Ch01-Intro to Ebuness and Ecom
Content
Introduction to e-business and e-commerce
Slide 1.2
E-commerce:
Buying and selling using internet Shopping on the internet E-commerce is buying and selling using an
electronic medium. It is accepting credit and payments over the net, doing banking transactions using the Internet, selling products or information using the World Wide Web
Slide 1.3
E-business:
transformation of key business processes through
the use of internet technologies. Business processes:The group of logical, related, and sequential activities and transactions in which businesses engage e.g. transferring funds, placing orders, sending invoice , shipping goods to customers etc.. includes both front and back-office applications that form the engine for modern E-commerce.
Figure 1.4
Three definitions of the relationship between e-commerce and e-business
Slide 1.5
E-com transaction between organization can be considered from two perspectives. Buy-side e-com refers to transaction to procure resources needed by an organization from its suppliers. Sell-side e-com refers to transaction involved with selling products to an organization’s customers
Figure 1.1
The distinction between buy-side and sell-side e-commerce
Slide 1.7
1. Transactional e-com site:
Enable purchase of product online.
Support the business by providing information for
consumer that prefer to purchase offline. E.g.-retail site, travel site, online banking sites www.amazon.com, www.thomascook.com, www.hsbc.com
Slide 1.8
Slide 1.9
Slide 1.10
2. Service oriented relationship building web sites:
Provide information to stimulate purchase and build relationships Products are not typically available for purchase online Encourage offline sales, generate enquiries from customers E.g.- Management consultants such as PricewaterhouseCooper (www.pwcglobal.com) and Accenture (www.accenture.com).
Slide 1.11
Slide 1.12
Slide 1.13
3. Brand building sites:
Support the brand by developing an online experience of the brand Products are not typically available for purchase online E.g. Beverage manufacturers, e.g. Tango (www.tango.com)
Slide 1.14
Slide 1.15
4. Portal or media sites:
Provide information or news about a range of
topics Portals refer to gateway of information. Generate revenue by advertising, commission based sales, sale of customer data E.g.-Consumer site Yahoo! (www.yahoo.com). Business site: Silicon (www.silicon.com)
Slide 1.16
Slide 1.17
Slide 1.18
Five general e-commerce categories
Business-to-consumer Business-to-business
Business processes
Consumer-to-consumer Business-to-government
Slide 1.19
Slide 1.20
Summary and examples of transaction alternatives between businesses, consumers and governmental organizations
Figure 1.2
Slide 1.22
Adoption of digital platform enable access to e-com services.
E.g.-use a mobile phone,
use internet, use digital TV
Figure 1.5
UK rate of adoption of different digital media
Source: MORI Technology Tracker, January 2006. See www.mori.com/technology/techtracker.shtml for latest details
Slide 1.24
Benefits of online services are summarized by ‘six C’s’
1. Content: more detailed, in-depth information of product support the buying process. ”content is the king” 2. Customization: Customization of content like email alerts 3. Community: discuss anything through forums, chat-rooms and blog comments
Slide 1.25
4. Convenience: able to select , purchase product any time from your desktop. 24*7*365 availability of a service. 5. Choice: web gives a wider choice of product and suppliers than via conventional distribution channels
6. Cost reduction: Internet is low-cost place of purchase as they have lower staff and distribution costs than a retailer that runs a network of high-street stores
Slide 1.26
Lack of trust Security problems Lack of skills cost
Slide 1.27
Potential for increased revenue arising from increased reach to a larger customer base Cost reduction achieved through delivering services electronically. Reduction include staff costs, transport costs and cost of material such as paper
Figure 1.6
Attitudes to business benefits of online technologies
Source: DTI (2002)
Slide 1.29
Cost/efficiency drivers
Increasing speed with which supplies can be obtained Increasing speed with which goods can be dispatched
Reduced sales and purchasing costs
Reduced operating costs.
Competitiveness drivers
Customer demand
Improving the range and quality of services offered Avoid losing market share to businesses already using e-
commerce.
Slide 1.30
Tangible benefits
Intangible benefits
Increased sales from new sales leads giving rise to increased revenue from: – new customers, new markets – existing customers (repeat-selling) – existing customers (cross-selling). Marketing cost reductions from: – reduced time in customer service – online sales – reduced printing and distribution costs of marketing communications. Supply-chain cost reductions from: – reduced levels of inventory – increased competition from suppliers – shorter cycle time in ordering. Administrative cost reductions from more efficient routine business processes such as recruitment, invoice payment and holiday authorization.
