BusinessWeek Articles. Out-Discounting the Discounter: Why dollar stores that sell at cut-rate prices are giving Wal-Mart pause. Dollar General, Family Dollar, Dollar Tree, Big Lot.Wal-Mart is putting stores in the largest US cities. 1994: 13 stores in cities with over 1 million people. 2004: 38 stores in cities with over 1 million people..
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1. What’s Happening?! Gateway has announced the closing of its stores.
Siebel has a new CEO.
Amazon.com announced a profitable quarter.
Forbes most wealthy Americans.
2. BusinessWeek Articles Out-Discounting the Discounter: Why dollar stores that sell at cut-rate prices are giving Wal-Mart pause.
Dollar General, Family Dollar, Dollar Tree, Big Lot.
Wal-Mart is putting stores in the largest US cities.
1994: 13 stores in cities with over 1 million people.
2004: 38 stores in cities with over 1 million people.
3. Schedule Interview BIS Market Research boss today.
Midterm Exam on Thursday. Same format as first exam with additional essay question.
All material covered to date.
ISM Career Panel the following Tuesday.
Chapter 8 the following Thursday plus Access orientation.
Thursday – database project lab session.
4. Welcome to BIS Market Research! A highly admired, professional market research organization.
Have a premier list of clients.
Enables us to charge a premium fee for the great things that we do for our clients.
5. Current Project Provide survey data to the VC client that supports the fact that the Internet is a viable channel to sell products.
Identify 5 to 7 individuals to do a follow-on focus group to gain additional perspective of attitudes and priorities that are not identified via the survey data.
6. Chapter 6 Summary Enterprise e-Business Systems
11. SCM Supply Chain Management
A cross-functional inter-enterprise system that integrates and automates the network of business processes and relationships between a company and its suppliers, customers, distributors, and other business partners.
Allows a company to achieve agility and responsiveness in meeting its goals by enabling it to design, build and sell its products using a network-based approach involving business partners and processes within the supply chain.
12. SCM Benefits and Challenges In planning, SCM helps with supply chain design and collaborative demand and supply planning.
In execution, SCM helps with materials management, collaborative manufacturing, collaborative fulfillment, supply chain event management, and supply chain performance management.
A company that used SCM effectively is Wal-Mart while Solectron Corporation had problems with it.
13. CRM Customer Relationship Management
Is a cross functional enterprise system that integrates and automates many of the customer serving processes in sales, marketing and customer services that interact with a company’s customers.
Customer relationships have become the most valuable asset for a company because it is very easy to switch companies today. It is important to keep the customers happy.
A company that has used CRM successfully is Mitsubishi motors.
15. In Summary E-Business includes all aspects of business conducted over an interlinked network, not just buying and selling.
Enterprise resource management, supply chain management, and customer relationship management can greatly increase a company’s advantage in the business environment. However, if a company is not careful, they can still fail.
16. Possible Test Questions What is CRM and why is it more important now than ever before for a company’s success?
Explain how ERP can help a company succeed in its business environment.
17. Chapter 7 Introduction
18. What Is Electronic Commerce?
20. E-Commerce Applications
21. Electronic Payment Systems
22. The Segments of E-Commerce Infrastructure – The physical system of equipment necessary for a network (Sun Microsystems)
Applications – Organization, presentation, analysis, tracking, reception and transmission of information (Adobe, Oracle)
Portals – Search and navigation (Yahoo!, Google)
Content – Information and data (CNN, Reuters)
Services – Online services (Travelocity, Amazon)
Exchanges – Online trading (eBay, etc.)
23. How To Be Successful With E-Commerce Selection and value – Product satisfaction and customer support
Performance and service –Website navigation and prompt delivery
Look and feel – Of the website
Advertising and incentives – Targeted advertising and special offers
Personal attention – Personalized product recommendations interactive support
Community relationships – Online communities of customers and chat rooms
Security and reliability – Security of customer information and reliability of online ordering
24. Ways to Make Money via the Internet Sell things.
Charge for advertising.
Charge a basic fee for access.
Over time the only approach that seems to
work is the first one.
25. Raises Social Issues The Internet as a business channel (a way to sell
products or services) raises a number of social issues
that have some people very concerned.
