BUSINESS DRIVEN TECHNOLOGY UNIT 4: Creating Collaborative Partnerships in Business UNIT FOUR OPENING CASE Amazon.com – Just a Click Away The Amazon case offers an exciting look at an extremely successful e-businesses Many of your students have used Amazon and will be able to easily relate to the case Discuss the case with your students and address the Opening Case Questions found at the end of each chapter in the Unit UNIT FOUR OPENING CASE – Additional Case Information Amazon.com now allows users to search the entire Internet with A9.com, a new Amazon.com company. A9.com uses Amazon.com account information to provide personalized search results, as well as a search history. A customized A9 toolbar allows users to search the Web and Amazon.com right from their browser. Despite some intriguing new features not yet found on leading sites such as Google and Yahoo!, the site (www.a9.com) is still in test mode. A9's offering appears modest, however the site: Not only emulates Google's minimalist style but it even displays search results licensed from Google Provides a Web browser toolbar quite similar to Google's Offers some unique capabilities, mainly the ability for people to personalize and organize their searches Remembers every search one makes, so that they are easy to find later

The chapters in this unit include: Unit Four The chapters in this unit include: Chapter Thirteen – Creating Collaborative Partnerships through E-Business Chapter Fourteen – Enhancing Collaborative Partnerships Chapter Fifteen – Outsourcing Collaborative Partnerships Chapter Sixteen – Integrating Collaborative Partnerships

BUSINESS DRIVEN TECHNOLOGY Chapter Thirteen: Creating Collaborative Partnerships through E-Business CLASSROOM OPENER GREAT BUSINESS DECISIONS – Jeff Bezos Decides to Sell Books over the Internet Jeff Bezos owns 41 percent of Amazon and is estimated to be worth over $900 million. Bezos graduated from Princeton and was the youngest Vice President at Banker’s Trust in New York. Bezos had to make a decision to stay and receive his 1994 Wall Street bonus or leave and start a business on the Internet. “I tried to imagine being eighty years old, looking back on my life. I knew that I would hardly regret having missed the 1994 Wall Street bonus. But having missed being part of the Internet boom – that would have really hurt,” stated Bezos. The first books ordered through Amazon were dispatched in the fall of 1994 (personally packaged by Bezos and his wife). Amazon.com is now the biggest bookstore on the planet. It is the exemplar of electronic business.

13.1 Describe how IT accelerates and enhances e-business LEARNING OUTCOMES 13.1 Describe how IT accelerates and enhances e-business 13.2 List and describe the importance of e-business models 13.3 Explain why forming electronic partnerships and alliances is critical to an organization 13.1 Describe how IT accelerates and enhances e-business IT accelerates and enhances e-business through the multiple opportunities a business can touch customers, enrich products and services with information, and reduce costs. IT maximizes convenience, and improves communications globally 13.2 List and describe the importance of e-business models E-business models aim to use and leverage the unique qualities of the Internet and the Web to conduct business The importance of the e-business models takes place between two major entities: (1) organizations (companies) and (2) consumers. All of these e-business activities happen within the framework of two types of business relationships: (1) the exchange of products and services with consumers (business-to-consumer) and (2) the exchange of products and services between companies (business-to-business) 13.3 Explain why forming electronic partnerships and alliances is critical to an organization Instructors Note: Students will have to “think outside the box” on this. The answer is not explicitly outlined in the Chapter, but inferred. Forming electronic partnerships leads to a synchronized and seamless value and/or supply chain to create tailored offerings

13.4 Differentiate between B2B and B2C e-business models LEARNING OUTCOMES 13.4 Differentiate between B2B and B2C e-business models 13.5 Describe the major digital marketplace structures 13.6 Describe the benefits of m-commerce 13.4 Differentiate between B2B and B2C e-business models B2B applies to companies buying from and selling to each other over the Internet. B2C applies to any business or organization that sells its products or services to consumers over the Internet 13.5 Describe the major digital marketplace structures The major digital marketplace structures provide a central market space where multiple buyers and suppliers can engage in e-business activities. They present foundations for commercial exchange, consolidating supply chains, and creating new sales channels 13.6 Describe the benefits of m-commerce The benefits of m-commerce includes more choices, greater flexibility, and enhanced value. The mobile workforce is increasingly using new forms of technology, such as smartphones offering fax, e-mail, and phone capabilities all in one

