The Digital Revolution and The Global E-Marketplace Chapter 25 Matakuliah: J0474 International Marketing Tahun: 2009

Bina Nusantara University 3 Learning Outcome Convergence Value Networks and Disruptive Technologies Global E-Commerce Web Site Design and Implementation New Products and Services

Bina Nusantara University 4 Convergence The digital revolution is causing dramatic changes in industry structure. Convergence is a term that refers to the coming together of previously separate industries and product categories. What business is Sony in? 1999 Telephones Consumer Electronics Computers Photography 2008 Computers Photography Consumer Electronics New technologies affect the business sectors in which a company competes. Telephones

Bina Nusantara University 5 Value Networks and Disruptive Technologies In every industry, companies are embedded in a value network. Each value network has a cost structure associated with it that dictates the margins needed to achieve profitability. Christensen has developed five principles of disruptive innovations: 1.Companies depend on customers and investors for resources. 2. Small markets don’t solve the growth needs of large companies. 3.Markets that don’t exist can’t be analyzed. 4. An organization’s capabilities define its disabilities. 5. Technology supply may not equal market demand. Sustaining technologies Or Disruptive technologies ??

Bina Nusantara University 6 Global E-Commerce Benefit of Global marketing The term e-commerce refers to the general exchange of goods and services using the internet as a marketing channel. Web sites can be classified by purpose : 1.Promotion sites 2. Content sites 3. Transaction sites. E-commerce activities can be divided into three broad categories : Business to consumer (B2C), Business to business (B2B), Consumer to consumer (C2C)

Bina Nusantara University 7 Web Site Design and Implementation Whichever approach a company adopts, several issues must be addressed when setting up for global e- commerce. To fully exploit the internet’s potential, company executives must be willing to integrate interactive media into their marketing mixes. Web sites can be developed in-house, or an outside firm can be contracted to do the job. During the past few years, a new breed of interactive advertising agency has emerged to help companies globalize their internet offerings. Domain names Arranging payment Setting up a distribution system Localizing sites Addressing privacy issues

Bina Nusantara University 8 New Products and Services As a result of the digital revolution, a variety of companies in all parts of the world are developing a new generation of product, services and technologies. A new generation of products, services and technologies, include broadband networks, mobile commerce,etc. Wow… I proud with its ……. wireless connectivity “ smart” cell phones, and internet phone service.

Bina Nusantara University 9 New Products and Services Broadband A broadband communication system is one that has sufficient capacity to carry multiple voice, data, or video channels simultaneously. Bandwidth determines the range of frequencies that can pass over a given transmission channel. What opportunities does broadband offer to companies outside the telecommunications industry? Broadband internet allows users to access streaming audio, streaming video, and streaming media.

Bina Nusantara University 10 New Products and Services Mobile Commerce and Wireless Connectivity Many companies are developing ways to provide internet access without the need for a wired broadband connection. Wireless fidelity (Wi-Fi) permits laptop and PDA users to establish high speed wireless connections to the internet and corporate intranets via’ hot spots’ located in airports, cafes or other public places. Wi-Fi networks have a limited range; An improved technology known as WiMax, Is being deployed in many parts of the world. A mobile communication technology known as Bluetooth, Is well suited to use with cell phones.

Bina Nusantara University 11 New Products and Services Smart Cell Phones Now, advertisers are taking advantage of this capability by using short message service (SMS) The record companies prepare to make original recordings available ….Ring tunes….

Bina Nusantara University 12 Summary The digital revolution has created a global electronic marketplace. The digital revolution has resulted in a process known as convergence. In this environment, the innovator’s dilemma means that company management must decide whether to invest in current technologies or try to develop new technologies. E-commerce is growing in importance for both consumer and industrial goods marketers.