online service provider: Provides online services, including search service. (Google.com, Xdrive.com,Employease.com,backup.com) 4.10 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.1 ELECTRONIC BUSINESS, ELECTRONIC COMMERCE, AND THE INTERNET Internet Business Models (Continued) • Virtual community: Provides an online community to focused groups (Friendster.com, iVillage.com) • Portal: Provides initial point of entry to Web, specialized content, services (Yahoo.com, MSN.com) • Specialized portal: Helps users with specific interest (StarMedia.com,Sina.com) 4.11 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.1 ELECTRONIC BUSINESS, ELECTRONIC COMMERCE, AND THE INTERNET • The source of revenue for this web sites are through • Banner-ads • Pop-up ads 4.12 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Categories of Electronic Commerce • Business-to-customer (B2C): Retailing of products and services directly to individual customers (BarnesandNoble.com,Amazon.com) • Business-to-business (B2B): Sales of goods and services to other businesses (Grainger.com, Ariba.com,Milacron.com) • Consumer-to-consumer (C2C): Individuals using the Web for private sales or exchange (eBay.com ) 4.13 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Business-To-Consumer Direct sales over the web: • Customer-centered retailing: Closer and more personalized relationship with customers is possible • Web sites: Provide a corporate-centered portal for the consumer to quickly find information on products, services, prices, orders 4.14 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Business-To-Consumer Direct sales over the web: (Continued) • Disintermediation: The elimination of organizations or business process layers responsible for certain intermediary steps in a value chain, reducing costs to the consumer 4.15 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE The Benefits of Disintermediation to the Consumer 4.16 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Interactive Marketing and Personalization Interactive Marketing Clickstream tracking tools: • Collect data on customer activities at Web sites and store them in a log 4.17 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Web Site Visitor Tracking 4.18 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Web Personalization • Create unique personalized Web pages that display contents and ads for products or services of special interest to each user • Increased closeness to customer increases value to the customer, while reducing costs of interacting with the customer 4.19 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Web Site Personalization 4.20 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Techniques for web personalization is collaborative filtering Collaborative filtering: • Compares information gathered about a specific user’s behavior at a Web site to data about other customers with similar interests to predict what the user would like to see next. The software then makes recommendations to users based on their assumed interests. 4.21 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Blogs Web based tools for marketing-where individuals can publish,stories,opinions Example Macro media uses web logs to nurture ties with customer and introduce them to new features in the software. 4.22 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Customer self-service: • The use of Web sites to provide customers with access to information and answers to questions • Replacing human call center operators and clerks • UPS.com: Customer tracking of packages • Orbitz.com: Customer self-help for organizing and managing a trip • Dell.com: “My Order Status” facility 4.23 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Business-to-Business Electronic Commerce: New Efficiencies and Relationships • Electronic Data Interchange (EDI): Enables the computer-to-computer exchange between two organizations of standard transactions. Currently 80% of B2B e-commerce uses this system. 4.24 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Electronic Data Interchange (EDI) 4.25 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Private Industrial Networks or private exchange • The largest Web-based form of B2B commerce • Private B2B extranets that focus on continuous business process coordination between a small group of companies for collaboration and supply chain management. Wal-Mart uses its own private network to coordinate more than 15,000 suppliers to its stores. 4.26 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Extranets Private intranets extended to authorized users outside the company. B2B use extranets for linking to other business for purchase and sales transactions. 4.27 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE A Private Industrial Network 4.28 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE • Companies use internet than private network for EDI Example • E-Procurement: Platforms for purchasing goods and materials and also sourcing, negotiating with suppliers, paying for goods, and making delivery arrangements (Ariba.com) 4.29 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE A Net Marketplace -Single digital market place based on Internet technology for many different buyers and sellers -Generating revenue from purchase and sale transactions 4.30 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Types of net marketplace 1.Sells direct goods 2.Sells indirect goods 3.Contractual purchasing based on long-time 4.Short term spot puchasing 5.Vertical markets 6. Horizontal markets 4.31 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Industry owned Net market place Focus on long-term contract purchasing relationships and on providing common networks and computing platforms for reducing supply chain inefficiencis. Example – Exostar This aerospace and defence industry-sponsored Net Marketplace to connect these companies to their suppliers and facilitate collaboration on major projects. 