Sessions 19 and 20 (Online Business Models and Bitcoin)

Question 1

what is Web 2.0?

Answer 1

 Web 2.0 is a loose collection of information
technologies and applications, and the websites
that use them.
 Internet services that foster collaboration and
information sharing; characteristics that
distinctly set “Web 2.0” efforts apart from the
static, transaction-oriented Web sites of “Web
1.0”
 Often applied to Web sites and Internet services
that foster social media or other sorts of peer
production

Question 2

what is Web 2.0’s most powerful feature?

Answer 2

peer production

Question 3

Peer-produced services have the ability to:

Answer 3

save their sponsors the substantial cost of

servers, storage, and bandwidth

Question 4

what is peer production?

Answer 4

When users collaboratively

work to create content, products, and services

Question 5

_____ is a type of peer production
where initially undefined groups of users
band together to solve problems, create code,
and develop services

Answer 5

crowdsourcing

Question 6

Web-based efforts that foster peer

production:

Answer 6

Social media or user-generated

content sites

Question 7

social media:

Answer 7

Content that is created, shared, and

commented on by a broader community of users

Question 8

Services that support the production and sharing

of social media include:

Answer 8

blogs, wikis, video sites

like YouTube, and most social networks

Question 9

properties of social media:

Answer 9

• Reach
• Accessibility
• Usability
• Recency
• Permanence

Question 10

ways to monitor your social media presence?

Answer 10

Social Media Awareness and Response Team
 Set a Social Media Policy

 Monitor (external & internal)

Engage

 Establish First-Responders Network

Question 11

describe setting a social media policy

Answer 11

– Explicit guidelines (honesty, transparency, caution
in representing firm, legal issues), Positive
Examples, Case studies showing potentially
damaging consequences

Question 12

discuss external and internal monitoring

Answer 12

– Tools (Google Alerts, Twitter Clients, Facebook
Insights), ORM Agencies (online rep. mgmt),
Deputies (reveal dark web)

Question 13

discuss “engaging” with social media

Answer 13

– Create points of contact w/trained staff; craft a
compelling social media voice; liaison to internal
communities

Question 14

discuss establishing a first-responders network with regards to social media

Answer 14

– Train; ‘War-game’ scenarios; Escalation path to
bring in experts (engineers, sr. executives, support
specialists); Deeply involve customer service, PR,
legal, tech staff.

Question 15

what is e-commerce?

Answer 15

Focus on the transaction: adding revenue
streams using the web or the Internet to
build/enhance relationship with clients &
partners
 Buying & selling of products or services over
electronic systems such as the Internet
 The marketing, buying, selling and support of
products and services via computer networks
including the Internet

Question 16

Based on degree of digitization involved (in
the nature of product, and production and
delivery process), firms can be classified as:

Answer 16

– bricks-and-mortar
 e.g., A traditional grocery store, or car repair shop
– clicks-and-mortar (or hybrid)
 e.g., Amazon.com; Staples.com; Bestbuy.com
– pure-play (or pure-click, pure digital or virtual)
 e.g., Buy.com, iTunes, ebay.com

Question 17

how can e-commerce be classified?

Answer 17

– B2C (business-to-consumer)
– B2B (business-to-business)
– C2C (consumer-to-consumer)
– B2E (business-to-employee)
– G2B (government-to-business)

Question 18

what are different types of internet business models?

Answer 18

Online Sales Model
– Click and Mortar; Pure play (or pure click)

 Brokerage (market-makers)
– Auction Broker: ebay.com
– Payment or Transaction Broker: paypal.com
– Name-your-price (Demand Collection System):
Priceline.com
– Virtual Marketplace: Alibaba

Infomediary: Similar to Brokerage ; Deal
with information: Edmunds.com

 Advertising (Content Publishers/Portals):
Yahoo, NYT.com, Google Adwords

 Affiliate (Pay-per-click; Pay–peraction/sale):
Amazon

 Subscription: FT.com, Netflix

 Utility: (Metered Usage): Digital Ocean,
Amazon AW

Question 19

what are issues in B2C

Answer 19

Long Tail

 Channel conflict
– Disintermediation
– Cannibalization

 Order fulfillment
– More difficult in B2C as compared to B2B

Question 20

describe channel conflict (disintermediation and cannibalization)

Answer 20

Disintermediation (conflict with channel
partners)
– Manufacturers disintermediate their channel
partners by selling their products directly to
consumers
– Often replaces one intermediary (retailer) with
another (FedEx or UPS)

 Cannibalization (conflict within own
distribution channels)
– logistic services, pricing
– Separate offline and online businesses or adopt
multichanneling strategy

Question 21

what is electronic data interchange (EDI)?

