1. Chapter 4 The Business Environment (and IT Strategies for EC/EB)

2. Copyright © 2003, Addison-Wesley A Business Plan The (long-term) path to profitability Contents Product Market Competitors Customers Risks Financials

3. Copyright © 2003, Addison-Wesley Figure 4.2 Elements of a business plan.

4. Copyright © 2003, Addison-Wesley Competitive Advantage Something that Your company can do Your customers want (or value) Your competitor cannot or will not match Sources of competitive advantage Unique product Price Quality Cost controls and efficiency

5. Copyright © 2003, Addison-Wesley Figure 4.3 The value chain. Conflicting objectives Local process vs. organization-wide efficiency Efficiency vs. effectiveness Faster, cheaper, better: Pick any two.

6. Copyright © 2003, Addison-Wesley Figure 4.4 The supply chain. Conflicting objectives again Company vs. company

7. Copyright © 2003, Addison-Wesley E-Commerce Business Environment Low cost of entry Global reach Huge potential markets Intense competition

8. Copyright © 2003, Addison-Wesley Figure 4.5 The three categories form an integrated structure. Integration is the future of e-commerce.

9. Copyright © 2003, Addison-Wesley Figure 4.6 The three categories are applications that communicate with each other via the infrastructure. Another way to view integration

10. Copyright © 2003, Addison-Wesley Digital Products Potential killer applications/services (?) Software Recorded media: music, movies, books Information services Online computer games Diminishing returns does not apply EC is a digital technology

11. Copyright © 2003, Addison-Wesley Digital products do not experience diminishing returns. High startup cost First copy Low incremental cost After breakeven Pure profit

12. Copyright © 2003, Addison-Wesley Intermediaries An intermediary is a middleman Disintermediation Eliminating the middleman Sometimes claimed as e-commerce benefit Reintermediation New middlemen replace the old ones An e-commerce reality

13. Copyright © 2003, Addison-Wesley Negating Location Geography no longer matters Global competition Example—writing this textbook Participants The authors (Florida and Ohio) The publisher (Boston) Production (New England) Printing and warehousing (Indiana)

14. Copyright © 2003, Addison-Wesley Figure 4.10 A manuscript page. Created by the authors Florida Ohio MS Word

15. Copyright © 2003, Addison-Wesley Figure 4.11 Rough art. Created by the authors Florida Ohio Visio

16. Copyright © 2003, Addison-Wesley Figure 4.12 A copy edited page Copy editor in Massachusetts MS Word

17. Copyright © 2003, Addison-Wesley Figure 4.13 A finished page. Paging done in Massachusetts Adobe Acrobat All electronic communication

18. Copyright © 2003, Addison-Wesley Figure 4.15 The competitive advantage model. The two yellow boxes represent activities that happen simultaneously.

19. Copyright © 2003, Addison-Wesley Information Technology as Strategic Tool Modern business is Extremely competitive Changing at an accelerating rate Impossible to keep current manually Information technology infrastructure Essential A strategic resource