1 INTERNET TECHNOLOGY FOR

BUSINESS, ISD378
 Course Structure (Outline)
 Introduction
 Analysing an Online Business
 How to Set Up an Online Business
 Retail Businesses
 Direct Selling (Removing the Middlemen (Disintermediation)
 Exploring the Impact of the Internet on an Industry: The role of information businesses and information goods
 Online Marketplaces – Making Money by performing the role of the Middleman
 Internet Services Businesses – Providing what people need!
 Online Marketing
 How the Internet has changed the manner in which businesses work

Lecture 1
2 INTERNET TECHNOLOGY FOR
BUSINESS, ISD378
 COURSE TEXTS
 Zittrain, J (2008), “The Future of the Internet”, Penguin Books, Strand, London
 Berners-Lee, T (2000) “Weaving the Web: The Original Design and Ultimate Destiny of
the World Wide Web”, HarperBusiness, New York
 Carr, N (2013) “The Big Switch: Rewiring the World From Edison to Google”, Norton
Paperback, New York
 Benkler, Y (2006) “The Wealth of Networks: How Social Production Transforms Markets
and Freedom”, New Haven, London
 Castells, M (2001) “The Internet Galaxy: Reflections on the Internet, Business, and
Society”, Oxford University Press, Oxford

Lecture 1
 LEARNING OUTCOMES

 Describe how Internet technology has changed modern day businesses.

 Identify the unique features of e-commerce, digital markets, and digital goods.
 Understand the Key concepts in e-commerce
 Identify the benefits of disintermediation to the consumer
 INTRODUCTION

 E-Business

 refers to the use of digital technology and the Internet to execute the major business processes in the
enterprise.

 E-business includes activities for the internal management of the firm and for coordination with suppliers
and other business partners. It also includes e-commerce.

 E-commerce

 is the part of e-business that deals with the buying and selling of goods and services over the Internet.

 It encompasses activities supporting those market transactions, such as advertising, marketing, customer
support, security, delivery, and payment.

 Use of the Internet and Web to transact business

 Digitally enabled transactions

 HISTORY OF E-COMMERCE

 Began in 1995 and grew exponentially; still growing at an annual rate of 16 percent

 Rapid growth led to market bubble

 While many companies failed, many survived with soaring revenues

 E-commerce today the fastest growing form of retail trade in U.S., Europe, Asia

 With the growing number of internet users over the years, e-commerce is booming in African
countries especially in Ghana
 GROWTH OF E-COMMERCE

Source: Laudon & Laudon

Can we imagine the rate of growth as at now in Ghana and Africa in general?
 FEATURES OF E-COMMERCE

1. Ubiquity
 Internet/Web technology available everywhere: work, home, etc., and anytime
2. Global reach
 The technology reaches across national boundaries, around Earth
3. Universal standards
 One set of technology standards: Internet standards
4. Richness
 Supports video, audio, and text messages
 FEATURES OF E-COMMERCE CONTD.

5. Interactivity
 The technology works through interaction with the user
6. Information density
 Vast increases in information density—the total amount and quality of
information available to all market participants
7. Personalization/Customization:
 Technology permits modification of messages, goods
8. Social technology
 The technology promotes user content generation and social networking
 KEY CONCEPTS OF IN E-COMMERCE

 Digital markets reduce

 Information asymmetry

 Search costs

 Transaction costs

 Menu costs

 Digital markets enable

 Price discrimination

 Dynamic pricing

 Disintermediation
 DIGITAL GOODS

 Goods that can be delivered over a digital network

 E.g., Music tracks, video, software, newspapers, books

 Cost of producing first unit almost entire cost of product:

marginal cost of producing 2nd unit is about zero

 Costs of delivery over the Internet very low

 Marketing costs remain the same; pricing highly variable

 Industries with digital goods are undergoing revolutionary

changes (publishers, record labels, etc.)
BENEFITS OF DISINTERMEDIATION TO THE
CONSUMER
END OF SESSION

THANK YOU