Freedom of speech issues
Sales tax issues
26. Chapter 7 Electronic Commerce Systems
27. Internet Perspective Roadmap
28. Internet World
29. Strategic Value of the Internet Assessing strategic value of the Internet to a
business by way of:
E-Commerce to sell products
Interaction with customers
Customization of web sites and services
Collaboration internally and with customers
Global Dissemination & Communications
Integration into other networks and businesses
30. Best Customer Strategy? Web-only?
Bricks and Clicks?
Integrated Bricks and Clicks?
Separate Bricks and Clicks?
31. What is e-Business?
32. E-Commerce Versus E-Business
33. What is e-Commerce? The buying, selling, and support of products and services over the World Wide Web and other Internet based technologies.
Applications include business to consumer and business to business.
Includes multiple forms of payment via Electronic Funds Transfer (EFT) which consist of networked banks and credit card companies.
Security methods in use include Secure Socket Layer (SSL) automatically encrypts data being sent and received through web browsers.
34. Big Picture The Internet has become a major force in making long and short range communication and collaboration easier.
Interactive marketing and E-Commerce have given customers a new way to do business with businesses and consumers.
The strategic value of the Internet for businesses have provided for better customer interaction, revenue, and internal communication.
35. Business-to-Business Commerce
36. Win/Win Process
37. B2B Benefits
38. EDI Applications
39. EDI System Obstacles
40. Electronic Data Interchange (EDI) Through the Use of a VAN
41. The Bad News
42. B2B Integration Feasibility
45. Dell, Inc.
46. Dell Business Strategies
48. Direct Business Model
49. Customer Focus
50. Dell Premier Web Pages
51. Product Development
52. Strong Business Alliances
54. Dell and the Internet
55. Customer Value Product availability.
Consistency of delivery.
Ease of placing orders.
Ease of communication.
56. Success in e-Business
57. B2C Perspective
58. B2C Skeptic
59. Assessing the Impact of B2C
60. A Small Brick-and-Mortar Retailer
61. A Small Brick-and-Mortar Retailer
62. The Evolution of B2C
63. Electronic Commerce Few concepts have revolutionized business more
profoundly than e-commerce.
It has changed:
The nature of competition.
The speed of action.
The streamlining of interaction.
The payment process with customers and suppliers.
64. Changed Industries Retail Books.
65. .Com Bust Corporate America can be forgiven for allowing itself a small sigh of relief that it didn’t get “Amazoned.”
Or overrun by Expedia like travel agents.
When the NASDAQ buckled in 2000, the corporate felt that it was time to relax—relieved that things weren’t going to change as radically or as rapidly as they had feared.
66. Uh-oh, the threat is back! BusinessWeek, May 10, 2004 special report.
67. E-Biz Strikes Again! Web-based companies are gain threatening to force
down prices, squeeze profit margins and put some
companies out of business.
68. Industry Candidates?! Jewelry.
69. Jewelry Industry Hunters: eBay, Diamond.com, Amazon.com, Blue Nile.
Online companies represented $2 billion of the $45 billion industry during 2003.
Amazon says it can buy a diamond for $500 and sell if for $575 versus $1,000 from a traditional jeweler.
Blue Nile, Inc. has been in business for five years and did $129 million in sales in 2003 while making a $27 million profit.
Diamond Industry Newsletter: “The upstarts are going to kill everyone.”
During 2003, 465 jewelry stores closed.
70. Blue Nile Deals directly with major suppliers through its own network online.
Provides independent quality ratings on diamonds.
Offers a 30 day money-back guarantee.
It has 115 full time employees and a 10,000 square foot warehouse.
To equal its $129 million in sales it is estimated that a traditional jeweler would need 116 stores and 900 employees.
Traditional jeweler who stopped carrying diamonds: “Anyone with half a brain will go to the Internet to buy a diamond.”
71. Amy Smith 31 years old.
Oohed and aahed over engagement rings at Tiffanfy & Co. near her home in Potomac Falls, Va.
When she got engaged last October she checked out other stores including Blue Nile.
She Blue Niles guides to master the Four Cs of diamonds (color, cut, clarity and carats) and picked out a $10,000 ring at Tiffanfy.
