Chap1 Lecture

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Chapter 1

Introduction to Cyber Entrepreneurship

Introduction to Cyber Entrepreneurship2 of 82

Objectives

� Understanding the basic definitions and concept of entrepreneurship and cyber entrepreneurship

� Understanding Islamic Entrepreneurship concept

� Understanding the relation between cyber entrepreneur with technopreneur and entrepreneur.

� Identify what motivate the cyber entrepreneurs

� Recognizes the traits of cyber entrepreneurs


Entrepreneurship definition

� A process of creating and expanding businesses that collectively form a force for national development and societal prosperity.


Who is Entrepreneur?

� Entrepreneur is a person who organizes, operates, and assumes the risk for a new business venture.


Characteristic of Entrepreneur

� A desire to achieve - The push to conquer problems, and give birth to a successful venture.

� Hard work - It is often suggested that many entrepreneurs are workaholics

� Desire to work for themselves -Entrepreneurs like to work for themselves rather than working for an organization or any other individual. They may work for someone to gain the knowledge of the product or service that they may want to produce.



� Nurturing quality- Willing to take charge of, and watch over a venture until it can stand alone.

� Acceptance of responsibility - Are morally, legally, and mentally accountable for their ventures. Some entrepreneurs may be driven more by altruism than by self-interest.

� Reward orientation: Desire to achieve, work hard, and take responsibility, but also with a commensurate desire to be rewarded handsomely for their efforts; rewards can be in forms other than money, such as recognition and respect.

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� Optimism: Live by the philosophy that this is the best of times, and that anything is possible.

� Orientation to excellence: Often desire to achieve something outstanding that they can be proud of.

� Organization: Are good at bringing together the components (including people) of a venture.

� Profit orientation: Want to make a profit; but the profit serves primarily as a meter to gauge their success and achievement.




Islamic Entrepreneurship

� To indulge in business is to perform an obligatory duty (fardhu kifayah)

� Profit are encouraged to prosper the community through donation and taxes.

� Regardless the outcome the muslimentrepreneur will always humble and contented with what Allah given (redha).


Motivation of Muslim Entrepreneur (Hamat 1992)

� Success through factors of

� Halal (lawful livelihood)

� Qanaah (be pleased with one’s earning)

� Taufik (blessing of Allah in proportion to one’s expectation)

� Sa’adah (happy) and

� Jannah (heaven)


Six Steps for Success (Imam Al Ghazali-book Minhajuk ‘Abidin)

� Knowledge and gnosis (ma’rifat) stage

� Repentance (taubat) stage

� Temptation stage

� Obstacles stage

� Motivation stage

� Imperfections stage and

� Praise and thankful (syukur) stage.


Islamic Entrepreneurship Model (Adnan et al. 1992)

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What is Cyber Entrepreneurship

� Cyber Entrepreneurship is not about technology.

� Cyber Entrepreneurship

� how to manage technology

� Improve value for customer


Who is Cyber Entrepreneur?

� someone starting or running a business in cyberspace and the Internet

� an independent entrepreneur creating a new organization in electronic marketplace.

� an entrepreneur that have skills and mindsets to deal with a knowledge economy

What is a knowledge economy?


Knowledge Economy

� The use of knowledge to produce economicbenefits

� a way of referring to the manner in which various high-technology businesses, especially computer software, telecommunications and virtual services, as well as educational and research institutions, can contribute to a country's economy.


Characteristic of Cyber Entrepreneur (Amat Taap, 2001)

� All the characteristic of an entrepreneur

� Conceptually strong

� Can manage knowledge workers

� Add value to the customer

Knowledge Knowledge Knowledge Knowledge Worker?Worker?Worker?Worker?


Knowledge Worker

� Knowledge worker, a term coined by Peter Drucker in 1959, is one who works primarily with information or one who develops and uses knowledge in the workplace.


