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INTERNET FOR BUSINESS REVIEWE-business Concepts & Implication 1. Explain the difference between e-business and e-commerce

E-commerce: All electronically mediated information exchanges with external stake holders. E-business: All electronically mediated information exchanges both within the organization and with external stakeholders supporting the range of business processes.

2. Identify different types of sell-side websites and provide example

Sell-side e-commerce refers to transactions between a supplier organization and its customers. There are 5 types of sell-side sites: Transactional e-commerce sites: These enable purchase of products online. The sites also support the business by providing information for customers that prefer to purchase products offline. These include retail sites, travel sites, and online banking services (Amazon). Services-oriented relationship-building web sites: provide information to stimulate purchase and build relationships. Products are not available for purchase online, but information is provided through the web site and e-newsletters to inform purchase decisions. Such sites also add value to existing customers by providing them with detailed information to help support them in their lives at work or at home (Price Waterhouse Cooper). Brand-building sites: provide an experience to support the brand excluding online purchase. They are typically for low-value, high-volume fast-moving consumer goods for customers. Portal, publisher or media sites: portal refers to a gateway of information about a range of topics. Portals have diversity of options for generating revenue including advertising, commission-based sales, sale of customer data (Yahoo). Social network or community site (Facebook).

3. Identify different types of business models. Explain three of them with example

Business model is a summary of how a company will generate a profit identifying its core product or service value proposition, target customers in different markets, position in the competitive online marketplace or value chain and its projections for revenue and costs.

E-shop: marketing of a company or shop via the web E-procurement: electronic tendering and procurement of goods and services E-malls: a collection of e-shops (Indigo Spuare) E-auctions: eBay is the best-known example and offers both B2B and B2C offerings Virtual communities: can be B2C communities such as the major social networks or B2B communities such as built around trade publishers Collaboration platforms: enable collaboration between businesses or individuals (Yahoo) Third-party marketplaces: are described in Focus on electronic B2B marketplace Value-chain integrators: offer a range of services across the value chain Value-chain service providers: specialize in providing functions for a specific part of the value chain (logistic company UPS)

E-auctions: e-auction is an online negotiation tool. The buyer with the lowest bid will win the auction. eg: E-bay offers both B2B and B2C offerings Value-chain service providers: specialize in providing functions for a specific part of the value chain eg: logistics company UPS Trust and Other Services: trust services authenticate the quality of service provided by companies trading on website eg: Internet Shopping is Safe-ISIS, or TRUSTe 4. Indentify and classify the drivers and barriers of adoption of e-business for businessDrivers

Cost/efficiency drivers Increasing speed with which supplies can be obtained Increasing speed with which goods can be dispatched Reduced sales and purchasing costs Reduced operating costs Competitiveness drivers Customer demand Improving the range and quality of services offered Avoid losing market share to businesses already using e-commerce Potential for increased revenue Barriers: Consumers doubt about mismatching between product and image display Leaking out of important information Hackers Lack of face-to-face contact5. Understand the different internet revenue modelsRevenue models describe methods of generating income for an organization

Brokerage: bringing buyers and sellers together Kelkoo, eBay Advertising Yahoo Google sponsored links Google content-targeted-advertising ads by google Infomediary ( information intermediaries) DoubleClick AC Nielsen NetRatings internet marketing research Merchant Virtual retailer like Amazon Catalogue Merchant like LandsEnd Manufacturer (Direct) Dell Affiliate Divert traffic to partner sites, eg Barnes & Noble Community Access to the community is free but there is a charge for premium services. Many dating sites use this and also business / software communities like RedHat. Subscription Can be similar to the community model, eg FriendsReunited allows users to join free but an annual subscription must be paid in order to contact other members Utility This model is based on the electricity or water model, ie pay according to your consumption. Slashdot offers subscriptions based on consumption of (access to) IT related articles.

