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The Second Wave of Global E-Business - Coggle Diagram
The Second Wave of Global E-Business
Into the Third Wave
History
Mid 1990s - 2000s
"Dot-com boom" to "dot-com bust"
2003: Signs of new life
Sales and profit growth return
Electronic commerce growing at a rapid pace
Eletronic commerce becomes part of general economy
2008: General Recessipn
Handheld devices lend the opportunity for third wave
Electronic commerce hurt less than most of economy
Electronic Commerce and Electronic Business
Electronic Commerce
Shopping on the Web
Business trading with other businesses
Internal company processes
All business activities using Internet technologies
Internet and World Wide Web (WEB)
Wireless transmissions on mobile telephone networks
Categories of Electronic Commerce
Dot-com (pure dot-com)
Businesses operating only online
Business-to-consumer (B2C)
Consumer shopping on the Web
Business-to-business (B2B)
Transactions conducted bertween Web business
Supply management (procurement) departments
Negative purchase transactions with suppliers
Activity
Task performed by a worker in the course of doing his or her job
Transaction: exchange of value
Purchase, sale or conversion of raw materials into finished product
Involves at least one activity
Consumer-to-consumer (C2C)
Individuals buying and selling among themselves
C2C sales included in B2C category
Business-to-government (B2G)
Business transactions with government agencies
Paying taxes
Filling required reports
B2G transactions included in B2B discussions
The Development and Growth of Electronic Commerce
Internet
Changed way people buy, sell, hire and organize business activities
Electronic funds Transfers (EFTs)
Wire transfers
Electronic transmissions of account exchange information
Electronic Data Interchange (EDI)
Business-to-business transmission of computer-readable data in standard format
Traiding partners
Business engaging in EDI with each other
EDI pioneers (General Electric, Sears, Walmart)
Value-added network (VAN)
Independent firm offering EDI connection and transaction-forwarding services
The Second Wave of Electronic Commerce
Electronic commerce first and second wave characteristics
Start-up capital
First wave: easy to obtain
Second wave: companies using internal funds
Regional Scope
First wave: United States phenomenon
Second wave: international
Interent technologies used
First wave: slow and inexpensive (espicially B2C)
Second wave: broadband connections
Electronic mail (e-mail)
First wave: unstructed communication
Second wave: integral part of marketing, customer contact strategies
Revenue source
First wave: online advertising (failed)
Second wave: Internet advertising (more successful)
The Third Wave Begins
Smart phone technology and tablet computers gave made internet availabale everywhere
Internet technology intergration
First wave: bar codes, scanners
Second wave: Radio Frequency Identification (RFID) devices, smart cards, biometric technologies
Business Models
Electronic commerce first wave
Investirs sought Internet-driven business models
Expectations of rapid sales growth, market dominance
Successful "dot-com" business models were emulated
Michael Porter argued business models did not exist
Revenue Models
Specific collection of business processes
Identify customer
Market to these customers
Generate sales
Classify revenue-generating activities for communication and analysis purposes
Focus on Specific Business Processes
Identify processes benefiting from e-commerce technology
Internet technologies as a means to facilitate business processes
Improve existing practices, identify new opportunities, adapt to change
Role of Merchandising
Salespeople skills
Identify customer needs
FInd products or services meeting needs
Merchandising and personal selling
Difficult to practice remotely
Product/Process Suitability to Electronic Commerce
Evaluating advantages/disadvantages of electronic commerce
Easier-to-sell products have
Strong brand reputation
Appeal to small but geographically diverse groups
Traditional commerce
Better for products relying on personal selling skills
Advantages and Disadvantages of Electronic Commerce
Provides faster transmission
Lower costs to issue and secure
Electronic payments of tax refunds
Public retirement
Welfare support
Products and services available in remote areas
Cautions and Concerns
Poor choices for electronic commerce
Perishable foods and high-cost, unique items
Cultural and legal concerns
Consumers resistant to change
Cultural differences; security, privacy and payments
Ambiguous and conflicting laws
Economic Fores and Electronic Commerce
Study how people allocate scare resources
Through commerce abd governement actions
Organization hierarchy (flat or many levels)
Bottom level includes largest number of employees'
Pyramid structure
Transaction costs
Motivation for moving economic activity to hierarchically stuctured firms
Transaction costs
Total costs a buyer and seller incur
While gathering information and negotiating purchase-and-sale transaction
Includes
Brokerage fees and sales commissions
Cost of information search and acquisition
Using Electronic Commerce to Reduce Transaction Costs
Electronic commerce
Change vertical intergration attractiveness
Change transaction costs' level anc nature
Example: employment transaction
Telecommuting
May reduce or eliminate transaction costs
Markets and Hierarchies
Manufacturing innovations increased monitoring activities' efficiency and effectiveness
Oliver Williamson (extended Coase's analysis)
Complex manufacturing, assembly operations
Hierarchically organized, vertically intergrated
Network Economic Structures
Strategic alliances (strategic partnerships)
Coordinate strategies, resources, skill sets
Form long-term, stable relationships with other companies and individuals
Based on shared purposes
Strategic partners
Come together for specific project or activity
From many intercompany teams
Undertake variety of ongoing activities
Network Effects
Law of diminishing returns
Example: hamburger consumption
Network effect
Exception to law of diminishing returns
More people or organizations participate in network
Value of network to each participant increases
Examples: Landline and mobile phones
Identifying Electronic Commerce Opportunities
Industry
Multiple firms seiling similar products to similar customers
Firm
Multiple business units owned by a common set of shareholders or company
Focus on specific business processes
Commerce conducted by firms of all sizes
Strategic Business Unit Value Chains
Value chain
Organizing strategic business unit activities to design, produce, promote, market, deliver and support the products or services
Michael Porter includes supporting activities
Human resource management and purchasing
Strategic business unit primary activities
Identify customers, deisgn, purchase materials and supplies, manufacture product or create srvice, market and sell, deliver, provide after-sale service and support
Central corporate organization support activities
Finance and adminstration
Human resource
Technology development
Industry Value Chains
Delivery of product to customer
Use a purchased materials in its value chain
Awareness of businesses value chain activities
Allows identification new opportunities
Useful way to think about about general business strategy
Evaluating Business Unit opportunities
SWOT analysis
Strengths, weakness, opportunities and threats
Take advantage of opportunities
Build on strenghts
Avoid threats
Compensate for weakness
International Nature of Electronic Commerce
Internet connects computers worldwide
Key international commerce issues
Trust
Language
Culture
Government
Infrastrutucre
Trust Issues on the Web
Important to establish trusting relationship with customers
Rely on established brand names
Difficult for online businesses
Anonymity exixts in Web presence
Banking example: browsing site's pages
Difficult to determine bank size or how well established
Language issues
Provide local language versions of Web site
"Think globally, act locally"
High priorty pages to translate
Marketing, product information, establishing brand
Cultural issues
Select icons carefully
Shopping cart versus shopping baskets, trolleys
Hand signal for "OK": obscene gesture in Brazil
Online business apprehension
Japenese shoppers' unwillingness to pay by credit
Culture and Government
Online disvussion inhospitable to cultiral environments
Intenet censorship
Restricts electronic commerce
Reduces online participant interest levels
Infrastructure Issues
Internet infrastructure
Computers and software connected to internet
Communications networks' message packets travel
Freight forwarder
Arranges international transactions' shipping and insurance
Customer broker
Arranges tariff payment and compliance
