some technical challenges for m commerce 31 size of

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Unformatted text preview: ction costs (1) Branch Cost of Banking Transactions Delivery Channel Phone Introduced in the 70s ATM Introduced in the 90s Intern et 0 32 0. 0. 0. 1 1. [Source: E-Business, by Gerald Trites and David Pugsley, 2 4 6 2 Prentice Hall, 2003] M Benyoucef | ADM2372 | US Dollars E-Business lower transaction costs (2) Transaction Traditional Internet Processing a customer order $15 $0.80 Paying a bill $2.22 $3.32 $0.65 - $1.10 Servicing one customer by a CSR $10 - $45 Answering an email: $1 - $5 Web self-service: $0.10 - $0.20 [Source: Management Information Systems: Managing the Digital Firm, Third Canadian Edition, 3/E, by Kenneth C. Laudon, Jane P. Laudon, and Mary Elizabeth Brabston, Pearson Education Canada, 2007] 33 M Benyoucef | ADM2372 | E-Business long tail The Long Tail – Refers to the tail of a sales curve Because online 34 businesses are not limited by shelf space, they can offer a wider selection of products that may suit only a few M Benyoucef | ADM2372 | customers (i.e., Offline DVD rental store: revenue comes mostly from new (and popular) releases Online movies (e.g., Netflix): revenue comes from new (and popular) releases, plus from the long tail of less popular movies rented less frequently E-Business disintermediation The more intermediaries that are cut from the distribution chain, the lower the product price Dell “re- 35 intermediated” when it decided to sell its PCs through Wal-Mart, having led the | ADM2372 | M Benyoucef way years in direct-tobefore E-Business digital goods Goods that can be delivered over a digital network Examples: music, video, software, newspapers, magazines, books Characteristics Low copying cost Low distribution cost 36 Low inventory cost M Benyoucef | ADM2372 | You can learn Jeff Bezos introducing the Kindle Fire HD E-Business e-marketing (1) Banner ad - box running across a Web page that contains ads Affiliate (associate) program a business signs up as an associate of Amazon the business sends 37 potential buyers to M Benyoucef | ADM2372a Amazon using | Amazon’s Affiliate program: E-Business e-marketing (2) Ad views - each time you view a webpage with a banner ad (also called i...
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This document was uploaded on 02/06/2014.

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