Chapter 1

1. Chapter 1 Introduction to e-business and e-commerce

2. Learning outcomes Define the meaning and scope of e-business and e-commerce and their different elements Summarize the main reasons for adoption of e-commerce and e-business and barriers that may restrict adoption Outline the ongoing business challenges of managing e-business and e-commerce in an organization.

3. Management issues How do we explain the scope and implications of e-business and e-commerce to staff? What is the full range of benefits of introducing e-business and what are the risks? How do we evaluate our current e-business capabilities?

4. Figure 1.1 Google circa 1998Source: Wayback machine archive: http://web.archive.org/web/19981111183552/google.stanford.edu

5. E-business innovation and opportunity Since Google was launched in 1998 whiche-business startups have transformed the way we work, live and play? How has Google innovated in search and its business model? See Table 1.1 for some of major innovators

6. The impact of the Internet on business Andy Grove, Chairman of Intel, one of the early adopters of e-commerce, has made a meteorological analogy with the Internet. He says: Is the Internet a typhoon force, a ten times force, or is it a bit of wind? Or is it a force that fundamentally alters our business? (Grove, 1996)

7. E-business opportunities Reach Over 1 billion users globally Connect to millions of products Richness Detailed product information on 20 billion + pages indexed by Google. Blogs, videos, feeds… Personalized messages for users Affiliation Partnerships are key in the networked economy

8. What is e-commerce and e-business? E-commerce : All electronically mediated information exchange between an organization and its external stakeholders (Chaffey) Digitally enabled commercial transactions between and among organizations and individuals

9. What is e-commerce and e-business? E-business: All electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business process (Chaffey) Digital enablement of transactions and processes within a firm, involving information systems under firm’s control. Does not include commercial transactions involving an exchange of value across organizational boundaries (Laudon)

10. Figure 1.2 The distinction between buy-side and sell-side e-commerce

11. Figure 1.3 Three definitions of the relationship between e-commerce and e-business

12. Figure 1.4 The relationship between intranets, extranets and the Internet

13. Why Study E-commerce? • E-commerce technology is different, more powerful than previous technologies • E-commerce bringing fundamental changes to commerce • Traditional commerce: Traditional commerce often relies on face to face interaction with consumers and thrives based on word of mouth, networking and customer referrals for new and repeat business. Personal interaction is a key component of businesses experience success with traditional commerce. Many businesses network within the community, establish rapport with city leaders and chambers of commerce and sponsor local events and sports teams to develop a relationship with the community to draw in business.

14. Origins & Growth of E-commerce • Precursors: • Electronic Data Interchange (EDI) • 1995: Beginning of e-commerce • First sales of banner advertisements • Since then, e-commerce fastest growing form of commerce in the United States

15. The Growth of B2C E-commerce SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b;

16. The Growth of B2B E-commerce SOURCES: U.S. Census Bureau, 2009a; authors’ estimates.

17. E-commerce: A Brief History • 1995–2000: Innovation • Key concepts developed • Dot-coms; heavy venture capital investment • 2001–2006: Consolidation • Emphasis on business-driven approach • 2006–Present: Reinvention • Extension of technologies • New models based on user-generated content, social networking, services

18. Types of E-commerce • Selling Side • Transaction e-commerce sites • Service-oriented relationship-building site • Brand-building sites • Portal, publisher or media sites

19. Types of E-commerce • Digital Marketing • The management and execution of marketing using e-media in conjunction with digital data about customer • Involves using digital technology • To achieve these objectives • Through using these marketing tactics

20. Figure 1.5 First Direct Interactive (www.firstdirect.com)

21. Figure 1.6 Blendtec viral campaign micro-site (www.willitblend.com)

22. Web 2.0 and Beyond • Web 2.0 Web 2.0 is the term given to describe a second generation of the World Wide Web that is focused on the ability for people to collaborate and share information online. Web 2.0 basically refers to the transition from static HTML Web pages to a more dynamic Web that is more organized and is based on serving Web applications to users. • Web 3.0 (semantic markup and web services) Semantic markup refers to the communication gap between human web users and computerized applications. Web 3.0 would be a “read-write-execute” web.

23. Figure 1.7 Evolution of web technologiesSource: Adapted from Spivack (2007)

24. e-Commerce and SCM • What’s Supply Chain Management (SCM) • The coordination of all supply activities of an organization from its supplier and partners to its customers • Value Chain • Necessarily processing, converting, improving or adding value to a particular product (from its original state) thereby giving more appeal, utility or value to a new product that promises a level of satisfaction to prospective clients or customers.

25. How e-Commerce impact SCM? • Cost efficiency E-commerce allows transportation companies of all sizes to exchange cargo documents electronically over the Internet. By using e-commerce, companies can reduce costs, improve data accuracy, streamline business processes, accelerate business cycles, and enhance customer service. • Changes in the distribution system E-commerce will give businesses more flexibility in managing the increasingly complex movement of products and information between businesses, their suppliers and customers. • Customer orientation E-commerce is a vital link in the support of logistics and transportation services for both internal and external customers. E-commerce will help companies deliver better services to their customers, accelerate the growth of the e-commerce initiatives that are critical to their business, and lower their operating costs. • Shipment tracking E-commerce will allow users to establish an account and obtain real-time information about cargo shipments

26. Business-Consumer Model of e-Commerce • Classified by market relationship • Business-to-Consumer (B2C) example: www.amazon.co.uk • Business-to-Business (B2B) Example:manufacturers and wholesalers or between retailers and wholesalers (Bajaj India to Uttara Motors) • Consumer-to-Consumer (C2C) Example: www.bikroy.com • Classified by technology used • Mobile commerce (M-commerce):-The use of wireless handheld devices such as cellular phones and laptops to conduct commercial transactions online.

27. Figure 1.8 Summary and examples of transaction alternatives between businesses, consumers and governmental organizations

28. Figure 1.9 Betfair peer-to-peer gambling exchange

29. Cost/efficiency and competitiveness drivers 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

30. Business Adoption of E-Commerce/Business • Drivers for Adoption-Profit generation and cost reduction • Tangible and Intangible benefits from e-business.

31. Figure 1.11 North West Supplies Ltd site (www.northwestsupplies.co.uk)Source: Opportunity Wales