What motivate the Cyber Entrepreneur

�Profit

� Independence

�A satisfying way of life

�Pressure and Drawbacks

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Qualities in Cyber Entrepreneur

� Need for achievement - This need drives individual to take risks or make decisions

� Self-confidence - Self-confidence are necessary to make tough decisions and lead business forward

� Calculated Risks - most entrepreneur will only take calculated risk. Risk based on the amount of reward you get for an amount of risk (5% for 1 amount of risk)� A risk averse want a higher return (maybe 7%)

� A risk neutral accept average return (in case 5%)

� A risk taker will accept a low return (maybe 3%)


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Who is Technopreneur?

�� They are entrepreneurs who used They are entrepreneurs who used

““technologytechnology”” as their driven factor in as their driven factor in

transforming resources into transforming resources into

goods and servicesgoods and services, creating an , creating an

environment conducive to industrial environment conducive to industrial

growthgrowth”…”…


Characteristic of a Technopreneur

� Possess the characteristics of Entrepreneur and Cyberpreneur

� Innovative

� Critical and creative thinker

� Comfortable working and using technology to solve problem


What motivate a Technopreneur?

� Solving problems

� Desire to change things and innovate

� Profit by default


Qualities in Technopreneur

� Flexibly Inflexible

� Practical Visionary

� Rational and methodical

� Realist but Romantic

� Loner but Team Player

� Creative, Innovative and Discipline

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Entrepreneur, Cyber Entrepreneur & Technopreneur

� Entrepreneur = Product + Market = profits

�Cyber Entrepreneur = Product + Market + Internet = profits

� Technopreneur = Today + Future = vision


Differences between Technopreneurand Entrepreneur

TechnopreneurCyber Entrepreneur

takes failure in stride and knows it will lead

to success if correction be made

focuses his/her attention on the chances of

success rather that the possibility of failure

is motivated by a strong vision and his

passion to innovate

is motivated by a strong desire to achieve

and attain financial success

likes to be the one to control innovation and be part of evolution

likes to work for him/herself and be in control

is innovate and has greater visionis creative, and has dreams and goals

is able to do many things at once, but choose to delegate

is able to do many things at once.

is part of a teamis a self-starter

likes to innovatelikes to compete


Similarities between Technopreneur

and Cyber Entrepreneur

� Is independent and self-confident, yet knows when to get help

� Likes a challenge� Hardworking and willing to stick with a project� Is not easily discouraged� Is in good health, has lots of energy and can

handle stress� Has a strong sense of self-worth� Is a positive thinker who does not dwell on

setbacks� Often has a close friend or relative who owns a

business.Introduction to Cyber Entrepreneurship

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Technopreneurs and Cyber Entrepreneurs

Larry Page & Sergey Brin

(Google)

Jerry Yang & David Filo

(Yahoo)

Pierre Omidyar

(eBay)

Sabeer Bhatia

(Hotmail)

Bill Gates

(Microsoft)

Michael Dell Irfan Khairi


Technopreneur stories

� Read the story about Hotmail and Microsoft founders (10 min)

� What traits they have in common?

� What motivate them?

� Present it.

Hotmail

Microsoft


Summary

� Anyone can become a Cyber Entrepreneur if they have the desire but only by acquiring the knowledge of technology, drive to change things and make other’s life easier, one can become a Technopreneur.

� Cyberpreneurs are motivated by many things, including money and the need for independence.

� Technopreneurs are motivated by desire to innovate not profit. They acquire profit by default.

� Cyber Entrepreneurs is similar to Entrepreneur but the difference is where the conduct their business.

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Summary (cont’)

� To become a successful cyber entrepreneur, you must become a technopreneur first. Your innovative ideas and product could assist you gain competitive advantage over other competitors thus helping you survive longer than typical cyber entrepreneur.

� Entrepreneurial success in Islam, is wider in scope and not confined to merely profit and material wealth


WHO DO YOU WANT TO BECOME?

