Transcript Ch 4. The Digital Firm: E- Business and e
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce 4.1
THE DIGITAL FIRM: ELECTRONIC BUSINESS AND ELECTRONIC COMMERCE
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce OBJECTIVES
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How has Internet technology changed business models?
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What are the principal payment systems for e commerce?
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How can Internet technology facilitate internal business processes and SCM?
4.2
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What are the major managerial challenges posed by e-commerce?
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4.3
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS
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Business Model:
An abstraction of what an enterprise is Describes how the enterprise delivers a product or service eg: traditional bookstore vs Amazon.com
finding a successful one for e-commerce has been difficult
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Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce ELECTRONIC COMMERCE 4.4
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Business-to-Customer (B2C):
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Electronic retailing directly to individual customers Business-to-Business (B2B):
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Electronic sales among businesses Consumer-to-Consumer (C2C):
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Consumers selling electronically to other consumers Mobile Commerce (M-Commerce):
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use of handheld wireless devices for purchasing goods and services
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Used in B2B and B2C e-commerce transactions
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Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS 4.5
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Facilitates Dynamic Pricing:
Real-time interactions between buyers and sellers determine worth of items
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Facilitates Banner Ads
vs. Pop-up Ads (user must click to close)
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Makes ‘Disintermediation’ possible
removal of business process layers in a value chain
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Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS 4.6
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2005 Pearson Education Canada Inc.
4.7
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS
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Shrinks Information Asymmetry:
One party in a transaction has more information than the other
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Allows Web Personalization:
tailoring of web content directly to a specific user
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS 4.8
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2005 Pearson Education Canada Inc.
4.9
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS
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Reduces need to tradeoff
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Richness for Reach :
can now have both!
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Reduces Transaction Costs:
Reduces costs of finding buyers, collecting payments, and (perhaps) delivering product (eg?)
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Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce INFORMATION SYSTEMS IMPACT 4.10
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS 4.11
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2005 Pearson Education Canada Inc.
4.12
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS
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Makes possible new Business Models
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‘Virtual Storefront’: move from ‘bricks and mortar’ to ‘clicks and mortar’, or ‘pure play’ to sell product
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‘Net Marketplace’: Buyers and sellers meet - revenue from transaction fees. can serve either vertical or horizontal markets vs. Private Industrial Network
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Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS 4.13
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS 4.14
E.G.: Covisint to supply automobile ‘vertical market’
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4.15
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce THE EFFECT OF THE INTERNET ON BUSINESS MODELS
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Makes possible new Business Models
‘Content Provider’:
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Provides digital content - customer pays for access
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Advertising can also provide revenue. ‘Portal’: initial point of entry to web specialized content and services
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce OBJECTIVES
•
How has Internet technology changed business models?
•
What are the principal payment systems for e commerce?
•
How can Internet technology facilitate internal business processes and SCM?
4.16
•
What are the major managerial challenges posed by e-commerce?
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce ELECTRONIC COMMERCE PAYMENT SYSTEMS Digital Credit Card Digital Wallet Secure services for credit card payments – see Chapter 11 for details Software that stores credit card info, address etc; e.g. Amazon.com’s 1-Click shopping Accumulated Balance Payment System Accumulates micropayments as a debit balance; e.g. Qpass Digital Cash (e-cash) A stored value digital account enabling instant payments; e.g. eCoin, Mondex smart cards Peer-to-Peer Payment Digital Chequing Electronic Billing 4.17
Digital currency for vendors who do not have pre-arranged payment options; e.g.PayPal
Electronic cheque with digital signature; e.g. CHEXpedite Supports electronic payment of monthly bills; e.g. epost.ca
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce ELECTRONIC COMMERCE PAYMENT SYSTEMS 4.18
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce OBJECTIVES
•
How has Internet technology changed business models?
•
What are the principal payment systems for e commerce?
•
How can Internet technology facilitate internal business processes and SCM?
4.19
•
What are the major managerial challenges posed by e-commerce?
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce How Intranets Support Electronic Business 4.20
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce How Intranets Support Electronic Business 4.21
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce How Intranets Support Electronic 4.22
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©
2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce OBJECTIVES
•
How has Internet technology changed business models?
•
What are the principal payment systems for e commerce?
•
How can Internet technology facilitate internal business processes and SCM?
4.23
•
What are the major managerial challenges posed by e-commerce?
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce MANAGEMENT CHALLENGES & OPPORTUNITIES 4.24
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce MANAGEMENT CHALLENGES & OPPORTUNITIES 4.25
• • • •
Current status of E-Business in Canada:
Internet use per capita – higher than US E-commerce use per capita or per business – lower than US E-commerce sales
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up 27% in 2002 (down from 46% in 2001) .6% of total revenue 7 firms stopped using e-commerce in 2002 for every 10 that started What are the barriers?
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Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce MANAGEMENT CHALLENGES & OPPORTUNITIES 4.26
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Barriers Reported
(Cdn E-Business Roundtable): Products not suited to e-commerce (56%) Prefer current business model (36%)
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E.G. ‘channel conflicts’ Security concerns (14%) High costs (12%)
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HBC - $40M / yr to upgrade web site Lack of skills (10%) Customers not ready to purchase online (9.6%)
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Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce MANAGEMENT CHALLENGES & OPPORTUNITIES 4.27
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Other Barriers to consider:
Unproven business models Business process change requirements Legal issues Trust, security and privacy Lack of broadband access False sense of security in retail circles
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previously sheltered from US competition Investment decisions often based on ROI
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appropriate for e-commerce investment?
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4.28
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce MANAGEMENT CHALLENGES & OPPORTUNITIES
Roundtable Recommendations
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Put all government services online Canada already leads the world in e-government portal at http://www.gc.ca/
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Offer financial incentives to businesses Expand the e-business talent pool Build Canada’s e-business leadership profile internationally
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Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce 4.5 STATUS OF CANADIAN E-COMMERCE 4.29
Opportunities for Canadian Leadership: 1. Network Infrastructure 2. Multimedia North 3. Global Customer Care Centres 4. Remote Service Provider 5. Web Tools Developer
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2005 Pearson Education Canada Inc.
Management Information Systems, Second Canadian Edition Chapter 4: The Digital Firm: Electronic Business and Electronic Commerce 4.30
THE DIGITAL FIRM: ELECTRONIC BUSINESS AND ELECTRONIC COMMERCE
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2005 Pearson Education Canada Inc.