Digital enablement of transactions and processes within a firm, involving information systems under firm's control.

*Does NOT include commercial transactions involving an exchange of value across organizational boundaries

• Ubiquity
• Global Reach
• Universal Standards
• Information Richness
• Interactivity
• Information Density
• Personalization/Customization
• Social Technology

• Price Transparency
• Cost Transparency
• Price Discrimination

• The "new" Web (2007)
• Applications and technologies that allow users to:
  • Create, edit and distribute content
  • Share preferences, bookmarks and online personas
  • Participate in virtual lives
  • Build online communities Examples: YouTube, Photobucket, MySpace, Facebook, Second Life, Wikipedia

• Worldwide network of computer networks built on common standards
• Created in late 1960s
• Services include the Web, e-mail, file transfers, etc
• Can measure growth by looking at number of Internet hosts with domain names

• Most popular service on the Internet
• Developed in early 1990s
• Provides access to Web pages (HTML documents)
• Can include text, graphics, animations, music, videos
• Web content has grown exponientially, from around 2 billion Web pages in 2000 to around 40 - 50 billion today

• B2C : Business-to-Consumer
• B2B : Business-to-Business
• C2C : Consumer-to-Consumer
• P2P : Peer-to-Peer
• M-Commerce : Mobile Commerce

• Late 70's: Telephone-based modem used to re-order pharmaceuticals
• Early 80's: PC-based remote ordering system

• Amazon
• Staples
• Office Depot
• Dell.com
• HP Home & Office
• Office Max
• Apple Computer
• Sears Holding Corporation
• CDW Corp
• Newegg.com
• QVC Corp

• Value Proposition
• Revenue Model
• Market Opportunity
• Competitive Environment
• Competitive Advantage
• Market Strategy
• Organizational Development
• Management Team

Defines how a company's product or service fulfills the needs of customers

Examples of successful Value Propositions:

• Personalization/Customization
• Reduction of product research, price discovery costs
• Facilitation of transactions by managing product delivery

Describes how the firm will earn revenue, generate profits and produce a superior return on invested capital

Major types:

• Advertizing Revenue
• Subscription Revenue
• Transaction Fee
• Sales Revenue
• Affiliate Revenue

Refers to the other companies selling similar products and operating in the same marketspace

Influenced by:

• Number of active competitors
• Each competitor's market share
• Competitor's profitability
• Competitor's pricing

• Quality products that command a premium price
• Superior customer service
• Low price
• Product differentiation
• Compelling brand equity

First Mover

(plusses and minuses)

(+)

The first into the marketplace

(-)

A firm has a factor that is not available to others

• No competitive advantages
• All firms have access to all factors

• Portal
• E-tailer
• Content Provider
• Transaction Broker
• Market Creator
• Service Provider
• Community Provider

B2C:

Portal

• Offers powerful search tools plus an integrated package of content and services
• Typically utilizes a combined fee model: subscription, advertising, transaction
• Today, is seen as a "destination" site, rather than a "gateway"
• May be general (horizontal) or specialized (vertical)

B2C:

E-tailer

• Online version of traditional retailer
• Types include:
  • Virtual merchants
  • Bricks-and-clicks
  • Catalog merchants
  • Manufacturer-direct
• Low barriers to entry

B2C:

Content Provider

• Distribute digital content: Information and Entertainment over the Web
• Typical revenue models:
  • Subscription
  • Pay for download
  • Advertising
• Variations:
  • Syndication
  • Web aggregators

B2C:

Transaction Broker

• Process online transactions for consumers
• Primary Value Proposition: Saving time and money
• Typical revenue model: Transaction fee
• Largest industries using this model:
  • Financial services
  • Travel services
  • Job placement services

B2C:

Market Creator

• Uses Internet technology to create markets that bring buyers and sellers together
• Examples:
  • Priceline
  • eBay
• Typically uses a transaction fee revenue model

B2C:

Service Provider

• Offers services online (e.g. Google Maps, Google Docs, etc.)
• Value proposition
  • Valuable, convenient, time-saving, low-cost alternatives to traditional service providers
• Revenue models
  • Subscription feels
  • One-time payment

B2C:

Community Provider

• Creates an online environment (social network) where people with similar interests can communicate and transact
• Typical revenue model: hybrid
  • Including advertising fees, subscription fees, sales revenues, transaction fees, affiliate fees
• Examples: MySpace, Facebook, iVillage

• E-distributor
• E-procurement
• Exchanges
• Industry Consortia
• Private Industrial Networks

B2B:

E-distributor

• Supplies products and services directly to individual businesses
• Owned by one company seeking to serve many customers
• Example: Grainger.com

B2B:

E-procurement

• Creates and sells access to digital electronic markets
  • Includes B2B service providers, application service providers (ASPs)
• Revenue models:
  • Transaction fees, usage fees, annual licensing fees
• Ariba
  • Software that helps firms organize procurement process

B2B:

Exchanges

• Electronic digital marketplace where suppliers and commercial purchasers can conduct transactions
• Usually owned by independent firms whose business is making a market
• Revenue model: Transaction fees
• Usually serves a single vertical industry
• The number of exchanges has fallen dramatically

B2B:

Industry Consortia

• Industry-owned vertical marketplaces that serve specific industries (e.g. automobile, chemical, floral, logging)
  • Supply smaller number of companies with product and services relevant to industry
  • Sponsored by powerful industry players
  • Strengthen traditional purchase behavior
• Exostar: Online trading exchange for aerospace and defence industry

B2B:

Priave Industrial Networks

• Digital networks designed to coordinate the flow of communications among firms engaged in business together
• Single firm network: most common form
  • Wal-Mart
• Industry-wide networks: Often evolve out of industry associates
  • Agentric

• Network Interface Layer
• Internet Layer
• Transport Layer
• Application Layer

• 32-bit number
• Expressed as series of four separate numbers marked-off by periods

e.g.

201.61.186.227

• 128-bit addresses
• Able to handle up to 1 quadrillion addresses (IPv4 can only handle 4 billion)

• Model of computing
• Firms and individuals obtain computing power and software over Internet, rather than purchasing and installing locally (e.g. Google Apps)
• Fastest growing form of computing
• Radically reduces costs of
  
  • buidling and operating Web sites
  • Infrastructure, IT support

• High-bandwidth fiber-optic cable networks
• Private networks owned by a variety of Network Service Providers (NSPs)
• Bandwidth: 155 Mbps - 2.5 Mbps
• Built-in redundency

Narrowband

Traditional telephone mdem connection at 56.6 Kbps

Broadband

Service based on DSL, cable mdem, T1 or T3 telephone lines, and satellite

Digital Subscriber Line

(DSL)

• Hardware or software that filters packets
• Prevents some packets from entereing the network based on security policy
• Two main methods:
  • Packet filters
  • Application gateways

• Accounts created by depositing funds into an account and from which funds are paid out or withdrawn as needed
• Examples: debit cards, gift certificates, prepaid cards, smart cards
• Peer-to-peer payment systems are a variation on stored value systems (e.g. PayPal)