Determinants of Firm Performance

1
Determinants of Firm Performance
Business Model Components and linkages
Dynamics
Change Properties Underpinnings
Performance
Environment Competitive Macro
2
Determinants of Performance An Internet-Based
Firm
Internet Business Model Components and
linkages Dynamics
Internet Properties Underpinnings
Performance
Environment Competitive Macro
3
Internet Business Models and Strategies Topics
Conceptual Overview
Business Model

• Chapter 4 Components of a business model
• Chapter 5 Dynamics of business models
• Chapter 6 Taxonomy of Internet business models
  
• Chapter 7 Value configurations and the
  Internet
• Chapter 8 Valuing and financing Internet
  start-ups
• Chapter 9 Appraisal of Business Models

Chapter 1 Introduction and overview
Internet
Chapter 2 Overview of Internet technology and
value network Chapter 3 Competitive
landscape-transforming properties of the Internet
Performance
Chapter 10 Competitive and macro environments
Chapter 9 The general manager and the
Internet Chapter 10 Sample analysis of an
Internet business model case
Environment
4
History of the Internet

• Advanced Research Projects Agency of the
  Department of Defense (ARPA)
• Implemented the ARPAnet, the grandparent of
  todays Internet
• Packet switching
• Digital data is sent in small packages called
  packets
• Packets
• Contain data, address information, error-control
  information and sequencing information
• Transmission Control Protocol (TCP)
• ensures that messages are properly routed from
  sender to receiver and that those messages
  arrived intact, error free, and in the correct
  sequence.
• Internet Protocol (IP)
• Responsible for addressing packets. IP addresses
  are 32 bits long. Example 123.201.100.109 Each
  packet must have a valid source and destination
  IP address.
• Routers digital switches
• Firewalls

5
Other Protocols used on the Internet

• File Transfer Protocol (FTP)
• Used to upload and download files between the
  client and the server.
• Hypertext Transfer Protocol (HTTP)
• Used on the Internet for sending Web pages from a
  Web Server to a Web Client (Browser)
• Point-to-Point Protocol (PPP)
• Used to establish a dial-up connection with an
  ISP for Internet services.
• e-mail Protocols
• SMTP sending e-mail
• POP3 receiving e-mail

6
History of the World Wide Web

• World Wide Web
• Locate and view multimedia-based documents
• Makes information instantly and conveniently
  accessible worldwide
• Possible for individuals and small businesses to
  get worldwide exposure
• Changing the Rules of the Game in Competition

7
Internet and World Wide Web Development

• Computer use is increasing in almost every field
  of endeavor
• Dramatic decrease in the cost of computing
• Enhanced multimedia capabilities
• Increased publishing and learning opportunities
• Enhanced communication technologies

8
e-Business and e-Commerce

• Successful e-businesses are those that recognize
  the needs of their target audiences and match
  those needs with relevant content
• Seasoned professionals and young entrepreneurs
• e-Commerce
• Buying and selling of goods and services over the
  Internet
• e-Business
• E-Commerce plus exchanges with suppliers,
  strategic alliance partners, as well as
  electronic transactions within the business itself

9
e-Business and e-Commerce Overview

• Intense competition
• Businesses must adjust to new technologies and
  implement new systems
• Customized production capabilities
• Finding and keeping key employees
• 24-by-7 maintenance responsibilities
• Must be reliable, fast, functional and user
  friendly
• Brick-and-mortar businesses
• Businesses that have only a physical presence
• Click-and-mortar businesses
• Businesses that have both an online and an
  offline presence
• Pure Play Businesses
• Only online business

10
e-Business and e-Commerce Overview

• Virtual office
• All communications are conducted via phone, voice
  mail, fax, e-mail and the emerging capabilities
  of the Internet
• Personalization
• Tailoring Web pages to users individual
  preferences and letting users bypass irrelevant
  content
• Privacy invasion
• The sale of personal data to another organization
  without the consumers knowledge
• Tracking of Internet activity
• Unauthorized access to credit-card numbers,
  medical history and criminal history

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Simple E-Commerce Technological Architecture
Figure 1
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Chapter 2 The Internet value network
Homes small organizations
Users computer
POP
Enterprise
Users computer
Router (digital switch)
Enterprise
backbone
Individuals
Gateway (LAN server)
Enterprises
Wireless Gateway
Users computer
Users computer
Web server
Mail server (POP, SMTP)
Cell Phones
News Server IRC Server
PDAs
Other Mobile Devices
FTP Server
13
Internet Value Network (continued)
Large organization
POP
Home users
LAN
ATM switch
High Speed backbone line
Home users
Home users
OSPs (e.g., AOL) Access to proprietary content
and the Web
ISPs Access to the Web
POP
POP
14
Value Network Profit Sites (with examples)
Chapter 2
I. Users 1. E-commerce (Cisco, Amazon) 2.
Content aggregators (AOL,Yahoo!) 3. Market makers
(Priceline, eBay) 4. Brokers/Agents (Schwab,
ETrade) 5. Service providers (EDS, EMC)
II. Communications service providers
6. Backbone (MCI Worldcom, ATT)
Homes Organiz- ations
7. ISPs / OSPs (MSN, AOL)
III. Suppliers 9. Content
creators (Disney, Time-Warner) 10. Software
suppliers (Microsoft, Oracle) 11. Hardware
suppliers (IBM, Hewlett-Packard)
8. Last Mile (Verizon, SBC)
15
Components and Linkages

• Components (Chapter 4)
• Customer value
• Scope
• Pricing
• Sources of revenue
• Connected activities
• Capabilities
• Implementation

Strategy Formulation Implementation
Linking Components to Maximize Value
Competitive Advantage Sustainability