Second Life :

« Who hasn’t ever dreamt of having a second life? Meanwhile this dream became (virtual) reality in ‘Second Life’. In public as well as in many populist discussions, magazines and blogs ‘Second Life’ is often called a game. It is true that it could also be a global game for the players, named residents, in this virtual world. But ‘Second Life’ is much more. Within the last years since its foundation in 2003 on June, 23rd it grew up spirally, consequential and more and more exponential to a seriously taken business with USD 2.6 million trading volume at round about 10.7 million transactions in November 2006. The trading volume in the reference period one year ago was only USD 0.3 million.

Today a wide variety of companies of all industries like Adidas, Amazon, American Apparel, BMW, EnBW, Mercedes-Benz, Sony BMG, Toyota and Vodafone have built up virtual branches, agencies and stores in ‘Second Life’. Also newswires, radio stations and publishing companies such as Reuters, BBC and Axel Springer Verlag are participating actively in this virtual world. The German boulevard magazine ‘Bild’, for instance, published the first edition of the online magazine ‘The Avastar’ on December 21st, 2006 [4]. Finally, individuals started their own virtual trade-off, rent and lease businesses or doing trading with acquired real estates and islands.

So, the question could be, why it is interesting for mankind to participate in a virtual world. On the one hand it is the possibility to exchange the real, over-directed life with a new one which can be created by the individual himself. In this context this virtual world can offer a diversity of things which are impossible to buy, to have or to do in the real life for most people, like buying an expensive sports car at a fraction of the real costs, having an island for oneself or to hold down an exciting job as a disk jockey, model or fashion designer. On the other hand the interpersonal social behavior has developed from door-to-door and place-to-place up to person-to-person relationships – a social network of individuals.

But ‘Second Life’ is, of course, no closed economical and financial circuit. On the one hand real money must be exchanged into ‘Linden Dollars’ – the virtual currency, traded at the virtual user-to-user commerce market, the ‘LindeX Currency Exchange’, and vice versa. Otherwise, real companies are selling (virtual) products and services in ‘Second Life’, providing services for the online communities and people are working as employees for virtual enterprises. An example is the IBM Corporation, which “[…] is ramping up its push into virtual worlds with an investment of roughly $ 10 million over the next 12 months […]”. The EMDS AG, Stuttgart, Germany built up a new virtual convention center and a virtual booth for the CeBIT trade fair in 2007. Furthermore, Sun Microsystems, Inc. expressed the significance of ‘Second Life’ in a press release in October 2006: “Sun Microsystems will launch its presence in the virtual world Second Life next week, holding the first 'in-world' press conference by a Fortune 500 company at the opening of the company's new virtual Sun Pavilion.”.

The most interesting on-going and upcoming things are the convergence and conflation of real world and virtual businesses on the one hand and the harmonization of principles and standards on the other hand. However, this will have a major impact on economical and social behavior, even on corporate identities and cultures. But this will be likewise a chance and a challenge for almost all of today’s and future enterprises. For the individuals, however, this brings along a number of opportunities and shows that the residents will remain the most important factor in ‘Second Life’ .

 VIRTUAL ELECTRONIC BUSINESS

According to the definition of electronic business of Wirtz, virtual electronic business is the initiation and the partial respectively complete support, development and maintenance of performance exchange processes by using electronic networks and internet based electronic intermediaries within the internet economy, see also . An intermediary such as ‘Second Life’ also promotes the disintermediation – the elimination of interstages like wholesale traders and retailers within the distribution chain.

Furthermore, in this context the intermediaries could also act as ‘information intermediaries’ or ‘infomediaries’ under the precondition that they are able to support the information exchange process between transaction partners.

If an enterprise intends to do virtual electronic business in ‘Second Life’ this can be done in three ways:

1. Doing any kind of advertising for real world products and services within ‘Second Life’ that the individuals behind the residents will buy the products and services in the real world like shoes, cars and mobile phone contracts. This is the common goal of probably all enterprises which are located in ‘Second Life’.

2. Trading with real world products and services by using ‘Second Life’ as an intermediary while promoting products and services – equivalent to point 1 – in ‘Second Life’ and linking to an online shop outside ‘Second Life’ where the products can be bought or to a website where the individual behind the resident can offer services or get in contact with a consultant or sales representative.

