10.1 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Lecturer:
Richard Boateng, PhD. • Lecturer in Information Systems, University of Ghana Business School
• Executive Director, PearlRichards Foundation, Ghana
Email:
Internet Business: Digital Markets and
Digital Goods
Internet Business
10.2 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Internet Business: Digital
Markets, Digital Goods Lecturer:
Richard Boateng, PhD. • Lecturer in Information Systems, University of Ghana Business School
• Executive Director, PearlRichards Foundation, Ghana
Email:
10.3 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Class Website
• www.vivaafrica.net
10.4 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
LEARNING OBJECTIVES
This session seeks to introduce the course and also explain the
basic concepts of information systems, internet business, e-
business and e-commerce. Learning objectives include:
1. Identify the unique features of e-commerce, digital markets,
and digital goods.
2. Describe how Internet technology has changed business
models.
3. Identify the various types of e-commerce and explain how e-
commerce has changed consumer retailing and business-to-
business transactions.
10.5 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Visit Nike ID – www.nikeid.com create your own shoe
10.6 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods Visit Nike ID – www.nikeid.com create your own shoe
10.7 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
10.8 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
10.9 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Internet Business
Doing Business on the Internet
E-commerce E-business
Information Systems
10.10 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
What is an information system?
10.11 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Information system:
– Set of interrelated components
– Collect, process, store, and distribute information
– Support decision making, coordination, and control
• Information System
– IT + People + Processes and Policy
What is Information Systems
10.12 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Data and Information
Raw data from a supermarket checkout counter can be processed and organized
to produce meaningful information, such as the total unit sales of dish detergent
or the total sales revenue from dish detergent for a specific store or sales
territory.
Information vs. data • Data are streams of raw facts
• Information is data shaped into meaningful form
10.13 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Types of Information Systems
6. Transaction Process
Systems (TPS)
5. Office Systems (OS)
3. Management Information
Systems (MIS)
2. Decision Support
Systems (DSS)
1. Executive Support
System (ESS)
4. Knowledge Work
Systems (OS)
Strategic-Level Plan and Project,
Forecast - Senior Managers
Management-Level
Decision Analysis; Summary Reports - Staff Managers & Middle Managers
Knowledge- Level
Models; Graphics; Documents & Mail
-Professionals & Clerical Workers
Operational-Level Sorting; lists; Detailed
Reports; Pay Slips - Operations
Personnel; Supervisors
10.14 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Systems that Span the Business
SAP ERP:
Human Resource Systems - Leave Request
Example
Executive Support Systems – Sales Planning and
Forecasting
http://www.sap.com/solutions/business-suite/erp/demos/index.epx
10.15 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Transaction processing systems
– Perform and record daily routine transactions
necessary to conduct business
• Examples: sales order entry, payroll, shipping
– Allow managers to monitor status of operations
and relations with external environment
– Serve operational levels
– Serve predefined, structured goals and decision
making
Types of Business Information Systems
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Internet Business: Digital Markets, Digital Goods
• Management information systems
– Serve middle management
– Provide reports on firm’s current
performance, based on data from TPS
– Provide answers to routine questions with
predefined procedure for answering them
– Typically have little analytic capability
10.17 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Decision support systems
– Serve middle management
– Support nonroutine decision making
• Example: What is impact on production schedule if
December sales doubled?
– Often use external information as well from TPS
and MIS
– Model driven DSS
• Voyage-estimating systems
Types of Business Information Systems
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Internet Business: Digital Markets, Digital Goods
Voyage-Estimating Decision Support System
Figure 2-5
This DSS operates on a powerful PC. It is used daily by managers who must develop bids on
shipping contracts.
Types of Business Information Systems
10.19 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Executive support systems
– Support senior management
– Address nonroutine decisions requiring judgment,
evaluation, and insight
– Incorporate data about external events (e.g. new
tax laws or competitors) as well as summarized
information from internal MIS and DSS
– Example: ESS that provides minute-to-minute view of firm’s financial performance as measured
by working capital, accounts receivable, accounts
payable, cash flow, and inventory
10.20 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Systems from a constituency
perspective
– Transaction processing systems:
supporting operational level employees
– Management information systems and
decision-support systems: supporting
managers
– Executive support systems: supporting
executives
10.21 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Enterprise applications
• Span functional areas
• Execute business processes across firm
• Include all levels of management
• Four major applications:
a) Enterprise systems
b) Supply chain management systems
c) Customer relationship management systems
d) Knowledge management systems
Systems That Span the Enterprise
10.22 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Enterprise Systems
Figure 2-8
Enterprise systems integrate the key business processes of an entire firm into a single software system that enables
information to flow seamlessly throughout the organization. These systems focus primarily on internal processes but may
include transactions with customers and vendors.
10.23 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Enterprise systems • Collects data from different firm functions and stores
data in single central data repository
• Resolves problem of fragmented, redundant data
sets and systems
• Enable:
• Coordination of daily activities
• Efficient response to customer orders (production,
inventory)
• Provide valuable information for improving
management decision making
Systems That Span the Enterprise
10.24 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Supply chain management systems
• Manage firm’s relationships with suppliers
• Share information about
• Orders, production, inventory levels, delivery
of products and services
• Goal: Right amount of products to destination
with least amount of time and lowest cost
Systems That Span the Enterprise
10.25 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Example of a Supply Chain Management System
Figure 2-9
Customer orders, shipping notifications, optimized shipping plans, and other supply chain information flow
among Haworth’s Warehouse Management System (WMS), Transportation Management System (TMS), and its
back-end corporate systems.