Blue Nile beat them by almost $6,000.
72. Bill Payment Industry Hunters: Viewpointe, Endpoint Exchange and NetDeposit that manage archives of digital checks and provide check exchange software and service.
Hunted: Check printing companies like Deluxe and check transport specialists like AirNet plus community banks.
At Stake: A $30 billion industry that handles the printing, transporting and processing of checks.
The number of checks within the US that is about 40 billion a year, is expected to decline 25% over the next three years.
73. Telecom Industry Hunters: Vonage, Net2Phone, etc.
Vonage charges 2/3 less for long distance service. (voice over IP)
Net phone calls are expected to hit $6.7 billion in 2007 up from $281 million in 2003.
Net technology makes it much easier for small companies to compete with the large telecom companies.
Large telecom companies will also roll out similar service.
74. Hotel Industry Hunters: Expedia, Travelocity, Orbitz
At stake: Pricing and profits in the $80 billion US hotel industry.
Online companies have an increasing number of loyal customers that they can direct to the most cooperative hotelries.
By 2006, the online companies are expected to account for 17% of the hotel market up from 8% in 2003.
75. Real Estate Industry Hunters: Lending Tree, zipRealty.
At Stake: Control of $60 billion US residential real estate commission business.
In a highly fragmented market, the web-based companies are expected to take 4% within three years.
76. Software Industry Hunters: Red Hat, JBoss, MySQL.
At Stake: Profits in $200 billion worldwide software industry.
Open source packages are gaining momentum. MySQL has 5,000 customers for its database software. Could force existing software companies to lower prices and become innovative to stay ahead of open source alternatives.
77. Internet Market
78. Internet Communities
79. Internet Communities
80. Community Conclusions
81. The Promise of B2C
82. Loyalty Plays a Big Part of B2C
83. eBay Inc. and Amazon.com: Lessons from e-Business Leaders
87. eBay Features and Services
88. eBay Features and Services
89. eBay Alliances
90. eBay Profile
91. Data Volumes
92. A Data Centric Business Model
94. Would the Amazon.com Business Model Work?
97. What they offer…. Convenience
A huge selection
Quick web page performance and accuracy
Personal notification system
Reviews by other customers
Gift-wrapped books with a personalized note
A complete, money-back guarantee
98. How Does Amazon.com Compete?
99. Personalized Services
102. What About Price?
103. Financial Status
104. Buy Rates
106. Amazon.Com Original Strategy
107. Important Business Issues
108. The Internet Obliterates Traditional Barriers
109. Success of B2B and Intranets Compared to B2C?
110. Three Important Questions
114. Making Money Via the Internet
115. Internet Retailer Demographics
116. Is Brand Identity a Key Factor?
117. Secure Payments on the Internet Vendors want safe and secure transactions on the Internet through the use of encryption (code and scramble).
Secure Socket Layer (SSL) by Netscape Communications
Secure Electronic Transaction (SET) Backed by companies such as Visa, MasterCard, IBM, etc.
118. Internet Fraud
119. Essential e-Business Processes Security and Access Control
Profiling and Personalization
Collaboration and Trading
120. Electronic Payment Processes Web Payment
B2C – Credit Cards
B2B – Purchase Orders
Electronic Funds Transfer
Secure Electronic Payments
121. Workflow Management Express the predefined sets of business rules,
role of stakeholders, authorization requirements,
routing alternatives, databases used and sequence of
tasks required for each e-Commerce process.
122. Bricks and Clicks Strategies Full Integration
Capitalize on existing capabilities to support E-Business
Share brand name, business information, buying power and distribution
Joint Ventures, Strategic Partnerships, Spin-Offs
123. Internet Pornography Size of the industry $57.0 B world-wide, $12.0 B US Adult videos $20 billion
Escort services $11 billion
Magazines $7.5 billion
Sex clubs $5 billion
Phone sex $4.5 billion
Cable/Pay per view $2.5 billion
Internet $2.5 billion
CD-Rom $1.5 billion
Novelties $1.0 billion
Other $1.5 billion
Industry is larger than all combined revenues of all professional football, baseball and basketball franchises.
Child pornography generates $3 billion annually.
