IT6506 · eBusiness Technologies

Topic 4: eBusiness Strategies
Quick Q & A

5 Questions · Summarized Answers · Sections 4.1 – 4.6

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4.1 – 4.2 · Business Environment & Driving Forces
What is the business environment, and what are the four driving forces for change?
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A business operates within two layers — an internal environment (staff, skills, structure, strategy, shared values, systems, style) and an external environment (customers, competitors, suppliers, government, partners, etc.). Four categories of forces drive organisations to change:

  • TTechnical Forces: Internet & WWW, automation, digital transformation, cloud computing, AI, IoT, cybersecurity threats, mobile workforce.
  • BBusiness-Driven Forces: Buyer/supplier bargaining power, strong competition, market shifts, need for new products, declining performance.
  • EExternal Forces: Government regulations, economic changes, social/cultural shifts, globalisation, environmental pressures, competitor entry.
  • IInternal Forces: New strategies, leadership changes, restructuring, cultural shifts, employee feedback, technology upgrades.
Key Point: A single event (e.g. rise of e-commerce) can trigger all four forces simultaneously — organisations must treat them as a system, not isolated triggers.
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4.2 · E-Business Road Map
Explain the stages of the E-Business Road Map from Basic Website to New Processes.
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The road map tracks an organisation's growth in process sophistication across two tracks — External (customer-facing) and Internal (operations). As both tracks mature, the organisation converges into a fully integrated eBusiness.

🌐 External Track

Basic Website — static brochure, company info, FAQs.
Interactive Site — two-way communication, forms, forums, own database.
eCommerce Site — secure payments, payment gateway, back-end systems.

🏢 Internal Track

Effective Individual — standalone productivity tools (payroll, spreadsheets).
Effective Team — LAN, shared databases, intranet.
Effective Organisation — ERP, VPN, enterprise-wide integration.

Basic Site→ Interactive→ eCommerce→ Convergence→ New Processes

Convergence: All internal systems and external channels connect via a central Corporate Data Repository. New Processes then become possible — SCM, CRM, and Knowledge Management.

SCM — Supply Chain Mgmt CRM — Customer Relationship Mgmt KM — Knowledge Management
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4.3 & 4.4 · Customer Disruption & Product Disruption
What is the difference between customer disruption and product disruption? Give examples of each.
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Customer disruption occurs when customer behaviours/expectations change, bypassing traditional channels. Product disruption occurs when a new product/technology makes existing products obsolete.

👤 Customer Disruption

DELL: Sold PCs directly online — no middlemen, payment at order time, custom configuration.

Uber/Lyft: Bypassed taxi dispatch systems with app-based ride requests, real-time tracking & payment.

Mattel: Launched "Build Your Own Barbie" direct online, leaving standard dolls to retailers.

📦 Product Disruption

Streaming (Netflix): Replaced DVD/Blu-ray rental with on-demand digital content.

Smartphones: Replaced cameras, GPS, music players & more in one device.

Digital Music: MP3 replaced LP records and tapes; web journalism replaced print newspapers.

Key Point: Businesses that proactively innovate before disruption peaks gain competitive advantage. Those that react too late risk losing market share permanently.
LP → MP3 Print → Web Cash → Web Banking Film → Digital Photo
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4.5 · Price Disruption
What is price disruption? Describe three new digital pricing models with examples.
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Price disruption happens when a product/service is offered at a significantly lower price than the market rate, causing major market share shifts — driven by lower cost structures, technology efficiencies, or new entrants.

  • 1 Dynamic / Buy-Cycle Pricing (Accompany): Price updates in real time as more buyers commit — the more buyers, the lower the price. Buyers are incentivised to recruit friends via email (network marketing), driving further demand aggregation.
  • 2 Name-Your-Own-Price (Priceline.com): Buyers state the price they'll pay for flights, hotels, or car rentals; sellers accept or reject. Shifts pricing power from seller to buyer, establishing a pure market price. Grew to 12 million+ customers.
  • 3 Below-Cost / Ad-Funded Pricing (buy.com): Products sold at or below cost; profit earned entirely through advertising. Destroys traditional retail pricing models and forces competitors to either match prices or exit.
Key Point: Traditional businesses must restructure costs, differentiate on value beyond price, or adopt digital pricing mechanisms — or risk permanent loss of market share to disruptors like low-cost airlines (Ryanair) or online retailers (Amazon).
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4.6 · Intelligent Agents
What are intelligent agents? Classify them and explain how they are used in eBusiness.
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Intelligent agents are software programs that perform tasks autonomously or semi-autonomously using rules, algorithms, or machine learning — making decisions without step-by-step human instructions.

  • RReactive Agents: Respond only to the current environment with no memory. Example: basic FAQ chatbot that matches keywords to fixed responses.
  • PProactive Agents: Anticipate future events using memory of past experiences. Example: news aggregator that pre-fetches content based on reading history.
  • LLearning Agents: Improve over time via machine learning. Example: Netflix recommendation engine that refines suggestions continuously.
  • SIntelligent Software Agents: Autonomously interact with users or other systems for complex tasks. Examples: Siri, Alexa, Google Assistant.
💰 Price Comparison

Agents like PriceSCAN and Alibris scan multiple sellers in real time and rank by price, shipping & ratings — shifting power to buyers and forcing sellers to price transparently.

🔒 Fraud Detection

Analyse transaction streams in real time to flag anomalies (unusual location, rapid repeats). Used widely in online banking and e-commerce to block fraud before it occurs.

Key Point: Intelligent agents are both a disruptive force (they erode businesses' information asymmetry) and a strategic tool — organisations that deploy them gain major efficiency and personalisation advantages.
Chatbots Recommendation Engines Fraud Detection Autonomous Vehicles Digital Assistants