Transcript e-business

Electif 621
E-Business and m-Business
Antoine Harfouche
Session 3
Pillars of the e-Business
and m-Business models
The impact of SIS on firm’s
Business Models II
The Web and the value
innovation
• Value Propositions
• Customer value co-creation
• Co-creation in e-communities
• Social Media
THE IMPACT OF SIS ON THE
PILLARS OF THE BUSINESS
MODEL
ISI impact on the value
innovation
Value Propositions
Value Propositions describes what
creates value for a targeted Customer
Segment.
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Newness
Performance
Customization
“Getting the job done”
Brand / Status
Design





Cost reduction
Risk reduction
Accessibility
Convenience
Usability
Co-creation
Traditional Relationship
Focus on expanding the pie
Value to Customer
Value to Customer
Focus on splitting the pie
Extended Enterprise
Value to Supplier
Value to Supplier
Source: J.H. Dyer, Collaborative Advantages
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Customer value co-creation
Co-creation
• Co-creation relates to the value received by
the customer through usage, consumption
or experience. (Lusch & Vargo 2006).
• Occurs whenever consumers interact with
companies or products and thereby have
an active role in the shaping of their
experience and ultimately value perception.
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Co-creation of Value
• Co-creation between firms and customers, as
well as production and consumption, is about
tapping successfully into the collective
intelligence of consumers.
• Co-creation is an active, creative and social
process
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• Co-creation is important because it is:
1. Creative: co-creation is a form of collaborative
creativity, that’s initiated by firms to enable innovation
with, rather than simply for their customers.
2. A rich mix: co-creation draws on a combination of
management and marketing approaches, the
psychoanalytic tradition, and processes related to
innovation, knowledge and group decision-making.
3. A facilitated process: co-creation thrives on fantasy,
play and creativity, but the role of the facilitator or
facilitating organisation is often overlooked.
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4. All about relationships: we stress the importance
of focusing on the quality of the interactions
between people rather than on technologies per se
5. A learning process: we need to intertwine
knowledge and processes in an overall co-creation
framework, rather than just enabling co-creativity,
if we want to achieve wider organisational impact.
From ‘Co-creation: New pathways to value, An overview’,
by Nick Coates, Research Director, Promise, 2009.
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1. Connections: interactions between people, such
as companies and customers, not interactions
between consumers and products only.
2. Collaboration, rather than just involvement.
3. Co-creativity, not simply co-construction or coproduction.
• Co-creation can be seen as a comingtogether of aspects of marketing and
management theory, psychology and
techniques derived from group decisionmaking, innovation and knowledge
processes.
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Co-creation in ecommunities
Complementary Perspective: Communities
of Practice
• “Communities of practice are groups of people who share
a concern, a set of problems, or a passion about a topic,
and who deepen their knowledge and expertise in this area
by interacting on an ongoing basis” (Wenger et al., 2002, p.
4)
– Or…unique types of networks in which a shared practice binds
members together
• Practice:
– Includes shared participation in a task, job, or profession, and can
extend beyond work to include hobbies, a shared passion about a
topic, or a common set of concerns (Brown & Duguid, 2000,
2001).
E-communauties
Virtual communities
• Building virtual Communities
– Internet ideal for gathering people with similar
ideas/tasks (communities).
– Communities form at web sites in chat rooms,
bulletin boards, and distributed e-mail lists.
– If a firm builds/maintains the “watering hole” where
community gathers, can build relationship with
them.
Exemplar Blog/Brand Communities
• Nike Blog
– The Art of Speed
• Red Hat Blog [http://blogs.redhat.com/]
– Road show and executive blogs
• Channel 9 - Microsoft [http://channel9.msdn.com/]
– Microsoft employees and developers talking, learning, and listening
globally.
• General Motors Blogs [http://smallblock.gmblogs.com/]
– Community for small block enthusiasts
• Google Blog
– Insight into the news, technology, and culture of Google.
virtuels avatars
Social Media
Social Media
• The popular term for advanced Internet
technology
and
applications,
including blogs, wikis, RSS, and social
bookmarking.
• One of the most significant differences
between Web 2.0 and the traditional www
(World Wide Web) is greater collaboration
among Internet users and other users, content
providers, and enterprises.
– The ability to tap into the collective
intelligence of users
– Data is made available in new or neverintended ways
– Web 2.0 relies on user-generated and usercontrolled content and data
Marketing Your Web Site
Traditional Marketing
• Television
• Radio
• Newspapers
• Magazines
• Billboards
• Direct Mail
• Word-of-Mouth
Internet Marketing
• Video sharing web sites
• Blogs, Micro-blogs
• Social Networks
• Widgets
• Search Advertising
• Direct Email
• Word-of-mouth
– Users can access applications entirely through a
browser
– An architecture of participation encourages users
to add value to the application
– A major emphasis on social networks and
computing
– Strong support of information sharing and
collaboration
– Rapid and continuous creation of new business
models
• social media
The online platforms and tools that people
use to share opinions, experiences, insights,
perceptions, and various media, including
photos, videos, and music, with each other.
