Chapter 3 Ebusiness Electronic Business Value Mc GrawHillIrwin

Chapter 3 Ebusiness: Electronic Business Value Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

CHAPTER OVERVIEW Chapter 3 • SECTION 3. 1 – WEB 1. 0 - EBUSINESS § Disruptive Technologies and Web 1. 0 § Advantages of Ebusiness § Ebusiness Models § Ebusiness Tools for Connecting and Communicating § The Challenges of Ebusiness • SECTION 3. 2 – WEB 2. 0 – BUSINESS 2. 0 § Web 2. 0: Advantages of Business 2. 0 § Networking Communities with Business 2. 0 § Business 2. 0 Tools for Collaborating § The Challenges of Business 2. 0 § Web 3. 0: Defining the Next Generation of Online Business Opportunities 3 -2

Chapter 3 SECTION 3. 1 WEB 1. 0 EBUSINESS 3 -3

LEARNING OUTCOMES Chapter 3 1. Compare disruptive and sustaining technologies and explain how the Internet and WWW caused business disruption 2. Describe Web 1. 0 along with ebusiness and its associated advantages 3. Compare the four categories of ebusiness models 4. Describe the six ebusiness tools for connecting and communicating 5. Identify the four challenges associated with ebusiness 3 -4

DISRUPTIVE TECHNOLOGIES AND WEB 1. 0 Chapter 3 • Digital Darwinism – Implies that organizations which cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction • How can a company like Polaroid go bankrupt? 3 -5

Disruptive versus Sustaining Technology Chapter 3 • What do steamboats, transistor radios, and Intel’s 8088 processor all have in common? § Disruptive technology – A new way of doing things that initially does not meet the needs of existing customers § Sustaining technology – Produces an improved product customers are eager to buy 3 -6

Disruptive versus Sustaining Technology Chapter 3 3 -7

Disruptive versus Sustaining Technology Chapter 3 • Innovator’s Dilemma discusses how established companies can take advantage of disruptive technologies without hindering existing relationships with customers, partners, and stakeholders 3 -8

Disruptive versus Sustaining Technology Chapter 3 3 -9

The Internet and World Wide Web – The Ultimate Business Disruptors Chapter 3 • One of the biggest forces changing business is the Internet – a massive network that connects computers all over the world and allows them to communicate with one another • Organizations must be able to transform as markets, economic environments, and technologies change • Focusing on the unexpected allows an organization to capitalize on the opportunity for new business growth from a disruptive technology 3 -10

The Internet and World Wide Web – The Ultimate Business Disruptors Chapter 3 • The Internet began as an emergency military communications system operated by the Department of Defense • Gradually the Internet moved from a military pipeline to a communication tool for scientists to businesses 3 -11

The Internet and World Wide Web – The Ultimate Business Disruptors Chapter 3 • World Wide Web (WWW) – Provides access to Internet information through documents including text, graphics, audio, and video files that use a special formatting language called HTML – hypertext markup language • Web browser – Allows users to access the WWW • Hypertext Transport Protocol – The Internet protocol Web browsers use to request and display Web pages using URL – universal resource locator 3 -12

The Internet and World Wide Web – The Ultimate Business Disruptors Chapter 3 • Reasons for growth of the WWW § Microcomputer revolution § Advancements in networking § Easy browser software § Speed, convenience, and low cost of email § Web pages easy to create and flexible 3 -13

Web 1. 0 – The Catalyst for Ebusiness Chapter 3 • The Internet has had an impact on almost every industry including § Travel § Entertainment § Electronics § Financial services § Retail § Automobiles § Education and training 3 -14

Web 1. 0 – The Catalyst for Ebusiness Chapter 3 • Web 1. 0 – A term to refer to the WWW during its first few years of operation between 1991 and 2003 • Ecommerce – Buying and selling of goods and services over the Internet • Ebusiness – Includes ecommerce along with all activities related to internal and external business operations 3 -15

ADVANTAGES OF EBUSINESS Chapter 3 3 -16

Expanding Global Reach Chapter 3 • The Internet’s impact on information § Easy to compile § Increased richness § Increased reach § Improved content 3 -17

Opening New Markets Chapter 3 • Mass customization – The ability of an organization to tailor its products or services to the customers’ specifications • Personalization – Occurs when a company knows enough about a customer’s likes and dislikes that it can fashion offers more likely to appeal to that person 3 -18

Opening New Markets Chapter 3 • The Long Tail – Refers to the tail of a typically sales curve 3 -19

Opening New Markets Chapter 3 • Intermediary – Agents, software, or businesses that provide a trading infrastructure to bring buyers and sellers together § Disintermediation § Reintermediation § Cybermediation 3 -20

Opening New Markets Chapter 3 Business Value of Disintermediation 3 -21

Improving Effectiveness Chapter 3 • Clickstream data tracks the exact pattern of a consumer’s navigation through a website • Clickstream data can reveal § Number of pageviews § Pattern of websites visited § Length of stay on a website § Date and time visited § Number of customers with shopping carts § Number of abandoned shopping carts 3 -22

