1. Strategies in Response to the Potential of Electronic Commerce Chapter 12 Jatinkumar Shah

2. About this chapter Focus on Business Strategies rather than IT Strategies 4 similar cases to explain how they pursue target benefit and deal with barriers

3. Market-making firms CALM IA AUCNET CATS

4. Market-making firms Social institutions in which a large number of commodity exchanges of a specific type regularly take place, facilitated and structured by institutional rules governing the exchange.

5. Why deal via market-making firms? Costs of obtaining relevant information are reduced since market- making firms help publicize prices as well as other relevant information Easier to find preferable trading counterparts Bargaining costs can be reduced as market-making firms help establish procedures and conventions for reaching a bargain Policing and enforcement costs can be reduced because market-making firms bring norms of conduct and codes of practice for buyers or sellers.

6. Difference between internet shopping Sellers are price takers, not price makers, although they have a certain level of reserve prices. Buyers who purchase goods are not end consumers but typically wholesalers or retailers Institutional rules established to reduce transaction uncertainties and to protect member traders against transaction conflicts. Agreement over the governing rules can be facilitated because the members meet frequently and deal in a restricted range of goods. It is possible to enforce the rules because the opportunity to trade on the exchange itself is of great value

7. Business process redesign (BPR) BPR requires a firm to step back from current business processes to consider its overall business objective Information technology is usually a necessary but insufficient factor in achieving BPR. Successful reengineering is not an IT initiative but, rather, a business initiative

8. Decoupling of product flows

9. Opportunities and challenges of electronic market adoptions Increased efficiency & effectiveness in: Information gathering Contract formation Trade settlement Adoption barriers resulting from: Increased transaction risks and uncertainties Lack of power to enforce the change Economic gainsChallenges Increased efficiency & effectiveness in: Information gathering Contract formation Trade settlement Adoption barriers resulting from: Increased transaction risks and uncertainties Lack of power to enforce the change Economic gains Increased efficiency & effectiveness in: Information gathering Contract formation Trade settlement Adoption barriers resulting from: Increased transaction risks and uncertainties Lack of power to enforce the change ChallengesEconomic gains Increased efficiency & effectiveness in: Information gathering Contract formation Trade settlement Adoption barriers resulting from: Increased transaction risks and uncertainties Lack of power to enforce the change

10. Four cases

11. Observed economic gains

13. Adoption barriers and tactics to overcome

14. Concerned points Electronic product description Thin market Resistance to change Standard product quality rating and inspection Quick achievement of critical mass Preparation for resistance and retaliation

15. Conclusion IT-enabled reengineering increases market efficiency as well as barriers By examining the barriers and facilitators of success in the case studies presented, market makers can be better prepared to design electronic markets that increase market efficiency and overcome barriers to adoptions

16. My experience Toshiba Global One system Building a system that Converts Distributor’s forecast into orders Building a system that helps customers to download engineering specification information

17. Question?