Lecture 1 Flashcards
Value modeling
Determines which value relation exists
E.g. Brand to brand or brand to consumer
Process modeling
Determines which processes provide value (via products and services)
Data (or information) modeling
Determines which data are used to run the processes to create information (services) and to provide the value
E-commerce
The impact of IT on business
IT (information technology)
The use of any computers, s torage, networking and other physical devices, infrastructure and processes to create, process, store , secure and exchange all forms of electronic data
IT-enabled firms
Are firms (existing firms as well as start-ups) that use IT to reach customers, to produce products and services, to purchase materials, hire personnel etc.
IT-provider firms
An increasing variet of firms (existing as well as start-ups) provide IT (all kinds of products and services) to IT-enabled firms (and/or other IT providers)
Eight unique features of E-commerce technology
It is everywhere, It can reach customers globally, standards shared by all nations, user generate content and social networks, personalized services and products, IT enables big data, IT enables communication and data sharing, IT enables enhanced services
E-business (impact of IT at the firm level) IT affects:
All business process stages (purchasing, design, manufacturing, sales and marketing)
The linkages and integration of subsequent steps in the value chain
Contracting between firms
Connecting value chains (firms) into a dynamic value system
E-commerce (impact of IT at industry level)
It can affect each of porters five forces, thereby influencing:
Industry structure
Intermediation
Dis-intermediation
Etc.
Porters five forces model of competition
1) threat of new entrants
2) Determinants of buyer power
3) Threat of substitute products
4) Determinants of supplier power
5) Rivalry among existing firms
Threat of new entrants (porters five forces)
Barriers to entry: Economies of scale, product differentiation, capital requirements, switching cost to buyers, access to distribution channels, other cost advantages
Incumbents defense of market share industry growth rate
Determinants of supplier power (porters five forces)
Supplier concentration
Availability of substitute inputs
Importance of suppliers input to buyer
Suppliers product differentiation
Importance of industry to suppliers
Buyers switching costs to other input
Rivalry among existing firms (porters five forces)
Number of competitors (concentration)
Relative size of competitors (balance)
Industry growth rate
Fixed vs variable costs
Product differentiation
Exit barriers
Diversity of competitors
Determinants of buyer poer (porters five forces)
Number of buyers relative to sellers
Product differentiation
Switching costs to use other product
Buyers profit margins
Sellers threat of forward integration
Importance of product to the buyer
Threat of substitute products (porters five forces)
Relative price of substitute
Relative quality of substitute
Switching costs to buyers
Friction free commerce
Using data and insight on consumer behavior and preferences to help design simple, seamless buying experiences
Does IT lead to friction-free commerce?
no
Consumers turned out to be less price sensitive (no time to know everything)
Considerable price dispersion (dynamic pricing, local pricing)
Does IT lead to perfect competition
NO
Information asymmetries between buyers and sellers persist
Does IT lead to disintermediation
No
Many internet based new intermediary services (in travel, finance, retail etc.)
Many intermediaries assist buyers to find the best products and services, therefore –> reintermediation
Does the first mover always have the advantage?
No
Fast-followers (using proven technologies) often overtake first movers
Does IT enhance transparency of prices, goods, markets and services
There is transparency, yet this triggers information overload
-> buyers cannot know everything from all products and markets
–> information asymmetry between buyers and sellers
–> no friction free pricing
