Internet Service

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Internet Service
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Learning Objectives

• Describe different Internet business models.
• Contrast an electronic and traditional service.
• Understand the importance of scalability to
  E-commerce success.
• Distinguish among the E-business models.

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Technology Convergence Enabling E-Business

• Internet
• Global telephone system
• Communications standard TCP/IP (Transfer Control
  Protocol/Internet Protocol)
• Addressing system of URLs
• Personal computers and cable TV
• Customer databases
• Sound and graphics
• User-friendly free browser

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Purpose of Web-site

• A retail channel (Amazon.com)
• Supplemental channel (Barnes Nobel)
• Technical support (Dell Computer)
• Embellish existing service (HBS Press)
• Order processing (Delta Airline)
• Convey information (Dr. Koop)
• Organization membership (POMS.org)
• Games (Treeloot.com)

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E-Business Models(Weill Vitale, Place to
Space, HBS Press, 2001)

• Content Provider Reuters
• Direct to Customer Dell
• Full-Service Provider GE Supply Co.
• Intermediary eBay
• Shared Infrastructure SABRE
• Value Net Integrator Seven-Eleven Japan
• Virtual Community Monster.com
• Whole-of-Enterprise Government

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Service Package and E-Service
 
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Electronic and Traditional Services
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Grocery Shopping Comparison
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E-Business Supply Chain (Network) Elements

• Major entities including firm of interest and its
  customers, suppliers, and allies
• Major flows of product, information, and money
• Revenues and other benefits each participant
  receives
• Critical aspects participants, relationships,
  and flows
• Example 7-Eleven Japan

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Economics of E-Business

• Sources of Revenue- Transaction fees-
  Information and advice- Fees for services and
  commissions- Advertising and listing fees
• Ownership- Customer relationship- Customer
  data- Customer transaction

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Economics of Scalability

• Information vs goods content of service package
• Degree of customer contact
• Standardization vs customization
• Shipping and handling costs
• Cost of after sales service
• Why did living.com fail?

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Economics of Scalability
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Topics for Discussion

• Can an Internet service encounter be a memorable
  experience?
• What is the front-office of an Internet
  service?
• What is the contribution to gross national
  product (GNP) of self-service activities?
• Position the following websites on the electronic
  services product-process matrix cookingpost.com,
  chocoholic.com, peapod.com, raisinrack.com, and
  win.com.

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Amazon.com

• How would you contrast Amazons business design
  with that of Barnes Noble before Barnes Noble
  went online?
• From a customers perspective, what are the
  advantages and disadvantages of each design?

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Amazon.com (cont.)

• Why has Amazon.com not turned a profit yet and
  what needs to be done to achieve profitability?
• Will amazon continue to be successful against
  click and mortar competitors, such as Barnes
  Nobel, which go online?
• Is Amazon.com a model for the future of retailing?