6. Discuss how the internet can restructure the marketThe relationship between a company and its channel partners can be dramatically altered by the opportunities afforded by the internet. Disintermediation: the removal of intermediaries such as distributors or brokers that formerly linked a company to its customers. It is able to remove the sales and infrastructure cost of selling through the channel. (Example: Digital music, Video downloads to 3G phones) Reintermediation: the creation of new intermediaries between suppliers and customers providing services such as supplier search and product evaluation. (Example: Kelkoo) Countermediation: creation of a new intermediary by an established company

7. Define digital marketing and provide example.

Digital marketing has a similar meaning to electronic marketing both describe the management and execution of marketing using electronic media such as the web, e-mail, interactive TV, and wireless media in conjunction with digital data about customers characteristics and behavior. For example: Feed or RSS feed: blogs, news or other content is published by an XML standard and syndicated for other sites or read by users in RSS reader services such as Google Reader, personalized homepages or e-mail systems. Podcasts: individuals and organizations post online media which can be viewed in the appropriate players. Social network: a site that facilitates peer-to-peer communication within a group or between individuals through providing facilities to develop user-generated content and to exchange messages and comments between different users

E-Business Strategy Chaffey (2009) Chapter 5

1. How can you apply six decisions from strategy definition on any business? Explain with example.

Channel priorities: Right channelling (p.298-300)E Business strategy is a definition of the approach by which applications of internal and external electronic communications can support and influence corporate strategy. Decision 1: E business channel prioritiesRight-channeling is selective adoption of e-channels by business for some products or markets in order to best generate value for the organization according to stakeholder preferencesExamples Application and tactics to achieve channel adoptionTypical sector and company examples

Sell to and serve SMEs through online channelsUsing the internet for sales and service through an extranet to lower-sales-volume SME customers who cannot be serviced direct through account managersCustomer channel adoption encouraged by convenience and lack of other optionsB2B

Account-managed relationships with larger companies offline, either direct or through partner companiesUsing face-to-face and phone meetings with large, high-sales-volume clients through account managers.Customer channel adoption encouraged by personal service and capability to negotiate service levels and buying optionsB2B. Account managers at Dell for larger clients

Selective service levels for different customer typesWith integrated CRM systems, companies can determine the value of customers and then assess where they are placed in queue or which call-centre they are directed toThe practice is common amongst financial services companies, mobile phone network providers and some pureplays.

Decision 2: Organizational restructuring Strategy process and performance improvement: The process for selecting, implementing and reviewing e-business initiatives Structure: Location of e-commerce and the technological capabilities through the software, hardware infrastructure used and staff skills Senior management buy-in: E-business strategies are transformational, so require senior management sponsorship Marketing integration: Staff members responsible for technology and marketing need to work together more closely to achieve this Online marketing focus: Strategic initiatives will focus on the three core activities of customer acquisition, conversion and retention. Decision 3: Business, service and revenue models As well as new business and revenue models, constantly reviewing innovation in services to improve the quality of experience offered is important for e-business. Flexibility in the business model should not be to the companys detriment through losing focus on the core business. Finally, we can note that companies can make less radical changes to their revenue models through the internet which are less far-reaching nut may be worthwhile. Decision 4: Marketplace restructuring Disintermediation: the removal of intermediaries such as distributors or brokers that formerly linked a company to its customers. It is able to remove the sales and infrastructure cost of selling through the channel. Reintermediation: the creation of new intermediaries between suppliers and customers providing services such as supplier search and product evaluation. Countermediation: creation of a new intermediary by an established company Decision 5: Market and product development strategies Market penetration: involves using digital channels to sell more existing products into existing markets. Market development: existing products can be sold to new market segments or different types of customers. Product development: the web can be used to add value to or extend existing products for many companies. Diversification: new products are developed which are sold into new markets. The internet can facilitate high-risk business strategies at lower costs than have previously been possible. Decision 6: Positioning and differentiating strategies Product performance excellence: enhance by providing online product customization Price performance excellence: use the facilities of the internet to offer favorable pricing to loyal customers or to reduce prices where demand is low Transactional excellence: combining pricing information with dynamic availability information on products listing number in stock Relationship excellence: personalization features to enable customers to review sales order history and place repeat orders.

