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Basic foilset Implications of Internet Technologies for Business

Given by John Gallaugher at CPS616 -- Information Track of CPS on Spring Semester 97. Foils prepared 5 May 97
Outside Index Summary of Material

What is the Internet?
Drivers of commercial Internet growth
Current barriers & unresolved issues
Strategic considerations

Table of Contents for full HTML of Implications of Internet Technologies for Business

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1 Notes for this Slide Business & Internet Technologies
2 Outline
3 Notes for this Slide What is the Internet?
4 Notes for this Slide Example: Use of Internet to Maintain PC
5 Notes for this Slide Drivers of Commercial Internet Growth
6 Notes for this Slide Desirable Demographics
7 Notes for this Slide Lower Transaction Costs
8 Notes for this Slide Example: Flowers by Internet
9 Notes for this Slide Example: Online Banking
10 Notes for this Slide Example: Brokerage
11 Notes for this Slide Example: Book Sales
12 Notes for this Slide Lower Information Dissemination Costs
13 Notes for this Slide Example: General Electric Site
14 Notes for this Slide Broaden Reach
15 Notes for this Slide Example: Aberdeen Group Marketing
16 Notes for this Slide Example: Online Stock Market
17 Notes for this Slide Increased Service
18 Notes for this Slide Example: Gateway PC Sales
19 Notes for this Slide Example: Fedex Package Tracking
20 Notes for this Slide Example: Music CD's
21 Notes for this Slide Increased Customer Feedback
22 Notes for this Slide Example: Time Warner Media Products
23 Notes for this Slide Example: Pointcast
24 Notes for this Slide Research
25 Notes for this Slide Example: US Dept. of Commerce
26 Notes for this Slide Example: Netscape In Box
27 Notes for this Slide Current Barriers
28 Notes for this Slide Security
29 Notes for this Slide Unresolved Issues
30 Notes for this Slide Strategic Considerations
31 Notes for this Slide Example: Identify Best Price
32 Notes for this Slide Position in the Distribution Chain
33 Notes for this Slide If you build it...
34 Notes for this Slide Example: Reel.com Movie Info
35 Notes for this Slide Future Technologies

Outside Index Summary of Material

HTML version of Basic Foils prepared 5 May 97

Foil 1 Business & Internet Technologies

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
John Gallaugher
http://web.syr.edu/~jmgallau/
jmgallau@syr.edu
HTML version of Basic Foils prepared 5 May 97

Foil 2 Outline

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index
What is the Internet?
Drivers of commercial Internet growth
Current barriers & unresolved issues
Strategic considerations
HTML version of Basic Foils prepared 5 May 97

Foil 3 What is the Internet?

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
A Network of Networks
A medium capable of transmitting all forms of digital data
A support infrastructure for services
  • Electronic Mail
  • File Transfers (FTP)
  • Bulletin Boards (Usenet Newsgroups)
  • Voice and Video Communication
  • World Wide Web
HTML version of Basic Foils prepared 5 May 97

Foil 4 Example: Use of Internet to Maintain PC

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 5 Drivers of Commercial Internet Growth

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
Desirable demographics of user base
Lower transaction costs
Lower information dissemination costs
Broader buyer/supplier reach
Increased service through interactivity
Ability to gather customer feedback
Access to research materials
HTML version of Basic Foils prepared 5 May 97

Foil 6 Desirable Demographics

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
More affluent
  • online $50-80,000 vs. US avg. $32,264
Younger
  • online 35 vs. US avg. of 41
Better educated
  • 64% of on-line users are college educated
May translate into increased sales of high ticket items
  • (ex. Dial-A-Mattress)
HTML version of Basic Foils prepared 5 May 97

Foil 7 Lower Transaction Costs

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
Reduced processing costs & cycle time
  • Sundance reported 2/3 cost savings
  • IBM study reports 25% cost savings & 60% cycle time savings
Reduced transaction errors
  • PC Gifts & Flowers: .02% vs. almost 5%
Allows firms to reduce prices and attract customers
  • 1-800 Flowers passes on savings
  • Financial firms offer more competitive rates
HTML version of Basic Foils prepared 5 May 97

Foil 8 Example: Flowers by Internet

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 9 Example: Online Banking

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 10 Example: Brokerage

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 11 Example: Book Sales

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 12 Lower Information Dissemination Costs

