E-Commerce-Exam 1: Lessons 1-5
Categorization Difficulties
"Don't put all your eggs in one basket" • Many different e-commerce business models exist • Technology & Innovation = newer ones constantly • Many organizations use MULTIPLE business models Amazon, GoDaddy, Google= Lot's of $$$$ • Countless e-Commerce Enablers exist (L2: Part 3)
Market Opportunity
"What marketspace do you intend to serve and what is its size?" • Marketspace: Area of actual or potential commercial value in which company intends to operate • Realistic market opportunity: Defined by revenue potential in each market niche in which company hopes to compete • Niche Marketing: A portion of a larger market
E-Business vs. E-Commerce
*E-Business: Back of the House - Information, Research, Details, 24×7 - Back Office (SCM-Supply Chain Management, ERP, Ordering, P2P-Production-to-Payment) -Dealing with your Suppliers! -How you run your entire business *E-Commerce: Front of the House -What your customers are doing - SELL/Exchange Something of Value to your customers -More $$$$ -Retail is where the profit margin comes it, where the money hits the road -A subset of E-Business -Smaller portion that deals with buying and selling goods and services from your customers
Outsourcing Benefits
*Outsourcing benefits include: •Increased quality and efficiency • Reduced operating expenses = Outsourcing non-core processes •Reduced exposure to risk •Economies of scale, expertise, and best practices •Access to advanced technologies • Increased flexibility • Avoid costly outlay of capital funds • Reduced headcount and associated overhead expense • Reduced time to market for products or services
B2B Models: E-Distributer
B2B Models: E-distributor • Version of retail and wholesale store or supplier • Sell Direct and Indirect goods • Owned by one company seeking to serve many customers - benefit: One Single Supplier & Invoice! • Revenue model: Sales of goods (e.g. Staples & Grainger)
You should use a travel agent b/c
Best prices Exclusive offers Lots of options Travel expertise Industry insiders Peace of mind Time savings Help is a phone call away Money savings Personalize suggestions
Key elements of a business model
COMPONENTS & KEY QUESTIONS Value Proposition-Why should the customer buy from you? Revenue Model-How will you earn money? Market Opportunity-What marketspace do you intend to serve, and what is its size? Competitive Environment-Who else occupies your intended marketspace? Competitive Advantage-What special advantages does your firm bring to the marketspace? Market Strategy-How do you plan to promote your products or services to attract your target audience? Organizational Development-What types of organizational structures within the firm are necessary to carry out the business plan? Management Team-What kinds of experiences and background are important for company's leaders to have?
E-commerce business model
Uses/leverages unique qualities of the Internet, and the web
9/11: We will NEVER forget
WI NEVER Forget (20 yrs ago) =>Now - the 1st generation not even born back then • Forever changed our lives going forward • New World: Intercept/Obstruct Terrorist Acts • It SIGNIFICANTLY Changed how we: • BANK: ~Open bank accounts (Patriot/Freedom Act) ~Move $ • TRAVEL: ~TSA/TSA-Pre/Global Entry ~Passports ~Real ID Act •9/11 changed travel: ~More security ~Less Privacy ~More data ~Longer lines ~Scanning/shoe removal ~Evolving procedures
Firm Value Chains
• Activities that a firm engages in to create final products from raw inputs • Each step adds value • Effect of Internet: ~Increases operational efficiency ~Enables product differentiation ~Enables precise coordination of steps in chair
Travel Trends:$$$ via Internet
• Additional Airline Revenue Streams? ~Wi-Fi Onboard ($, Usage, Proper Behavior) ~Free TV on Southwest! ~Baggage Fees (1, 2, >50lbs. ~SW: EarlyBird Check-In Fee (up to +$25 now/segment) ~1st Class Upgrades at Kiosk or Online? ~"Premium" Meals/Snacks for Purchase • Hotel Upgrades Online & Onsite • Rental Car Upgrades Online & Onsite • Cruises: Pre-Pay/Pre-Purchase
Factors in Website Optimization
• Advantages - Lowers menu costs _ Permits easy online market segmentation - Enables cost-free price discrimination - Enables content management system (CMS) • Page Generation ~ server response time device space, accelerators, efficient resource allocation, resource utilization threshold, monitoring site performance • Page Delivery ~ content delivery networks, edge caching bandwidth • Page Content ~ Optimize HTML optimize images, site, architecture, efficient, Page style
Limitations of the Current Internet
• Bandwidth limitations ~Slow peak-hour service • Quality of service limitations ~Latency (Case Study/Quiz Reading) (Akamai) • Network architecture limitations ~Identical requests are processed individually • Wired Internet ~Copper and expensive fiber-optic cables (e.g. TECHNICAL LIMITATIONS)
How does e-commerce change business?