2. What are the key characteristics of an e-business strategy model?The characteristics of a multi-channel e-business strategy are: E-business strategy is a channel strategy Specific e-business objectives need to be set to benchmark adoption of e-channels Communicate the benefits of using e-channels Prioritize audiences or partners targeted for e-channel adoption Prioritize products sold or purchased through e-channel Achieve our e-channel targets E-channel strategies thrive on creating differential value for all parties to a transaction BUT still need to manage channel integration E-business strategy also defines how an organization gains value internally from using electronic networks.

3. Provide some of the E-Marketing techniques mentioned in plan with example.

Search engine optimization: pay per clickAdvantages: customers can access into webpage easilyDisadvantages: it causes traffic information in the website Online PR: blogs and RSSAdvantages: website will be more attractive since customers can involve in exchanging information. Furthermore, information can be transferred quickly and it is easy to create huge effect on community due to large number of portal website usersDisadvantages: information posted by customers cannot be controlled Online partnership: sponsorship for events, co-branding or affiliate marketingAdvantages: the brand name appears in the event if they sponsor for it.Disadvantages: customers may not differentiate our brand names with others because many businesses will take part in the event Interactive ads: put an ads on the third party websites or place in our websiteAdvantages: increase effectiveness of adsDisadvantages: customers pay less attention in other banners and ads in the third party websites Opt-in email: e-mails are sent to customersAdvantages: it is the cheapest tacticDisadvantages: customers are not willing to visit the website and less security for customer information Viral marketing: transmit a promotion message to another potential customers through word-of-mothAdvantages: easy to attract customers

4. How can you apply Treese and Stewarts 4 ACTS for an organization?

Strategy Implementation [A2a]Attract (NOT Design) Detailed in E-Marketing Plan (Week 4 & 5) STP (p.437-443) 7Ps: focus on Promotion marketing communications Search Engine Marketing (SEM) Search Engine Optimization (SEO): Organic (p.507-509) Paid search marketing: Inorganic (p.509-510) Online PR (p.511-514) Online Partnerships (p.514-517) Advertising: Banners/pop-ups/interactive/integrated online and offline (p.517-520) Emails: opt-in, opt-out, double pt-in (p.520-524) Viral marketing (p.524-526)Interact (Design/ Usability) A dynamic catalogue (in a database) that encourages buyers to move around the site and view all the products. Personalisation Amazon, heres a book you might like Novelty Navigation Easyjet, step 1of 5 Creative use of informationTransact Payment process must be Easy, fast and efficient to use Secure Authenticates the data of the purchaser, including any credit card details Uses encryption and other security measures Accepts standard methods of payment. Automated Fulfilment of the order with the order process being handled by the back end system of the business. The order will be a data transmission to the warehouse, with no human interference. React Acknowledgement of order sent automatically to the purchaser. Order tracking system that permits the purchaser to view the status of the order process. Follow-up service (What the business can do, at a low cost, to encourage further orders.) Knowledge base of FAQs On-line chat for service enquiries.

E-CRM1. What are the driving factors to adopt E-CRM? Global competition makes products harder to differentiate Technology allows all customer information to be integrated in one system, allowing the restructuring of business processes Customer is empowered, impatient, has a short attention span, many choices and low switching costs 2. Provide three benefits of E-CRM with separate example for each benefit. (487)-Targeting more cost effectively: traditional method which may target the wrong marketExample: The ABC Company wants to target affluent customers in Ho Chi Minh City and uses postcodes of district 1, 2, 3 to reach them via direct mail. However, the population in each district is heterogeneous, causing poor targeting and results in very low response rate. With the application of E-CRM, the company can filter affluent customers easily and cost-effectively based on frequency and value of each transaction saved in customer database.-Lower cost: contact customers by email less cost than using physical mail. The most important is the information only needs to be sent to those customers who have expressed a preference for it, resulting less mail- outExample: when doing targeting, FPT sends direct mail to the customers. This tactic allows the company to reduce great expenses since while sending direct mails demands spending on postal costs, adopting email costs it almost nothing. -Increase depth, breadth and nature of relationshipExample, Dell provides customers specific information and frequently contact with them thus Dell will increase the relationship with users and can know more about customers buying behaviors.

