THE DIGITAL FIRM : ELECTRONIC BUSINESS AND ELECTRONIC COMMERCE

A.INTERNET TECHNOLOGY AND THE DIGITAL FIRM

-Information Technology Infrastructure : The internet provides a universal and easy-to-use set of technologies and technology standard that can be adopted by all organizations.

-Direct Communication Between Trading Partner : Disintermediation removes intermediate layers.

-Round the Clock Service : Web sites available to consumers 24 hours

-Reduced Transaction Costs : Costs of searching for buyers, declines

B. The Changing Economics of Information

= Information Asymmetry :One party in a transaction has more information than the other. The internet decreases information asymmetry.

=Increases Richness : The internet increases the depth, detail and scope of information.

=Increases Reach : The internet increases the number of people who can be contacted efficiently.

 C. INTERNET BUSINESS MODELS

- Virtual Storefront : Sells goods or Services online ( Amazon)

-Information Broker : Provides information on products or services ( Edmunds)

-Transaction Broker : Provides online transaction facility ( e-trade, Expedia.com)

-Online Marketplace : Provides a trading platform for individuals and firms (eBay)

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D. CATEGORIES OF ELECTRONIC COMMERCE

- Business-to-customer (B2C) : Retailing of products and services directly to individual customers ( walmart)

-Business-to-business (B2B) : Sales of goods and services to other businesses (Grainger, ariba)

-Consumer-to-consumer (C2C) : Individuals using the Web for private sales or exchange (eBay)

E. ADVANTAGES OF E-COMMERCE

-Customer- Centered Retailing : Closer and more personalized relationship with customer is possible

-Web Sites : Provide a corporate – centered portal for the consumer to quickly find information on products, services, prices, orders.

-Disintermediation : The elimination of organizations or business process, responsible for certain intermediary steps in a value chain, reducing costs to the consumer.

F. THE BENEFITS OF DISINTERMEDIATION TO THE CONSUMER

Manufacture à Distributorà Retailer à Customer ( spend more example, $48)

Manufacturer à Retailer à Customer ( spend lesser than above example, $40 per product)

Manufacture à Customer (spend lesser for example 420 per product)

G. BENEFITS OF INTRANETS

- Connectivity : Accessible from most computing platforms

- Can be tied to internal corporate systems and core transaction databases

-Platforms for interactive applications

-Scalable to larger or smaller computing platforms

H. FUNCTIONAL APPLICATIONS OF INTRANETS

Finance and Accounting

Human Resources

Sales and Marketing

Manufacturing and production

I.MANAGEMENT OPPORTUNITIES

~  New Products and Services

~ New Distribution Channels

~ New Avenues for Marketing and Sales

~ New Business Models

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