• Changes industry structure by changing: ~The rivalry among existing competitors (Market Share) ~Creates barriers to entry (difficult for others to enter & survive) ~There is ALWAYS the threat of new/substitute products ~Suppliers of the products kind of own all the cards ~Buyers have a HUGE degree of bargaining power • The structure (way) we do business has changed
Telephone-Based Wireless Internet Access
• Competing 3G standards ~GSM: Used world-wide, AT&T, T-Mobile ~CDMA: Used primarily in U.S., Verizon, Sprint • Evolution: ~3G cellular networks: next generation, packet-switched ~3.5G (3G+) ~4G (WiMax, LTE) ~5g
The Internet2 Project
• Consortium of 40+ institutions collaborating to facilitate revolutionary Internet technologies • Primary goals: ~Create leading-edge very-high speed network for national research community ~Enable revolutionary Internet applications ~Distributed and collaborative computing environmen for sciences, health, arts and humanities initiatives
B2B Models: E-Procurement
• Creates digital markets where participants transact for indirect goods B2B service providers, application service providers (ASPs) Helps your business scale up/globally.... • Revenue model: Service fees, supply-chain management, fulfillment services (e.g. SAP Ariba)
The Internet: Key Technology Concepts
• Defined as network that: ~Uses IP addressing ~Supports TCP/IP ~Provides services to users, in manner similar to telephone system • Three important concepts: ~Packet switching ~TCP/IP communications protocol ~Client/server computing
B2C Models: Content Providers
• Digital content on the Web News, music, video, text, artwork • Revenue models: Use variety of models, including advertising, subscription; sales of digital goods Key to success is typically owning the content • Variations: Syndication Aggregators
Domain Names, DNS, and URLS
• Domain name ~IP address expressed in natural language • Domain name system (DNS) ~Allows numeric IP addresses to be expressed in natural language • Uniform resource locator (URL) ~Address used by Web browser to identify location of content on the Web ~URL Registration: •Go Daddy com •HostGator
E-commerce Enabler: The Gold Rush Model
• E-commerce infrastructure companies have profited the most: ~Hardware, software, networking, security ~E-commerce software systems, payment systems ~Media solutions, performance enhancement ~CRM software HostGator we eat up the competition ~Databases ~Hosting services, etc. (e.g. GoDaddy.com, HostGator, Volusion, Webs, WIX, Weebly) ~Low cost/ Low risk and FREE trials ~Minimal technical skills required
Internet Marketing: (L8) Email Campaign
• Effective Email Marketing: • Segment Based • Targeted • Customized Email • Multiple Campaigns • Tracking Results • Always with a Call-to-Action! • Later in the semester, we will talk MORE with examples of good & bad emails for the Semester Project!
The Internet & Web Features
• Features on which the foundations of e-commerce are built: ~Communication tools ~Search engines ~Downloadable and streaming media ~Web 2.0 applications and services ~Virtual reality and augmented reality ~Intelligent digital assistants • WE already know about all of these things and pretty much USE them DAILY!