3. Mention two tactics and one goal for each of the following. Provide at least one example for each of the tactics to help the organization.(499-451) Customer acquisitionTactics- From push to pull Example: Advertisements are posted on portal sites (yahoo, MSN, etc), gaining customers attention. This physical stimulus must be attractive enough to make customers want to visit the site. Next, the site must be optimized for search engines (obtaining popular keywords, etc ) to assist customers effectively when they try to find it. -From one-to many to many to-many communicationsExample: eBay allows many-to-many interactions between customers throughout eBay websites.Goal Acquire new customers to a website that can (hopefully) be converted into sales Migrate offline customers to the online channel Customer retention Tactics: Personalization and mass customization (extranets, opt-in email, promotions/ loyal schemes) Personalization: Delivering individualized content through web pages or e-mail. Mass customization: Delivering customized content to groups of users through web pages or email. Examble: if a company gives their clients the option to tell their service center when and how to contact them, that's also personalization. Amazon.com is an example of personalization where the latter learns your interests and adapts to your need Dell and many auto makers are good examples of companies providing mass customization Online community: a customer-to-customer interaction delivered via e-mail groups, web-based discussion forums or chat (C2C: email groups, forums, chat)Example: Forums are created to enhance the interaction between customers as well as between customers and the site. Goals: To retain customers of the organization (repeat customers) To keep customers using the online channel (repeat visits). Customer extension (539) Tactics: Direct e-mail. Example: Sending direct e-mails to highly profitable/loyal customers On-site promotion. Example: More promotions posted on the website for attracting more customers to visit and purchase. Goals: Increase lifetime value (LTV) of customers4. Mention four E-marketing communication techniques with the application example in an organization for each. (511) Online PR: maximizing favorable mentions of your company, products or websites which are likely to be visited by your target audience. (Portal representation, social media blogs, feeds and communities, media alerting services, brand protection)Example: Yogurt creates a facebook account and regularly updates information about the companys events, new products and promotional campaigns, etc. Comments are allowed to increase the interaction with customers. Viral marketing: E-mail is used to transmit a promotional message to another potential customer. (pass along e-mails, buzz marketing, generating media mentions)Example: A note on facebook about the development of Shoes Century/the topic of a new advertising campaign is written in the form of a fairytale with interesting characters and appealing content. To be effective, it must be interesting enough to make people want to share with others. The more people send around this note (via facebook, leaving links on Yahoo or other communities), the better customer awareness about Shoes Century and its campaign. Search engine marketing SEM: provide an index of content on registered sites that can be searched by keywords. It is the primary method of finding information about a company and its productExample: Shoes.com looks for the most popular keywords by using Alexa (an website analysis tool) and utilizes them in its meta tags or headings to improve SEO of the site, which will consequently lead more customers to Shoes.com. Online partnership (affiliate marketing, sponsorship, co-branding, link-building, widget marketing) Example: Ninomax and Vnexpress.net builds an online partnership in the form of affiliate marketing. Links to Ninomaxs website will be posted on Vnexpress.net and whenever products are purchased or leads are generated for Ninomax, Vnexpress will earn a transaction fee accordingly

5. Explain the relation for Google search with Search engine marketing? You can draw the Google search page and highlight different Search engine marketing techniques there.(505)

6. How can social networking website be used for viral marketing? Explain with example.

Viral marketing: Social networking website is used as a tool for viral marketing. Pass along messages/note (a clever/shocking idea, etc), media tool (a game, a video clip, etc.) and so on are shared among members of social networking sites. The company makes use of the network/ the community of such sites to spread out information about the company, its promotion campaign or for other commercial purposes. Example: A note on facebook about the development of Shoes Century/the topic of a new advertising campaign is written in the form of a fairytale with interesting characters and appealing content. To be effective, it must be interesting enough to make people want to share with others. The more people send around this note (via facebook, leaving links on Yahoo or other communities), the better customer awareness about Shoes Century and its campaign.