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http://www.fredcavazza.net/2008/06/09/social-media-landscape/
Social Networks
• A social network is a social structure made of
nodes which are generally individuals or
organizations. It indicates the ways in which they
are connected through various social familiarities
ranging from casual acquaintance to close familial
bonds.
• The term was first coined in 1954 by J. A. Barnes
(in: Class and Committees in a Norwegian Island
Parish, "Human Relations").
• The maximum size of social networks tends to be
around 150 people and the average size around
124 (Hill and Dunbar, 2002).
Books on SN
• INDUSTRY AND MARKET DISRUPTORS
Disruptors
Companies that introduce a significant change in
their industries, thus causing a disruption in
normal business operations.
Social Network Theory
Social network theory views social relationships in terms of nodes and ties. Nodes are the
individual actors within the networks, and ties are the relationships between the actors.
There can be many kinds of ties between the nodes. In its most simple form, a social
network is a map of all of the relevant ties between the nodes being studied. The network
can also be used to determine the social capital of individual actors. These concepts are
often displayed in a social network diagram, where nodes are the points and ties are the
lines.
Degrees of Separation and the
Global Social Network
• The small world phenomenon is the hypothesis that the chain
of social acquaintances required to connect one arbitrary
person to another arbitrary person anywhere in the world is
generally short.
Degrees of Separation and the
Global Social Network
• The concept gave rise to the famous phrase six degrees of
separation after a 1967 small world experiment by
psychologist Stanley Milgram which found that two random
US citizens were connected by at most, six acquaintances.
Degrees of Separation and the
Global Social Network
• Current internet experiments continue to explore this
phenomenon, including the Ohio State Electronic Small World
Project and Columbia's Small World Project.
• As
of
2005,
these
experiments confirm that
about five to seven
degrees of separation are
sufficient for connecting
any two people through
the internet.
Social Media Strategies
Strategy #3 – “Appealing
to Influencers”: Target
Influencers Who Can
Move the Masses
Engaging the
Advocates
User Reviews
“Pro-sumer”
collaboration
Influencer-Led
Development
Strategy #1 – “Accessing
social Consumers”: Use
Social Media as a New
Channel to Individuals
Social Media
Wildfire
Social Media
Community
Creating Urgency/
Spontaneous
Selling
Policies
Customers as
“Community
Organizers”
“Pass it along”
promptions
Recruiting others/
Group Seles
Strategy #2 – “Engaging the Hive”: Get Customers to
Mobilize Their Personal Networks
Source: Robert Wollan, Nick Smith, Catherine Zhou, The Social Media Management Handbook, John Wiley, 2011.
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The New Age: “Social retailing”
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
“Shopping meets social networks” (Foresee Results, 2010)
o More than 50% of online shoppers use Facebook,
o 56% of shoppers who interact with social media websites have
elected to “friend” or “follow” or “subscribe” to a retailer
o 49% of respondents who “friend” or “follow” companies
through social media do so to learn about special deals and
options
o 45% of users do it to learn about products
o 5% use social media primarily for customer support
However, 60% of retailers do not have a presence on a social
networks…
 85% of Gen Y shoppers participate in social networking
(PriceGrabber, 2010)
Strategy #1 – “Accessing
social Consumers”: Use
Social Media as a New
Channel to Individuals
Strategy
#2 –
“Engaging
the Hive”:
Get
Customers
to Mobilize
Their
Personal
Networks
What is Social Media? Does it take the
place of “in person” networking or
meetings?
Social media consists of online marketing with photos,
video, podcasts, audio, chat rooms, discussions, blogs,
surveys, etc.
All of these help engage conversation and allows your
message to go “viral” on social networks such as
Facebook, Twitter, Linkedin, Plaxo, YouTube, Flicker,
StumbleUpon, Digg, and so many others.
Traditional marketing does not allow for interaction or
participation towards content or creation.
Social media supplements “in person” networking or
meetings, but does not replace it.
Study: Collective action in an electronic NoP
• Social capital (SC):
– A theory that provides a link b/w social structure and action
– Def’n: “Social relations that are accessed or mobilized for
purposive action” (Lin, 2001, p. 29)
• Wasko and Faraj (2005) hypothesize that social capital
positively influences individual knowledge contributions to
an electronic NoP
• Sample: Members of a U.S. legal professional association
using an electronic message board
• Structural capital operationalized as centrality based on
messages posted to a discussion thread
• Results: A user’s network centrality predicted volume of
contributions
Also, Networks of Practice…
Key Features
CoP
NoP
Shared Practice
Strength of Ties
Strong
Weak
Spatial
Characteristics
Physical copresence
Geographically
dispersed (strangers)
Form of
Communication
Direct/Face to face
Indirect/Mediated (e.g.,
listserves, newsletters,
conferences)
Reciprocity
High
Low
Coordination
Easy
Difficult
Conceptual Similarities between Networks,
CoPs/NoPs, and SC
• Cohen and Prusak (2001) describe networks and
communities as “the source and shape of social capital in
organizations, the primary manifestation of cooperative
connections between people” (p. 55).
