Chapter 3McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

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CHAPTER THREE OVERVIEW

• SECTION 3.1 - BUSINESS AND THE INTERNET Disruptive Technology Evolution of the Internet Accessing Internet Information Providing Internet Information

• SECTION 3.2 - EBUSINESS Ebusiness Basics Ebusiness Models Organizational Strategies for Ebusiness Measuring ebusiness Success Ebusiness Benefits and Challenges New Trends in Ebusiness: Egovernment and Mcommerce

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DISRUPTIVE VERSUS SUSTAINING TECHNOLOGY

• Disruptive technology – a new way of doing things that initially does not meet the needs of existing customers• Sustaining technology – produces an improved product customers are eager to buy

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EVOLUTION OF THE INTERNET

• The Internet began as an emergency military communications system operated by the Department of Defense

• Gradually the Internet moved from a military pipeline to a communication tool for scientists to businesses

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EVOLUTION OF THE WORLD WIDE WEB

• The Internet’s impact on information Easy to compile Increased richness and reach Improved content

• The Internet makes it possible to perform business in ways not previously imaginable• It can also cause a digital divide

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EVOLUTION OF THE WORLD WIDE WEB• World Wide Web (WWW) – a global hypertext system that uses the Internet as its transport mechanism

Web 2.0 Mashups Web 3.0

• Hypertext transport protocol (HTTP) – the Internet standard that supports the exchange of information on the WWW

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ACCESSING INTERNET INFORMATION

• Four tools for accessing Internet information

1. Intranet – internalized portion of the Internet, protected from outside access, for employees

2. Extranet – an intranet that is available to strategic allies

3. Portal – website that offers a broad array of resources and services

4. Kiosk – publicly accessible computer system that allows interactive information browsing

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PROVIDING INTERNET INFORMATION

• Three common forms of service providers1. Internet service provider (ISP) –provides

individuals and other companies access to the Internet

2. Online service provider (OSP) – offers an extensive array of unique Web services

3. Application service provider (ASP) – offers access over the Internet to systems and related services that would otherwise have to be located in organizational computers

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EBUSINESS MODELS

• Ebusiness model – an approach to conducting electronic business on the Internet

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ORGANIZATIONAL STRATEGIES FOR EBUSINESS

• Primary business areas taking advantage of ebusiness include: Marketing/sales Financial services Procurement Customer service Intermediaries

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MEASURING EBUSINESS SUCCESS

• Most companies measure the traffic on a website as the primary determinant of the website’s success

• Clickstream data tracks the exact pattern of a consumer’s navigation through a website

• Website metrics include visitor metrics, exposure metrics, visit metrics, and hit metrics

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EBUSINESS BENEFITS AND CHALLENGES

• Ebusiness benefits include: Highly accessible Increased customer

loyalty Improved information

content Increased convenience Increased global reach Decreased cost

• Ebusiness challenges include: Protecting consumers Leveraging existing

systems Increasing liability Providing security Adhering to taxation

rules

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EBUSINESS BENEFITS AND CHALLENGES

• There are numerous advantages and limitations in ebusiness revenue models including: Transaction fees License fees Subscription fees Value-added fees Advertising fees

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EGOVERNMENT AND MCOMMERCE

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EGOVERNMENT AND MCOMMERCE

• Mobile commerce - the ability to purchase goods and services through a wireless Internet-enabled device