3. Trading with virtual products and services within ‘Second Life’. In this case ‘Second Life’ is much more than just an intermediary as the whole process exchange transaction is done completely in this virtual world by using the ‘Second Life’ currency – ‘Linden Dollars’. In this case the only restrictions are the daily and monthly billing and trading limits, depending on the personal account.

In the first case only the initiation phase of a virtual electronic business transaction is concerned whereas in the following two cases the whole performance exchange process takes effect. The advantage for well-known companies like Adidas, BMW or Vodafone is their publicity and reputation they firstly bring in into ‘Second Life’. In this virtual world, however, they have the possibility even to increase their reputation via the so called ‘Electronic Branding’ which will then have a positive effect onto real world business.>>

Exemple of e business advertising for second life :

E business : Good or bad ?

What do we need to think about e business ?

Advantages of ebusiness :

The Internet is creating a new, completely electronic economy. New economy  lead a new to commerce in B2B, B2C or C2C  market.  Any company that thinks it can possibly be "business as usual" in the e-business era will find itself sitting in a corner wearing a dunce's cap pondering the means of survival. In fact, trading online enables businesses to reach much wider audiences while cutting the costs of traditional retailing methods. Therefore, E business allow companies or even customer to sell or exchange products, services or ideas through different websites or platform. It is the fastest growing method of trading worldwide. However, this new environment cause positive and negative impacts.

The benefits of E business can be enormous. In fact, today's marketplace want quality products and information in a quick and easy manner. I would emphasis on the fact that the internet bring a huge benefit thanks to its speed and convenience. Therefore e-business, which uses the internet as the core for business dealings, can help make a company more customer-friendly in addition to many other things, such as creating a more efficient exchange of information and/or products and services.

First principal advantage would be about the location and absence of restrictions. In fact, e-business allow us to exchange information and effectuate transactions at any time, twenty-four hours a day, seven days a week and from any location in the world with Internet access. Second advantage would be the reduction of the time to obtain a product or service and the benefit to save money thanks to the intensive and global competition online.

Thanks to e business, we can heightens the customer service. In fact, the customers receive highly customizable service, and communication is often more effective. There is far more flexibility, availability and faster response times with online support. There is also a faster delivery cycle with online sales, helping strengthen the customer/business relationship. The internet is a powerful channel for reaching new markets and communicating information to customers and partners. Having a better understanding of your customers will help to improve customer satisfaction.

 To finish e business brings competitive advantage. The internet opens up a brand new marketplace to businesses moving online. Competition via the internet is growing as the internet itself grows and waiting too long to move online may cause you to lose your place in line entirely. Easy access to real time information is a primary benefit of the internet, enabling a company to give more efficient and valid information and helping to gain the competitive advantage over those that are not online.

As the book and the majority of the people emphasis on the advantage of E business, in this reflexion essay i will focus on the negative e business aspects.

E business risks :

Manipulation of the customer : this is happening to you everytime you are on the internet

According to the academic article Strategic Manipulation of Internet Opinion Forums: Implications for Consumers and Firms written by Chrysanthos Dellarocas, The Internet has enabled individuals all over the world to make their personal experiences, thoughts,and opinions easily accessible to the global community “at the click of a mouse”. This, in turn, has led to the creation of a diverse mosaic of online word-of-mouth communities (“online forums”) where individuals exchange experiences and opinions on a variety of topics ranging from products and services, to politics and world events.

In the past few years, online forums have been steadily growing in popularity and have become an indispensable component of portals (e.g. Yahoo! Movies), traditional news sites (e.g. BBC Talking Point), consumer report sites (e.g. CNET, Epinions, Citysearch, Moviefone), and online retailer websites (e.g. Amazon, Circuit City). Table 1 lists some common types of online forums in use today.

There is growing evidence that consumers are influenced by Internet-based opinion forums before making a variety of purchase decisions. Firms whose products are being discussed in such forums are, therefore, tempted to try to manipulate consumer perceptions by posting costly anonymous messages that praise their products or by offering incentives to consumers to do so.

Similar evidence suggests that forums play an increasingly important role in public opinion formation. Online forums are thus emerging as an alternative source of information to mainstream mass media, replacing our societies’ traditional reliance on the “wisdom of the specialist” by the “knowledge of the many”.