ASK YOURSELF

Part 2

Overview of Electronic Commerce


Learning Objectives

1. Define electronic commerce (EC) and describe its various categories.

2. Describe and discuss the content and framework of EC.

3. Describe the major types of EC transactions.

4. Describe the digital revolution as a driver of EC.

5. Describe the business environment as a driver of EC.


Learning Objectives

6. Describe some EC business models.

7. Describe the benefits of EC to organizations, consumers, and society.

8. Describe the limitations of EC.

9. Describe the contribution of EC to organizations responding to environmental pressures.

10. Describe online social and business networks.


Electronic Commerce: Definitions and Concepts

� electronic commerce (EC)

The process of buying, selling, or exchanging products, services, or information via computer networks

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� EC can be defined from these perspectives:

� Business process

� Service

� Learning

� Collaboration

� Community



� e-business

A broader definition of EC that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organization



� Pure versus Partial EC

� EC can take several forms depending on the degree of digitization 1. the product (service) sold

2. the process (e.g., ordering, payment, fulfillment)

3. the delivery method





� brick-and-mortar (old economy) organizations

Old-economy organizations (corporations) that perform their primary business off-line, selling physical products by means of physical agents

� virtual (pure-play) organizations

Organizations that conduct their business activities solely online



� click-and-mortar (click-and-brick) organizations

Organizations that conduct some e-commerce activities, usually as an additional marketing channel

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� Internet versus Non-Internet EC

� Most EC is done over the Internet, but EC also can be conducted on private networks, such as value-added networks, local area networks, or on a single computerized machine

� Non-Internet EC includes the use of mobile handwriting-recognition computers used by field reps to write their notes in the field



� electronic market (e-marketplace)

An online marketplace where buyers and sellers meet to exchange goods, services, money, or information



� interorganizational information systems (IOSs)

Communications systems that allow routine transaction processing and information flow between two or more organizations

� intraorganizational information systems

Communication systems that enable e-commerce activities to go on within individual organizations


The EC Framework, Classification, and Content

� intranet

An internal corporate or government network that uses Internet tools, such as Web browsers, and Internet protocols

� extranet

A network that uses the Internet to link multiple intranets





� EC applications are supported by infrastructure and by these five support areas:

� People

� Public policy

� Marketing and advertisement

� Support services

� Business partnerships

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� Classification of EC by the Nature of the Transactions or Interactions

� business-to-business (B2B)

E-commerce model in which all of the participants are businesses or other organizations



� business-to-consumer (B2C)

E-commerce model in which businesses sell to individual shoppers

� e-tailing

Online retailing, usually B2C

� business-to-business-to-consumer (B2B2C)

E-commerce model in which a business provides some product or service to a client business that maintains its own customers



� consumer-to-business (C2B)

E-commerce model in which individuals use the Internet to sell products or services to organizations or individuals who seek sellers to bid on products or services they need

� mobile commerce (m-commerce)

E-commerce transactions and activities conducted in a wireless environment



� location-based commerce (l-commerce)

M-commerce transactions targeted to individuals in specific locations, at specific times

� intrabusiness EC

E-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization



� business-to-employees (B2E)

E-commerce model in which an organization delivers services, information, or products to its individual employees

� collaborative commerce (c-commerce)

E-commerce model in which individuals or groups communicate or collaborate online

� consumer-to-consumer (C2C)

E-commerce model in which consumers sell directly to other consumers



� peer-to-peer (P2P)Technology that enables networked peer computers to share data and processing with each other directly; can be used in C2C, B2B, and B2C e-commerce

� e-learningThe online delivery of information for purposes of training or education

� e-governmentE-commerce model in which a government entity buys or provides goods, services, or information from or to businesses or individual citizens

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� exchange

A public electronic market with many buyers and sellers

� exchange-to-exchange (E2E)

E-commerce model in which electronic exchanges formally connect to one another for the purpose of exchanging information



� The Future of EC

�Web 2.0

The second-generation of Internet-based services that let people collaborate and share information online in perceived new ways—such as social networking sites, wikis, communication tools, and folksonomies






� digital economy

An economy that is based on digital technologies, including digital communication networks, computers, software, and other related information technologies; also called the Internet economy, the new economy, or the Web economy

Digital Revolution Drives EC


Digital Revolution Drives EC

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Business Environment Drives EC

� The Business Environment

� The business environment impact model

� Business pressures

� Organizational response strategies






EC Business Models

� business model

A method of doing business by which a company can generate revenue to sustain itself


