Ch3 - Ch3 The Internet E-business ADM2372 Management...

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ADM2372 - M anagement I nformation S ystems Prof. Benyoucef [email protected] ca (613)562-5800, 4787 Ch3: The Internet & E-business
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Agenda M Benyoucef | ADM2372 | uOttawa.ca 2 Disruptive Technology The Internet Evolution of the Internet E-Business
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Disruptive Technology Polaroid M Benyoucef | ADM2372 | uOttawa.ca 3 Polaroid was a solid company with an innovative technology & a huge customer base One-hour film processing and, later, digital photography contributed to its spectacular downfall
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Disruptive Technology Polaroid M Benyoucef | ADM2372 | uOttawa.ca 4 If Polaroid executives had used Porter’s Five Forces analysis would they have discovered the threat of substitute products ? What could they have done to counter the threat?
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Disruptive Technology disruptive vs. sustaining M Benyoucef | ADM2372 | uOttawa.ca 5 Disruptive technology A new way of doing things that redefines the competitive playing fields; opens new markets and destroys old ones (e.g., digital photography, digital music, e-books, etc.) Sustaining technology Provides customers with better products (e.g., faster car, larger hard drive, cheaper mp3 player) in established markets Produces improvements to products that customers are eager to buy
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Disruptive Technology disruptive vs. sustaining M Benyoucef | ADM2372 | uOttawa.ca 6 Expected Returns on New Investments ( disruptive ) Expected Returns on Existing investments ( Sustaining ) Dell Johnson & Johnson Procter & Gamble Wal-Mart Phillips Petroleum General Motors Expected Returns on Disruptive & Sustaining Technology
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Disruptive Technology innovator’s dilemma M Benyoucef | ADM2372 | uOttawa.ca 7 In his book “The Innovator’s Dilemma”, Clayton Christensen claims: Companies that place too much emphasis on satisfying customers’ current needs , while forgetting to adopt new disruptive technology that will meet customers’ future needs , eventually fall behind You can watch him talk about Disruptive Innovation: http://www.youtube.com/watch?v=nJ7EG58J5eo
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The Internet a disruptive technology M Benyoucef | ADM2372 | uOttawa.ca 8 The Internet has disrupted the way businesses operate, employees communicate, and products are developed and sold: Travel sites (e.g., www.Expedia.ca) 13% of traditional travel agencies closed in 2002 because of their inability to compete with online travel Online music $40 billion annual online music downloads are wrecking the traditional music business Dell increases profit margins while cutting prices by using the Internet to link suppliers
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The Internet beginnings M Benyoucef | ADM2372 | uOttawa.ca 9 The Internet began as an emergency military communications system operated by the U.S. Department of Defense Gradually the Internet moved from a military pipeline to a communication tool for scientists , then businesses
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The Internet networks & protocol M Benyoucef | ADM2372 | uOttawa.ca 10 Internet is a network of computer networks which operates world-wide using a common communication protocol Protocol : standards that specify the format of data as well as the rules to be followed during Source: www.howstuffworks.com 
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