Cloud Computing
• Firms and individuals obtain computing power and software over Internet ~(e.g., Google Apps, SalesForce.com..) • Services: ~Infrastructure, Software, Platform (all as a service) • Types: Public, Private & Hybrid • Radically reduces costs of: ~Building and operating Web sites ~Infrastructure, IT support ~Hardware software staff • Issues: Who's got YOUR Data & Where? ~Security/Access/Sabotage/ Nationalization ~Outages/DownTime ~ Backups/Recovery ~24x7 Support ~AutoPilot Monitoring/Resolution • Risk: Dependent on an outside provider • "Container" Data Centers
Hypertext & Markup Languages
• Hypertext: ~Links connect documents to one another, and to other objects such as sound, video, or animation files ~Uses Hypertext Transfer Protocol (HTTP) and URLs to locate resources on the Web • Hypertext Markup Language (HTML) ~Fixed set of pre-defined markup "tags" used to format text ~Controls look and feel of Web pages ~HTML5 the newest version • eXtensible Markup Language (XML) ~Designed to describe data and information ~Tags used are defined by user
Online Travel Discussion
• Impact to those not booking online travel? • Research: Information Overload? • Travel Review Sites: ~"User Generated Content?" ~Truthful vs. Retaliation ~TripAdvisor.com ~Lesson 3 Links: • Taking On Review Sites • Fake Reviews • Review of the Guest Reviewer (AirBnB host)
B2B Models: Exchanges
• Independently owned vertical digital marketplace for goods & services • Revenue model: ~ Transaction, commission fees • Create powerful competition between suppliers • Tend to force suppliers into powerful price competition to "Win the Bid" • The number of exchanges has dropped dramatically
B2B Models: Industry Consortia
• Industry-owned vertical digital marketplace open to select suppliers • More successful than exchanges ~Sponsored by powerful industry players ~Strengthen traditional purchasing behavior • Revenue model: Purchase-to-Pay ~Transaction, commission fees (e.g. SupplyOn)
The Internet: Technology Background
• Internet ~Interconnected network of thousands of networks and millions of computers ~Links businesses, educational institutions, government agencies, and individuals • World Wide Web (Web) ~One of the Internet's most popular services ~Provides access to billions, possibly trillions, of Web pages
Other Internet Protocols and Utility Programs
• Internet Protocols/Tools: ~HTTP: Protocol used to transfer Web pages ~SMTP, POP and IMAP: Protocols used to send and receive e-mail ~FTP: Protocol that permits users to transfer files from server to client and vice versa ~SSL: Protocol that provides secure communications between client and server ~Telnet: Program that enables a client to emulate a mainframe computer terminal • Utility Programs: ~Ping: Utility program that allows you to check connection between client and server ~Tracert: Utility program that allows you to follow par a message sent from a client to a remote computer
Intranets & Extranets
• Intranet ~TCP/IP network located within a single organization for communications and processing ~Used by private & government organizations for internal networks • Extranet ~Formed when firms permit outsiders to access their internal TCP/IP networks
Imagine Your E-commerce Presence CONT.
• Know yourself-SWOT analysis • Develop an e-commerce presence map • Develop a timeline: Milestones • How much will this cost? ~Simple Web sites: up to $5000 ~Small Web start-up: $25,000 to $50,000 ~Large corporate site: $100,000+ to millions ~OR use Volusion (ramp up over time)! volusion
The Future Internet
• Latency solutions (Akamai) ~diffserv (differentiated quality of service) "Throtteling" • Guaranteed service levels and lower error rates ~Ability to purchase the right to move data through network at guaranteed speed in return for higher fee • Declining costs ~The Internet of Things (IoT): Objects connected via sensors/RFID to the Internet ~"Smart things" ~Interoperability, standards, and privacy concerns
Pieces of the Site-Building Puzzle
• Main areas where you will need to make decisions: ~Human resources and organizational capabilities • Creating team with skill set needed to build and manage a successful site ~Do-it-Yourself or a Tool for: ~Hardware/software ~Telecommunications ~Site design
Building an E-commerce Site: A Systematic Approach
• Most important management challenges: ~Developing a clear understanding of business objectives ~Knowing how to choose the right technology to achieve those objectives •Factors to Consider: 1. Management 2. Hardware 13. Software 4. Design 5. Telecom 6. HR/Staffing
Firm Value via the web
• Networked business ecosystem •Uses Internet technology to coordinate the value chains of business partners •Coordinates a firm's suppliers with its own production needs using an Internet-based supply chain management system
Categorizing E-commerce business models
• No one correct way • Ch 182: Text categorizes according to: E-commerce sector (B2B, B2C, C2C, Social, Local) E-commerce technology (P2P, m-commerce) • Similar business models appear in more than one sector • Some companies use multiple business models (e.B., eBay: B2C, B2B & C2C)
B2C Models: Service Provider
• Online services (e.g., RocketLawyer, LegalZoom) • Value proposition Valuable, convenient, time-saving, low-cost alternatives to traditional service providers • Revenue models: Sales of services mostly but also perhaps subscription fees, advertising, sales of marketing data
B2C Models: E-Tailer
• Online version of traditional retailer • Revenue model = Product Sales • Variations: Virtual merchant Bricks-and-clicks Catalog merchant Manufacturer-direct • Low barriers to entry
Outsourcing Projects
• Onshore outsourcing - engaging another company within the same country for services • Nearshore outsourcing - contracting an outsourcing arrangement with a company in a nearby country • Offshore outsourcing - using organizations from developing countries to write code and develop systems
Who Governs the Internet?
