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If the auto industry had keep with technology like the computer industry...

If the auto industry had keep with technology like the computer industry... ...we would all be driving $25 cars that get 1000 miles per gallon. This is true, but… - Your car would crash twice a day - Every time a road is repair, you would have to buy a new car

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If the auto industry had keep with technology like the computer industry...

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  1. If the auto industry had keep with technology like the computer industry... ...we would all be driving $25 cars that get 1000 miles per gallon.

  2. This is true, but… - Your car would crash twice a day - Every time a road is repair, you would have to buy a new car - The airbag systems would say, “Are you sure?” before going off - When your car died on the freeway for no reason, you would just accept this, restart, and drive on

  3. History of the Internet • 1956 - USSR launches Sputnik (Earth satellite) - US forms Advance Research Project Agency • 1969 - ARPANET commissioned by DOD for research in networking • 1971 - 15 nodes (23 hosts) UCLA, SRI, UCSB, U of Utah, BBN, MIT, SDC RAND, Harvard, Lincoln Lab, Stanford, UIU, CWRU, CMU, NASA • 1973 - First international connections for ARPANET: England & Norway. - Bob Metcalfe's Ph.D. dissertation at Harvard: Ethernet • 1977 - Electronic Mail to over 100 researchers • 1981 - BITNET: electronic mail & listserv servers • 1982 - Transmission Control Protocol (TCP) and Internet Protocol (IP) established.

  4. History of the Internet (continuation) • 1983 - ARPANET split into ARPANET and MILNET. - Berkeley Unix + TCP/IP for desktop stations. Hosts: 1,000 • 1986 - NSFNET created (backbone 56 Kbps) • 1987 - NSF agreed to manage the backbone with Merit, IBM and MCI - No. of hosts breaks 10,000 • 1989 - NSFNET upgraded to 1.544 Mbps - Creation of pan-European IP network. Hosts: 100,000 - Tim Berners-Lee paper “Hyper Text and CERN” • 1990 - ARPANET ceases to exist - Initial World-Wide-Web program on NeXT • 1991 - Gopher released by University of Minnesota - WAIS released by Thinking Machines Corporation

  5. History of the Internet (continuation) • 1992 - NSFNET upgraded to 44.736 Mbps - NSF relaxes the “Acceptable Use Policy”. Hosts: 1 million • 1993 - White House, United Nations and World Bank come On-Line - Business and media take notice of the Internet - MOSAIC is released in Illinois (Mark Andreessen at NCSA) - Annual growth of traffic was 341,634% • 1994 - US Senate and House provide information servers - Shopping malls arrived on the Internet - Mass marketing find its way to the Internet - Andreessen & colleagues form Mosaic Communications Corp. (now Netscape) • 1995 - The Web main theme at the European Parliament - Sun Microsystems launched JAVA

  6. Bandwidth Type of Circuit Speed/KBPS Time/Meg. Telephone 14.4 9.3 min Telephone 28.8 4.6 min ISDN 128 1 min DirectPC 128 1 min T1 1,440 5.5 sec Cable TV Modem 4,000 2.0 sec ASDL 6,000 1.5 sec Adv. Cable TV Mod. 40,000 0.2 sec T3 45,000 0.2 sec Optical fiber 80,000 0.1 sec

  7. Growth of Internet Users U.S. Online Population Forecast by Researcher 200 150 100 50 CommerceNet/Nielsen Cyber Dialogue (Aggressive) Cyber Dialogue (Conservative) International Data Corp. Jupiter/NFO Population (Millions) 1999 2000 20001 20002 2003

  8. Why the Optimism? - Continuing rapid growth of the Web - Business are rapidly deploying intranets/extranets and moving toward browsers as universal frontends

  9. Electronic Commerce E-Commerce is any electronic process supporting one or more elements of the value chain. The goal is to generate revenues through enhanced sales, reduced costs, or improved communications.

  10. Internet Value Chain: Customer Relations Internet Capability Benefits to Company Opportunities for Advantage Marketing and Sales and Support and Product Research Distribution Customer Feedback Data for market Research new Access to customer research customers comments on-line Establishes Low cost More staff in contact consumer response distribution with the customer to new products method Environmental Multiple contact Immediate response Scanning points at no to customer problems incremental cost Incremental market Lower cost Enhanced customer share margins satisfaction Source: Cronin 1994

  11. The Customer Continuum CUSTOMER NEEDS INTERNET RESOURCES company material home page new products, announcements MARKETING gopher server specific information newsgroups direct e-mail product description commercial platforms ordering options SALES privacy enhancements remittance on-line electronic catalogs individual problem resolution help desk changes & updates SUPPORT fixes & updates general product support user discussion groups Source: Cronin 1994

  12. LOW TOUCH PRODUCTS WINS US online transactions in 2000, ($bn) 0 2 4 6 8 Computer h/s Travel Financial brokerages Collectibles Music/video Books Clothes/sporting Flowers/cards/gifts Department store Event tickets Consumer electronics Automotive Home/garden Toys Food/wine Source: Boston Consulting Group

  13. Internet Value Chain: Inputs from Suppliers Internet Capability Benefits to Company Opportunities for Advantage Pricing and Delivery/Order/Tracking Product Ordering On-line Inventory Support Easy, efficient Faster turnaround Direct access to access expertise Information Improved Interactive constantly updated planning Not locked in to Less inventory Faster problem proprietary system stockpiled resolution Lower cost of Faster, more flexible Improved reliability obtaining materials delivery and performance Source: Cronin 1994

  14. B2B E-Commerce Projections 1,200 1,000 800 600 400 200 0 $ Billions 1999 2003 U.S. World Source: IDC

  15. Internet Value Chain: Internal Operations Internet Capability Benefits to Company Opportunities for Advantage Global R&D/ Collaboration Location-independent connectivity sharing/distributed resources Work Savings in Facilitates business Flexible work telecommunications partnerships and arrangements joint ventures Improves connec- Shortens develop- Telecommuting and tions to business ment time contract employees partners/customers Promotes global Disseminates Virtually teams based awareness resources more on expertise, not broadly location International Flexibility & effectiveness Increased reach in information-based activities productivity Source: Cronin 1994

  16. Options for Evolving an E-Business Extend Launch a new business or add a new model Enhance Add functionality or improve product /service that is currently offered Extend Enhance Expand Expand Add products/services in existing line or enter a new market Exit Exit Drop a product/service or exit a business

  17. Alternative Views of Strategy Past DecadeToday - One ideal competitive position - Unique competitive position - Benchmarking and achieving best - Activities tailored to strategy practices - Aggressive outsourcing and - Clear trade-offs partnering - Advantages rest on a few key - Advantage arrives from fit across success factors, resources, competencies activities - Flexibility and rapid responses - Operational effectiveness a given

  18. Other Interesting References Strategy: “In Search of Strategy,” Sloan Management Review, Spring 1999 Internet Technology: Keen, P., Mougayar, W., and Torregrossa, T. (1998) The Business Internet and Intranet: A manager’s guide to key terms and Concepts, Harvard Business School Press. Internet Online Atlas: http://www.cybergeography.org/atlas/atlas.html History of the Internet: http://www.isoc.org/guest/zakon/Internet/

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