Accounting 5922 E-Business Strategies and Processes Overview Organizations engaging in electronic forms of business are seeking to create and sustain value by radically altering conventional business models whilst focusing and reconfiguring their internal processes. Emergent electronic business models such as e-tailer, information brokerage, electronic auction, virtual community, third party market place and value chain integrator, are challenging the conventional ways by which business is conducted and work is performed. It is argued that, for such organizations the strategic management of positioning, customer management, technology, processes, organisational capabilities, and innovation is critical to sustain value generation. This course using texts and e-business case studies: Provides an overview of the emergence of electronic commerce and facilitating technologies and seeks to identify some of the characteristics of the New Economy. Outlines and evaluates new business strategies and business models adopted by E- businesses. This will include some of the emerging scenarios such as decapitalizing traditional companies, the emergence of value added communities and Meta markets. It explores the attributes of organisational capability necessary to deliver new value propositions and to facilitate value generation within e-businesses. It analysis the application of web technologies to key processes across the value chain and discusses the opportunities this presents to e-businesses. The application of web based Enterprise Resource Planning, Customer Relationship Management, Selling Chain Management, Supply Chain Management, E-Procurement and Business Intelligence will be discussed. The course will also address the challenges presented to traditional businesses as they assess and seek to integrate e-business strategies and projects with their traditional strategies. It will review methods of assessing and establishing performance measures and addresses the issue of the effective valuation of e-business. Course Co-ordinator: Joan Ford Contact: 9387 2419, Business Hours Fax: 9389 2686 joanford@ozemail.com.au Classes: Thursday, 6-9 pm Quad GO35 Friday, 9 12am Quad GO 45 Consulting Hours: Thursday 4.00 6.00pm Room: QUAD 3090
Assessment: Class Participation: 15% Individual Assignment: 15% Group Assignment: 20% Examination: 50% Text: Rayport, Jeffery F. & Jaworski, Bernard J. E-Commerce, McGraw-Hill /Irwin MarketspaceU, 2001. Rayport, Jeffery F. & Jaworski, Bernard J. Cases in e -Commerce, McGraw-Hill /Irwin MarketspaceU, 2001. Afuah, Allan & Tucci, Christopher, L, Internet Business Models and Strategies, McGraw- Hill/Irwin, 2001 E-Business Course Outline E-commerce E-Business Strategies & Business Models Process & Organizational Issues E-Business Performance & Value Creation Weeks 1-4 Weeks 5-8 Weeks 8-11 Weeks 12-14 2
Week 1: 23 rd July: Introduction to E-Business Strategies and Process Acct 5922 Week 2: 30 th July: What is e-commerce? Week 3: 6 th August: e-commerce Infrastructure and Web Based Technology Week 4: 13 th August: E-business - Its Global Impact Week 5: 20 th August: What is meant by E-Business Strategies? Week 6: 27 th August: What is meant by E-Business Business Models? Week 7: 3 rd September: E-Business Business Models Week 8: 10 th September: E-Business Business Models Week 9: 17 th September: E-business Organisational Implications - Core Processes in the Value Chain 24 th September: Semester Break Week 10: 1 st October: E-business Implementation - the Core Processes in the Value Chain Week 11: 8 th October: E-business Organisational Capabilities Week 12: 15 th October: E-Business, Performance Management & Measures Week 13: 22 nd October: E-Business Valuation Week 14: 29 th October: e-business Valuation 3