• Organizations that influence the Internet and monitor its operations include: ~Internet Corporation for Assigned Names and Numbers (ICANN) ~Internet Assigned Numbers Authority (IANA) ~Internet Engineering Task Force (IETF) ~Internet Research Task Force (IRTF) ~Internet Engineering Steering Group (IESG) ~Internet Architecture Board (IAB) ~Internet Society (ISOC) ~Internet Governance Forum (IGF) ~World Wide Web Consortium (W3C) ~Internet Network Operators Groups (NOGs)
Build/Host your own vs. outstanding
• Outsourcing: Hiring vendors to provide services involved in building site • Build own vs. outsourcing: ~Build your own requires team with diverse skill set; choice of software tools; both risks and possible benefits • Host own vs. outsourcing ~Hosting: Hosting company responsible for ensuring site is accessible 24/7, for monthly fee ~Co-location: Firm purchases or leases Web server (with control over its operation), but server is located at vendor's facility
Business Strategy
• Plan for achieving superior long-term returns on the capital invested in a business firm • Five generic strategies: 1. Product/Service Differentiation 2. Cost (reduce acquisition/logistics...) 3. Scope (Global vs. local customers) 4. Focus (niche/narrow/segment) 5. Customer Intimacy /Interaction/bonding
Web Browser (Wars)
• Primary purpose to display Web pages but now include built in search, email, newsgroups... • Mix constantly changing! • Browser Usage Stats ~Make note of the super interesting SHIFT over the decades!
B2C Models: Community Provider
• Provide online environment (social network) where people with similar interests can transact, share content, and communicate (e.g., Facebook, LinkedIn, Twitter, Pinterest) • Revenue models: Typically hybrid, combining advertising, subscriptions, sales, transaction fees, affiliate fees (e.g. www.Huggies.com)
E-commerce Merchant Style Software
• Provides basic functionality for sales ~Online catalog • List of products available on Web site ~Shopping cart • Allows shoppers to set aside, review, edit selections, and then make purchase ~Credit card processing • Typically works in conjunction with shopping cart • Verifies card and puts through credit to company's account at checkout • Integrated Solutions 1. Shopping Cart 2. Merchandise Display 3. Order Management
B2C Business Models: Portal
• Search plus an integrated package of content and services (More in Ch11!!) • Revenue models: Advertising, referral fees, transaction fees, subscriptions for "Premium Services" • Variations: Horizontal/General- (AOL, Yahoo, MSN, Facebook) Vertical/Specialized (Vortal)- (www.Move.com) Search (Google, Bing, Ask) Government Sector- (USA.gov, Texas.gov)
Raising Capital
• Seed capital • Elevator Pitch • Traditional sources Incubators Commercial banks Angel investors Venture capital firms Strategic partners • Crowdfunding:
Industry Value Chains
• Set of activities performed by suppliers, manufacturers, transporters, distributors, and retailers that transform raw inputs into final products and services • Internet reduces cost of information and other transactional costs • Leads to greater operational efficiencies, lowering cost, prices, adding value for customers
Travel Trends & Issues?