124. Internet Pornography Pornographic websites 4.2 million (12%)
Pornographic pages 372 million
Daily pornographic search engine requests 68 million (25%)
Daily pornographic emails 2.5 billion (8%)
Average daily pornographic emails/user 4.5 per Internet user
Daily "child pornography" requests 116 thousand
Websites offering illegal child pornography 100 thousand
Chat room sexual solicitations of youths 89%
Youths who received sexual solicitation 20%
Worldwide visitors to pornographic web sites 72 million
125. Internet Child Pornography Average age of first exposure to pornography 11 years old
Largest consumer of Internet pornography ages 12 - 17
15-17 year olds having multiple hard-core exposures 80%
8-16 year olds having viewed porn online 90% (most while
7-17 year olds who would freely give out home address 29%
7-17 year olds who would freely give out email address 14%
Children’s character names linked to thousands of porn
links 26 (Including Pokeman and Action Man)
126. Internet Gambling The world's first virtual online casino, Internet Casinos, Inc. (ICI) opened its doors on August 18, 1995 with 18 different casino games, online access to the National Indian Lottery, and plans to launch an Internet sports book.
The government of Liechtenstein is operating an online international lottery in six different languages, including Chinese.
According to Rolling Good Times Online gambling magazine, there are 452 gambling-related sites on the net.
127. Internet Gambling Most of these companies are located offshore to thwart government prosecution;
ICI operates out of the Turks and Caicos Islands and WagerNet out of Belize.
Bettors can either send cash through one of the companies offering secure payment systems for the Internet or open an offshore account, a requirement for Americans at ICI's site
Bets can be as low as a nickel for certain slot machines and go into the thousands of dollars.
128. Internet Gambling The economics are excellent.
It can cost $300 million to build a new resort casino which employs thousands,
ICI's virtual casino was developed for only $1.5 million and employs only 17 individuals.
ICI has said that the "house" cut averages about 24%, versus the typical U.S. casino house take, which ranges between 8% to 16% of each dollar wagered.
Interactive Gaming & Communications' Sports International handled $48 million dollars in its first year of 800 telephone line operations and managed to make a profit of almost $250,0000.
129. Internet Gambling Policy Implications: Is this a development the law should try
In evaluating the impact of online gambling, governments need to consider not only the loss of revenue to out-of-state organizations, but also the ancillary costs and benefits posed by cyberspace casinos.
One way to evaluate the potential impact of online gaming is to examine the experience of communities in which gambling has recently been legalized for its direct and indirect effects.
Legalized gambling in some form now exists in 48 states (only Utah and Hawaii are completely free of gambling). Casino gambling, specifically, is legal in more than 20 states.
130. Internet Gambling After gambling is legalized, communities experience a 100-550% increase in the number of addicted gamblers.
Every compulsive gambler impacts between seven and seventeen other people.
The mean gambling debt of compulsive gamblers is $52,000 to $92,000.
A study by Gambler's Anonymous found that 47% of compulsive gamblers had engaged in insurance related fraud or thefts where insurance companies had to pay the victims.
40% of white collar crime is thought to be caused by those with serious gambling problems.
Within three years after gambling was introduced to Atlantic City, the city experienced a tripling of total crime, rocketing from 50th to 1st in crime rate per capita.
The national price tag for compulsive gambling is currently estimated at $56 billion per year.
131. Freedom of Speech
132. Internet Sales Tax Online companies with a physical presence in a state are required
to collect and report taxes on sales made to customers living
within that same state.
There are more than 7,500 state and local entities collecting sales
taxes in the United States, each with its own system of rates and
In 1998 Congress postponed any decision to address the sales tax
Forty-two states and the District of Columbia are engaged in a
project to simplify the sales tax problem.
The National Research Council released a report Wednesday
recommending that the U.S. regulate the Web carefully but
sparsely, that a flat tax be levied on e-commerce and that low-
income families receive vouchers to help them get connected.
133. Internet Sales Tax The European Union is enacting a law requiring the collection
of taxes on digital goods like software and music downloads.
If you sell such digital items abroad, you will have to collect
the EU's Value Added Tax (VAT) based on where the buyer
is physically located.