EC Business Models

� Six elements of a business model include descriptions of:1. Customers to be served and the company’s relationships with

these customers including customers’ value proposition2. All products and services the business will offer

3. The business process required to make and deliver the products and services

4. The resources required and the identification of which ones are available, which will be developed in house, and which will need to be acquired

5. The organization’s supply chain, including suppliers and other business partners

6. The revenues expected (revenue model), anticipated costs, sources of financing, and estimated profitability (financial viability)


EC Business Models

� revenue model

Description of how the company or an EC project will earn revenue

� value proposition

The benefits a company can derive from using EC

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EC Business Models

� The major revenue models are:

� Sales

� Transaction fees

� Subscription fees

� Advertising fees

� Affiliate fees

� Other revenue sources


EC Business Models


EC Business Models

� Functions of a Business Model

� Articulate a customer value proposition

� Identify a market segment

� Define the venture’s specific value chain structure

� Estimate the cost structure and profit potential

� Describe the venture’s positioning within the value network linking suppliers and customers

� Formulate the venture’s competitive strategy


EC Business Models

� Online direct marketing

� Electronic tendering systems.

� Name your own price

� Find the best price

� Affiliate marketing

� Viral marketing

� Group purchasing

� Online auctions

� Product and service customization

� Electronic marketplaces and exchanges

� Information brokers (informediaries)

� Bartering

� Deep discounting

� Membership

� Value-chain integrators

� Value-chain service providers

� Supply chain improvers

� Social networks, communities, and blogging

� Direct sale by manufacturers

� Negotiation

Typical EC Business Models


EC Business Models

� tendering (bidding) system

Model in which a buyer requests would-be sellers to submit bids; the lowest bidder wins

� name-your-own-price model

Model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price


EC Business Models

� affiliate marketing

An arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to the selling company’s Web site

� viral marketing

Word-of-mouth marketing in which customers promote a product or service to friends or other people

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EC Business Models

� SMEs

Small-to-medium enterprises

� group purchasing

Quantity (aggregated) purchasing that enables groups of purchasers to obtain a discount price on the products purchased


EC Business Models

� e-co-ops

Another name for online group purchasing organizations

� customization

Creation of a product or service according to the buyer’s specifications


Benefits and Limitations of EC

� Benefits to (exhibit 1.9)

� Organizations

� Consumers

� Society

� Limitations (exhibit 1.10)

� Technological

� Nontechnological


Social and Business Networks

� social networks

Web sites that connect people with specified interests by providing free services such as photo presentation, e-mail, blogging, etc. Give examples?

� Business-oriented networks are social networks whose primary objective is to facilitate business. Example: Xing.com


Social and Business Networks

� Xing.com

� Originating in Germany

� Attracts million of executives, sales representatives and job seekers in Europe.

� Offers secure service in 16 languages� Establish new business contacts

� Systematically expand their network

� Easily manage their contacts

� Market themselves in a professional business context

� Identify experts and receive advice on any topic.

� Organize meeting and events

� Manage contacts from anywhere

� Control the level of privacy and ensure that their personal dataare protected.


The Digital Enterprise

� digital enterprise

A new business model that uses IT in a fundamental way to accomplish one or more of three basic objectives: reach and engage customers more effectively, boost employee productivity, and improve operating efficiency. It uses converged communication and computing technology in a way that improves business processes

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� corporate portal

A major gateway through which employees, business partners, and the public can enter a corporate Web site




Summary

1. EC involves conducting transaction electronically. Its major categories are pure vspartial EC, Internet-based vs non-Internet based, and electronic markets vsinterorganizational system.

2. EC is a major product of the digital and technological revolution, which enables companies to simultenously increase both growth and profits. This revolution enables digitization of products, services and information.


Summary (cont’)

3. The business environment is changing rapidly due to technological breakthroughs, globalization, societal changes, deregulations and more. The changing business environment forces organizations to respond so EC is the major facilitator of such organizational responses.

4. EC offers numerous benefits because these benefits are substantial, it looks as though EC is here to stay and cannot be ignored.

Chap1 Lecture

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