chapter 1

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009

Slide 1.1

Chapter 1

Introduction to e-business and e-commerce


Slide 1.2

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.


Slide 1.3

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?


Slide 1.4

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


Slide 1.5

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


Slide 1.6

E-business innovation

• P. 5, Activity 1.1• Discussion

– Which company / website impacted on Internet or the web?

– How do we measure their success?– What made them successful?


Slide 1.7

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)


Slide 1.8

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


Slide 1.9

Internet risks – what can go wrong with a transactional site?

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Slide 1.10

E-consultancy Interview

• How does HP drive traffic to their site?

• How do they communicate with partners?

• What do they syndicate?

• What’s driving their actions?

• What’s the benefit they can get by doing so?

• How do they manage user reviews?

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Slide 1.11

What is e-commerce and e-business?

• You are attending a role in the e-business team of a global bank

• You anticipate you may be asked the distinction between e-commerce ande-business.

• Write down a definition for each

• E-commerce:–

• E-business:–


Slide 1.12


• 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


Slide 1.13


• 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)


Slide 1.14


• P. 10, Activity 1.2

• Use Google, Yahoo, and BING to do the search and report the number of hits


Slide 1.15

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


Slide 1.16

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


Slide 1.17


Activity 1.3, P. 11 – Discussion—Question 1

Intranet vs. Extranet


Slide 1.18

Intranet vs. Extranet

• P. 11, Activity 1.3

• Discussion—Question 1


Slide 1.19

Figure 1.4 The relationship between intranets, extranets and the Internet


Slide 1.20

Why Study E-commerce?

• E-commerce technology is different, more powerful than previous technologies

• E-commerce bringing fundamental changes to commerce

• Traditional commerce:– Passive consumer– Sales-force driven– Fixed prices– Information asymmetry


Slide 1.21

Unique Features of E-commerce Technology

1. Ubiquity

2. Global reach

3. Universal standards

4. Information richness

5. Interactivity

6. Information density

7. Personalization/customization

8. Social technology


Slide 1.22

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


Slide 1.23

The Growth of B2C E-commerce

SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b;


Slide 1.24

The Growth of B2B E-commerce

SOURCES: U.S. Census Bureau, 2009a; authors’ estimates.


Slide 1.25

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


Slide 1.26

Types of E-commerce

• Selling Side

– Transaction e-commerce sites

– Service-oriented relationship-building site

– Brand-building sites

– Portal, publisher or media sites


Slide 1.27

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

• ………..


Slide 1.28

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


Slide 1.29

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


Slide 1.30

Web 2.0 and Beyond

• Web 2.0

– Features-p. 24

– Web 2 examples

• Web 3.0 Features-pp. 24-25 Box 1.1

– Research the web to discover what Web 3.0 technology and features have been used by which company


Slide 1.31

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


Slide 1.32

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

• How e-Commerce impact SCM?


Slide 1.33

Business-Consumer Model of e-Commerce

• P. 26, Fig. 1.8

• Classified by market relationship

– Business-to-Consumer (B2C)

– Business-to-Business (B2B)

– Consumer-to-Consumer (C2C)

• Classified by technology used

– Peer-to-Peer (P2P), e.g., BitTorrent and Napster

– Mobile commerce (M-commerce)


Slide 1.34

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


Slide 1.35

Mini Case Study

P. 27, Betfair

– How does Betfair gains profit

– What’s the challenges they may face


Slide 1.36

Figure 1.9 Betfair peer-to-peer gambling exchange


Slide 1.37

E-government

What is?

What are the benefits?


Slide 1.38

E-Business Opportunities

what goals does a business can achieve through e-business?


Slide 1.39

Business Adoption of E-Commerce/Business

• Activity: You are in a team of advisers at a local business link

• 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


Slide 1.40

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


Slide 1.41

Business Adoption of E-Commerce/Business

• Drivers for Adoption-Profit generation and cost reduction

• Tangible and Intangible benefits from e-business.-ref. p.31, table 1.3


Slide 1.42

Figure 1.10 Usage of different e-business services in European countriesSource: European Commission, 2008


Slide 1.43

Case Study

• P. 33, Case Study 1.2 North West Supplies

• Read the case and discuss the questions on p. 35


Slide 1.44

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


Slide 1.45

E-business Risks and Barriers for Adoption

• Strategy level issues

• Practical risks

– Ref. p. 35


Slide 1.46

Figure 1.12 Barriers to development of online technologiesSource: DTI (2002)


Slide 1.47

Potential Limitations on B2C E-commerce*

• Expensive technology

• Sophisticated skill set

• Persistent cultural attraction of physical markets and traditional shopping experiences

• Persistent global inequality limiting access to telephones and computers

• Saturation and ceiling effects


Slide 1.48

Evaluating an Organization’s E-business Capability

• Is any company ready for e-commerce?

• Stage model of e-commerce

– –Ref. p. 37 Fig. 1.13


Slide 1.49

Figure 1.13 A simple stage model for buy-side and sell-side e-commerce


Slide 1.50

Drivers of consumer adoption

Driver Marketing approach

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Slide 1.51

Barriers to consumer adoption

Barrier Marketing approach

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Slide 1.52

Figure 1.14 Variation in different online activities by genderSource: UK National Statistics (2006) Individuals accessing the Internet – Report from the UK National Statistics Omnibus Survey . Published online at www.statistics.gov.uk


Slide 1.53

Management Responses to E-Commerce

• This will be addressed in the part 2 of the book


Slide 1.54

Case Study

• Case Study 1.3. eBay

• Read the case and discuss the question on page 46.


Slide 1.55

Next Class

• McKinsey 7S framework was referenced but not introduced in detail. Research the Internet to find some background information about it and bring back your discovery to next class.

• Preview Chapters 2

• Read the Real-world E-Business Experience Interview on pp.53-57.

• Visit the www.morethan .com web site to get a sense on their business


Slide 1.56

Next Class

• Be prepared to discuss these questions:

– What type of business does MoreTh>n do?

– What key issues has the interview covered?

– Why people would go online than offline according to the interview?

– Do you see a similar business model in Canada?

chapter 1

Documents

marketing

dave chaffey

businessdave

commercedave

4th edition

census bureau

case study

case study