The digital firm

4 THE DIGITAL FIRM: ELECTRONIC COMMERCE & ELECTRONIC BUSINESS c h a p t e r

LEARNING OBJECTIVES EXPLAIN HOW INTERNET TRANSFORMS BUSINESS COMPARE CATEGORIES OF ELECTRONIC COMMERCE EVALUATE PRINCIPAL ELECTRONIC PAYMENT SYSTEMS *

LEARNING OBJECTIVES DEMONSTRATE HOW INTERNET TECHNOLOGY SUPPORTS ELECTRONIC BUSINESS, SUPPLY CHAIN MANAGEMENT EXAMINE CHALLENGES OF INTERNET TO BUSINESS & SOCIETY *

MANAGEMENT CHALLENGES EMERGING DIGITAL FIRM ELECTRONIC COMMERCE ELECTRONIC BUSINESS CHALLENGES & OPPORTUNITIES *

MANAGEMENT CHALLENGES 1. ELECTRONIC COMMERCE & ELECTRONIC BUSINESS REQUIRE NEW MIND SET 2. FINDING SUCCESSFUL INTERNET BUSINESS MODEL *

INTERNET TECHNOLOGY & THE DIGITAL FIRM INFORMATION TECHNOLOGY INFRASTRUCTURE: Information flows seamlessly throughout DIRECT COMMUNICATION BETWEEN TRADING PARTNERS: DISINTERMEDIATION removes intermediate layers streamlines process *

INTERNET TECHNOLOGY & THE DIGITAL FIRM VENDORS CAN PROVIDE INFORMATION 24 HOURS A DAY CAN EXTEND DISTRIBUTION CHANNELS CAN REDUCE TRANSACTION COSTS *

INTERNET TECHNOLOGY & THE DIGITAL FIRM REDUCES INFORMATION ASYMMETRY : Asymmetry exists when one party has more information than other INCREASES RICHNESS : Depth & detail of information INCREASES REACH : Number of people contacted *

INTERNET BUSINESS MODELS VIRTUAL STOREFRONT: Sells goods, services on-line MARKETPLACE CONCENTRATOR: Concentrates information from several providers ON-LINE EXCHANGE: Bid-ask system, multiple buyers, sellers *

INFORMATION BROKER: Provide info on products, pricing, etc. TRANSACTION BROKER: Buyers view rates, terms from various sources AUCTION: Electronic clearinghouse products, prices, change in response to demand * INTERNET BUSINESS MODELS

REVERSE AUCTION: Buyer sets price, submits to multiple sellers AGGREGATOR: Group pools orders for volume discount DIGITAL PRODUCT DELIVERY: Sell, download software, other digital products * INTERNET BUSINESS MODELS

CONTENT PROVIDER: Creates revenue through providing client for a fee, and advertising ON-LINE SERVICE PROVIDER: Provides service, support for hardware, software products VIRTUAL COMMUNITY: Chat room, online meeting place * INTERNET BUSINESS MODELS

PORTAL: Initial point of entry to Web, specialized content, services SYNDICATOR: Aggregate information from several sources sold to other companies * INTERNET BUSINESS MODELS

ELECTRONIC COMMERCE BUSINESS-TO-CONSUMER (B2C) BUSINESS-TO-BUSINESS (B2B) CONSUMER-TO-CONSUMER (C2C): Individuals use Web for private sales or exchange *

BUSINESS-TO-CONSUMER WEB SITES: Provide information on products, services, prices, orders CUSTOMER-CENTERED RETAILING: Closer, yet more cost-effective relationship with customers INFORMATION BROKERS: Comparison shops to customer’s requirements, reintermediation *

BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE AUTOMATION OF PURCHASE, SALE TRANSACTIONS FROM BUSINESS TO BUSINESS PROVIDES ALTERNATIVE SOURCES ELECTRONIC HUBS: Online marketplaces, point-to-point connections, integrated information *

BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE EXCHANGES: Commercial on-line market, many buyers, sellers POTENTIAL FOR INTEGRATING PRODUCT INFORMATION PROVIDES SERVICE, VALUE *

ELECTRONIC COMMERCE PAYMENT SYSTEMS

INTRANETS AND ELECTRONIC BUSINESS BENEFITS FUNCTIONAL APPLICATIONS SUPPLY CHAIN MANAGEMENT *

BENEFITS OF INTRANETS: CONNECTIVITY CAN BE TIED TO LEGACY SYSTEM & TRANSACTION PROCESSING INTERACTIVE APPLICATIONS WITH TEXT, AUDIO, VIDEO SCALABLE TO LARGER OR SMALLER SYSTEMS AS REQUIRED *

BENEFITS OF INTRANETS: EASY TO USE BROWSER INTERFACE LOW START-UP COSTS RICH, RESPONSIVE INFORMATION ENVIRONMENT REDUCED INFORMATION DISTRIBUTION COSTS *

FUNCTIONAL APPLICATIONS: FINANCE & ACCOUNTING HUMAN RESOURCES SALES & MARKETING MANUFACTURING & PRODUCTION *

FINANCE & ACCOUNTING: GENERAL LEDGER REPORTING PROJECT COSTING ANNUAL REPORTS BUDGETING *

HUMAN RESOURCES: CORPORATE POLICIES EMPLOYEE SAVINGS PLANS BENEFITS ENROLLMENT ON-LINE TRAINING JOB POSTING *

SALES & MARKETING: COMPETITOR ANALYSIS PRICE UPDATES PROMOTIONAL CAMPAIGNS SALES PRESENTATIONS SALES CONTRACTS *

MANUFACTURING & PRODUCTION : QUALITY MEASUREMENTS MAINTENANCE SCHEDULES DESIGN SPECIFICATIONS MACHINE OUTPUT ORDER TRACKING *

SUPPLY-CHAIN MANAGEMENT SHIPPING INVENTORY PLANNING & FORECASTING ORDER PROCESSING PRODUCTION PROCUREMENT ACCOUNTING SUPPLIERS CUSTOMERS LOGISTICS SERVICES DISTRIBUTORS INTRANET INTRANET

CHALLENGES & OPPORTUNITIES UNPROVEN BUSINESS MODELS BUSINESS PROCESS CHANGE REQUIREMENTS CHANNEL CONFLICTS LEGAL ISSUES SECURITY & PRIVACY *

The digital firm

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The digital firm