E Consumer online buyer behavior1. What do internet users want online? Explain 4 of them with example

Socialising: to communicate with people in the world. For example, make friend through facebook.com. Product information: find and research information of product or knowledge. For example, find information of electronic products on bestbuy.com Purchasing: shop online by using internet. For example, buy book on Amazon.com. Entertainment: for entertainment purposes. For example, watch video on youtube.com

2. Why do they shop online? Explain 4 of them with example

Convenient: they can save a lot of time by shopping online rather than physically go shopping from store to store. It can also easily to fit with other activities for example, you can shop online while you are babysitting your children at home. Large variety of products: you can choose and find many different products such as clothes with different stylists, colour, brands and prices that are suitable for everyone. Cheaper prices: by shop online you can find variety products with cheaper prices than shop offline. For example, bestbuy.com provides cheaper prices for customers buy products on their website. Easy comparison of prices: many website have same products with different prices so by shopping online you can compare easily what is the best price for you. For example, I want to buy electronic product but I do not know what better price is so I can enter in different website such as bestbuy.com, epathchina.com or cholon.com to compare price. Then I can choose what the best price for me.Characteristics of online shoppers: More willing to buy without handling goods Like shopping hate crowds Price conscious, seeking price advantage Lifestyle need convenience and variety More likely to be an impulsive buyer

3. Explain following web segmentation with example PsychiatricRealistic enthusiasts: characterized by an enthusiastic approach toward e-commerce but they typically like to see the product in real life before making a purchase and they often consider that finding the product to purchase is a difficult process. (e.g.:)Confident brand shoppers: members of this group are happy to use the Internet for the next time they want to make a purchase in excess of 500 with this confidence stemming from the importance they lay on purchasing well known brands and the necessity to shop around.Carefree shoppers: these consumers are prepared to purchase from unknown companies and do not consider that purchase should be restricted to well known brands. Furthermore, they are willing to make the purchase without seeing the product first.Cautious shoppers: these shoppers are not likely to purchase goods through an online auction, have concerns over the quality of products they purchase and would like to see the product prior to making a purchase.Bargain hunters: this group would buy from an unknown company or any web site as long as it was the cheapest and is driven not by the convenience of the medium but by price.Unfulfilled shoppers: this group finds it difficult to find the products they wish to purchase on the Internet, they would not buy from any web site or through an auction and they think it takes too long for products purchased online to be delivered. Searching behaviorDirected information seekers: Will be looking for product, market or leisure information such as details of their football clubs fixtures. This type of user tends to be experienced in using the web and is proficient in using search engines and directories.Undirected information seekers: These are the users usually referred to as surfers, who like to browse and change sites by following hyperlinks. This group tends to be novice users (but not exclusively so) and they may be more likely to click on banner advertisements. This behavior is now less common.Directed buyers: These buyers are online to purchase specific products. For such users, brokers or cybermediaries who compare product features and prices will be important locations to visit.Bargain Hunters: These users want to use the offers available from sales promotions such as free samples or prizes.Entertainment seekers: Users looking to interact with the web for enjoyment through entering contests such as quizzes.4. List and explain with an example the steps of the online buying process1-Problem recognitionImportance of online/offline marketing integration: an organisation needs an integrated online and offline marketing strategy to inform consumers who recognise that they have a problem 2-Information (supplier) searchSearching behaviours: Directed (B2B) Non-directed (surfers)3-EvaluationCommunicate relevant benefitsPersonalisationProduct selection4-DecisionMixed mode messages: reinforce the benefitsIncentives to capture contact details to reinforce benefits5 - PurchaseSlick, user-centred design to make purchase easySecurity and privacy issues: Reassure customers Offer other channels6 - Post-purchase supportEmail confirmation and tracking to improve serviceCRM

5. Explain channel integration for mixed-mode buying with exampleDefinition: Buying process where both online and offline channels can be used to facilitatethe purchase of a product. (1 mark)Mixed mode buying is the process by which customer changes between online and offline channels during the buying process. It is a key aspect of devising online marketing communications since the customer should be supported in changing from one channel to another. See figure 8.17 to explain:

For example, Dell has a prominent web-specific phone number on their website that encourages customers to ring a representative in the call centre to place their order.

