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The Business Environment

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Huge potential markets. Intense competition. The three categories form an integrated structure ... replace the old ones. An e-commerce reality. Intermediaries ... – PowerPoint PPT presentation

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Title: The Business Environment


1
Chapter 4
  • The Business Environment

2
Topics
  • E-commerce Business Environment
  • Intermediaries
  • New competition

3
E-Commerce Business Environment
  • Low cost of entry
  • Global reach
  • Huge potential markets
  • Intense competition

4
The three categories form an integrated structure
Integration is the future of e-commerce.
5
The three categories are applications that
communicate with each other via the infrastructure
  • Another way to view integration

6
A B2C transaction and a supplychain purchasing
transaction are similar
  • Supply chain links value chains
  • Categories somewhat arbitrary
  • Categories are a model

7
Digital Products
  • Potential killer applications/services
  • Software
  • Recorded music
  • Digital books
  • Information services
  • Diminishing returns does not apply
  • E-commerce is a digital technology

8
The law of diminishing returns applies to
physical products.
At some point, unit cost increases with volume.
9
Digital products do not experience diminishing
returns.
  • High startup cost
  • First copy
  • Low incremental cost
  • After breakeven
  • Pure profit

10
Intermediaries
  • An intermediary is a middleman
  • Disintermediation
  • Eliminating the middleman
  • Sometimes claimed as e-commerce benefit
  • Reintermediation
  • New middlemen replace the old ones
  • An e-commerce reality

11
Intermediaries
Intermediaries provide services that lie off the
value chain.
12
Some intermediaries
13
Negating Location
  • Geography no longer matters
  • Global competition
  • Examplewriting this textbook
  • Participants
  • The authors (Florida and Ohio)
  • The publisher (Boston)
  • Production (New England)
  • Printing and warehousing (Indiana)

14
A manuscript page
  • Created by the authors
  • Florida
  • Ohio
  • MS Word

15
Rough art
  • Created by the authors
  • Florida
  • Ohio
  • Visio

16
A copy edited page
  • Copy editor in Massachusetts
  • MS Word

17
A finished page
  • Paging done in Massachusetts
  • Adobe Acrobat
  • All electronic communication

18
Bots
  • Bot is an intelligent agent
  • Increases customer power

Source www.botspot.com
19
The competitive advantage model
The two yellow boxes represent activities that
happen simultaneously.
20
Time for technologies to reach 50 million users
21
The accelerating pace of innovation
  • Textbook
  • 198036 months
  • 200021 months
  • Lose 40 of competitive advantage
  • Rapid obsolescence
  • Time to market is key
  • Delay means lost opportunity

22
Evolving E-Commerce Business Strategies
  • Dangereverything becomes a commodity
  • Frictionless e-commerce
  • No competitive advantage for anyone
  • Brand name matters more than ever
  • Brand name reduces perceived risk
  • Bricks-and-clicks strategy
  • Reduced cycle time is a key objective
  • Reduce time to market
  • React quickly to change

23
The 20 top technology-related brand names in the
US
  • This list is from 2001
  • How would it change today?

24
Information Technology as Strategic Tool
  • Modern business is
  • Extremely competitive
  • Changing at an accelerating rate
  • Impossible to keep current manually
  • Information technology infrastructure
  • Essential
  • A strategic resource
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