19 augustus 2003augustus 2003

OHT 1.1

Chapter 1

Introduction to e-business and e-commerce

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2Learning 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.

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3The 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)

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4The impact on one industry – banking (exercise)

Metric May 1995 Dec. 2002

Financial institutions with Web banking (WW) 1 6,000

Financial institutions with Web sites (WW) 50 14,000

Total online banking households (WW) 5 million 100 million

Total online banking households (US) 300,000 28 million

Monthly bank and credit card Web traffic (US) 100,000 50 million

Monthly credit apps submitted via Web (US) 0 1.5 million

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

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5

UK adults online?

31% 41% 51% 61%

16-24 year olds online?

50% 60% 80% 90%

Percentage bought groceries online?

6% 16% 26% 36%

Source: www.statistics.gov.uk Oct 2002

Online UK

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6The Internet’s impact on you

How many of you have purchased something on the Internet in the last 6 months?

– What is the number of transactions?– Total value?

How many times have you used the Internet as an information source, before buying offline?

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7Popularity of online purchases

Source: The Internet Monitor, BMRB, November 2001 (www.bmrb.co.uk)

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8Definitions

You are asked to distinguish between e-commerce and e-business at a job interview.

Write down your definitions.

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9E-commerce defined

‘All electronically mediated information exchanges between an organization and its external stakeholders’

Examples:– Buying books online (transactional)– Selecting a car online (informational)– Asking a customer service query, e.g. www.easyJet.com

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10E-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)

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11The distinction between buy-side and sell-side e-commerce

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

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12Recap – which is correct?

Figure 1.2 Three definitions of the relationship between e-commerce and e-business

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13Activity – 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

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14

Driver Marketing approach

1 Reduced costs Examples?

2 Increase reach to new markets Examples?

3 Customer demand Data on those researching and buying online

4 Competitive threats Ditto

5

6

Business drivers to going online

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15

Barrier Marketing approach

1 Security Reassurance, what can be done about this?

2 No need Illustrate with data of businesses researching and buying online

3 Costs Illustrate low cost options

4 Skills Summarise skills alternatives

5

6

Business barriers to going online

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16Drivers for e-commerce

Figure 1.6 Attitudes to benefits of online technologies

Source: DTI (2002)

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17Barriers to e-commerce

Figure 1.7 Barriers to development of online technologies

Source: DTI (2002)

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18B2B, B2C

Business to Business– example

Business to Consumer– example

Differences? Why differentiate? Two examples, see next sheets

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19Intro 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)

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20Intro 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).

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21Activity - 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

Indicate with +/- which benefits are more/less important for B2B and B2C. See website Chaffey for indications answers