DOING BUSINESS DOING BUSINESS ON THE INTERNET. June 2, 2015 QUME 1852 Some Implications Removes the...
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Transcript of DOING BUSINESS DOING BUSINESS ON THE INTERNET. June 2, 2015 QUME 1852 Some Implications Removes the...
April 18, 2023 QUME 185 2
Some Implications
• Removes the impact of geography• Consumer has more power: Competitors are
only a click away• First impressions count• Small companies can look large and serve
global markets, allowing for specialization• Consumers have very high expectations• Fast response needed to stay competitive
April 18, 2023 QUME 185 3
Management Challenges
Internet provides many opportunities, but also challenges, such as:
• Electronic commerce & electronic business require a new way of thinking
• Finding a successful Internet business model
April 18, 2023 QUME 185 4
Internet Business Models
• Three basic categories of e-commerce
– B 2 C – Business to consumer
– B 2 B – Business to Business
– P 2 P – Peer to Peer
April 18, 2023 QUME 185 5
Retailers
• Retailers who have no physical presence eg. Amazon.com, (now over 10 years!)
• Retailers who have both physical stores and on-line stores eg. VIU Bookstore (Sometimes called Bricks and Clicks)
• Bricks, clicks, and catalogue – traditional mail-order business, plus physical store, plus on-line store eg. Mountain Equipment Co-op, L.L. Bean
April 18, 2023 QUME 185 6
Implications for Retailers
• Supply, inventory and delivery of physical goods.
• Technical capability of delivering digital products: – software titles– downloadable media
April 18, 2023 QUME 185 7
On-line auctions
• On-line auctions eg. E-Bay
• Revenue comes mainly from commissions
• Makes it easy for anyone to participate in on-line commercial activity
April 18, 2023 QUME 185 8
Information / Entertainment Providers
• Magazines eg. Slate and Salon
• Newspapers eg. New York Times
• Sports sites eg. ESPN
– Make money from a combination of advertising, subscriptions for premium content, affiliations with other sites
– Trend toward getting people to pay for content directly
April 18, 2023 QUME 185 10
Technology Affects the Business
• Internet technology allows organizations to communicate directly with their constituents
• Removes layers between the organization and its partners (e.g. suppliers)
• Reduces transaction costs in many ways
April 18, 2023 QUME 185 11
New Strategies
• Viral Videos on YouTube– Ikea– i-Tunes: Affects the entire music distribution
industry; a disruptive innovation– Second Life: Many organizations have a
presence there
April 18, 2023 QUME 185 13
More Business Models
• Virtual Storefront
• Marketplace Concentrator
• Online Exchange
• Information Broker
• Transaction Broker
• Auction
• Reverse Auction
• Aggregator• Digital Product Delivery• Content provider• On-line service
provider• Virtual Community• Portal• Syndicator
Some additional examples:
April 18, 2023 QUME 185 14
Internet Business Models: Selling
• Virtual Storefront– Sells goods and /or
services online– www.chaptersindigo.
ca• Marketplace
Concentrator– Concentrates
information and/or products from several providers
– www.canadashop.com
• Online Exchange– Bid-ask system, multiple
buyers and sellers– www.U-Swap.com
• Aggregator– groups come together to
gain volume discounts– www.accompany.com
April 18, 2023 QUME 185 15
Internet Business Models: Auctions
• Auction– Dynamic pricing– www.eBay.com
• Reverse Auction– Consumers submit a bid to
multiple sellers– www.priceline.com
April 18, 2023 QUME 185 16
Business Models: Online Delivery, Products & Services
• Digital Product Delivery– Sell and deliver
software, multimedia, etc.
– www.Compusmart.com
• Content provider– creates revenue
through providing content for a fee, and through advertising
– www.yahoo.com
• On-line service provider – provides service
& support for hardware, software products
– www.PCSupport.com
April 18, 2023 QUME 185 17
Internet Business Models: Brokers & Syndicators
• Information Broker– Provides information
about products– www.travelocity.com
• Transaction Broker– Buyers view rates and
terms & completes transaction
– www.TDWaterhouse.com
• Syndicator– Aggregate
information or applications from several sources, sell to other companies
– www.Sportsline.com
April 18, 2023 QUME 185 18
Internet Business Models: Web Entries & Communities
• Virtual community– Provides an online meeting place for
people with common interests– www.kidshelp.sympatico.ca
• Portal– Initial point of entry to Web,
specialized content, services– www.yahoo.com
April 18, 2023 QUME 185 19
Electronic Commerce
Business to Business
B2B
C2C
Consumer to consumer
Business to consumer
B2C
April 18, 2023 QUME 185 20
Intranets
• Using Internet technology to support internal organizational needs– E-mail– Document sharing– Online repositories of information– Remote access to resources– Group collaboration
April 18, 2023 QUME 185 21
Intranets: Organizational Benefits
• Cross platform availability• Can be tied to internal & transaction
processing systems• Interactive applications with text,
audio, video• Scalable as required• Easy to use Web interface• Low start-up costs• Improved information sharing• Reduced cost of distributing
information
April 18, 2023 QUME 185 22
Challenges & Opportunities
• Unproven business models
• Business processes require change– channel conflicts
• Legal Issues
• Security and Privacy
April 18, 2023 QUME 185 23
E-commerce in Canada
• There is a higher percentage of Canadians than Americans using the Internet
• But . . . Canadian businesses are underrepresented on the Internet– Only 6 percent of Canadian businesses
selling online in 2000, down from 10% in 1999
– In 2000, e-commerce sales accounted for 0.4 % of revenues, up from 0.2% in 1999
– Canadians purchase from US companies
April 18, 2023 QUME 185 24
Internet Technology affects Relationships
Information flows seamlessly • Throughout the organization• With trading partners, suppliers &
distributors• To and from customers
April 18, 2023 QUME 185 25
Barriers to e-commerce in Canada
• High percentage of SMEs in Canada– May not have adequate resources to
develop e-commerce strategy & solution• Shortage of skilled IT workers• Lack of sense of urgency• Traditional investment decisions based on
ROI, which may not be appropriate • Conservative investor culture• Tax structure