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E-Business - PowerPoint PPT Presentation

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E-Business. John A. Hengeveld. Agenda for Today. E-Business Amazon.com Monster.com. Pearlson Chapter 7. Definitions. Discussion: Whats the difference between: Internet Extranet Intranet E-Marketplaces. E-Marketplaces.

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E business l.jpg


John A. Hengeveld

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Agenda for Today

  • E-Business

  • Amazon.com

  • Monster.com

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  • Discussion: Whats the difference between:

    • Internet

    • Extranet

    • Intranet

    • E-Marketplaces

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  • E-Marketplace: special type of network that brings different companies together.

  • Sometimes called net-markets, they are typically built by a consortium of businesses in a market, or by an e-business interested in providing the marketplace.

  • Both vertical and horizontal e-marketplaces exist.

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Basic Internet Business Models

  • B-to-B: targets other businesses

  • B-to-C: targets consumers

  • B-to-E (employee): companies provide service to employees of other companies.

  • B-to-G: companies provide services to local, state and national governments

  • C-to-C: Consumers interact with other consumers.

  • Hybrid: combines B-to-B & B-to-C models

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Web-based business mechanisms

  • Auctions: Web-based auction site (e-bay).

  • Reverse auctions: sellers offer items to meet buyer’s requests (priceline.com).

  • Net markets: provides a place for buyers and sellers to meet.

  • Portals: combined offering of information, services and links to other sites (Yahoo!).

  • Bricks & clicks: storefront plus Web site.

  • ASPs: offer business process functionality over the web to customers that use the site for internal business processes.

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EDI: infrastructure for e-commerce

  • What is it?

  • Give examples…

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Advantages and Disadvantages of E-Business

  • Four important issues affecting e-business are:

    • Cost

    • Speed

    • Security

    • Competitiveness

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Cost advantages of e-business

  • E-business systems require less human interaction so less labor and training is required.

  • In the case of EDI, RJR Nabisco calculates that the cost of processing a purchase was brought down from about $100/order to $1/order.

  • Another area of cost savings is through reductions in inventory costs.

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Speed advantages of e-business

  • E-business systems also generally process transactions more quickly than human operators. Orders can be processed in real-time.

  • Catalogs can be maintained online, so the need to print and mail them is gone.

  • In the case of some information products, such as MP3 based music files, the products themselves can be downloaded from the web, lead time to nothing.

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E-Business and Security

  • Security used to be a major consideration for Web-based e-business, but is less so now as e-commerce security continues to improve.

  • Traditional credit systems are also vulnerable to security breaches such as forging signatures or using credit card numbers taken from discarded or stolen receipts.

  • Security innovations using secure servers, digital signatures and encryption are now widespread.

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E-Business and Competition

  • The Internet has lowered barriers to entry for new retailers.

  • Many e-business startups now compete with long-established firms.

  • Since the web is undifferentiated, web sites for both new and old companies have essentially the same appeal.

  • On the Web, delivery and responsiveness are key to competitiveness, not simply how the web site looks.

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Fig. 7.5 Kalakota and Whinston’s E-commerce framework

  • Four key building blocks:

    • Common business services infrastructure

    • Message and information distribution

    • Multimedia content and network publishing

    • The Internet (infrastructure)

  • Two supporting pillars:

    • Public policy (“governance”)

    • Technical standards

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Common Business Services Infrastructure

  • The common business infrastructure for electronic commerce consists of three main elements:

    • Security

    • Electronic Payments

    • Directory Services and Search Engines

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  • Authentication

  • Encryption

  • Firewalls

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  • Authentication is the security process of verifying that a user is who he or she says they are.

  • Passwords are the most common type of authentication.

  • Digital signatures are now gaining popularity for authenticating transmitted information.

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Authentication: digital signatures

  • Digital signatures take the place of ordinary signatures in online transactions to prove that the sender of a message is who he or she claims to be.

  • When received, the digital signature is compared with a known copy of the sender’s digital signature.

  • Digital signatures are also sent in encrypted form to ensure they have not been forged.

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  • Encryption systems translate data into a secret code.

  • Encryption systems include 4 main components:

    • Plaintext: the unencrypted message

    • An encryption algorithm: that works like the locking mechanism to a safe

    • A key that works like the safe’s combination

    • Ciphertext is produced from the plaintext message by the encryption function.

    • Decryption is the same process in reverse (like a modulation/demodulation), but it doesn’t always use the same key or algorithm. Plaintext results from decryption.

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Encryption Techniques

  • There are three important encryption techniques now in use:

    • Symmetric encryption in which both sender and receiver use the same key.

    • Asymmetric or public key encryption, which uses two separate keys, called public and private keys.

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Symmetric Encryption

  • Symmetric or private key encryption, uses the same algorithm and key to both encrypt and decrypt a message.

  • Historically, this is the most common encryption technique.

  • Since the key must be distributed, however, it is vulnerable to interception. This is an important weakness of symmetric key encryption.

  • DES uses symmetric encryption.

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Asymmetric or Public Key Encryption

  • A second popular technique is asymmetric or public key encryption (PKE).

  • PKE is called asymmetric since it uses two different “one way” keys:

    • a public key used to encrypt messages, and

    • a private key used to decrypt them.

  • PKE greatly reduces the key management problem since the private key is never distributed.

  • PGP (pretty good privacy) is a popular form of PKE available as shareware.