• Socially Responsible/Impact Travel: ~Aka Mission Trip style Spring Breaks ~Haiti Relief Efforts (RCL) ~U.S. Cuba Ban ~"Green Travel" (LEED Certified) Straws/Tiny toiletry bottles ~Lawsuits? Starwood .vs. Hilton ~Human Trafficking **especially for the Super Bowl ~Hurricane relief: **Supplies, evacuations, Restore Tourism •Bahamas, Lake Charles, New Orleans/NE Travel/Time-Share scams • System Conversions: ~Passengers, Flights, Crew, Agent "issues" • Mergers: • ~Hotels Chains: •Marriott acquired Gaylord then Starwood •Wyndham acquired La Quinta • Airline Consolidations (Frequent Flyers/Guest Programs) ~Delta & Northwest ~United & Continental ~Southwest & AirTran ~American Airlines & U.S. Air ~Alaskan & Virgin America • Rewards Program Changes/Conversions
Intelligent Agents (Bots)
• Software programs that gather and/or filter information on a specific topic and then provide a list of results • Types include search bot, shopping bot, Web monitoring bot, news bot, chatterbot and now even Travel! (e.g. Trivago, Kayak)
Online Travel Strategies
• Strategies: ~Monitor fares for a trip (auto notify/email) ~Alternative Airports (SFO/Oakland, Miami/FLL) ~Potential Issues: DFW/DAL, IAH/HOU, ORD/MDW ~Hotel website guarantees & emails (e.g. Hilton) ~Social Media (TripAdvisor, Yelp...) ~Email (Pre/Post Stay, Past Guest) ~Multi-Media/Multi-Channel ~PriceLine (priceline.com) • EVENTS: Festivals, Bowl Games...
Testing, Implementation, and Maintenance
• Testing ~ Unit Testing ~ System Testing ~ Acceptance Testing • Implementation and maintenance: ~ Maintenance is ongoing ~ Maintenance costs: Similar to development costs ~ Benchmarking (Timing/Stress Test/Peak Demands)
TCP/IP
• Transmission Control Protocol (TCP): ~Establishes connections among sending and receiving Web computers ~Handles assembly of packets at point of transmission, and reassembly at receiving end • Internet Protocol (IP): ~Provides the Internet's addressing scheme • Four TCP/IP layers ~Network interface layer (Hardware: Connect) ~Internet layer ( The path) ~Transport layer (The how-TCP) ~Application layer (Applications)
Travel Tools: Apps!
• Travel Resources (Wi-Fi, Gates, Food, Directions...) • Plan & Manage your Travel: ~Airlines, Hotels, Rental Cars, Appts, Food ~Changes to your travel plans • Provider Apps: ~Rental Cars: Slot #, Upgrade, Change Vehicle ~Airline: Check-In, Gate#, Status, Boarding Pass, Modify/Cancel ~Hotel: Reservations, E-Check In, Modify/Upgrades, New, Last Minute (GPS) ~Additional REVENUE!
The Emerging Client: The Mobile Platform
• Trend: primary Internet access through: ~Tablets • Supplementing PCs for mobile situations • iPad, Surface, •Smartphones: So Many Choices.... ~Disruptive technology: • Shift in processors, operating systems • The MAJORITY of individuals access the internet via their smartphone' "constantly"
What Details/Issues are involved?
• Trip Schedule •Mode/Route of Travel • Budget/Costs/Payments • Lodging, Food & Beverage • Transportation once arrived • WiFi Solution or NONE? • Maps/Apps/Addresses/Destinations • Excursion/Event/Activity Tickets • Weather Outlook (what to wear/pack) • Being "Prepared"
Mobile Devices & Apps
• Use of mobile Devices & Apps ~Most popular entertainment media, over TV ~Always present shopping tool ~Almost all top 100 brands have an app • Primary Platforms: ~iOS(iPhone/iPad) & Android • App marketplaces: ~Google Play, Apple's App Store, ~MOST of us only use a few Apps but Constantly!
Private Industrial Networks
• Used to coordinate communication among firms engaged in business together ~Electronic Data Interchange (EDI), digital network •Typically evolve out of company's internal enterprise system (for key/trusted suppliers) ~Walmart's Supplier Portal, HEB SupplierNet ~P&G
Why we travel (purpose)?