Assignments Class Participation: 15% Each student will be required to: 1. Attend 80% of all lectures and seminars and participate in the seminars. This will count for 10% of the class participation mark. 2. All students should form groups of 6. a. Each group will be expected to prepare 2 of the discussion topics indicated in the weekly outline. (See below) The presentation should be 4 power point slides. This will be presented and handed in for marking. Each group should nominate three people from the group to be responsible for each of the presentations. These presentations will be attributed to the authors as 45% of their class participation mark. 1. What is e-commerce? How is e-commerce different from traditional commerce? (Week2) 2. What are the technological innovations that underpin e-commerce? How have they facilitated the emergence of the various categories of e- commerce? Eg. B2B, B2C (Week 3) 3. What are the components of an e-business strategy as outlined by Rayport? (Week 5) 4. Outline the arguments presented by Michael Porter in his article Strategy and the Internet (Week 5) 5. What does Rayport mean by a business model? (Week 6) 6. What does Afuah & Tucci mean by a business model? (Week 6) 7. Outline the key arguments presented by Afuah and Tucci in their chapter on Dynamics and Appraisal of Business Models (Week 7) 8. What is the argument presented by Kalakota & Robinson in Constructing the E-Business Architecture: Enterprise Apps (Week 9) 9. Outline the key components of Schwab s IT infrastructure? (Week 10) 10. Outline the key implementation issues of Marshall Industries (Week 10) 11. Outline the key steps in implementing the Performance Dashboard. (Week 12) 12. What are three sources of metrics information that firms can use to chart their progress? (Week 12) 13. How do valuation methodologies actually work and when is one methodology more appropriate than another? (Week 13) 14. Discuss the valuation of TOM.com. (Week 13) b. Each group will be expected to prepare two of the following group exercises. (See below). The presentation will consist of 4 power point slides and will be presented and handed in for marketing after the class. This will form 45% of the class participation mark for each individual member of the group. One of the group exercises is also the basis for a major Group Assignment worth 20 % of a student s mark 4
Group Assignment: 20% Each group will be required to prepare a 2000 word assignment based on one of the Group Exercises. Assignments are to be handed in one week after the seminar. Group Exercise 1: (Week 4) Outline the opportunities and threats e-business presents to Asia/Pacific countries? To what extent do you agree with the arguments presented in the Boston Consulting Report? Group Exercise 2: (Week 5) Using the e-commerce business strategic framework presented by Rayport (chp 1) evaluate the business performance of either Amazon.com OR Barnesandnoble.com Framing the Market Opportunity Business Model Customer Interface Market Communications & Branding Metrics Valuation Group Exercise 3: (Week 6) Using the e-commerce business strategic framework presented by Afuah & Tucci evaluate the business performance of Streamline against the following criteria: Customer Value Scope Price Revenue Source Connected activities Capabilities Sustainability Group Exercise 4: (Week 7) Using the e-commerce business strategic framework presented by Afuah & Tucci evaluate the business performance of First Direct against the following criteria: Customer Value Scope Price Revenue Source Connected activities Capabilities Sustainability 5
Group Exercise 5: (Week 11) What are the organisational capabilities needed to effectively develop e-businesses. What are the key arguments presented by Means and Schneider in the first three chapters of their book and what are the organisational issues implicit in these types of organizations. Group Exercise 6: (Week 12) Using the e-commerce business strategic framework presented by Rayport (chp 1) evaluate the business performance of Schwab in the following key areas: Framing the Market Opportunity Business Model Customer Interface Market Communications & Branding Metrics Valuation 6
Individual Assignment: 15% Due Week 9 Week of 17 th September 2000 words maximum Outline the arguments presented by Applegate and Collura in Crafting E-Business Models. Using the e-commerce business strategic framework presented by Rayport (chp 1) evaluate the business performance of Ventro: Builder of B-2-B Businesses, in the following key areas: Framing the Market Opportunity Business Model Customer Interface Market Communications & Branding Metrics Valuation 7
