Creating a Winning E-Business

Second Edition

Understanding E-Business
Chapter 1
 Learning Objectives
 Discuss e-business basics
 Describe the Internet and World Wide Web
 Discuss the role of e-business in the global
economy
 List e-business advantages and disadvantages

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Second Edition, Chapter 1
 Learning Objectives
(continued)
 Explain e-business value chains and value
activities
 Identify e-business models

Creating a Winning E-Business 3

Second Edition, Chapter 1
 E-Business Basics
 E-commerce – Process of buying or selling
goods or services across a telecommunications
network
 E-business – Widest spectrum of business
activities using Internet and Web technologies
 Many technologies facilitate e-business
– Electronic funds transfer (EFT)
– Electronic data interchange (EDI)
– Internet / World Wide Web
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Second Edition, Chapter 1
 The Internet and
World Wide Web
 Network
– Group of two or more computers
– Linked by communication media
• Cable
• Telephone lines
• Wireless connections
 Networks servers
– Give users access to shared network resources
– Printers, files, telecommunication lines
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Second Edition, Chapter 1
 The Internet and
World Wide Web (continued)

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Second Edition, Chapter 1
 The Internet and
World Wide Web (continued)
 Internet
– A worldwide public network that connects private
networks
– Originated in the late 1960s as ARPANET
– Managed by the National Science Foundation in
the 1980s and early 1990s as NSFnet
– Connected colleges, universities, and research
centers
– Commercial activity was prohibited until 1991

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Second Edition, Chapter 1
 The Internet and
World Wide Web (continued)
 Internet (continued)
– Replaced by commercial high-speed
telecommunications backbones in 1995
• Individuals and SMBs connect via an Internet
Service Provider (ISP)
• Large businesses, colleges, and universities may
have direct connection

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Second Edition, Chapter 1
 The Internet and
World Wide Web (continued)

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Second Edition, Chapter 1
 The Internet and
World Wide Web (continued)

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Second Edition, Chapter 1
 The Internet and
World Wide Web (continued)

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Second Edition, Chapter 1
 The Internet and
World Wide Web (continued)
 World Wide Web (Web)
– A subset of the Internet
– Built on the concept of hypertext
– System of linked pages called Web pages
– Related Web pages are called a Web site
– Viewed in a Web browser
– Stored on Web servers
 Millions of people around the world access
the Internet and Web daily

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Second Edition, Chapter 1
 E-Business and the
Global Economy
 Widespread linking of individuals and
businesses has changed global economy
– Time and space are no longer limiting factors
– Business value of information is greater
– Information is more accessible
– Traditional intermediaries have been replaced
by new types of intermediaries

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Second Edition, Chapter 1
 E-Business and the
Global Economy (continued)
 Buyers are growing more powerful
 Internet and Web access has changed
buyers expectations
– Information on competing products
– Transaction speed and convenience

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Second Edition, Chapter 1
 E-Business and the
Global Economy (continued)

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Second Edition, Chapter 1
 E-Business and the
Global Economy (continued)

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Second Edition, Chapter 1
 E-Business and the
Global Economy (continued)

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Second Edition, Chapter 1
 E-Business and the
Global Economy (continued)

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Second Edition, Chapter 1
 E-Business and the
Global Economy (continued)

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Second Edition, Chapter 1
 E-Business and the
Global Economy (continued)
 Value chain or value network
– Activities involved in the production of goods
or services
– Internet and Web technologies facilitate value
chains and networks
• Improve communication
• Improve transaction speed
 Internet and Web access allows businesses
to rethink their value chains

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Second Edition, Chapter 1
 E-Business and the
Global Economy (continued)

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Second Edition, Chapter 1
 E-Business and the
Global Economy (continued)

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Second Edition, Chapter 1
 E-Business Models
 Business models
– How a company conducts business in order to
generate revenue
– Widespread access to the Internet and Web
allows companies to adapt old models and
create new ones
 E-business models are often categorized by
type of customer

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Second Edition, Chapter 1
 E-Business Models
(continued)

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Second Edition, Chapter 1
 E-Business Models
(continued)
 Business-to-consumer (B2C)
– Retail sales (e-retail) including airline tickets,
entertainment venue tickets, hotel rooms, stock
purchases, diet and fitness programs
 Brick-and-mortar companies are moving to
brick-and click companies
– Sears, Best Buy, Barnes & Noble, the Gap
 Pure-play e-retailers and catalog merchants
– Amazon.com, eBags, Harry and David

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Second Edition, Chapter 1
 E-Business Models
(continued)

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Second Edition, Chapter 1
 E-Business Models
(continued)

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Second Edition, Chapter 1
 E-Business Models
(continued)

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Second Edition, Chapter 1
 E-Business Models
(continued)
 Business-to-business (B2B)
– Businesses selling to other businesses
– Online stores, such as Office Depot, Staples
– Internet and Web technologies
• Web hosting
• Web design
• Hardware and software
• Consulting

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Second Edition, Chapter 1
 E-Business Models
(continued)
 Business-to-business (B2B)
– Online trading communities for vertical markets
– Exchanges, aggregators, auctions
• Virtual marketspaces for buyers and sellers
• Elance, ATLA Exchange, Business.com,
HedgeHog

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 E-Business Models
(continued)

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Second Edition, Chapter 1
 E-Business Models
(continued)

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 E-Business Models
(continued)

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Second Edition, Chapter 1
 E-Business Models
(continued)
 Business-to-government (B2G)
– Businesses provide a marketspace for other
businesses and government agencies
– Bidmain, B2GMarkets

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 E-Business Models
(continued)

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Second Edition, Chapter 1
 E-Business Models
(continued)
 Consumer-to-consumer (C2C)
– Consumers sell or exchange products and
services directly with other consumers
– Auctions, online classified ads, expert information
exchanges
• eBay, American Boat Listing, TraderOnline.com,
AllExperts

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Second Edition, Chapter 1
 E-Business Models
(continued)

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Second Edition, Chapter 1
 E-Business Models
(continued)

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Second Edition, Chapter 1
 E-Business Models
(continued)
 Consumer-to-business (C2B)
– Reverse auctions in which a single consumer
names his or her own price for products or
services
– Consumer’s offer made to multiple businesses,
which can accept or decline offer
– Priceline.com

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Second Edition, Chapter 1
 E-Business Models
(continued)

Creating a Winning E-Business 40

Second Edition, Chapter 1
 Chapter Summary
 E-business – Conducting a broad spectrum of
business activities over a telecommunications
network
 Internet – A worldwide public network that
connects private networks
 World Wide Web – A subset of the Internet
 Time, space, and geographic location no longer
limiting factors

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Second Edition, Chapter 1
 Chapter Summary
(continued)
 Buyers are growing more powerful
 Businesses are rethinking their value chains
 Business model – The way a company conducts
its activities in order to generate revenue
 Businesses are adapting old business models
and creating new ones
 E-business models – B2C, B2B, B2G, C2C, C2B

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Second Edition, Chapter 1