• Vacations •Get-A-Ways/Escapes • Meetings • Conferences • Family (good & bad things) • Sporting Events • Concerts & Festivals • Evacuation
Web Servers and Clients
• Web server software: ~Enables a computer to deliver Web pages to clients on a network that request this service by sending an HTTP request ~Apache, Microsoft IIS ~Basic capabilities: Security services, FTP, search engine, data capture • Web server ~Web server software or physical server ~Specialized servers: Database servers, ad servers, etc. • Web client: ~Any computing device attached to the Internet that is capable of making HTTP requests and displaying HTML pages
Imagine Your E-commerce Presence
• What's the idea? ~Vision ~Mission statement ~Target audience ~Intended market space ~Strategic analysis ~Marketing matrix ~Development timeline ~Preliminary budget
Imagine Your E-commerce Presence CONT.
• Where is the content coming from? ~Static or dynamic?
Imagine Your E-commerce Presence CONT.
• Who and where is the target audience? ~Describing your audience • Demographics • Age, gender, income, location • Behavior patterns (lifestyle) • Consumption patterns (purchasing habits) • Digital usage patterns • Content creation patterns (blogs, Facebook) • Buyer personas • The marketplace (aka The Ballpark or Playground) ~Demographics ~Size, growth, changes /arket place the right place to be ~Structure • Competitors • Suppliers • Substitute products
Wireless Internet Access Network Technologies
• Wi-Fi ~High-speed, fixed broadband wireless LAN (WLAN) ~Wireless access point ("hot spots") ~Limited range but inexpensive ~For-profit Wi-Fi networks: Boingo, AT&T Wi-Fi Services •WiMax ~High-speed, medium range broadband wireless metropolitan area network • Bluetooth ~Personal connectivity between devices and to Internet • Internet via Drones, Balloons..
Akamai
•"Edge Delivery" •Brings digital life closer to you •Information is spread everywhere for faster information transfers
Last Mile: Fiber to YOUR House?
•"Last mile": your neighborhood /house via your ISP or your ireless service provider •Google Fiber'hoods coming to Austin! •San Antonio: Race between AT&T, TW/Spectrum & Google!
Recent Big IT Events
*Security & Privacy US Airports knocked offline by Russian hack Rampant Zelle fraud USAA customer account data theft by 2 Louisiana contract workers TikTok user data accessed by TikTok employees Rackspace Ransomware impact on customer email accounts and phishing threats *SCM & Retail/Services Unclogged SCM but the economy is no help *Technology • Twitter and Elon Musk ongoing issues • Goodwill embracing online thrifter's to the max • Northeastern Univ sends out 205 law school acceptance emails by "mistake" • HEB pilotd"Fast Scan" check-out technology • Ticketmaster Taylor Swift pre-sale debacle and govt inquiries • Amazon launches a virtual care application • Walmart rolls out in-home delivery in area markets • Winter Storm Dec 20022: Southwest Airlines Holiday Travel crew/plane scheduling software shortcomings with massive cancellations *Economic More Retail Store Closures continue Freight RailRoad workers and strike threats Huge waves of High-Tech lavoffs due to the economy (Meta, Amazon...) *Content, Competition & Merge FTC reviewing proposed $24.6 billion merger be Kroger & Albertsons (anti-competitive) FTC blocks Microsoft/Activision Blizzard $69 billi merger deal (would dilute xBox competitors) *IT Industry & Lawsuits Austin-based Versata Software awarded $105 million against Ford Motor Company (vehicle config. Software) Meta platforms found to have infringed on the live-streaming patents of Voxer and pays $174 million
Basic Course Objectives
. Explore the constantly changing world of e-Business/e-Commerce from a Domestic & International Perspective • Focus on Global Challenges & Opportunities: 1. Fresh Site Content and Rapid Changes 2. Impact of Mobile devices 3. Customer e-Marketing (clutter) 4. Rate of Change (Social Media) ur Threats & Dangers (Security, ID Theft) 6. Shifting product/service demand and delivery options-based on the wants and needs of the customers
Business plan
Describes a firms business model
B2C: 7 Business Models
E-tailer (Online Retailer) Community provider (Share/Similar Interests) Content provider (Stuff YOU Want) Portal (Window to World) Transaction broker (Make it Happen) Market creator (Facilitate Sales) Service provider (Tools/Resources)
The Internet Today
Internet growth has boomed without disruption because of: ~Client/server computing model ~Hourglass, layered architecture •Network Technology Substrate •Transport Services and Representation Standards •Middleware Services •Applications