Week 1: 23 rd July: Introduction to E-Business Strategies and Process Acct 5922 Overview of Course Resources Participant Introductions Form Groups. Assign group work. Overview of e-business Week 2: 30 th July: What is e-commerce? Rayport, Jeffery F. & Jaworski, Bernard J. E-Commerce, Chapter 1 Overview of e-commerce Framework pp 1-22 Afuah, Allan & Tucci, Christopher, L, Internet Business Models and Strategies, Chapter 2: Overview of Internet Technology and Value Network pp. 11 26 Additional Reading: www.dushkin.com/powerweb, Readings: Unit 1 Understanding the E-Business Tidal Wave, Articles 1 & 2 The Internet Economy: The World s Next Growth Engine Shaping Forces and Tidal Waves 1. What is e-commerce and how is e-commerce different from traditional commerce? 2. What are the technological innovations that have occurred that make it possible? 3. What are the various categories of e-commerce? Eg. B2B, B2C 4. What are the key steps to be considered when setting up an e-commerce business? 5. What is the potential impact of e-commerce? 8
Week 3: 6 th August: e-commerce Infrastructure and Web Based Technology Rayport, Jeffery F. & Jaworski, Bernard J. E-Commerce, Chp 9 Network Infrastructure pp 321-361 Afuah, Allan & Tucci, Christopher, L, Internet Business Models and Strategies, Chp 3 Competitive Landscape-Changing Properties of the Internet pp27 41 Rayport, Jeffery F. & Jaworski, Bernard J. Cases in e Commerce, Amazon A -D pp 1-69 Additional Reading: www.dushkin.com/powerweb, Readings: Unit 1 Understanding the E-Business Tidal Wave, Articles 3 & 4 The Next Industrial Revolution? Information Technology Makes a Difference Finally CMGI: Inside the Internet s Incubator Powerhouse 1. What is e-commerce? 2. What are the technological innovations that underpin e-commerce? How have they facilitated the emergence of the various categories of e- commerce? Eg. B2B, B2C 3. How is e-commerce different from traditional commerce? 4. What are the key steps to be considered when setting up an e-commerce business? 5. What is the potential impact of e-commerce? Questions for discussion of the Case Study Amazon A D Use Rayport s 10-point Decision Making Process (p12) for developing an e-business strategy and evaluate the decisions made by the senior management of Amazon.com. 1. Which customers did they decide to serve? 2. What compelling set of benefits did they develop to offer to their targeted customers? How did they differentiate their value proposition versus online and off line competitors? 3. How did they communicate with customers? 4. What is the content, look-and-feel, level of community and degree of personalisation of the website? 5. How did they structure their organization? What business services and applications software choices did they need to consider? 6. Who are their potential partners? Whose capabilities complement theirs? 7. How will their business provide value to shareholders? 8. What metrics did they use to judge the progress of the business? How did they value the business? 9
Week 4: 13 th August: E-business - its global impact Arming for E-Combat in Asia Pacific: The New Rules of Engagement, Boston Consulting Group, Feb. 2001 Additional Reading: www.dushkin.com/powerweb, Readings: Unit 6 Going Global and Reaching Out through the Net, Articles 25 30. Questions for discussion on the Report by the Boston Consulting Group: 1. Outline the opportunities and threats e-business presents to Asia/Pacific countries? To what extent do you agree with the arguments presented? 2. Evaluate the recommendations made by the Report? 3. Share with your group what is happening in your country of origin? Group Exercise 1: Outline the opportunities and threats e-business presents to Asia/Pacific countries? To what extent do you agree with the arguments presented in the Boston Consulting Report? Week 5: 20 th August: What is meant by E-Business Strategies? Rayport, Jeffery F. & Jaworski, Bernard J. E-Commerce, Chp 2 Framing the Market Opportunity pp 25-66 Porter, Michael, E. Strategy and the Internet, Harvard Business Review, March 2001 Rayport, Jeffery F. & Jaworski, Bernard J. Cases in e Commerce, Barnes & Noble, A-D. pp 70-113 Additional Reading: www.dushkin.com/powerweb, Readings: Unit 2 - Deciding on E-business Models and Strategies, Articles 5 & 6 A New Era of Bright Hopes and Terrible Fears Internet Anxiety 1. What are the components of an e-business strategy as outlined by Rayport? 2. Outline the arguments presented by Michael Porter in his article Strategy and the Internet 3. What is Schwab s market opportunity? Group Exercise 2: Using the e-commerce business strategic framework presented by Rayport (Chp 1) evaluate the business performance of either Amazon.com OR Barnesandnoble.com Framing the Market Opportunity Business Model Customer Interface Market Communications & Branding Metrics Valuation 10