4.32 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE Independently owned third-party or Exchanges Net marketplaces that can connect thousands of suppliers and buyers for spot purchasing.Many exchanges provide vartical markets for a single industry, such as food,electronics. Eg: FoodTrader.com 4.33 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.2 ELECTRONIC COMMERCE A Net Marketplace 4.34 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.4 Electronic Commerce Payment Systems Credit cards The most common form of payment. $50 Limited customer liability. Digital wallets Electronic storage of I.D. and digital cash. Not widely used. Accumulated balance Stored value Used for micro payments. Pre-payment of funds, debited on use. Smart Cards I.D. and credit information stored on a chip attached to a card. Used in Europe. Digital cash Electronic currency that can be transferred over the Web. Peer-to-Peer payment Interpersonal transfer of funds such as PayPal. Digital checking Electronic checks with digital signatures, used most often in B2B commerce. Electronic billing presentment and payment 4.35 Used for micro payments. Similar to monthly telephone bills. Used by consumers to pay bills online, provided by many banks. © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.4 Electronic Commerce Payment Systems Electronic Commerce Payment Systems 1.Digital Credit card Payment System Extends the functionality of Credit card payment for on-line purchasing. Capability for processing Credit card purchases on the web. Authenticating the purchaser's credit card to make sure that it is valid and arranging for the bank that issued the credit card to deposit in seller's bank account. 4.36 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.4 Electronic Commerce Payment Systems Electronic Commerce Payment Systems 2. Digital wallet Eliminating the need for entering address and Credit card information.A digital wallet securely stores Credit card and owner identification information and provides that information at an E-Commerce site's “Checkout counter” A digital wallet enters the shopper's name,credit card number and shipping information automatically when invoked to complete the purchase. Example: Amazon,MSN wallet. 4.37 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.4 Electronic Commerce Payment Systems Electronic Commerce Payment Systems 3. Micropayments Developed for purchases of less than $10,such us downloads of individual articles or music clips (a) Accumulated balance digital payment systems accumulating a debit balance that they must pay periodically on their credit card or telephone bills Example PaymentOne and Trivnet enable consumers to charge small purchases to their monthly telephone bill. 4.38 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.4 Electronic Commerce Payment Systems Electronic Commerce Payment Systems (b) Stored value payment systems Enables the consumers to make instant online payments to merchants and other individuals based on value stored in a digital account. On-line value systems rely on the value stored in a consumer's bank or credit card Example Ecount offers a prepaid debit account for online purchases RocketCash 4.39 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.4 Electronic Commerce Payment Systems Electronic Commerce Payment Systems (c) Smart card Another type of stored value system for micropayments. It is a plastic card stores digital information.It can store health records, identification data or telephone number or it can serve as 'electronic purse' in the place of cash.But it needs a Smart card reader Example Mondex and American Express Blue Smart cards. 4.40 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.4 Electronic Commerce Payment Systems Electronic Commerce Payment Systems 4. Digital cash Also known as electronic cash used for micropayments or larger purchases. Digital cash is currency represented in electronic form.Exchange money with other e-cash user. useful for people who do not have credit card and wish to make web purchases example eCoin.net 4.41 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.4 Electronic Commerce Payment Systems Electronic Commerce Payment Systems 5.Peer-to-peer payment systems serve people who want to send money to vendors or individuals who are not set up to accept credit card payments. The party sending money uses his credit card to create an account with the designated payment at a web site dedicated to peer-to-peer payments. The recipient 'picks up' the payment by visiting the web site and supplying information about where to send the payment (a bank account or physical address) Example 4.42 PayPal © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.4 Electronic Commerce Payment Systems Electronic Commerce Payment Systems 6. Digital checking payment systems Extend the functionality of existing checking accounts so they can be used for on-line shopping payments. These checks are encrypted with a digital signature that can be verified and used for payments in E-commerce. It is useful in B2B E-commerce. Example Western Union MoneyZap 4.43 © 2006 by Prentice Hall
  • Management Information Systems Chapter 10 The Digital Firm: Electronic Business and Electronic Commerce 10.4 Electronic Commerce Payment Systems Electronic Commerce Payment Systems 7. Electronic billing presentment and payment systems used for paying monthly routine bills. They enable users to view their bills electronically and pay them through electronic fund transfers from bank or credit card accounts. These services support payment for on-line and physical store purchases about bills that are due, present the bills, and process the payments Example CheckFree consolidate subscribers bills from various sources so that they can all be paid at one time. 4.44 © 2006 by Prentice Hall