10.26 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Customer relationship management systems:
• Provide information to coordinate all of the business
processes that deal with customers in sales,
marketing, and service to optimize revenue,
customer satisfaction, and customer retention
• Integrate firm’s customer-related processes and
consolidate customer information from multiple
communication channels
Systems That Span the Enterprise
10.27 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Internet Business
Doing Business on the Internet
E-commerce E-business
Information Systems
10.28 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Electronic Commerce: Sharing business information, managing business relationships and facilitating transactions with Internet technology. (linking buyers and sellers).
• Electronic Business: Executing all the firm’s business processes with Internet technology. (sales, finance, human resources, manufacturing)
• Intranet: Business builds private, secure network based on Internet technology
• Extranet: Extension of intranet to authorized external users
10.29 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Intranets:
• Internal networks built with same tools and
standards as Internet
• Used for internal distribution of information to
employees
• Typically utilize private portal providing single
point of access to several systems
• May connect to company’s transaction
systems
Systems That Span the Enterprise
10.30 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Extranets:
• Intranets extended to authorized users
outside the company
• Expedite flow of information between firm
and its suppliers and customers
• Can be used to allow different firms to
collaborate on product design, marketing,
and production
Systems That Span the Enterprise
10.31 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• E-business (Electronic business):
• Use of digital technology and Internet to execute
major business processes in the enterprise
• Includes e-commerce (electronic commerce):
• Buying and selling of goods over Internet
• E-government:
• The application of Internet and networking
technologies to digitally enable government and
public sector agencies’ relationships with citizens,
businesses, and other arms of government
Systems That Span the Enterprise
10.32 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
1. Ubiquity
• Internet/Web technology available everywhere: work, home,
etc., and anytime
2. Global reach
• The technology reaches across national boundaries, around
Earth
3. Richness
• Supports video, audio, and text messages
4. Universal Standard
• Internet provides a universal standard for communication
Unique Features of Internet Technology for Business
10.33 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Unique features (cont.)
5. Interactivity
• The technology works through interaction with the user
6. Information density
• Vast increases in information density—the total amount and
quality of information available to all market participants
7. Personalization/Customization:
• Technology permits modification of messages, goods
8. Social technology
• The technology promotes user content generation and social
networking
Unique Features of Internet Technology for Business
10.34 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Key concepts in e-commerce
• Digital markets reduce
• Information asymmetry
• Search costs
• Transaction costs
• Digital markets enable
• Price discrimination
• Dynamic pricing
• Disintermediation
Electronic Commerce and the Internet
10.35 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Figure 10-2
The typical distribution channel has several intermediary layers, each of which adds to the final
cost of a product, such as a sweater. Removing layers lowers the final cost to the consumer.
The Benefits of Disintermediation to the Consumer
10.36 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
• Key concepts in Internet Business (cont.)
• Digital goods
• Goods that can be delivered over a digital network
• E.g., Music tracks, video, software, newspapers, books
• Cost of producing first unit almost entire cost of product:
marginal cost of producing 2nd unit is about zero
• Costs of delivery over the Internet very low
• Marketing costs remain the same; pricing highly variable
• Industries with digital goods are undergoing revolutionary
changes (publishers, record labels, etc.)
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Internet Business: Digital Markets, Digital Goods
10.38 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Music Industry and Internet
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Internet Business: Digital Markets, Digital Goods
INTERNET BUSINESS MODELS
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Internet Business: Digital Markets, Digital Goods
Internet Business Models
1. Social Network
• Online meeting place
• Social shopping sites
• Can provide ways for corporate clients to
target customers through banner ads and pop-up ads
2. Online marketplace:
• Provides a digital environment where buyers and sellers can
meet, search for products, display products, and establish prices
for those products
10.41 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
3. Content provider
• Providing digital content, such as digital news, music, photos, or
video, over the Web – yahoo,
4. Service provider
• Provides Web 2.0 applications such as photo sharing and interactive
maps, and services such as data storage - google maps, flickr,
5. Portal
• “Supersite” that provides comprehensive entry point for huge array of
resources and services on the Internet – yahoo
6. Blogs
• Personal web pages that contain series of chronological entries by
author and links to related Web pages – wordpress.com
10.42 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
10.43 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Google is doing great right now, Yahoo is not.
If Yahoo is in some kind of a problem
today, it's because they have tried to wear
other people's clothes that were mostly
falling down their ankles. Yahoo wanted
to be many things, from Media
Company to Myspace. Lack of focus
and direction made them languish.
Yahoo makes its money selling online ads. Yahoo's reach is enormous: 600 million unique visitors a month.
Google on other hand has worked towards being a
knowledge-based company and not just search. This does
not mean they have not done anything wrong or failed, but
they have a permission-to-fail policy.
10.44 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
7. Virtual storefront:
• Sells physical products directly to consumers or to
individual businesses – prada.com, best buy
8. Information broker:
• Provides product, pricing, and availability information to
individuals and businesses – kbb.com, pricerunner.co.uk,
nexttag.com
9. Transaction broker:
• Saves users money and time by processing online sales
transactions and generating a fee for each transaction –
expedia.com, etrade.com
10.45 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
10.46 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
Types of Internet Business
• Business-to-consumer (B2C)
• Business-to-business (B2B)
• Consumer-to-consumer (C2C)
• Government-to-citizen (G2C)
• Government-to-government (G2G)
• Government-to-business (G2B)
• Mobile commerce (m-commerce)
10.47 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods Information Technology Capital Investment
Considering the context of a developing
country like Ghana, is the internet a strategic
choice for every firm or otherwise, should
every firm do business online?
10.48 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
E-commerce in Ghana – Where are we?
Go to the Class website:
www.vivaafrica.net
Under Case studies download the paper
on E-commerce in Ghana and Read for
discussion and a quiz next week.
10.49 © 2010 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected]) |
Internet Business: Digital Markets, Digital Goods
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