Week 6: 27 th August: What is meant by E-Business Business Models? Rayport, Jeffery F. & Jaworski, Bernard J. E-Commerce, Chp 3 Business Models pp 69-111 Afuah, Allan & Tucci, Christopher, L, Internet Business Models and Strategies, Chp 4, Components, Linkages, Dynamics, and Evaluation of business Models pp 43-64 Rayport, Jeffery F. & Jaworski, Bernard J. Cases in e -Commerce, Streamline A--D, pp 220 247 Additional Reading: www.dushkin.com/powerweb, Readings: Unit 2: Deciding on E-business Models and Strategies, Articles 7 & 8 Leveraging the Web for Corporate Success Where the Money is 1. What does Rayport mean by a business model? 2. What does Afuah & Tucci mean by a business model? 3. Do firms compete on value propositions or value clusters? 4. How does a firm develop an online offering whether product, service or information? 5. What is a successful, unique resource system? What are characteristics of good resource systems? 6. What are the financial models available to firms? 7. What business classification schemes seem most appropriate for the New Economy? 8. What is Schwab s business model? Group Exercise 3: Using the e-commerce business strategic framework presented by Afuah & Tucci evaluate the business performance of Streamline against the following criteria: Customer Value Scope Price Revenue Source Connected activities Capabilities Sustainability 11
Week 7: 3 rd September: E-Business Business Models Rayport, Jeffery F. & Jaworski, Bernard J. E-Commerce, Chp 4 Customer Interface pp. 113-165 Afuah, Allan & Tucci, Christopher, L, Internet Business Models and Strategies, Chp 5 Dynamics and Appraisal of Business Models pp 68-85 Rayport, Jeffery F. & Jaworski, Bernard J. Cases in e -Commerce, First Direct pp 302-322 1. What are the seven design elements to the customer interface? 2. What are the alternative look-and-feel approaches to design? 3. What are the five content archetypes? 4. Why be concerned with community? 5. What are the levers used to customize a site? 6. What types of communication can a firm maintain with its customer base? 7. How does a firm connect with other businesses? 8. What re alternative pricing models of commerce archetypes? 9. Outline the key arguments presented by Afuah and Tucci in their chapter on Dynamics and Appraisal of Business Models Group Exercise 4: Using the e-commerce business strategic framework presented by Afuah & Tucci evaluate the business performance of First Direct against the following criteria: Customer Value Scope Price Revenue Source Connected activities Capabilities Sustainability 12
Week 8: 10 th September: E-Business Business Models Applegate, L,M. & Collura, M, Crafting E-business Models Building Businesses Online, Boston. 2000 Business Case, Ventro: Builder of B-2-B Businesses HBS 1. Outline the arguments presented by Applegate and Collura in Crafting E- Business Models. 2. Using the e-commerce business strategic framework presented by Rayport (chp 1) evaluate the business performance of Ventro: Builder of B-2-B Businesses, in the following key areas: Framing the Market Opportunity Business Model Customer Interface Market Communications & Branding Metrics Valuation Week 9: 17 th September: E-business Organisational Implications - Core Processes in the Value Chain Rayport, Jeffery F. & Jaworski, Bernard J. E-Commerce, Chp 9 pp 346 353 How can the Internet be used in Business Processes? Afuah, Allan & Tucci, Christopher, L, Internet Business Models and Strategies, Chp 6` Value Configurations and the Internet pp 87-103 Kalakota, R. & Robinson, M. e-business 2.0, Road Map for Success, Addison- Wesley, 2001 Chp 5 Additional Reading: www.dushkin.com/powerweb, Readings: Unit 6 Unit 3 Integrating the Value Chain with Web Technologies, Articles 9 14 Untangling the Value Web From Reengineering to E-Engineering Changing Channels: The Impact of the Internet on Distribution Strategy 1. What is a value chain? 2. How can the Internet technologies be used to facilitate efficiencies in the key business processes in the value chain? 3. Why should a firm bother to choose the most appropriate value configuration? 4. What is meant by e-engineering the core processes? 5. What is the argument presented by Kalakota & Robinson in Constructing the E-Business Architecture: Enterprise Apps 24 th September: Semester Break 13