Online Travel Sites
Over Time: •Early: Expedia, Travelocity, Priceline •Newer: Orbitz, Airlines, Kayak •Online Travel Sites: Hotel Bookings ~cheaper but no rewards/treatment/worst rooms/1st to be cancelled! •Newer: Trivago, BookIt, Booking.com
Business model
Set of planned activities designed to result in a profit in a market place
Middleware
Software which acts as an interface between multiple programs, databases, servers
Fiber Optics and the Bandwidth Explosion in the First Mile
• "First mile": Backbone Internet services that carry bulk traffic over long distances • Fiber-optic cable: hundreds of glass strands that use light to transmit data ~Faster speeds and greater bandwidth ~Thinner, lighter cables ~Less interference ~Better data security • Substantial investments in fiber optic by telecommunications firms in last decade ~Enable integrated phone, broadband access, video services
Market Strategy
• "How do you plan to promote your products or services to attract your target audience?" Details how a company intends to enter market and attract customers Best business concepts will fail if not properly marketed to potential customers No Need to "Re-Invent the Wheel' Use existing software resources/solutions (Ch 3&4)
Revenue Model
• "How will the firm earn revenue, generate profits, and Return on Investment?" • Major models: how e-Commerce sites make $: • Advertising: Charge Fees for advs on site & Subscription: Charge for access/delivery + Fremium • Transaction fee: Charge for doing the transaction • Sales: Sale of goods/info/Services • Affiliate: Collect Fees for Referrals
The Last Mile: Mobile Wireless Internet Access
• "Last mile": From Internet backbone to user's computer, smartphone, etc. • Two different basic types of wireless Internet acceSs: ~Telephone-based (mobile phones, smartphones) ~Computer network-based
Management Team
• "What kind of backgrounds should the company's leaders have?" • A strong management team: Can make the business model work Can give credibility to outside investors Has market-specific knowledge Has experience in implementing business plans
Competitive Advantage
• "What special advantages does your firm bring to the marketspace?" Is your product superior to or cheaper to produce than your competitors'? How are YOU Better? • Important concepts: First-mover advantage Unfair competitive advantage (Patent?) Leverage /Financial Backing Aggressive expansion into surrounding markets
Organizational Development
• "What types of organizational structures within the firm are necessary to carry out the business plan?" • Describes how firm will organize work Functional departments As company grows, hiring moves from genera to specialists Manage growth, quality control, Future Leaders
Competitive Environment
• "Who else occupies your intended marketspace?" Other companies selling similar products in the same marketspace Includes both direct and indirect competitors • Influenced by: Number and size of active competitors Each competitor's market share Competitors' profitability Competitors' pricing • Direct competitors - companies that sell products or services that are very similar and into the same market segment Priceline, Orbitz, Trivago, Hotels.com, Travelocity (Recently Acquired by Expedia!) • Indirect competitors - companies that may be in different industries but that still compete indirectly because their products can substitute for one anci Example: CNN.com and ESPN.com
Value Proposition
• "Why buy from you?" • Successful e-commerce value propositions: • Personalization / customization • Reduction of product search, price discovery costs • Facilitation of transactions by managing product delivery
The Web
• 1989-1991: Web invented ~Tim Berners-Lee at CERN ~HTML, HTTP, Web server, Web browser • 1993: Mosaic Web browser w/ GUI ~Andreessen and others at NCSA ~Runs on Windows, Macintosh, or Unix • 1994: Netscape Navigator, first commercial Web browser ~Andreessen, Jim Clark • 1995: Microsoft Internet Explorer
Travel Sharing Economy: Lodging and Transportation
•Alternative to Hotels ~AirBnB •Homes/Vacation Homes ~VRBO HomeToGo •Full Time Rental/Short Term Rentals •Occupancy Taxes (TX law in place) •Unsafe/Unsanitary Conditions • Parking, Noise, Illegal Activity and SCAMS •Owner "creeping" on guests • Local Regulations/Zoning •Crack-down on "Party Houses" • Lyft/Uber: Background Checks, Robbery, Theft.. •Transportation: MASSIVE Rental Car Shortage and $$$ ~Bus, Train, Taxi's .vs. Rental Cars vs. Lyft/Uber...
