Managing information systems 7th edition brow ch07

Copyright © 2011 Pearson Education, Inc.. SOME DEFINITIONSE-Business Systems Enable the electronic transmission of business transactions or other related information between a buyer an

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-1

MANAGEMENT INFORMATION SYSTEMS

CHAPTER 7 E- BUSINESS SYSTEMS

SOME DEFINITIONS

E-Business Systems

Enable the electronic transmission of business transactions or other

related information between a buyer and seller

Dot-Com (pure-play)

A business that conducts business solely through their Web site (single channel)

Bricks and Clicks (click-and-mortar)

A company that uses Internet sales as an additional channel to an

offline business (multichannel)

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-3

SOME DEFINITIONS

Internet

A worldwide network of networks, accessible to the public, that

employs the TCP/IP protocol

Intranet

A private network operating within an organization that employs the

TCP/IP protocol, to provide information, applications, and other tools for use by the organization’s employees

Extranet

A portion of a company’s private intranet that is accessible via the

internet to authorized organizations that are business partners (such

as customers or suppliers)

E-BUSINESS GROWTH

e-business growth

members is proportional to the number of other connected

users in the network

times that of the network on the left

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-5

LEGAL AND REGULATORY ENVIRONMENT

Environmental influences on Internet growth:

of purchase not clear via Internet and federal government chose not to implement an Internet sales tax

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-7

E-BUSINESS TECHNOLOGIES: FIRST DECADE

E-BUSINESS TECHNOLOGIES

• Pre-Internet B2B electronic commerce used EDI

EDI (Electronic Data Interchange):

Proprietary applications for communicating with trading partners

based on agreed-upon standards for business document

transmission

EDI (Electronic Data Interchange):

Proprietary applications for communicating with trading partners

based on agreed-upon standards for business document

transmission

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-9

E-BUSINESS TECHNOLOGIES

• XML enables B2B electronic commerce via the Internet

XML (Extensible Markup Language):

A markup language standard to facilitate data interchange across

applications on the Web

XML specification:

Tags to convey the meaning of data

XML (Extensible Markup Language):

A markup language standard to facilitate data interchange across

applications on the Web

XML specification:

Tags to convey the meaning of data

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-11

E-BUSINESS TECHNOLOGIES

types of file content from their homes

E-BUSINESS TECHNOLOGIES

• Digital Signatures

Used to authenticate the sender of a digital message

Digital Signature:

A type of asymmetric cryptography that provides message

authentication by utilizing a public-private key pair

Digital Signature:

A type of asymmetric cryptography that provides message

authentication by utilizing a public-private key pair

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-13

STRATEGIC E-BUSINESS OPPORTUNITIES

(AND THREATS)

opportunities and threats on pre-existing companies due to the

influence of the Internet

STRATEGIC E-BUSINESS OPPORTUNITIES

(AND THREATS)

• Examples of potential Internet opportunities for existing

companies:

power over suppliers

- Distribution channels between traditional company and customer can be eliminated

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-15

STRATEGIC E-BUINESS OPPORTUNITIES

(AND THREATS)

- Migration to price competition – difficult to keep offerings

proprietary

- Increased number of potential competitors

- Internet reduces some traditional barriers (such as in-person sales

force)

- Customers increase their bargaining power – Internet reduces

customer’s switching costs

THE DOT-COM MELTDOWN

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-17

B2B APPLICATIONS

intermediaries are more likely to be needed

B2B APPLICATIONS

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-19

B2B APPLICATIONS

B2B

APPLICATIONS-• Reverse Auctions

Suppliers bid online in real time for a customer contract

They lower their prices to out bid their competitors

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-21

INTERNET USAGE ACROSS THE GLOBE

B2C APPLICATIONS

Seller Benefits:

• 24/7 access to customer for sales and support

• Lower costs from online channel

• Multimedia opportunities for marketing

• New ways to research potential markets

• New ways to distribute (if product/service can be digitized)

• Global reach to buyers

Fig 7.9: Potential B2C benefits to Sellers

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-23

B2C APPLICATIONS FOR RETAILERS

AMAZON

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-25

DOT-COM RETAILERS

- 2007: Proprietary video streaming

- 2010: Greater market share than Blockbuster

Netflix

CATALOG RETAILERS

- Developed custom software to support “mass customization” strategy

- By 2010: Increased focus on Business customers

DELL

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-27

CATALOG RETAILERS

- Traditional catalog seller

- Acquired by Sears in 2002

Landsend.com

STORE RETAILERS

- Superstore retailer of office products

- Launched online site in 1998

- Web site designed for online order efficiency

- By 2006: 25% of revenues from online sales; world’s largest

office products company

Staples

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-29

STORE RETAILERS

- Grocery supermarket, based in England

- By 2009: One of four successful multichannel grocery retailers

in the world

TESCO

DOT-COM INTERMEDIARIES

- By 2000: 80% of online auctions worldwide

eBay

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-31

DOT-COM INTERMEDIARIES

• Google

- Founded in 1998 by Stanford University students

- Leading online search engine

- 2010: Renewed compromise agreement with China for

censorship compliance

Google

DOT-COM INTERMEDIARIES

• Facebook

- Founded in 2004 by Harvard students

award-winning movie

Facebook

Copyright © 2011 Pearson Education, Inc publishing as Prentice Hall 7-33

WHAT MAKES A GOOD WEBSITE FOR CONSUMERS

.C

Context: Site layout and design - functionally vs aesthetically dominant or

both (integrated)

Content: Text, pictures, sound, and video that Web site contains, including

dominant “store types”

Commerce: Site’s capabilities to enable commercial transactions - functional

tools and pricing

Community: Ways that the site utilizes user-to-user communication to enable

feelings of membership and shared common interests

Connection: Extent to which the site is linked to other sites

Customization: Site’s ability to tailor itself to different users or to allow users

to personalize the site

WHAT MAKES A GOOD B2C SOCIAL MEDIA

• Usage goals aligned with business strategy

• Providing users control over their privacy settings