Internet is such a difficult medium to control directly, make it relatively easy for stakeholders to indirectly manipulate the probability distribution of information propagated through online forums by anonymously adding their own strategically biased messages to the total mix of posted opinions.

Issue of privacy : this can happen to you or already happened

Businesses engaging in e-commerce with their customers and other businesses must take precautions to ensure the privacy of their data, and the integrity of their communications. This includes securing communications over the Internet, as well as protecting internal data warehouses from outside attacks.

The lifeblood of every business is the circulation of crucial data, including customer orders, customer relationship management information and communications with outside vendors and other value chain providers. Each of these communications provides a potential vector for leaking private data to outside attackers.

Vodafone example : Vodafone faces compensation payments to up to 4 million customers after confirming it is investigating a security breach that has put billing and call records on a publicly accessible website protected only by passwords that change monthly.

Sony example :

At the beginning of the tear, Sony warn its millions of PlayStation Network (PSN) users to watch out for identity-theft scams after hackers breached its security and plundered the user names, passwords, addresses, birth dates, and other information used to register accounts.

The stolen information may also include payment-card data, purchase history, billing addresses, and security answers used to change passwords.

My example with Nokia :

 I receive spam from Nokia : Got message " you have won 500,000 pounds in the Nokia worldwide mobile promo. Reply via SMS for more info or email webnokia@msn.com. Congratulations!!

I have deleted it as i think it was a hoax or spam which can damaged or hack my data.

Facebook example :

E-procurement : particularity in B2B

I will emphasis on the relationship between suppliers and buyers. In fact, e procurement is basically replacing employees by  computer in the supply chain to be more effective, efficient and save money. As the book definition says : e procurement to perform at the right price, delivered at the right time, of the right quality, of the right quantity and from the right source. It is almost utopian. If any of the criteria happened wrong, don’t you think it will probably cost more at the end?

According to the academic article Contingency Effects in Digitized Supply Chain Relationships by J Dedrick , The potential productivity and cost-effectiveness of e-procurement are completely irrelevant if suppliers or customers do not accept this distribution channel or if products are unsuitable for this distribution channel. There is much to suggest that the frequently voiced expectations for e-procurement are currently no more than e-commerce illusions. So far, neither the elimination of the intermediate and retail stages nor the transfer of brokerage operations to electronic platforms has led to the expected high cost savings. The hope that online traders could get by without their own inventory has also proved largely illusory.

·         Negative impacts on the relationship buyers and suppliers

1.      The growth of e-procurement is rapid.  The capital investment of developing e-procurement is high.  But the supplier needs to upgrade their system to facilitate the cost and time saving in the e-procurement process for increasing the customer satisfaction. For seller’s view, e-procurement creates more pressure on them.

2.      Sometimes the system will have technical failure, so the process of e-procurement cannot run smoothly and the communication channel will be broken down. So neither buyer can place his order nor seller confirms the order. So we can see, here, the importance of the employees in the traditional process.

In direct website ordering, the terms and conditions are fixed at the site set by the supplier. The

negotiation does not exist in the transaction.  It is risky for buyer to make the contract in the direct website

ordering, especially in purchasing services where the requirements and specifications cannot be made

clear before the contract.

Since the terms and conditions are always favorable to the site owner, the buyer has little bargaining

power in the contract.  This is unfavorable to buyers.

There are no personal meetings. Moreover, if the transaction is about the technical complexity, it is difficult

for buyers and sellers to communicate and exchange ideas via Internet compared with fact to face

contact. This restriction on the communication will cause the performance beyond the customer

expectation.

However...

Future of e business :

Good or Bad, everyone is their own judge.

www.globalfuture.com: http://www.youtube.com/user/jamescanton1?feature=pyv&ad=5025503903&kw=future#p/u/0/Cslpth-rwJo

What’s your choice ?

We cannot avoid new technology or new business envrionment. We just need to be aware and protect oursleves against the risks. Here, i outline you fews risks you can encounter. Be aware that we cannot live in our world without technology, however, risks are everywhere, even where it is not expected.

Keep in mind that change is inevitable in today's marketplace!

Stetelle ;)