Week 10: 1 st October: E-business Implementation - the Core Processes in the Value Chain Rayport, Jeffery F. & Jaworski, Bernard J. E-Commerce, Chp 6 Implementation Rayport, Jeffery F. & Jaworski, Bernard J. Cases in e -Commerce, Marshall Industries pp 436-445 Additional Reading: www.dushkin.com/powerweb, Readings: Unit 3 Integrating the Value Chain with Web Technologies, Articles 9 14 How an Intranet opened up the Door to Profits First Do No Harm From soup to E-Nuts 1. What is online implementation? 2. Why does implementation matter? 3. What is the delivery system? 4. What are the categories of offline innovation? 5. What is the offline innovation process? 6. What is the new logic behind New Economy innovation? 7. Outline the key components of Schwab s IT infrastructure? 8. Outline the key implementation issues of Marshall Industries Week 11: 8 th October: E-business Organisational Capabilities Applegate, L.M. and Collura, M., Developing E-business Capabilities Building E- businesses, Boston: Harvard Business School Publishing. Means, G.& Schneider, D. Meta-Capitalism, The E-Business Revolution and the Design of the 21 st Century Companies and Markets, Wiley, 2000 Chp 1-3 1. What are the key arguments presented by Applegate & Collura in Developing E-business Capabilities 2. What are the key arguments presented by Means & Schneider in the first three chapters of their book? Group Exercise 5: What are the organisational capabilities needed to effectively develop e-businesses? What are the key arguments presented by Means and Schneider in the first three chapters of their book and what are the organisational issues implicit in these types of organizations. 14
Week 12: 15 th October: E-Business, Performance Management & Measures Rayport, Jeffery F. & Jaworski, Bernard J. E-Commerce, Chp 7, Metrics Afuah, Allan & Tucci, Christopher, L, Internet Business Models and Strategies Chp 8 Competitive and Macro Environments: 1. Why should senior managers be concerned about metrics? 2. How can we assess the health of the New Economy firms? 3. Outline the key steps in implementing the Performance Dashboard. 4. What are three sources of metrics information that firms can use to chart their progress? Group Exercise 6: Using the e-commerce business strategic framework presented by Rayport (chp 1) evaluate the business performance of Schwab in the following key areas: Framing the Market Opportunity Business Model Customer Interface Market Communications & Branding Metrics Valuation Week 13: 22 nd October: E-business Valuation Rayport, Jeffery F. & Jaworski, Bernard J. E-Commerce, Chp 8, Valuation pp 293 317 Rayport, Jeffery F. & Jaworski, Bernard J. Cases in e Commerce, TOM.Com, Valuation of an Asian Internet Company, pp 458 470 Afuah, Allan & Tucci, Christopher, L, Internet Business Models and Strategies Chp 7 Valuing and Financing an Internet Start-Up pp 106 118 1. How can one apply discounted-cash-flow analysis for robust growth companies? 2. How and when is it appropriate to use a real-options methodology for valuing emerging growth companies? 3. How should we think about valuing start-up companies? 4. How do valuation methodologies actually work: and when is one methodology more appropriate than another? 5. Discuss the valuation of TOM.com. Week 14: 29 th October: E-business Valuation Afuah, Allan & Tucci, Christopher, L, Internet Business Models and Strategies Chp 10 Chp 8 The Role of Competitive and Macro Environments pp 121 134 1. Discuss Affuah and Tucci s analysis of the financial viability of Amazon.com. 2. Is Amazon risking too much from the standpoint of brand name and reputation? 15