management information system introduction to electronic...

By: Laxman Pokhrel

Management Information System Introduction to Electronic Business

UNIT -I

Venue: Liberty College, New Baneshwor

Date: 20th August 2017

1.2 Copyright © 2013 Laxman Pokhrel

Management Information Systems

Unit I: Introduction to Electronic Business

• Describe the unique features of e-commerce, digital

markets, and digital goods.

• Describe the principal e-commerce business and revenue

models.

• Explain how e-commerce has transformed marketing.

• Explain how e-commerce has affected business-to-

business transactions.

• Describe the role of m-commerce in business and the

most important m-commerce applications.

• Describe the issues that must be addressed when building

an e-commerce presence.

Learning Objectives




• E-commerce: Use of the Internet and Web to transact business.

• Began in 1995 and grew exponentially; still stable even in a recession.

• Companies that survived the dot-com bubble burst and now thrive.

• E-commerce revolution is still in its early stages.

E-commerce and the Internet



Unit I: Introduction to Electronic Business E-Business

vs TRADITIONAL BUSINESS

Key elements E-commerce Traditional commerce

Value Creation Information Product/Service

Strategy Sense and respond Simple rules Classical

Competitive edge Speed Quality/Cost

Competitive force Low barriers of entry

Power of customers

Power of suppliers

Product substitution

Resource focus Demand side Supply side

Customer interface Screen-to-face Face-to-face

Communication Technology-mediated channels Personal

Accessibility 24 x 7 Limited time

Customer

interaction

Self-service Seller influenced

Consumer behavior Personalization

One-to-one marketing

Standardization

Mass/one-way marketing

Promotion Word of mouth Merchandising

Product Commodity Perishables, feel & touch




Retail e-commerce revenues grew 15–25 percent per year until the recession of 2008–

2009, when they slowed measurably. In 2012, e-commerce revenues are growing

again at an estimated 15 percent annually.

The Growth of E-Commerce




Anonymous e-Mail Joke

Three beggars were begging in New York City, each with a small cup in his

hand. The first one wrote “beg” on his broken steel cup and he received 10

bucks after one day.

The second one wrote “beg.com” on his cup and after one day he

received hundreds of thousand dollars. Someone even wanted to take him

to NASDAQ.

The third one wrote “e-beg” on his cup. Both IBM and HP sent vice

presidents to talk to him about a strategic alliance and offered him free

hardware and professional consulting while Larry Ellison claimed on CNBC

that e-beg uses 95% Oracle technology and i2 announced e-beg Trade

Matrix, a B2B industry portal to offer supply chain integration in the beggar

community.




• Eight unique features of Internet and Web as commercial medium – Ubiquity

– Global reach

– Universal standards

– Richness

– Interactivity

– Information density

– Personalization/customization

– Social technology

E-Business and the Internet




– Ubiquity

• Internet/Web technology available everywhere: work, home, and so on, anytime.

•Effect:

– Marketplace removed from temporal, geographic locations to become “marketspace”

– Enhanced customer convenience and reduced shopping costs

•Reduces transaction costs

– Costs of participating in market





• Global reach

• The technology reaches across national boundaries, around Earth

• Effect:

• Commerce enabled across cultural and national boundaries seamlessly and without modification.

• Marketspace includes, potentially, billions of consumers and millions of businesses worldwide.





• Universal standards

– One set of technology standards: Internet standards

– Effect:

• Disparate computer systems easily communicate with one another

• Lower market entry costs—costs merchants must pay to bring goods to market

• Lower consumers’ search costs—effort required to find suitable products





• Richness

– Supports video, audio, and text messages

– Effect:

• Possible to deliver rich messages with text, audio, and video simultaneously to large numbers of people.

• Video, audio, and text marketing messages can be integrated into single marketing message and consumer experience.





• Interactivity

– The technology works through interaction with the user.

– Effect:

• Consumers engaged in dialog that dynamically adjusts experience to the individual.

• Consumer becomes co-participant in process of delivering goods to market.





• Information density

– Large increases in information density—the total amount and quality of information available to all market participants

– Effect:

• Greater price transparency

• Greater cost transparency

• Enables merchants to engage in price discrimination





• Personalization/Customization

– Technology permits modification of messages, goods

– Effect:

• Personalized messages can be sent to individuals as well as groups.

• Products and services can be customized to individual preferences.





• Social technology

– The technology promotes user content generation and social networking

– Effect:

• New Internet social and business models enable user content creation and distribution, support social networks

• Many-to-many model





• Effect of the Internet on the marketplace: – Reduces information asymmetry

– Offers greater flexibility and efficiency because of: • Reduced search costs and transaction costs • Lower menu costs • Greater price discrimination • Dynamic pricing

– May reduce or increase switching costs

– Increased market segmentation

– Stronger network effects

– More disintermediation





The typical distribution channel has several intermediary layers, each of which adds to the final

cost of a product, such as a sweater. Removing layers lowers the final cost to the consumer.

The Benefits of Disintermediation to the Consumer




• How Internet reduces transaction cost?

Transaction Traditional Internet

Checking bank account balance $1.08 $0.13

Answering customer question $10-$45 $1-$5 email query

$0.1-$0.2 Web self

Trading 100 shares of stock $100 $9.95

Processing an expense record $36, 22days $4-$8, 72hours

Paying a bill $2.22-$3.22 $0.65-$1.1

Sending an advertising brochure $0.75-$10 $0-$0.25

Internet-based Business sector




• Digital goods – Goods that can be delivered over a digital network

• For example: music tracks, video, software, newspapers, books

– Cost of producing first unit is almost entire cost of product

– Costs of delivery over the Internet very low

– Marketing costs remain the same; pricing highly variable

– Industries with digital goods are undergoing revolutionary changes (publishers, record labels, etc.)





• Three major types of e-business

– Business-to-consumer (B2C)

• Example: thamel.com

– Business-to-business (B2B)

• Example: alibaba,

– Consumer-to-consumer (C2C)

• Example: eBay, hamrobazar.com

• E-commerce can be categorized by platform

– Mobile commerce (m-commerce)





The ‘newer’ models

• C2B – consumers sourcing possibilities from corporations

• G2C – interactions with citizens, not consumers





E-Business Markets

To Business To Consumer To Government

Initiated by

Business

Business-to-Business

(B2B)

Ariba

www.ariba.com

Business-to-

Consumer (B2C)

Amazon

www.amazon.com

Business-to-

Government (B2G)

Western Australian

Government Supply

www.ssc.wa.gov.au/

Initiated by

Consumer

Consumer-to-Business

(C2B) Better Business Bureau

site

www.bbb.org

Consumer-to-

Consumer

(C2C)

eBay

www.ebay.com

Consumer-to-

Government

(C2G)

GovWorks

www.govworks.com

Initiated by

Government

Government-to-Business

(G2B)

Small Business

Administration site

www.sba.gov

Government-to-

Consumer

(G2C)

USPS

www.usps.com

Government-to-

Government

(G2G)

FirstData

http://www.fdgs.com/




Electronic Business Models

• A business model defines how a company will meet the needs of

its customers while making a profit.

• An e-commerce business model is a business model appropriate

for conducting business via electronic networks.




• Electronic business models

Electronic Business and Technology





E-commerce: Business and Technology




Questions??

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