Chapter 8 E-Commerce Web 2 0 and Social

Chapter 8 E-Commerce, Web 2. 0, and Social Networking

Study Questions Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -2

Q 1: What Types of Interorganizational Systems Exist? Pre-Internet Systems Postal mail, telephone, fax Web 2. 0 Google, e. Bay, Amazon, CNet E-Commerce Web Storefronts Interorganizational Systems Enterprise 2. 0 Social CRM, SOA Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -3

Interorganizational Systems Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -4

Q 2: How Do Companies Use E-Commerce? Merchant companies—take title to goods they sell Nonmerchant companies—arrange for purchase and sale of goods without owning or taking title to those goods Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -5

Example of Use of B 2 B, B 2 G, and B 2 C

Nonmerchant E-Commerce Companies Online auctions • E-commerce application enables auction company to offer goods for sale and to support a competitive-bidding process Clearinghouses • Provide goods and services at stated price, arrange delivery, but do not take title • Amazon. com sells books and other merchandise for other businesses Electronic exchanges • Match buyers and sellers • Priceline. com Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -7

Q 2: How Does E-Commerce Improve Market Efficiency? Disintermediation Companies learn how customers internalize competitors’ pricing, advertising, and messaging X Retail Store Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -8

What Economic Factors Disfavor E-Commerce? • Channel conflict • Price conflict with traditional Economic Factors channels in • Logistics expenses increase Disintermediation for manufacturer • Customer-service expenses increase for manufacturer Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -9

Q 3: Why is Web 2. 0 Important to Business? Copyright © 2012 Pearson

Software as a (Free) Service (Saa. S) Figure 8 -6 Copyright © 2012 Pearson

Software as a (Free) Service Saa. S—thin-client applications run in Internet cloud • License-free software • Does not require an installation on the users’ computers • Web servers download Web 2. 0 programs as code within HTML, as Flash, or as Silverlight code. • Readily (and frequently) updated. New features added with little notice or fanfare. Google Docs & Spreadsheets Google Groups Google Earth Google Maps Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -12

User-Generated Content Crowdsourcing examples Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Organic User Interfaces and Mashups • Mashup —a web application that combines data from other websites • Example—map data from Google Maps to add location information to real-estate data, thus creating a new and distinct web service • See www. programmableweb. com/mashups Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -14

How Can Businesses Benefit from Web 2. 0? Advertising • Ad. Words • Vendors pay for specific words, phrases • Placement on search results list depends on how much you pay for search word • Vendor pays when someone clicks on their link • Amount can vary day to day, hour to hour • Ad Sense • Google inserts ads that match web page content • Google pays web page owner for every click • Website owners enroll in this program to enable text, image, and video advertisements on their websites Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -15

Web 2. 0 Not for All Applications Don’t get carried away • Information systems that deal with assets, whether financial or material, requires control, rather than flexibility and organic growth. Examples • Credit card transaction processing • Accounts payable or general ledger system interface Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -16

Q 4: How Does Social Capital Benefit You and Organizations? Social Capital—investment in social relations with expectation of returns in the marketplace Adds value in four ways: 1. Information about opportunities, alternatives, problems and other factors 2. Influence decision makers in your organization or others 3. Social credentials from linking to network of highly regarded contacts 4. Personal re-enforcement of professional image and position Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -17

Social Capital Value of social capital: Number of relationships in a social network, by strength of those relationships, and by resources controlled by those related. Professional social networking factors • Gain social capital by adding more friends and strengthening relationships with existing friends. • Gain more social capital by adding friends and strengthening relationships with people who control resources important to you. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -18

Importance of Weak Relationships People you know the least contribute the most to your network. Eileen is weak tie Expand network by meeting Eileen Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -19

How Do Social Networks Add Value to Business? Progressive organizations maintain a presence on Facebook, Linked. In, Twitter, and other sites • Sales people, customer support, public relations, and endorsements by high profile people Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -20

Fan Connections and Endorsements Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Q 5: How Does Social CRM Empower Customers? Classical CRM organization speak to customers with one voice and controlled messages, offer support for customers, depending on value of customer. Today, customers craft own relationship with a business by their use of touch points. Social CRM—creation and use of Enterprise 2. 0 collaborative relationship between businesses and customers. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -22

What Are the Characteristics of Web 2. 0: SLATES Copyright © 2012 Pearson Education,

Social CRM is Enterprise 2. 0 CRM Social CRM done in style of Enterprise 2. 0. Relationships between organizations and customers emerge as both parties create and process content. Employees create wikis, blogs, discussion lists, frequentlyasked-questions, sites for user reviews and commentary, and other dynamic content. Customers search content, contribute reviews and commentary, ask more questions, create user groups, etc. Each customer crafts own relationship with company. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -24

Classical CRM vs. Social CRM Classical CRM Centered on customer lifetime value Control what customer reads, sees, hears about company and its products Social CRM Effective reviewer, commentator, or blogger can have significant influence Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8 -25