E-MARKETING1. How can we distinguish between e-marketing, e-business and e-commerce? Provide example to explain you answer.(p.10, 13, 43, 417&418)E-commerce refers to financial and non-financial transactions between organizations. These transactions are often considered in the context of a supplier organization distributing and selling its product to consumers. For example,shoes.comE-business includes transactions from a buy-side and sell-side e-commerce perspective and also the use of communications technology to improve internal process efficiencies. For example, eBay.com built feedback forum to help establish credentials of sellers and buyers and also help to improve this website.E-marketing: use of electronic communications technology to achieve marketing objectives and has an external and an internal perspective. For example, HSBC Global www.hsbc.com has a website to provide information about the bank, maintain relationship with customers and offer its customers with online banking services.E-commerce is generally understood to be a sub-set of e-business and E-marketing is also a subset of e-business.E-commerce involves buy-side or sell-side transaction whereas e-marketing concentrates on sell-side transaction and communication. Therefore, e-commerce is perhaps broader then e-marketing

2. Write briefly with example how you can perform following activities for an organization? (p.421-426)a. Demand analysis: assessment of the demand for e-commerce services amongst existing and potential customer segments. It examines current and projected customer use of each digital channel and different services within different target markets.For example, savvy e-marketers use tools provided by search engine services such as Google to evaluate the demand for their products or services based on the volume of different search terms typed in by search engine users. Then, they can calculate the total potential opportunity and the current share of search terms for a company.b. Competition analysis: Review of e-business services offered by existing and new competitors and adoption by their customers.

3. What is the difference between ORC and OVP? Explain with example. Provide at least one different with one example for each difference. (p.290,304 and 442).ORCOVP

An assessment of the direct or indirect contribution of the internet to sales, usually expressed as a percentage of overall sales revenues.

Ex: transfer potential customer from offline to online: increase online selling 70% and reduce offline selling 30% after 4 years operate.

A statement of the benefits of online services reinforces the core proposition and differentiates from an organizations offline offering and those of competitors.

Ex: Citibank UK has OVP for its Internet banking service is bank whenever you want, form wherever you are. Give you freedom and flexibility to manage your day-to-day finance. Its secure, convenient and very easy to use.

1. Consider Online Revenue Contribution (ORC).a. Explain the difference between direct ORC and indirect ORC using an example (2 marks).b. Would a business want to increase its ORC over time? Briefly explain (1 mark).

Direct ORC is revenue earned selling directly online using a transactional website.

Indirect ORC is revenue earned selling offline from a lead started through an online channel.

E.g. If I purchase a book online from Amazon using my credit card, this is considered part of Direct ORC, however if I didnt have a CC and/or Amazon has a bricks and mortar store, I could visit Amazons site and then go to their store to buy directly this is indirect ORC, since it started as an online channel.

A business would want to increase ORC over time (1/2). Apart from the fact that increasing revenue is the aim of business, an online business is cheaper and more efficient to run compared to offline to therefore a business would want to move offline revenue to online revenue this is one of the goals of retention in the 3 phases of CRM. (1/2 mark for reasonable argument)

4. Provide difference between traditional media communication and new media communication with respect to following?(p.443-448)a. interactivity:Traditional media communication has one way communication by using push technique from company to customer. This leads to limited interaction with customer.New media communication encourages two way communications through push and pulls technique between company and customer. For example, Nestl use the website (Nescafe.co.uk) as a method of generating interaction by providing competitions and sales promotions to encourage the customer to respond with their names, addresses and profile information such as age and sex.