System Analysis/Planning
•Business objectives: ~List of capabilities you want your site to have • System functionalities: ~List of information system capabilities needed to achieve business objectives • Information requirements: ~Information elements that system must produce in order to achieve business objectives
B2C Models: Market Creator
•Create digital environment, where buyers and sellers can meet in transact Priceline eBay Etsy Amazon Revenue model: -facilitate the sale -$= transaction fees/commissions •Sharing economy (mesh economy) Platforms that allow people to sell services!
E-commerce Technology and Business Model Distribution
•Disruptive Technologies • Digital disruption • Sustaining technology • Stages: ~Disruptors introduce new products of lower quality ~Disruptors improve products ~New products become superior to existing products ~Incumbent companies lose market share ~Put a Tech Spin (aka apps) to mix it up -Sharing Economy
2020: Covid-19 Outbreak
•Global "soon to be" Pandemic "situation" •Evacuations •Quarantines •Stigma •SCM Impact •The travel industry: ~Has suffered the MOST of all but rebounding ~60+% of all jobs initially LOST/GONE ~High unemployment rates ~Recovery: 9/11 (took 2 years) ~Covid-19: Leisure then Business
Internet Providers (ISP's)
•Internet Backbone: ~Tier 1 Internet Service Providers ~Numerous private networks physically connected to each other ~Undersea fiber optics, satellite links •Internet Exchange Points (IXP's) ~Tier 1 ISP's physically connect with Regional Tier 2 ISP's ~Tier 3 ISP's: YOUR provider (Comcast, Verizon, Spectrum...)
Government regulation and surveillance of the Internet
•NSA: National Security Agency
B2C Models: Transaction Broker
•Process online transactions for consumers Primary value proposition--saving time and money • Revenue model: Transaction fees to Facilitate (aka Make Happen) • Industries using this model: Financial services Travel services Job placement services
Internet Services
•Provide lowest level of service to individuals, small businesses, some institutions •Types of service ~Narrowband (dial-up) ~Broadband * Digital Subscriber Line (DSL) * Cable modem *T1 and T3 *Satellite
Packet Switching
•Slices digital messages into packets •Sends packets along different communication paths as they become available • Reassembles packets once they arrive at destination • Uses routers ~Special purpose computers that interconnect the computer networks that make up the Internet and route packets ~Routing algorithms ensure packets take the best available path toward their destination • Less expensive, wasteful than circuit-switching
Issues & Updates
•Special Events: Extra Flights/Hotel Rates! •Travel Details •Counterfeit Tickets •Illegal human Trafficking •The Saga •Costa Cruise Website •Avoiding Carnival "still" after the Triumph "situation" •Business Travel not expected to recover until 2022+ •Border lockdowns and restrictions LINGER •Boeing 737 max 2019 grounding and Slowly returning to service •Arriving passengers arriving from a foreign destination - mandatory COVID-19 testing •Face-masks required for ALL forms of Transportation •The cruise industry FINALLY restarting and re-adjusting!
System Design: Hardware and Software Platforms
•System design specifications ~Description of main components of a system and their relationship to one another • 2 components of system design (specs): ~Logical design • Data flow diagrams, processing functions, databases ~Physical design • Specifies actual physical, software components, models, etc.
Do's and Dont's of E-Commerce
•The 10 Biggest Do's and Dont's ~Do Plan Ahead Pick Right Solution Consider Design & Branding (pure marketing) Website is the Ultimate Sales Tool Target your Market Efforts ~Don't Expect Overnight Success Dismiss the Details Ignore Customer Service Forget to Keep your Site Fresh Try to do it All at Once
Computing Devices=Hardware
•The physical pieces of equipment that constitute " a computer or PC" •can have manufacturing Virus/Bugs
Imagine Your E-commerce Presence CONT.
•Where's the money? ~Business model(s): • Portal, e-tailer, content provider, transaction broker, market creator, service provider, community provider (social networks) • Revenue model (s): ~Advertising, subscriptions, transaction fees, sales, and affiliate revenue.