• Community and social capital constructs are “conceptual
cousins” (Putnam, 2000, p. 21).
• Mutual engagement in a CoP “identifies a condition that is
similar to connection in a network but describes such
relations as grounded in common interest and activity,
rather than mere interaction” (Iverson and McPhee, 2002,
p. 262).
Systems for Collaboration and Teamwork
• Social business
– Use of social networking platforms, internal and external
– Engage employees, customers, and suppliers
– Goal is to deepen interactions and expedite information
sharing
– “Conversations”
– Requires information transparency
• Driving the exchange of information without intervention
from executives or others
Value Chain to Identify potential coproduction and co-creation
The Web-DRIVEN SUPPLY CHAIN
• The web-driven supply chain operates like a digital
logistics nervous system.
• It provides multidirectional communication among
firms, networks of firms, and e-marketplaces so
that entire networks of supply chain partners can
immediately adjust inventories, orders, and
capacities.
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What is Value Chain?
• Represents how a business creates customer value by
examining contributions of different internal activities to
that value
• Divides a business into a set of activities within the
business
– Starts with inputs a firm receives
– Finishes with firm’s products or services and after-sales service to
customers
• Allows for better identification of a firm’s strengths and
weaknesses since the business is viewed as a process
Porter’s value chain.
Inbound
logistics
Production
processes
Outbound
logistics
Sales and
marketing
Information technology infrastructure
Upstream
Downstream
The key to intra-business e-commerce is
improving value chain efficiency.
Customer
service
Value Network
• Set of inter-organizational links and
relationships that are necessary to create and
sell a product or service.
Supplier
Channel
FIRM
Buyer
Value Network
The Value Chain
– The value chain is the string of activities that moves a product from the raw
material stage, through manufacturing and distribution, and ultimately to the
end user.
– By studying a product’s or service’s value chain, an organization can identify
ways to create additional value and assess whether it has the means to do so.
– Value chain analysis is also helpful in identifying opportunities for new
businesses and in understanding how business models emerge.
New vehicle
development
The basic value chain for new vehicles
Supply chain
Distribution
Channel
Aftermarket
Identifying collaboration Opportunities through Linking
the Value Chains of the Firm and its partners:
5
1
Distribution
Marketing
Canning
Processing
Inventory holding
Supplies of steel
& aluminum
Purchasing
Inventory holding
Design Engineering
Manufacturing
Inventory holding
Distribution
Sales
Service & technical
support
Purchasing
4
3
2
Identifying collaboration Opportunities through
Linking the Value Chains of the Firm and its partners:
5
1
Distribution
Marketing
Canning
Processing
Inventory holding
Supplies of steel
& aluminum
Purchasing
Inventory holding
Design Engineering
Manufacturing
Inventory holding
Distribution
Sales
Service & technical
support
Purchasing
4
3
2
Example
1. Value chain for a traditional furniture
manufacturer.
[All or most steps completed by the same company]
Design
Parts
Assembly
Ship and
warehouse
Sell –
retail or
catalogue
Delivery
Example
IKEA value chain.
Ship and
warehouse
Design
Parts
Outsource to
contract mfg.
3.
Sell – retail
or catalogue
Assembl
y
Outsource
to customer
IKEA advantages: no manufacturing, assembly or delivery
facilities = cost savings . Focus instead on core competencies:
design, purchasing, and distribution that give it a competitive
advantage.
Delivery
Outsource to
customer
The IKEA vision is to create a better
everyday life for people. We make this
possible by offering a wide range of
well –designed, functional home
furnishing products at prices so low
that as many people as possible will be
able to afford them.
From “Bow-Tie” to “Diamond”
Traditional buyer/supplier interface
Sales
R&D
Production
Marketing
Supply chain
Supplier
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Building stronger partnerships through
multiple linkages
Supplier
Development
Key-account
selling
Buyer
R&D
Marketing
Production
Operations
Marketing
Operations
Business
development
Marketing
Business
Development
Supply chain
Supply chain
Supply chain
Customer
Supplier
Customer
The role of supplier and customer collaboration
Intermediary
Manufacturing Collaboration
• Design for localisation
• Scheduling synchronisation
• Design anywhere build anywhere
Customer Collaboration
• Joint product definition
• Rapid proposal response
• Online custom configuration
SPEED to Margin
Supplier
Product Development Collaboration
• Global platform design
• Customisable products
• Global distributed product
development
Enterprise
Customer
Supplier Collaboration
• Joint development
• Outsource design
• Contract manufacturing
Complementor
Source : Accenture
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