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Artificial Intelligence, Big Data and Cloud Computing 144 Digital Business and Electronic Digital Business Models StrategyCommerceProcess Instruments Strategy, Business Models and Technology Lecture Material Lecture Material Prof. Dr. Bernd W. Wirtz Chair for Information & Communication Management German University of Administrative Sciences Speyer Freiherr-vom-Stein-Straße 2 DE - 67346 Speyer- Email: [email protected] Prof. Dr. Bernd W. Wirtz Chair for Information & Communication Management German University of Administrative Sciences Speyer Freiherr-vom-Stein-Straße 2 DE - 67346 Speyer- Email: [email protected] © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 1 Table of Contents I Page Part I - Introduction 4 Chapter 1: Foundations of Digital Business 5 Chapter 2: Mobile Business 29 Chapter 3: Social Media Business 46 Chapter 4: Digital Government 68 Part II – Technology, Digital Markets and Digital Business Models 96 Chapter 5: Digital Business Technology and Regulation 97 Chapter 6: Internet of Things 127 Chapter 7: Artificial Intelligence, Big Data and Cloud Computing 144 Chapter 8: Digital Platforms, Sharing Economy and Crowd Strategies 170 Chapter 9: Digital Ecosystem, Disintermediation and Disruption 184 Chapter 10: Digital B2C Business Models 197 © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 2 Table of Contents II Page Chapter 11: Digital B2B Business Models 224 Part III – Digital Strategy, Digital Organization and E-commerce 239 Chapter 12: Digital Business Strategy 241 Chapter 13: Digital Transformation and Digital Organization 277 Chapter 14: Digital Marketing and Electronic Commerce 296 Chapter 15: Digital Procurement 342 Chapter 16: Digital Business Implementation 368 Part IV – Digital Case Studies 376 Chapter 17: Google/Alphabet Case Study 377 Chapter 18: Selected Digital Case Studies 392 Chapter 19: The Digital Future: A Brief Outlook 405 © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 3 Part I - Introduction © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 4 Chapter 1: Foundations of Digital Business © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 5 Fig. 1.1 Kondratieff cycle Industrialized Information Society Society • Steam engine • Railway • Chemical industry • Petrochemistry • Information technology ? • Cotton • Steel • Electrical • Automobile industry engineering 1st Kondratieff 2nd Kondratieff 3rd Kondratieff 4th Kondratieff 5th Kondratieff 6th Kondratieff 1780 1830-1850 1870-1890 1920-1935 1950-1980 2000-2005 20xx Source: Nefiodow and Nefiodow (2014), and Wirtz (2021) © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 6 Fig. 1.2 Dimensions of the information society Digital Collaboration Digital Communication Electronic Internet Information Digital Economy Society Commerce Business Digital Information/ Entertainment Digital Education Source: Wirtz (2000c, 2020b, 2021) © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 7 Fig. 1.3 Development of the number of Internet hosts since 1993 1200 1000 800 600 Million hosts Million advertised advertised DNS in the 400 200 0 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Data Source: ISC (2019), and Wirtz (2021) © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 8 Fig. 1.4 Worldwide Internet usage and population statistics User in Million 5000 4500 4295 4000 3500 3000 2500 2300 2000 1500 1341 1000 835 728 658 526 454 500 369 349 261 180 43 29 0 Africa Asia Europe Latin America Middle East North America Australia Data Source: Internet World Stats (2020), and Wirtz (2021) Population Internet Users © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 9 Fig. 1.5 Structure of the textbook Part 1: Introduction 1. Foundations of Digital Business 2. Mobile Business 3. Social Media Business 4. Digital Government 7. Artificial Intelligence, Data Big Intelligence, Artificial 7. 11. B2B Digital Business B2B11. Business Digital Models 10. B2C 10. Business Digital Models Economy Economy and Crowd Strategies 13. Digital Digital 13.Transformation and 5. Digital Digital Business 5. Technology 12. Digital Digital 12.Business Strategy 8. Digital Digital Platforms, 8. Sharing 14. Digital Digital 14.Marketing and 15. Digital Digital 15.Procurement Disintermediation, Disintermediation, and and Cloud and Cloud Computing Electronic Electronic Commerce 9. Digital Ecosystem, Digital Ecosystem, 9. Digital Organization Digital 6. Internet Internet 6. of Things 16. Digital Digital 16.Business Implementation and Regulation Disruption Part 2: Part 3: Digital Technology, Strategy, Digital Digital Markets Organization and and Digital E-Commerce Business Models Source: Wirtz (2021) 17. Google/Alphabet