Corporate image communication Enhancement of brand More rapid, more responsive marketing communications including PR Faster product development lifecycle enabling faster response to market needs Improved customer service Learning for the future Meeting customer expectations to have a web site Identifying new partners, supporting existing partners better Better management of marketing information and customer information Feedback from customers on products
Slide 1.31
Around 40% of a small and medium enterprises(SMEs) do not have a web site and majority do not use intranets, extranets, online purchasing or e-government services.
Figure 1.8
Adoption of Internet and e-business services across Europe
Source: Eurostat, Community Survey on ICT usage in enterprises, eEurope (2005) Information Society Benchmarking Report, © European Communities 2005, http://europa.eu.int/information_society
Figure 1.9
Barriers to development of online technologies
Source: DTI (2002)
Slide 1.34
Question: What are the aspects that need to be managed when developing an e-business strategy? Answer: the McKinsey 7S framework
Figure 1.10
The McKinsey 7S framework
Source: Adapted from Waterman et al. (1980)
Slide 1.36
Employs 600 people worldwide Turnover £100m Products – composites and speciality polymers
See www.globalcomposites.com
Distribution – 90 companies worldwide via joint ventures and agents Competitors:
Derakan (www.dow.com/derakane) Scott Bader (www.scottbader.com) Owens Corning (www.owenscorning.com)
Slide 1.37
Established 1984, 80 staff Products – Kitchenware Distribution
Through retailers and transactional web sites
Competitors
Cooking.com (www.cooking.com) Lakeland (www.lakelandlimited.com) Tupperware (www.tupperware.com).
Slide 1.38
See activity 1.5 Give examples of these benefits of an online presence. Which of these are most important to each:
Cost reduction New capability Communication Customer service Control Competitive advantage
Slide 1.39
You are in a team of advisers at a local business link (a local government agency encouraging adoption of e-commerce) List:
Drivers to adoption of sell-side e-commerce by
business and how you can reinforce these by marketing benefits. Barriers to adoption of sell-side e-commerce by business and how you can reinforce these by stressing benefits.
Slide 1.2
E-commerce:
Buying and selling using internet Shopping on the internet E-commerce is buying and selling using an
electronic medium. It is accepting credit and payments over the net, doing banking transactions using the Internet, selling products or information using the World Wide Web
Slide 1.3
E-business:
transformation of key business processes through
the use of internet technologies. Business processes:The group of logical, related, and sequential activities and transactions in which businesses engage e.g. transferring funds, placing orders, sending invoice , shipping goods to customers etc.. includes both front and back-office applications that form the engine for modern E-commerce.
Figure 1.4
Three definitions of the relationship between e-commerce and e-business
Slide 1.5
E-com transaction between organization can be considered from two perspectives. Buy-side e-com refers to transaction to procure resources needed by an organization from its suppliers. Sell-side e-com refers to transaction involved with selling products to an organization’s customers
Figure 1.1
The distinction between buy-side and sell-side e-commerce
Slide 1.7
1. Transactional e-com site:
Enable purchase of product online.
Support the business by providing information for
consumer that prefer to purchase offline. E.g.-retail site, travel site, online banking sites www.amazon.com, www.thomascook.com, www.hsbc.com
Slide 1.8
Slide 1.9
Slide 1.10
2. Service oriented relationship building web sites:
Provide information to stimulate purchase and build relationships Products are not typically available for purchase online Encourage offline sales, generate enquiries from customers E.g.- Management consultants such as PricewaterhouseCooper (www.pwcglobal.com) and Accenture (www.accenture.com).
Slide 1.11
Slide 1.12
Slide 1.13
3. Brand building sites:
Support the brand by developing an online experience of the brand Products are not typically available for purchase online E.g. Beverage manufacturers, e.g. Tango (www.tango.com)
Slide 1.14
Slide 1.15
4. Portal or media sites:
Provide information or news about a range of
topics Portals refer to gateway of information. Generate revenue by advertising, commission based sales, sale of customer data E.g.-Consumer site Yahoo! (www.yahoo.com). Business site: Silicon (www.silicon.com)
Slide 1.16
Slide 1.17
Slide 1.18
Five general e-commerce categories
Business-to-consumer Business-to-business
Business processes
Consumer-to-consumer Business-to-government
Slide 1.19
Slide 1.20
Summary and examples of transaction alternatives between businesses, consumers and governmental organizations
Figure 1.2
Slide 1.22
Adoption of digital platform enable access to e-com services.
