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MIS 648 Presentation Notes: Lecture 8

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Title: MIS 648 Presentation Notes: Lecture 8


1
MIS 648 Presentation Notes Lecture 8
  • Global Aspects of E-Commerce

2
AGENDA
  • Goal of the Lecture
  • Global Aspects of E-Commerce
  • Global Economies of Style
  • Cultural Influences

3
Goals of the Lecture
  • Understand E-commerce as a global phenomenon,
    with global impact and driving forces
  • Describe the networked economy as the platform
    for global e-commerce
  • Understand the impact of differential
    infrastructure availability on the networked
    economy and hence on global e-commerce
  • Speculate about the future of e-commerce and
    properties of marginalization and hollowing out.

4
Global Aspects of E-Commerce
  • Any business can now transact globally
  • This is enabled through the ubiquitous and
    non-proprietary idea of a web browser.
  • HTML (and its successors) have empowered
    individuals to access information worldwide
    without proprietary networks and software.
  • Competitive advantage is now in the ability to
    capitalize on the capabilities of the ubiquitous
    browser.

5
Global Aspects of E-Commerce II
  • The new economy is the economy enabled by the
    Internet and the browser with open standards.
  • All new economy businesses are global
  • Each business can be intermediated and
    disintermediated almost at will.
  • Hence business models must be agile and
    businesses must be flexible.

6
Global Economies of Style
  • Licker, 2005 Presented at the 6th Global
    Information Technology Management World
    Conference, Anchorage, June.
  • Major Thesis Global Networked infrastructure
    enables value networks and a new way to compete.
  • Competing on style means managing a network of
    values delivered through relationships.

7
Value Networks
  • Achieving Economies of Style and Extracting
    Profit through Agility in a Value Network
  • GITMA Anchorage, June 2005

8
Agenda
  • Supply Chain ? Value Chain
  • Value Chain ? Value Network
  • Economies of Style
  • Moving around the Value Network
  • Profit Avoiding commoditization
  • Extracting Profit from the Value Network

9
The Supply CHAIN
Producer (focal firm)
Supplier
10
The Value CHAIN
Gg(S1, S2, Sn) P
VGP
Value is added by distributing the product where
needed or desired
Producer (focal firm
Supplier
Value is added by bringing together supplies
Value is added by creating a product via processes
11
The Value NETWORK
Supplier-1
Producer
Supplier-4
Supplier-2
Supplier-3
Buyer-5
Buyer/ Supplier
12
Putting the Value in the Value Network
Supplier-1
Producer
Supplier-4
Supplier-2
Supplier-3
Buyer/ Supplier
At any point in this network, value can be added
At any point in this network, value can be added
At any point in this network, value can be added
13
Multiple, Volatile Relationships
C
E
A
X
p
D
G
F
B
H
14
Relationship Management
ca
C
E
A
ax
ed
X
fd
gf
p
D
G
da
F
bx
fh
B
VALUE NETWORK V1
H
15
Economies of Style
  • Economy of Scale Reducing variable cost of
    production of product.
  • Economy of Scope Reducing variable cost of
    variation in product.
  • Economy of Style Reducing variable cost of
    relationship.

16
Avoiding Commoditization
Producer (focal firm
Buyer
Supplier
  1. Compete on price (economy of scale)
  2. Compete on design/differentiation (economy of
    scope)
  3. Compete on relationship (economy of style)

17
Moving Around the Value Network
18
Extracting Profit Around the Value Network
Profit comes from finding buyer for reseller
Profit comes from facilitating supplier alliance
Profit comes from locating supplier for producer
Profit comes from turning buyer into low risk
producer
19
Extracting Profit through Economies of Style
Third-order
Second-order
First-order
C
X
E
D
A
B
F
G
20
General Principle
  • Value network integration means firms can play
    more roles more quickly
  • Finding out where value is added and how to
    manage that value-adding process is important
  • The more information content to the physical
    product, the more likely it is that agility holds
    the key to increased profit

21
Cultural Influences
  • Globalization is not automatic, however
  • Although the browser is ubiquitous, websites may
    be tuned locally.
  • Each culture has its own preferences for style,
    layout, language, symbols, pace, emphasis, and
    especially content.
  • There are far too many examples
  • These cultural influences might not be fixed.

22
Culture Clash and Influences
Presumed World Culture
Business Culture
National Culture
Infrastructure Culture
IT Culture
Specialized Culture
23
Major Battleground
  • Cultural symbols
  • Language (English?)
  • Literacy requirements
  • Gender taboos
  • IT culture symbols, rites, practices
  • Consumerism/western culture
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