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Secure servers

  • Secure servers protect the privacy of the data they send and receive through encryption.

  • Secure sockets layer is a standard for secure interactions use on the Web. SSL, uses a combination of private key encryption (using a one-time session key) and digital signatures to enhance the security of transmission.

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  • Firewalls block intruders from entering a website or possibly blocking access to the outside by employees in a company.

  • For example, a hacker, an intruder trying to attack a corporate website might encounter a firewall making it more difficult to get access to the servers.

  • Likewise, an employee trying to get outside the corporate intranet might be block from doing so by a firewall.

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Electronic Payments

  • Includes: credit cards, electronic checks, EFT, smart cards, and e-cash.

  • Common types of e-payments systems are:

    • Virtual terminals (“online equivalent to credit card swipe machine”)

    • Transaction processors (www.itransact.com)

    • Internet checking services (www.redicheck.com)

    • Electronic funds transfer

    • Digital Cash(www.digicash.com)

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Directory and Search Engines

  • Directory services: keep track of who and what (servers, databases) is where on the Internet.

    • DNS is the most important of these

  • Search engines: keeps track of information (files) on the world wide web (WWW).

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Messaging and Information Distribution Infrastructure

  • Second building block of supporting framework for e-commerce. Used for moving messages over the Internet.

    • E-mail (including listserv)

    • Newsgroups

    • Pt-to-pt file transfers (FTP)

    • Groupware (Instant Messenger, CU-SeeMe, NetMeeting)

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Multimedia Content

  • Third building block of supporting framework for e-commerce. Includes standards for various multimedia file types. Examples of materials transported in this way include:

  • Video

  • Audio

  • Text/Electronic documents

  • Graphics & Photos

  • Realtime/Non-realtime applications (prioritization)

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Internet Infrastructure

  • Fourth building block of supporting framework for e-commerce. Includes data communications circuits over which information travels. Includes:

  • Packet-switched networking (telephony is circuit-switched)

  • Packets contain overhead information including addressing

  • They are also routed, like mail

  • All of this flows across Internet backbones

  • Newer Internet access technologies include wireless access, cable access and DSL.

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Public Policy

  • Public policy is one of two supporting pillars for e-commerce. Public policy issues include:

  • Public policy issues include: universal access, privacy, information pricing, information access.

  • Privacy issues include what information is private and/or who should have the right to use/sell information about Internet users:

    • Requesting personal information on visiting a web site

    • Creating customer profiles

    • Leaving electronic footprints when visiting a web site

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Technical Standards

  • Standardization is the second supporting pillars for e-commerce. Standards are critical for electronic interaction. TCP/IP is the standard “protocol suite” used by the Internet.

    • TCP is a “connection-oriented” protocol which establishes a connection between a client and a server

    • IP is a “connectionless” protocol responsible for the addressing and routing of the packets to their destination

  • An ongoing process exists for creating Internet standards. Members of the Internet Engineering Taskforce (IETF) first send out requests for comment (RFCs) which form the basis of new Internet standards.

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Other Uses of the Internet:

  • The growth of the Internet and especially the Web have sparked a wide variety of popular applications including those in the following areas:

    • Interpersonal Communication

    • News Media

    • Reference

    • Services

    • Entertainment

    • Education

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  • Assess the following quote:….

    “If learning can be embedded within business processes executed by workers, then organizations can make major changes in their business strategy and their organization strategy.”

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Okay.. Amazon.com

  • Compare walmart, amazon and barnes and noble websites.. What are strengths and weaknesses?

  • In the case, what is Amazon’s current strategy?Will Amazon ever achieve profitability?

  • What strategy should Amazon.com adopt?

  • What are the risks/issues with current and proposed strategy?

  • What are the keys to e-business success for Amazon.com?

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Okay.. Monster.com

  • Compare hotjobs, flipdog and monster.com websites.. What are strengths and weaknesses?

  • In the case, what is Monster.com (TMP’s) current strategy?

  • What strategy should Monster.com (TMP) adopt?

  • What are the risks/issues with current and proposed strategy?

  • What are the keys to e-business success for Monster.com?

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  • Okay, so you have strengths, weaknesses, opportunities and threats… SO WHAT??

  • Translate these abstract ideas into strategic options and agenda for action.

  • Start by listing the SWOT items

  • Look for options in the following chart

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List of SWOT elements

  • Strengths:

    • S1: Raw mindpower

    • S2: Good Looks

    • S3: Access to airplane tickets

  • Weaknesses:

    • W1: Poor social skills

    • W2: Bad breath

  • Opportunities:

    • O1: Growth in market for dentistry

    • O2: Growth in the market for male models

    • O3: The redhead down the street

  • Threats:

    • T1: The body builder who lives with redhead down the street

    • T2: Eroding stock market

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SWOT for strategic option development

Strengths Weaknesses

S1,O1: Enter career in dentistry

S1,O2: Become agent

S1-2,O3: Forget career - love

S2,O1: Become tooth model

S2:O2: Start Victors Rumor

S3, O1: Traveling dentist

W1-2,O1: Dental SW

W1,O2: Become talent lawyer

W1,O3: Cirano?

W2:O2: Become model

W2: O3: Invest in breath mints

<Acquire or partner>

Threat Opportunity

ST Strategies: Usually premptive strategies of some sort

WT Strategies: Usually divest strategies