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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
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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
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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 organizations customers
Figure 1.1
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consumer that prefer to purchase offline. E.g.-retail site, travel site, online banking sites www.amazon.com, www.thomascook.com, www.hsbc.com
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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).
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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)
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Business processes
Consumer-to-consumer Business-to-government
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Summary and examples of transaction alternatives between businesses, consumers and governmental organizations
Figure 1.2
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Figure 1.5
Source: MORI Technology Tracker, January 2006. See www.mori.com/technology/techtracker.shtml for latest details
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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
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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
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Cost/efficiency drivers
Increasing speed with which supplies can be obtained Increasing speed with which goods can be dispatched
Competitiveness drivers
Customer demand
Improving the range and quality of services offered Avoid losing market share to businesses already using e-
commerce.
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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
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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.
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Source: Eurostat, Community Survey on ICT usage in enterprises, eEurope (2005) Information Society Benchmarking Report, European Communities 2005, http://europa.eu.int/information_society
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Question: What are the aspects that need to be managed when developing an e-business strategy? Answer: the McKinsey 7S framework
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Employs 600 people worldwide Turnover 100m Products composites and speciality polymers
See www.globalcomposites.com
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Competitors
Cooking.com (www.cooking.com) Lakeland (www.lakelandlimited.com) Tupperware (www.tupperware.com).
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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
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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.