CHAPTER THIRTEEN OVERVIEW The Internet is a powerful channel that presents new opportunities for an organization to: Touch customers Enrich products and services with information Reduce costs E-commerce – the buying and selling of goods and services over the Internet E-business – the conducting of business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners Strategic alliances enable businesses to gain competitive advantage(s) through access to partner(s) resources, including markets, technologies, capital, and people Teaming up with another business adds complementary resources and capabilities, enabling participants to grow and expand more quickly and efficiently - especially fast growing companies who rely heavily on outsourcing many areas of their business to extend their technical and operational resources

EVOLUTION OF E-BUSINESS Individuals and organizations have embraced Internet technologies to enhance productivity, maximize convenience, and improve communications globally To develop an e-business even a decade ago would have required an individual organization to assume the burden of developing the entire technology infrastructure, as well as its own business and marketing strategies Today, the challenge of e-business is integrating technologies and services

A growing number of businesses are using the Internet to: E-Business Economy A growing number of businesses are using the Internet to: Streamline business processes Procure materials Sell products Automate customer service Create new revenue streams BarnesandNoble.com created a digital mirror of its brick-and-mortar bookstore (see Figure 4.3) minus the coffee shop. The Internet will create a digital reflection of the economy General Motors is bringing to the Web its response to AutobyTel.com and Carpoint.com by allowing consumers to go online to configure and price vehicles without bypassing dealers

THE IMPORTANCE OF THE E-BUSINESS MODEL E-business models aim to use and leverage the unique qualities of the Internet and the Web to conduct business E-business model- an approach to conducting electronic business by which a company can become a profitable business on the Internet Exchanges occur between two major entities: Businesses Consumers All e-business activities happen within the framework of two types of business relationships: 1. The exchange of products and services with consumers (B2C) 2. The exchange of products and services between businesses

THE IMPORTANCE OF THE E-BUSINESS MODEL Basic Internet business models Building a Web site does not mean that customers will come Traditional means of customer acquisition such as advertising, promotions, and public relations are just as important with a Web site Once customers are attracted, a Web site must create a “buzz” Discuss the Fruit of the Loom (FOL) example on page 139 Class Activity: Ask your students to compile a list of several examples of each type of e-business model Ans: B2B: grainger.com B2C: carfax.com C2B: ideas.com C2C: eBay.com

Types of E-Commerce Start This slide offers a brief introduction to types of e-commerce When in Slide Show view simply click on the Start button to play the presentation If you do not want to play the presentation simply delete this slide E-commerce transactions generally fall into one of four business models: B2B, where businesses exchange products, services, or information between businesses; B2C, where businesses such as Amazon.com or Lands End.com sell to consumers; C2B, where consumers can bond together and buy in volume at the lowest prices; and lastly, C2C, where consumers buy from other consumers -- typically from online auction or classified ad websites such as eBay. Start

Business-to-Business (B2B) Overview Business advantages of B2B include: Managing inventory more efficiently Adjusting more quickly to customer demand Getting products to market faster Obtaining lower prices on supplies Most of the early B2B procurements established tight links to a company’s existing suppliers They used their existing business practices and trading partners but lowered costs through automation The savings resulted from dramatically reducing the costs

Business-to-Consumer (B2C) Overview Business advantages of B2C include: Access to a wider selection of products and services Access to products at lower costs Convenience for transactions or for obtaining information The difference between B2B and B2C are the customers: B2B customers are other businesses B2C customers are consumers A B2C Web site must attract customers and more importantly retain customers This “stickiness” is the essence of e-business When most students think of B2C, they will think of Amazon and Dell However, in addition to online retailers, B2C has grown to include services such as online banking, travel services, online auctions, health information, and real estate sites

CHALLENGES OF THE E-BUSINESS MODELS Three primary challenges include: Security concerns 60% of Internet users consider the Internet unsafe Taxation Internet remains free of traditional forms of taxation Consumer protection Unsolicited goods and communications Illegal or harmful goods, services, and content Insufficient information about goods or their suppliers Invasion of privacy Cyberfraud Ask your students to identify additional challenges for e-business models? Ans: High cost of developing a dynamic Web site

CHALLENGES OF THE E-BUSINESS MODELS Class Activity – break your students into groups and assign each group one category from Figure 4.5. Ask them to elaborate on the security concerns and create a plan for how a business can combat these concerns and gain their consumers’ trust.