b. intelligence (profiling customers):Traditional media communication: long time takes to reply to consumer service emails and cannot create two way feedbacks.New media communication: provide low cost method of collecting marketing research. It can create two way feedback with does not usually occur in other media. Less time takes to collect customers reply. A wealth of marketing research information is also available from its the website itself and can be described through the web analytics tools.For example, HSBC (www.hsbc.co.uk) use a service from Omniture Test and Target (www.omniture.com) to serve messages according to an evaluation of which offers they are most likely to respond to.c. individualization:Tradition media: the same message tends to be broadcast to everyoneNew media: they can be tailored to individual. The process of tailoring is also referred to as personalization and it is an important aspect of achieving customer relationship management online.For example, Dell (www.dell.com/premier) set up Dell Premier for key accounts such as the Abbey where special offers and bespoke customer support are delivered.d. integration:Tradition media: not provide further scope for integrated marketing communicationsNew media: provide further scope for integrated marketing communications. Two perspectives when assessing the success of a website: organization- to- customer and customer- to- organization.e. industry restructure (disintermediation): no informationf. independence of location (new markets)New media: increasing the reach of company communications to the global market. This gives opportunity to sell into international markets that may not have been previously accessible. Also, it is possible to sell to a country without local sales or customers service force.

5. What does SOSTAC stand for? Briefly explain.(p.418-419)Situation: where are we now?Objectives: where do we want to be?Strategy: how do get there?Tactics: how exactly do we get there?Actions: the details of tactics, who does what and whenControl: how do we monitor performance?

Supply Chain Management1. Define E-SCM and explain four benefits of E-SCM with exampleE-SCM: The coordination of all supply activities of an organization from its suppliers and partners to its customers

Benefits of E-SCM: Increased efficiency of individual processes Reduced complexity of the supply chain Improved data integration between elements of the supply chain Reduced cost through outsourcing Innovation

2. Differentiate between push and pull SC with respect to virtual and vertical integration Push Model That emphasizes distribution of a product to passive customers. The push model is illustrated by a manufacturer who perhaps develops an innovative product and identified a suitable target market. A distribution channel is then created to push the product to the market. The typical motivation for a push approach is to optimize the production process for cost and effective.

Pull Model An emphasis on using the supply chain to deliver value to consumers who actively involved in product and service specification. It focuses on the customer needs and starts with analysis of their requirements through market research and close cooperation with customers and suppliers in new product development. The supply chain is constructed to deliver value to the customer by reducing costs and increasing service quality. The typical motivation for the pull approach is to optimize the production process for customer response, cost and efficiency. Modern car manufacturers now not only provide a choice of color but thousands of permutation of trim and accessories backed up by three year warranty.

Figure 6.3 Push and pull approaches to supply chain management

3. What is value chain? Compare the traditional and revised value chainIt is a model that considers how supply chain activities can add value to products and services delivered to the customer.

Traditional value chain distinguishes between primary activities that contribute directly to getting goods and services to the consumer (including procurement, manufacturing, marketing and delivery to buyers and support and service after sale). Support activities provide inputs and infrastructure that allow the primary activities to take place (including human resource, finance and information system)

Electronic communication can be used to enhance the value chain by making value chain activities such as procurement more efficient. For example, if a retailer share information electronically with a suppliers about demand for its products, this can enhance the value chain for both parties since the cycle time for ordering can be reduced, resulting in lower inventory holding and hence lower cost for both.

Figure 6.4 Two alternative models of the value chain: (a) traditional value chain model (b) revised (virtual) value chain model (HR, Finance & IS no longer just support: now critical)

4. List, discuss and apply interpret the benefits of IS for a business SCM Increased efficiency of individual process: the cycle time to complete a process and recourses needs to execute it are reduced. Benefit: reduce cycle time and cost per order Reduced complexity of the supply chain: this is the process of disintermediation. The company will offer the facility to sell direct for its e-commerce site rather than through distributors or retailers. It leads to reducing cost of distribution and sale. Improved data integration b/w elements of the supply chain: sharing information b/w parties may result in reducing cost of paper processing Reducing cost through outsourcing: the company can outsource or use virtual integration to transfer assets and costs such as inventory holding costs to the third parties. Benefits lower costs through price competition and reduced spend on manufacturing capacity and holding capacity. Better service quality through contractual arrangements. Innovation: E-SCM should make it possible to be more flexible in delivering a more diverse range of products and to reduce time to market. For example, the B2B Company may use e-commerce to enable its customers to specify the mixture of chemical compounds and additives used to formulate their plastics and refer to a history of pervious formulations. Benefit better customer responsiveness.

