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Chapter 1 Introduction to e-business and e-commerce

Chapter 1 Introduction to e-business and e-commerce. Learning objectives. Define the meaning and scope of e-business and e-commerce and their different elements; Summarise the main reasons for adoption of e-commerce and e-business and barriers that may restrict adoption;

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Chapter 1 Introduction to e-business and e-commerce

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

  2. Learning objectives • Define the meaning and scope of e-business and e-commerce and their different elements; • Summarise the main reasons for adoption of e-commerce and e-business and barriers that may restrict adoption; • Use resources to define the extent of adoption of the Internet as a communications medium for consumers and businesses; • Outline the business challenges of introducing e-business and e-commerce to an organization.

  3. Issues for managers • How do we explain the scope and implications of e-business and e-commerce to staff? • What are the full-range of benefits of introducing e-business and what are the risks? • How great will the impact of the Internet be on our business? What are the current and predicted adoption levels? How do we assess the validity of forecasts?

  4. The impact of 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)

  5. The impact on one industry - banking Table 1.1 7.5 years of web banking. Source: Online banking report, Number 89, December 10, 2002. Source: Online Banking Report estimates, +/- 25%, 11/02

  6. The Internet’s impact on you • How many of you have purchased something on the Internet in the last 6 months? • How many times have you used the Internet as an information source, before buying offline?

  7. Popularity of online purchases Source: The Internet Monitor, BMRB, November 2001 (www.bmrb.co.uk)

  8. Definitions • You are asked to distinguish between e-commerce and e-business at a job interview. • Write down your definitions. • Use examples to illustrate your points.

  9. E-commerce defined • ‘All electronically mediated information exchanges between an organization and its external stakeholders’ • Examples: • Buying books online (transactional) • Selecting a car online (informational) • Interacting with brand online (relationship building / experiential, e.g. www.tango.com) • Asking a customer service query, e.g. www.easyJet.com

  10. E-business defined • All electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business processes • Examples: • Purchasing from suppliers (e-procurement) • A company intranet (defined in Ch 3) • Supplying partners with information through an extranet (see Ch 3)

  11. The distinction between buy-side and sell-side e-commerce Figure 1.1The distinction between buy-side and sell-side e-commerce

  12. Recap – which is correct? Figure 1.2Three definitions of the relationship between e-commerce and e-business

  13. Activity – drivers and barriers to adoption • 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

  14. Business drivers to going online

  15. Business barriers to going online

  16. Drivers for e-commerce Figure 1.6Attitudes to benefits of online technologies Source: DTI (2002)

  17. Barriers to e-commerce Figure 1.7Barriers to development of online technologies Source: DTI (2002)

  18. Intro to B2B Company • 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)

  19. Intro to B2C Company • 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).

  20. Activity - Benefits to B2B and B2C Company • See activity 1.6 • 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

  21. Activity – Changes required by e-commerce • What changes to the overall business would be required by e-commerce for the B2C and B2B Company?

  22. Answer – the 7 Ss Figure 1.9The McKinsey 7S framework

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