THE EVOLUTION OF THE E-MARKETPLACE Electronic marketplace represent a new wave in e-business Electronic marketplace (e-marketplaces) – interactive business communities providing a central market space where multiple buyers and sellers can engage in e-business activities As e-business becomes more central to the operations of core companies, diverse marketplaces are arising in every industry Most of the early movers have been small, aggressive dot-coms seeking first-mover advantages that they hope result in market dominance For example: Microsoft’s Small Business Center positions itself as the online partner for the more than seven million small businesses across the United States

THE NEXT GENERATION: M-COMMERCE In a few years, Internet-enabled mobile devices will outnumber PCs Mobile commerce (m-commerce) – the ability to purchase goods and services through a wireless Internet-enabled device The emerging technology behind m-commerce is mobile devices equipped with Web-ready micro-browsers Nokia, Ericsson, Motorola, and Qualcomm are working with telecommunication carriers such as AT&T Wireless and Sprint to develop smartphones Figure 4.6 displays a visual overview of m-commerce

CHAPTER THIRTEEN Opening Case Study Questions Explain whether Amazon.com is a B2B or B2C Identify how Amazon.com is already integrating its business in the e-marketplace Explain how m-commerce will influence the way Amazon.com conducts business 1. Explain whether Amazon.com is a B2B or B2C This is somewhat of a trick question, because the answer is that Amazon.com is both. Amazon.com does business with other businesses (B2B), such as Borders, Target, and Office Depot. Amazon.com also supports a huge business-to-consumer model with their main Web site interface 2. Identify how Amazon.com is already integrating its business in the e-marketplace Amazon.com’s e-marketplace consists of 4 ways that anyone can earn money using their electronic resources: Marketplace - Anyone can sell new and used products Advantage - A publisher, label, or studio looking for a distribution and fulfillment channel for products Paid Placements - Amazon’s proprietary automation and personalization technology is able to reach the customers most likely to be interested in products Search Inside the Book - Help customers discover (your) books by enrolling them in Amazon’s Search Inside the Book program. With Search Inside the Book, customers can search every word in a (your) book and browse sample pages 3. Explain how m-commerce will influence the way Amazon.com conducts business M-commerce enables consumers to buy on the fly, from handheld devices and mobile phones. Using Amazon.com’s one-click, customers could search for and buy any of Amazon's offerings, from DVDs and CDs to books and toys, and do it anywhere. Which means customers would have the use of shopping in a traditional brick-and-mortar store, use comparative shopping methods, search Amazon.com for its price, and make a purchasing decision accordingly.

CHAPTER THIRTEEN CASE 7-Eleven’s Dream Team 7-Eleven Japan has integrated its online site 7dream.com with its physical stores Through the 7dream.com Web site, 7-Eleven Japan enables consumers to choose from an online assortment of 100,000 products which are picked up from one of 8,400 store locations

CHAPTER THIRTEEN CASE QUESTIONS What 7dream.com sells is “convenience.” Explain how integrating the Internet into its existing business is the key to its success Identify new electronic relationships 7-Eleven Japan can create to increase customer acquisitions Explain how 7-Eleven Japan can leverage the advantages of an e-marketplace to increase customer retention 1. What 7dream.com sells is “convenience.” Explain how integrating the Internet into its existing business is the key to its success The benefits of integrating the Internet into 7-Eleven’s business include: Fast delivery of items Timely elimination of slow moving items Early evaluation of new merchandise Reducing inventories and increasing sales by improving the merchandise turnover rate Preparation of appropriate merchandise for the differing conditions at different times Achieving a product line that matches the character of the clientele for each store 2. Identify new electronic relationships 7-Eleven Japan can create to increase customer acquisitions Answers will vary here, however some possible responses will be: Banking Dry-cleaning Parcel post Photocopying Voting Bicycle registration 3. Explain how 7-Eleven Japan can leverage the advantages of an e-marketplace to increase customer retention This is best answered by Question 2; more services, easier access, and true “convenience”