Answer 21

EDI: the transfer of structured data, by agreed
message standards, from one computer
system to another

Question 22

advantage and disadvantage of electronic data interchange?

Answer 22

Advantage: reduces the handling costs of
manually processing of paper documents,
reduces errors, reduces cycle times

 Disadvantage: cost (dedicated point-to-point),
inflexible, many standards, needs
restructuring, long startup period

Question 23

in the e marketplace, what are vertical products?

Answer 23

Vertical
– Direct/Manufacturing inputs
– Connects buyers and
sellers in a given industry
– Quality, specification and
delivery are important.

Question 24

in the e marketplace, what are horizontal products?

Answer 24

– Maintenance/Repair/Opera
tion (MRO) input
– Connects buyers and
sellers across many
industries
– Price, delivery and ease of
ordering are primary
considerations.

Question 25

characteristics of horizontal products?

Answer 25

Every business needs MRO inputs  Can be shipped through 3rd party logistics providers  Simplify/streamline the purchase process for MRO products; reduce admin and product cost  Access to wide variety of products, large number of suppliers, as well as support for auction mechanisms to help larger buyers (or an aggregation of small buyers)

Question 26

characteristics of vertical products/

Answer 26

```  Very specialized in terms of products,  Deep knowledge about the products and how the industry operates  Using long-term contracts with written agreements; negotiated prices ```

Question 27

describe public ownership in the e marketplace

Answer 27

Public (many firms connect to other firms) – Industry consortium:  Formed by a collaboration of firms that also participate in the marketplace; may have funding and governance issues – Third Party/ Neutral:  Owned and operated by one or more independent third parties (neutral) who host the public exchange/marketplace

Question 28

describe private ownership in the e marketplace

Answer 28

 Private (one firm connecting to other firms) – Buy side – Sell side

Question 29

characteristics of public ownership

Answer 29

 Greater liquidity (ease, speed, and volume of transactions)  Reduces marketplace friction

Question 30

characteristics of private ownership

Answer 30

 Formed by a single company to trade with its business partners (buyers and/or suppliers)  Buy-Side: – Key mechanism: reverse auctions, group purchasing  Sell-Side – Key mechanisms: electronic catalogs and forward auctions

Question 31

what are the three online ad pricing models?

Answer 31

Cost per thousand exposure (CPM) – impressions – time spent  Cost per click (CPC) – click-through  Cost per action (CPA) – downloads – sales lead – transactions

Question 32

what is sponsored search advertising?

Answer 32

Witnessing the fastest growth; dominant advertising format  Closest analogue: yellow pages directory - a pull media.  Ordered/ranked listing of sellers in search results  Firms compete in auctions to be listed on top ``` Ability to precisely target messages to potential consumers who are actively searching for sellers  Enables sellers to more directly relate advertising expenditures to outcomes ```

Question 33

with ___ ___ the Pay-per-click or pay-per-action pricing model allows for smaller and less well-established firms to compete

Answer 33

sponsored search

Question 34

benefits to consumers with e payments?

Answer 34

Much more choices, and in some cases, especially with digitized products, allows for quick delivery.  Enables customers to shop and do transactions 24 hours a day, 7 days a week and 365 days a year.  Allows customers to receive relevant and detailed information much faster  Enables consumers to get customized products/services.

Question 35

benefits to organizations with e payments?

Answer 35

 Decreases cost of creating, processing, distributing, storing and retrieving paperbased information:  Allows reduced inventories and overhead: EC can minimize supply chain inefficiencies (excessive inventories or delivery delays).  Helps small businesses to compete with larger companies  Enables organizations to reach customers outside their immediate area at minimum cost.

Question 36

benefits to society with e payment?

Answer 36

More individuals can work at home.  Some merchandise can be sold at lower prices, allowing less affluent people to buy more and increase their standard of living.  People in less developed countries and rural areas have access to products and services that otherwise are unavailable.  Public services can be delivered at a reduced cost and improved quality.

Question 37

limitations with e payment?

Answer 37

``` Technical  Lack of universally accepted security standards  Insufficient telecommunications bandwidth  Expensive accessibility ```

Question 38

non technical limitations with e payment?

Answer 38

Non-technical  Perception that EC is unsecure  Unresolved legal issues  Lacks a critical mass of sellers and buyers  Internet access is still expensive and inconvenient for many potential customers.  Psychological issues involved – touch/feel; face-to-face.  In many areas there is not enough critical mass for EC to be successful

Question 39

how does bitcoin work?

Answer 39

 First, you need a bitcoin wallet – https://bitcoin.org/en/choose-your-wallet – Provide access to bitcoin addresses  Secure your wallet – https://bitcoin.org/en/secure-your-wallet  Send/receive money with your wallet address