Chapter 7 E-Business Systems
Chapter 7
E-Business Systems
Objectives and Overview
and learn about products and services, make online purchases and track package delivery, and
communicate with others for business or personal reasons. This chapter is designed to build on this
– -com firms use Internet technologies to compete in new ways in
It is our experience that students from all countries are already highly motivated to better understand e-
business opportunities in general, as well as learn from the experiences during the early days of e–
business in the latter half of the 1990s which at that time was heavily influenced by United States
organizations. We therefore provide a brief discussion of not only e-business technologies (which are
The section on the strategic opportunities and threats due to the Internet makes reference to the ideas
posed by Michael Porter in which he uses his internationally known model of five competitive forces to
B2B applications using the Internet are then discussed in general, including the concept of a reverse
auction and the potential for different players in an industry to develop a successful B2B marketplace.
Chapter 7 E-Business Systems
The chapter concludes with a brief discussion of what makes a good Web site from a consumer
perspective and what makes a good B2C social media platform. As we go to press with this edition, more
articles are being published on how large and small businesses are leveraging so-called Web 2.0
applications, as well as mobile devices that provide context-specific information and advertisements
Three of the case studies that follow this chapter (all of which are unique to this textbook) can be
effectively used to emphasize and expand on many of the concepts in this chapter.:
Teaching Suggestions
1. Below is a Web Site Analysis Assignment that has been modified over the yars by one of the authors.
Using a framework of Web site characteristics for comparing and evaluating selected B2C Web sites
2. Although it is difficult to study B2B Web sites because of their proprietary password access, some
3. redictions for how the Internet influences the five competitive forces in his
traditional strategy model can be used as a starting point for evaluating opportunities and threats
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4. Several Web sites provide useful statistics about online activities, including retailing, such as the
Sample Assignment: Web Site Analysis
The objective of this assignment is for you to increase your knowledge about how businesses are
leveraging the Internet to conduct business. Because you will be using public Web sites to do your
research, the focus will be on marketing, sales, and customer service transactions with end-consumers
(B2C).
After you have formed a team:
1. Choose an industry of interest that has several companies that have developed online e-business
strategies that include public B2C Web sites. This industry might include traditional companies
2. Analyze each -and-
3. Write up your findings, including the following content:
Introduce the industry you selected and the Web sites you selected. Include the reasons why you
chose this industry and these particular companies, and include the URL for each site.
Based on your analyses, provide some recommendations for the company whose Web site you
Chapter 7 E-Business Systems
Review Questions
1. Define and contrast the following pairs of terms: dot-com and bricks-and-clicks; intranet and
extranet; B2C and B2B.
Dot-com: A term used to describe an online business that receives revenues entirely based on customer
– -com businesses, as
distinguished from bricks-and-clicks businesses. [As mentioned in the text, the term originates from the
2. What business capabilities are enabled by digital signatures and XML?
capabilities: XML tags are based
on agreed-upon standards for common data elements in business documents. This means that companies
3. Describe some characteristics of the U.S. regulatory and legal environment that influenced the
early growth of e-business applications
U.S. laws protecting freedom of expression have been primary shapers because of the U.S.-based roots of
the Internet, and the laws to protect the privacy of individuals within the United States date from the
4. What are some of the potential benefits of B2B applications that use the Internet?
One major benefit of traditional EDI is that it is already a well-established mechanism between trading
partners, using message standards agreed on by trading partners within many industries. Standards for
5. Choose one of the five competitive forces in Porter s model, and describe a new opportunity and
a new threat due to e-commerce via the Internet for a specific industry of your choosing.
Some of the most common threats across industries can be found on the Buyer Power side, including
The Internet can provide consumers with a great amount of information about prices of commodity
products, interest rates of bank accounts, airline seat prices, etc. For many products and services, it is
7. Describe some of the reasons that early dot-com companies had an initial advantage over
traditional companies in developing an online sales capability.
The dot-com companies could focus their efforts solely on their online sales capability. Unlike traditional
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8. What is meant by the term multichannel capability?
9. Describe some of the reasons why a company that is a traditional catalog retailer may have an
advantage over a traditional store retailer when first developing an online sales capability.
backend order fulfillment systems to accommodate the addition of an online sales channel compared to
10. What were some of the e-business innovations using Web technologies that were introduced by
Amazon.com, Netflix.com, Dell.com, and Landsend.com?
[Note: Each of these Web sites is described in some detail in the retailing examples in the chapter. All
four companies have been innovators with Web-based applications. The last two examples are bricks–
and-clicks examples, and both already had direct-selling capabilities as catalog companies.]
Amazon.com
11. Describe how eBay evolved from its original C2C business model.
E-Bay began as an intermediary that linked individual sellers and buyers, but has evolved to also be an
12. Why is Google today referred to as a Web portal rather than a search engine?
13. How does a company that is a dot-com intermediary earn revenues?
In general, a successful intermediary needs to be able to attract a large-enough user base that will generate
14. Why might a firm choose to use an external service provider to host its public Web site?
15. What is one of the ways that the dot-com meltdown in the United States during the early 2000s
influenced the growth of e-business in this country?
16. What is m-commerce and what are some of the new business opportunities associated with it?
M- -business applications for mobile
devices that have wireless communications capabilities, such as handheld cellular telephones and other
17. Why might a business choose to participate in a social networking site such as Facebook?
Discussion Questions
1. Provide evidence to support the following statement: The growth of e–business is due to both
business and technological innovations.
Although e-business applications to conduct business transactions beyond organizational boundaries did
2. Provide an argument to either support or refute the following statement: In B2B applications, the
customer holds the greatest power.
model (Figure 7.4) can be used to argue these points for trading partner B2B applications.]
–
suppliers. The large customer certainly holds significant power over its suppliers: Large retailers such as
3. Briefly describe some online experiences that you have had with good customer service and/or
4. Research the company Alibaba.com, and describe some reasons that you think it has been so
successful.
Alibaba Group is a privately owned Hangzhou-based family of Internet-based businesses that includes
5. Describe how the existence of (or lack of) state laws in the United States has been a barrier or a
catalyst to online sales.
6. Choose three traditional firms within the same industry that sell similar products or services to
consumers. Based on their public Web sites, compare and contrast how effective these companies
are in developing a multichannel capability.
7. Use the 7Cs framework described at the end of this chapter to evaluate the public Web sites of
two competitors. Based on your analyses, what improvements could these companies make to the
design of their Web sites?
8. Explore a social networking Web site, and analyze how businesses appear to be using the site.
What do you see as some of the pros and cons for this type of software, from the perspective of a
An example of a company that has extensive community building is Starbucks. The company has
community forums and blog aggregation for consumers to comment on the existing products and, more
9. Analyze current statistics on Internet users around the globe, and comment on the trends.
10. Analyze how candidates in a current political election appear to be leveraging the Internet as
part of their campaigns, or not.
voting polls in November 2008 than in prior U.S. election years. His Web site My.BarackObama let users
11. Describe some of the ways the Internet has or has not impacted the way you (1) buy groceries,
(2) make travel plans, (3) read news, (4) follow your favorite sports team, (5) decide which movie to
see next, (6) decide what political candidate to vote for, and (7) do research for a business course.
The Internet can provide a very efficient means to find information (both business and personal),
including recent news events, but we have found that students do not always assess the credibility of the
Chapter 7 E-Business Systems
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