1. Chapter 17 The Digital Revolution and the Global E-Marketplace

2. 17-2 Introduction This chapter looks at: Innovations that led to the digital revolution Convergence and the disruptive nature of Internet technology E-commerce and web site categories Insert istockphoto #505759 Woman’s hand holding a small backlit globe

3. 17-3 The Digital Revolution: A Brief History 1937 to 1942: World’s first electronic digital computer was developed at Iowa State University 1947: The transistor was invented 1950’s: Invention of the silicon chip 1970’s: The decade for companies like Atari, Commodore and Apple

4. 17-4 The Digital Revolution: A Brief History 1981: IBM introduced is first Personal Computer (PC) 1982: The 286 microprocessor was unveiled 1984: Apple introduced the Macintosh 1993: The creation of the Pentium processor

5. 17-5 The Digital Revolution: Additional Milestones 1969: The Internet can trace its origins (Defense Advanced Research Projects Agency) 1972: E-mail was sent for the first time 1973: The creation of a cross-network protocol; the true birth of a network of networks or the Internet 1993: Tim Berners-Lee invented URL, HTML and Http. Also the first commercial browser was created Web users in 1993: 600,000 Web users in 2003: 580,000,000 (estimated)

6. 17-6 Industry Convergence The coming together of previously separate industries and product categories

7. 17-7 Value Networks and Disruptive Technologies Innovator’s Dilemma Value network Sustaining Technologies Disruptive Technologies

8. 17-8 Innovator’s Dilemma Staying committed to a current, profitable technology Failing to provide adequate levels of investment to new and possibly risky technologies Company is responding to the needs of established customers

9. 17-9 Value Network Found in every industry Cost structure that dictates the margins needed to achieve profitability Boundaries are defined by the unique rank ordering of the importance of various product attributes Each network has its own metrics of value

10. 17-10 Sustaining Technologies Incremental or radical innovations that improve product performance Most new technologies developed by established companies are sustaining in nature The vast majority of innovations are sustaining in nature

11. 17-11 Disruptive Technologies Redefine performance New entrants to an industry Enable something to be done that was previously deemed impossible Enable new markets to emerge

12. 17-12 Global E-Commerce In 2003, global e-commerce revenues stood at $1.6 trillion and growing Every 48 hours, Yahoo records more than 24 terabytes of data about its users’ online habits— equivalent of all the information contained in all the books in the Library of Congress Between 2003 and 2006, the number of Internet users in China increased from 68 million to 123 million; in Shanghai, Beijing and Guangzhou, one-third of all residents use the Internet Japan has about 60 million Internet users, and accounted for $1.6 billion in online revenue in 2004

13. 17-13 Global E-Commerce Can be divided into 3 broad categories Business to Business (B2B) Business to Consumer (B2C) Consumer to Consumer (Peer-to-Peer)

14. 17-14 Technology Forecast Insert istockphoto #410092 Asian man with laptop in front of Mayan ruins Travel booked over the Internet represents the largest e-commerce category. Revenues totaled $68 billion in 2005 and are expected to reach $104 billion by 2010

15. 17-15 Web Sites Classified by Purpose Promotion sites to promote goods or services Content sites that provide news and entertainment Transaction sites allow consumers to purchase goods and services

16. 17-16 Categories of Web Sites

17. 17-17 Web Sites Companies must be willing to integrate interactive media into the marketing mix Can be developed in-house or by an outside firm

18. 17-18 Web Sites “Shopping on the Internet is no different than traditional sales channels. It’s all about trusting the brand and having a strong relationship with one’s customers.” —Ron Fry, Internet Business Manager, Lands’ End

19. 17-19 Web Sites Things to consider when creating a global Web Site Localize the Web site in the native language and business nomenclature of the target market Should reflect local culture, customs, and aesthetic preferences Privacy

20. 17-20 Web Sites What makes a ‘good’ Web site? Technology and functionality. This category includes layout, ease of navigation, and print-out opportunities. Does the site offer interactive functions such as order forms and e-mail subscriptions? Content. This category includes e-mail address information for key people or corporate functions; corporate information such as mission, vision, and company history; and financial information such as quarterly reports in PDF or HTML format.

21. 17-21 Broadband Has sufficient capacity to carry multiple voice, data, or video channels simultaneously Bandwidth determines the range of frequencies that can pass over a transmission channel

22. 17-22 Broadband Creates opportunities for streaming audio, video, and media Online gaming Online education Medical diagnosis and treatment E-Commerce

23. 17-23 Mobile Commerce and Wireless Connectivity Mobile commerce or M-commerce is the term for conducting commercial transactions using wireless handheld devices such as PDA’s Wi-fi – (Wireless Fidelity) permits laptop and PDA users to establish high-speed wireless Internet connections Bluetooth – uses less power than wi-fi, works well with cell phones and covers shorter distances than wi-fi

24. 17-24 Smart Cell Phones 500 million cellular handsets are sold annually European cellular providers have formed a consortium called Simpay to offer M-commerce services to 250 million cellular subscribers In Norway, mobile operator Telenor ASA has teamed with a finance group to offer mobile purchases of flowers, compact discs, bus tickets and food

25. 17-25 Internet Phone Service The next big thing for the telecommunications industry Has the potential to render the current telecommunications infrastructure obsolete Currently only accounts for 3% of total global calling

26. 17-26 Looking Forward To the Final Exam!