E.g.-use a mobile phone,
use internet, use digital TV
Figure 1.5
UK rate of adoption of different digital media
Source: MORI Technology Tracker, January 2006. See www.mori.com/technology/techtracker.shtml for latest details
Slide 1.24
Benefits of online services are summarized by ‘six C’s’
1. Content: more detailed, in-depth information of product support the buying process. ”content is the king” 2. Customization: Customization of content like email alerts 3. Community: discuss anything through forums, chat-rooms and blog comments
Slide 1.25
4. Convenience: able to select , purchase product any time from your desktop. 24*7*365 availability of a service. 5. Choice: web gives a wider choice of product and suppliers than via conventional distribution channels
6. Cost reduction: Internet is low-cost place of purchase as they have lower staff and distribution costs than a retailer that runs a network of high-street stores
Slide 1.26
Lack of trust Security problems Lack of skills cost
Slide 1.27
Potential for increased revenue arising from increased reach to a larger customer base Cost reduction achieved through delivering services electronically. Reduction include staff costs, transport costs and cost of material such as paper
Figure 1.6
Attitudes to business benefits of online technologies
Source: DTI (2002)
Slide 1.29
Cost/efficiency drivers
Increasing speed with which supplies can be obtained Increasing speed with which goods can be dispatched
Reduced sales and purchasing costs
Reduced operating costs.
Competitiveness drivers
Customer demand
Improving the range and quality of services offered Avoid losing market share to businesses already using e-
commerce.
Slide 1.30
Tangible benefits
Intangible benefits
Increased sales from new sales leads giving rise to increased revenue from: – new customers, new markets – existing customers (repeat-selling) – existing customers (cross-selling). Marketing cost reductions from: – reduced time in customer service – online sales – reduced printing and distribution costs of marketing communications. Supply-chain cost reductions from: – reduced levels of inventory – increased competition from suppliers – shorter cycle time in ordering. Administrative cost reductions from more efficient routine business processes such as recruitment, invoice payment and holiday authorization.
Corporate image communication Enhancement of brand More rapid, more responsive marketing communications including PR Faster product development lifecycle enabling faster response to market needs Improved customer service Learning for the future Meeting customer expectations to have a web site Identifying new partners, supporting existing partners better Better management of marketing information and customer information Feedback from customers on products
Slide 1.31
Around 40% of a small and medium enterprises(SMEs) do not have a web site and majority do not use intranets, extranets, online purchasing or e-government services.
Figure 1.8
Adoption of Internet and e-business services across Europe
Source: Eurostat, Community Survey on ICT usage in enterprises, eEurope (2005) Information Society Benchmarking Report, © European Communities 2005, http://europa.eu.int/information_society
Figure 1.9
Barriers to development of online technologies
Source: DTI (2002)
Slide 1.34
Question: What are the aspects that need to be managed when developing an e-business strategy? Answer: the McKinsey 7S framework
Figure 1.10
The McKinsey 7S framework
Source: Adapted from Waterman et al. (1980)
Slide 1.36
Employs 600 people worldwide Turnover £100m Products – composites and speciality polymers
See www.globalcomposites.com
Distribution – 90 companies worldwide via joint ventures and agents Competitors:
Derakan (www.dow.com/derakane) Scott Bader (www.scottbader.com) Owens Corning (www.owenscorning.com)
Slide 1.37
Established 1984, 80 staff Products – Kitchenware Distribution
Through retailers and transactional web sites
Competitors
Cooking.com (www.cooking.com) Lakeland (www.lakelandlimited.com) Tupperware (www.tupperware.com).
Slide 1.38
See activity 1.5 Give examples of these benefits of an online presence. Which of these are most important to each:
Cost reduction New capability Communication Customer service Control Competitive advantage
Slide 1.39
You are in a team of advisers at a local business link (a local government agency encouraging adoption of e-commerce) List:
Drivers to adoption of sell-side e-commerce by
business and how you can reinforce these by marketing benefits. Barriers to adoption of sell-side e-commerce by business and how you can reinforce these by stressing benefits.