Marketing/Sales Chapter 3 • 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 program (affiliate program) - Businesses generate commissions or royalties § Viral marketing - A technique that induces websites or users to pass on a marketing message 3 -23

Improving Effectiveness Chapter 3 • Website metrics include § Visitor metrics § Exposure metrics § Visit metrics § Hit metrics 3 -24

EBUSINESS MODELS Chapter 3 • Ebusiness model – A plan that details how a company creates, delivers, and generates revenues on the Internet 3 -25

EBUSINESS MODELS Chapter 3 3 -26

Business-to-Consumer (B 2 C) Chapter 3 Common B 2 C Ebusiness Models 3 -27

Ebusiness Forms and Revenue. Generating Strategies Chapter 3 • Common ebusiness forms § Content providers § Informediaries § Online marketplaces § Portals § Service providers § Transaction brokers 3 -28

Ebusiness Forms and Revenue. Generating Strategies Chapter 3 • Ebusiness revenue models § Advertising fees § License fees § Subscription fees § Transaction fees § Value-added service fees 3 -29

EBUSINESS TOOLS FOR CONNECTING AND COMMUNICATING Chapter 3 3 -30

EBUSINESS TOOLS FOR CONNECTING AND COMMUNICATING Chapter 3 • Email • Instant messaging • Podcasting • Videoconferencing • Web conferencing • Content management system § Taxonomy § Information architecture 3 -31

THE CHALLENGES OF EBUSINESS Chapter 3 3 -32

Chapter 3 SECTION 3. 2 WEB 2. 0: BUSINESS 2. 0 3 -33

LEARNING OUTCOMES Chapter 3 6. Explain Web 2. 0 and identify its four characteristics 7. Explain how Business 2. 0 is helping communities network and collaborate 8. Describe three Business 2. 0 tools for collaborating 9. Explain the three challenges associated with Business 2. 0 10. Describe Web 3. 0 and the next generation of online business 3 -34

WEB 2. 0: ADVANTAGES OF BUSINESS 2. 0 Chapter 3 • Web 2. 0 – The next generation of Internet use – a more mature, distinctive communications platform characterized by three qualities § Collaboration § Sharing § Free 3 -35

WEB 2. 0: ADVANTAGES OF BUSINESS 2. 0 Chapter 3 Characteristics of Business 2. 0 3 -36

Content Sharing Through Open Sourcing Chapter 3 • Open system – Nonproprietary hardware and software based on publicly known standards that allows third parties to create add-on products to plug into or interoperate with the system § Source code § Open source 3 -37

User-Contributed Content Chapter 3 • User-contributed content – Created and updated by many users for many users § Reputation system – Where buyers post feedback on sellers 3 -38

Collaboration Inside the Organization Chapter 3 • Collaboration system – Set of tools that supports the work of teams or groups by facilitating the sharing and flow of information • Collective intelligence – Collaborating and tapping into the core knowledge of all employees, partners, and customers • Knowledge management - Involves capturing, classifying, evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions 3 -39

Collaboration Inside the Organization Chapter 3 • Knowledge-based assets fall into two categories § Explicit knowledge – Consists of anything that can be documented, achieved, and codified, often with the help of IT § Tacit knowledge – Knowledge contained in people’s heads 3 -40

Collaboration Outside the Organization Chapter 3 • Crowdsourcing – the wisdom of the crowd § Asynchronous communication § Synchronous communication 3 -41

NETWORKING COMMUNITIES WITH BUSINESS 2. 0 Chapter 3 • Social media – Websites that rely on user participation and user-contributed content • Social network – An application that connects people by matching profile information • Social networking – The practice of expanding your business and/or social contacts by a personal network 3 -42

Social Tagging Chapter 3 • Tags – Specific keywords or phrases incorporated into website content for means of classification or taxonomy § Social tagging § Folksonomy § Website bookmark § Social bookmarking 3 -43

Social Tagging Chapter 3 Folksonomy for Cellular Phones 3 -44

BUSINESS 2. 0 TOOLS FOR COLLABORATING Chapter 3 3 -45

Blogs Chapter 3 • Blog – Online journal that allows users to post their own comments, graphics, and video § Microblogging § Real simple syndication 3 -46

Wikis Chapter 3 • Wiki – Collaborative web page that allows users to add, remove, and change content, which can be easily organization and reorganized as required § Network effect 3 -47

Mashups Chapter 3 • Mashup – Website or web application that uses content from more than one source to create a completely new product or service § Application programming interface § Mashup editor 3 -48

THE CHALLENGES OF BUSINESS 2. 0 Chapter 3 3 -49

WEB 3. 0 Chapter 3 • Web 3. 0 – Based on “intelligent” Web applications using natural language processing, machine-based learning and reasoning, and intelligence applications • Semantic Web – A component of Web 2. 0 that describes things in a way that computers can understand 3 -50

Egovernment: The Government Moves Online Chapter 3 • 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 citizenconsumer within all branches of government 3 -51

Egovernment: The Government Moves Online Chapter 3 3 -52

Mbusiness: Supporting Anywhere Business Chapter 3 • Mobile business - The ability to purchase goods and services through a wireless Internet-enabled device 3 -53