Case Study 18. Selected Digital Case Studies 19. The Digital Future Part 4: Digital Case Studies © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 10 Fig. 1.6 Development of information and communication applications (250 B.C. until 1956) Matrix of Eratosthenes Infinite Tape Recorder 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 27 28 29 Record-/Decoding head 31 32 33 34 35 36 37 38 39 41 42 43 44 45 46 47 48 49 Program Gottfried Leibnitz Eratosthenes Alexander With the Turing machine, constructs the first Implementation of Introduction of develops an Graham Bell puts Alan M. Turing develops a mechanical calculating the first mobile color television algorithm for the first basic foundation of machine that is capable network worldwide in the U.S. determining prime telephone into theoretical informatics of the four standard in the U.S. numbers operation calculation methods 250 B.C. 1623 1672 1854 1867 1903 1936 1941 1946 1948 1953 1956 Wilhelm Schickard George Boole Nikola Tesla patents Konrad Zuse builds the first William Bradford IBM introduces the constructs the first 4- publishes the the electrical circuits fully automated, program- Shockley patents the magnetic hard drive (IBM function calculator Boolean algebra controlled and freely transistor 350) programmable Computer Source: Wirtz (2013b, 2020b, and updates 2021) © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 11 Fig. 1.7 Development of information and communication applications (1966 until 1994) Aol. SAP Disk Operating System/360 (DOS) is Steve Case founds the Internet introduced as Intel launches the first Motorola introduces the service Quantum Computer SAP releases the operating system for microprocessor first cell phone worldwide Services (renamed to AOL 3 ERP-Software IBM mainframes 4004 (Dynatac 8000x) years later) SAP R/3 1966 1969 1971 1981 1983 1985 1989 1993 1994 Paul Baran und Donald Watts Introduction of Microsoft Start of the Jeff Bezos founds Davies create the first decentral IBM „Personal releases World Wide the internet mail network ARPANET Computer“ Windows 1.0 Web order business Amazon amazon.com Source: Wirtz (2013b, 2020b, and updates 2021) © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 12 Fig. 1.8 Development of information and communication applications (1995 until 2019) TeliaSonera ebay manx telecom Lawrence Edward Page Manx Telecom Implementation of the first commercial LTE-network of Pierre Omidyar und Sergei Brin found the implements one of the Marc Zuckerberg TeliaSonera in Stockholm founds the Internet Internet service provider first UMTS networks at founds the social Launch of 5G and Oslo auction site eBay Google Inc. the Isle of Man network Facebook wireless networks 1995 1996 1998 1999 2001 2004 2006 2009 2016 2019 2019 Nokia develops and Introduction of DSL, cable Apple introduces the AT&T launches U-verse Oculus VR launches distributes the first modem, and wireless first version of using the FTTP, VDSL, first VR glasses for smartphone internet access in the U.S. iTunes software and ADSL customers communication protocols iTunes Source: Wirtz (2013b, 2020b, and updates 2021) © Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 13 Table 1.1 Selected definitions of digital business Author Definition A secure, flexible, and integrated approach to delivering differentiated business value by combining IBM (1997) the systems and processes that run core business operations with the simplicity and reach made possible by Internet technology. Pricewaterhouse Hereafter, e-business will be defined as the application of information technologies to facilitate buying Coopers (1999) and selling of products, services, and information over public standard-based networks Digital business [...] is defined as the initiation, negotiation, and/or transaction of a business between Wirtz (2000e) economic subjects which is electronically realized through telecommunication networks. E-business can be formally defined as technology-mediated exchanges between parties (individuals, Rayport and Jaworski organizations, or both) as well as the electronically based intra- or interorganizational activities that (2001) facilitates such exchange. Jelassi and Enders The use of electronic means to conduct an organization’s business internally and/or externally. (2005) Business that is conducted using electronic networks or electronic media, sometimes used Chen (2005) synonymously with ecommerce and sometimes used more widely to include other business activities in addition to buying and selling. Papazoglou and Ribbers E-business can be defined as the conduct of automated business transactions
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