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E-Commerce

E-Commerce. What is E-Commerce?. considered the buying and selling of products over the internet Examples: Amazon- sell CDs, videos and others, and acts as a “host for other suppliers”

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E-Commerce

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  1. E-Commerce

  2. What is E-Commerce? • considered the buying and selling of products over the internet Examples: • Amazon- sell CDs, videos and others, and acts as a “host for other suppliers” • Lastminute.com- founded an idea in catering people who’d like to do something at the last minute (ex. Buy flight tickets) • Boo.com- sell sports goods

  3. Products sold on Internet

  4. Key issues of E-commerce • Physical delivery of goods • The future of services- real growth in consumer e-commerce is going to be in services (ex. Travel, hotel bookings) • The frustration of using e-commerce sites • Business-to-business e-commerce- happens when suppliers competitively bid for orders

  5. Question • What are the advantages of E-commerce? • What are the disadvantages?

  6. Group Discussion Discuss these questions: • What goods or services do you buy over the Internet? What do you prefer not to buy? • What problems have you had buying on the Internet? • What are the kinds of products or services sold on the Net? • Are there any things which could not or should not be sold on the Net? • What are the risks of e-commerce for a.) the companies involved b.) their customers

  7. Group Discussion Discuss these questions: • Which search engines do you use? • What makes a website easy or difficult to use? Why? • What do you like about the sites you visit regularly? • How much time do you spend browsing on the Net? • How can businesses make sure their websites receive more hits than their competitors?

  8. CASE STUDY: KGV Europe

  9. KGV Background • Is a traditional high-street music retailer • Based in Amsterdam, and has 12 stores in Netherlands. Expanded into the rest of Europe and owns 65 stores • Problem: • Profits have steadily fallen, from $450 million to $290 million • Sales have risen by 8% only because of excessive expenditure on advertising and promotions

  10. Problem • There was fierce competition • Narrow product range • Lack of innovation • Not exploiting opportunities offered by selling through Internet

  11. Market Study Study made by KGV produced the ff. findings: • Estimated in 5 years, 70% of music products will be bought via Internet • 65% of consumers under 30y.o will shop via Internet • KGV’s customers would like stores to provide a wider product range • Average spending per month in KGV’s medium-sized stores is highest among 41-60 years old group. • Spending on music products by the over 60 age group will increase significantly in the next 10 years in Europe. • The various age groups have clear preferences as to the type of music they enjoy and purchase.

  12. TASK – Future Strategy • Should KGV keep some of their stores but sell at least 50% of their goods via the Internet? • Should they close all their stores and offer a total online service? If so:a. what are the risks involved? B) how would cost of business change? c.) what organizational changes would the company have to make? • Should KGV stay as it is, but follow Hanna’s advice: a. outsource advertising and promotionb. introduce new products c. target new segments • What are the consequences of the chosen strategy? How can problems be minimized?

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