An alternative perspective on the benefits of E-SCM:1. Increased convenience through 24 hours a day, 7days per week, 365days a year ordering1. Increased choice of supplier leading to lower cost1. Faster lead times and lower costs through reduced inventory holding 1. The facility to tailor products more readily 1. Increased information about products and transactions such as technical data sheets and order histories

5. Explain with example four different SCM partnership modelsPartnering arrangementTechnical infrastructure integrationExamples

Total ownership (more than 51% equity in company)Technical issues in merging company systemsPurchases of Booker (distribution company) by Iceland (retailer). Since 1993 Cisco has made over 30 acquisition (not all SCM-related)

Investment stake (less than 49% equity)Technical issues in merging company systemsCisco has also made over 40 investments in hardware and software suppliers

Strategic allianceCollaboration tools and groupware for new product developmentCable and wireless, Compaq and Microsoft new e-business solution called a-Services

Profit sharing partnershipAs aboveArrangement sometimes used for IS outsourcing

Long-term contractSee above. Tools for managing service level agreements importantISPs have performance and availability SLAs with penalty clauses

Preferred suppliersPermanent EDI or Internet EDI links set up with preferred partnersTesco Information Exchange (case study 6.2)

Competitive tenderingTenders issued at intermediary or buyers websiteBuyer-arranged auctions (see chapter 2 )

Short term contractsAs aboveAs above

Spot markets and auctionsAuctions at intermediary or buyers web siteB2B marketplaces (e.g. www.freemarket.com)

E-Procurement1. Define E-Procurement and explain four drivers of E-commerce with example: The electronic integration and management of all procurement activities including purchase request, authorization, ordering, delivery and payment between a purchaser and a supplier Four drivers: The primary driver is cost reduction. In many cases the cost of ordering exceeds the value of the product purchased Greater profitability Process efficiencies The cycle time between order and use of suppliers can be reduced, greater flexibility in ordering goods from different suppliers according to best value.

2. Identify and list key procurement activities in an organization:

3. Differentiate between traditional Procurement and e-Procurement:Process Efficiency: faster Elimination of errors Purchaser focuses on strategic issues Better IM Access to suppliers Spending recorded Better payment process (sometimes)Costs Lower prices Product standardization Consolidation Budgetary control Limit spending Better reporting

4. Identify and list 3 risks and 3 impacts of e-Procurement: Organizational risks: resistance (loss of jobs), empowerment -> maverick purchasers (off-contract/expensive items) Failure to achieve real cost reductions: the return on investment from introducing e-procurement may be lower than that forecast and the introduction of the e-procurement system may not pay for itself Technology risks: integration with existing financial systems and range of marketplaces

5. List, discuss and apply interpret the benefits of IS for a businesss e-Procurement: Reduced purchasing cycle time and cost Enhanced budgetary control Elimination of administrative errors Increasing buyers productivity Lowering prices through product standardization and consolidation of buys Improving information management Improving the payment process

Web 2.0 and Emerging Technology1. What is web 2.0? Mention the main aspects of Web 2.0 with example Web 2.0 is a collection of web services which facilitate certain behaviors online such as community participation and user-generated content, rating and tagging Main aspect: Founded on user-generated content and collaboration These applications link like-minded people and enable social networks or online communities to form. Importantly, web 2.0 applications enable users to generate content individually or collaboratively, and develop large content databases that are both useful and interesting.

2. Discuss the three benefits to implement Web 2.0 into a businessThe company can have a better way to marketing by using online communities such as Facebook (an example of Web 2.0). People can discuss about their need, their feedback about the company product; so the company can improve to be better. Furthermore, if the products are good, many people will tell others people in the social network to increase the companys popularity. That is called viral marketing- By implement web 2.0, the company can create a better application to allow employees communicate better and efficiency, especially in team work because web 2.0 allow every people to share information with other users. For example Google Docs, that allow user to share the document with others users, they even can edit the document and save the document. It is very good in team work.

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