MIST201 Chapter 3: Ebusiness PDF

CHAPTER THREE EBUSINESS ELECTRONIC BUSINESS VALUE Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu DISRUPTIVE VERSUS SUSTAINING TECHNOLOGY  What do steamboats, transisto...

CHAPTER THREE EBUSINESS ELECTRONIC BUSINESS VALUE Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu DISRUPTIVE VERSUS SUSTAINING TECHNOLOGY  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  Innovator’s Dilemma discusses how established companies can take advantage of disruptive technologies without hindering existing relationships with customers, partners, and stakeholders Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu  THE INTERNET AND WWW – ULTIMATE BUSINESS DISRUPTORS  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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu  WEB 1.0: THE CATALYST FOR EBUSINESS  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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu EXPANDING GLOBAL REACH  The Internet’s impact on information  Easy to compile  Increased richness  Increased reach  Improved content Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu OPENING NEW MARKETS  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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu REDUCING COSTS  The Long Tail – Refers to the tail of a typically sales curve Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu REDUCING COSTS  Intermediary – Agents, software, or businesses that provide a trading infrastructure to bring buyers and sellers together  Disintermediation (direct selling)  Reintermediation  Cybermediation Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu IMPROVING EFFECTIVENESS  Interactivity - Measures advertising effectiveness by counting visitor interactions with the target ad, including time spent viewing the ad, number of pages viewed, and number of repeat visits to the advertisement.  Heat map - A two-dimensional representation of data in which values are represented by colors. Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu IMPROVING EFFECTIVENESS  Clickstream data tracks the exact pattern of a consumer’s navigation through a website  Clickstream data can reveal  Number of page views  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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu IMPROVING EFFECTIVENESS  Generating marketing revenue on the Internet  Associate program (affiliate program) - Businesses generate commissions or royalties Holding advertisement for other businesses  Banner ad - Box running across a web page that contains advertisements  Pop-up ad - A small web page containing an advertisement  Viral marketing - A technique that induces websites or users to pass on a marketing message Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu  IMPROVING EFFECTIVENESS  Clickstream analytics - The process of collecting, analyzing and reporting aggregate data about which pages a website visitor visits—and in what order.  Website traffic analytics - Uses clickstream data to determine the efficiency of the site for the users and operates at the server level.  Website ebusiness analytics - Uses clickstream data to determine the effectiveness of the site as a channel-to- market. Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu THE FOUR EBUSINESS MODELS  Ebusiness model – A plan that details how a company creates, delivers, and generates revenues on the internet Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu THE FOUR EBUSINESS MODELS Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu BUSINESS-TO-CONSUMER (B2C)  Common B2C Ebusiness Models Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu EBUSINESS FORMS AND REVENUE- GENERATING STRATEGIES  Common ebusiness forms  Content providers  Infomediaries  Online marketplaces  Portals (Google, Microsoft)  Service providers  Transaction brokers Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu EBUSINESS FORMS AND REVENUE- GENERATING STRATEGIES  Search engine – Website software that finds other pages based on keyword matching similar to Google  Search engine ranking – Evaluates variables that search engines use to determine where a URL appears on the list of search results  Search engine optimization – Combines art along with science to determine how to make URLs more attractive to search engines resulting in higher search engine ranking Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu EBUSINESS FORMS AND REVENUE- GENERATING STRATEGIES  Ebusiness revenue models  Advertising fees  License fees  Subscription fees  Transaction fees  Value-added service fees  Pay-per-click  Pay-per-call  Pay-per-conversion Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu EBUSINESS FRAUD  Affiliate program - Allows a business to generate commissions or referral fees when a customer visiting its website clicks a link to another merchant’s website.  Click fraud - The practice of artificially inflating traffic statistics for online advertisements.  Hitbots - Create the illusion that a large number of potential customers are clicking the advertiser's links, when in fact there is no likelihood that any of the clicks will lead to profit for the advertiser. Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu EBUSINESS TOOLS FOR CONNECTING AND COMMUNICATING  Email  Instant messaging  Podcasting  Videoconferencing  Web conferencing  Content management system Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu WEB 2.0: ADVANTAGES OF BUSINESS 2.0  Web 2.0 – The next generation of Internet use – a more mature, distinctive communications platform characterized by three qualities  Collaboration  Sharing  Free Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu  WEB 2.0: ADVANTAGES OF BUSINESS 2.0  Direct-to-Consumer (DTC) - Ebusiness model where companies build, market, sell, and ship their products themselves, without relying on traditional stores or intermediaries  Customer Experience  Data Collection  Reduced Costs of Business  Characteristics 2.0 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu CONTENT SHARING THROUGH OPEN SOURCING  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  Closed source Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu USER-CONTRIBUTED CONTENT  User-contributed content – Created and updated by many users for many users  Reputation system  Native advertising Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu COLLABORATION INSIDE THE ORGANIZATION  Collaboration system – Tools that support 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  Knowledge-based assets fall into two categories  Explicit knowledge – Consists of anything that can be documented, achieved, and codified  Tacit knowledge – Knowledge contained in people’s heads Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu COLLABORATION OUTSIDE THE ORGANIZATION  Crowdsourcing – the wisdom of the crowd  Asynchronous communication  Synchronous communication Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu  NETWORKING COMMUNITIES WITH BUSINESS 2.0  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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu BUSINESS 2.0 TOOLS FOR COLLABORATING Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu  WEB 3.0  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 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reprodu ction or distribution without the prior written consent of McGraw-Hill Edu