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
Marginal costs of distributing a 30 pg. document are less than 1¢
Distribution of Internal info (Intranets)
  • majority of web servers are purchased for Internal use
  • ex. Morgan Stanley, Los Alamos, HP, CAP Gemini
Distribution of customer info
  • ex. Visa, GE Plastics
HTML version of Basic Foils prepared 5 May 97

Foil 13 Example: General Electric Site

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 14 Broaden Reach

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
17% of US adults on-line, 32% have purchased on-line, 92% expect to soon
Allows firms to consider more suppliers, reducing costs and increasing quality
  • ex. Wright Patterson EDI procurement
Allows firms to attract more customers, increasing market share and geographic reach
  • ex. Salem Five, Aberdeen Group, Wit Beer IPO
HTML version of Basic Foils prepared 5 May 97

Foil 15 Example: Aberdeen Group Marketing

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 16 Example: Online Stock Market

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 17 Increased Service

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
IT can support the purchasing decision, reducing product complexity & uncertainty
  • ex. Gateway 2000
Cycle time reduction for faster service
  • ex. Package tracking
Enhanced interface to the customer
  • ex. Flowers by PC vs. by phone
  • ex. CDNow! and Firefly
HTML version of Basic Foils prepared 5 May 97

Foil 18 Example: Gateway PC Sales

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 19 Example: Fedex Package Tracking

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 20 Example: Music CD's

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 21 Increased Customer Feedback

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
Low cost method for gathering mailing lists and customer demographics
Increased frankness vs. face-to-face transactions
Source of ideas
  • ex. scottadams@aol.com
Analysis of usage patterns
  • advertising effectiveness, site tailoring, product development
HTML version of Basic Foils prepared 5 May 97

Foil 22 Example: Time Warner Media Products

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 23 Example: Pointcast

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 24 Research

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
Content available doubles every 2 months
  • even free info carriers a price
  • consider info-push and hired researchers
Offerings interesting to students
  • ex. Hoover, Edgar, www.search.com
Government offerings
  • ex. Dept. of Commerce
  • ex. Small Business Administration
HTML version of Basic Foils prepared 5 May 97

Foil 25 Example: US Dept. of Commerce

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 26 Example: Netscape In Box

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 27 Current Barriers

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
Lack of Organization
Speed / Bandwidth
Access
Software
Accountability and trust
Security
HTML version of Basic Foils prepared 5 May 97

Foil 28 Security

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
56% of users cited security concern as main reason why they don't shop online
Fraud Rates (source: Forrester Research)
  • $1 per $1000
  • $1.41 per $1000 Mastercard
  • $19.83 per $1000 Cellular
  • $16 per $1000 Phone
Net culture ensures constant scrutiny
HTML version of Basic Foils prepared 5 May 97

Foil 29 Unresolved Issues

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
Legal Ramifications
  • ex. gambling & decency
Copyright
  • ex. National Writers Union suit
Liability
  • ex. Prodigy suit
HTML version of Basic Foils prepared 5 May 97

Foil 30 Strategic Considerations

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
Understand Net culture
  • ex. the greencard lawyer spam & the perils of direct E-Mailing
Set corporate communication policy
Examine the likelihood and impact of price-based competition on the firm
Consider how long-term trends may affect the firm according to its position in the distribution chain
HTML version of Basic Foils prepared 5 May 97

Foil 31 Example: Identify Best Price

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 32 Position in the Distribution Chain

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
Benjamin & Wigand (1995)
HTML version of Basic Foils prepared 5 May 97

Foil 33 If you build it...

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
... will they come? Maybe, but they might not return.
Visitors
Time
Branding &
Innovation
HTML version of Basic Foils prepared 5 May 97

Foil 34 Example: Reel.com Movie Info

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
HTML version of Basic Foils prepared 5 May 97

Foil 35 Future Technologies

From Implications of Internet Technologies for Business CPS616 -- Information Track of CPS -- Spring Semester 97. *
Full HTML Index Notes for this Slide
Faster Speed Access
  • ISDN, ADSL, Cable Modems
Wireless Technologies
  • broadband satellite via DBS
  • Teledesic Corp. (target 2002)
Component Applications
  • Java, RealVideo
Integration with other software
  • scheduling, operating systems, television
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