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Chapter 13 Entrepreneurship by Zubair A Khan.

Chapter 13 Entrepreneurship by Zubair A Khan.

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Published by Zubair A Khan
Chapter 13 Entrepreneurship by Zubair A Khan.
Chapter 13 Entrepreneurship by Zubair A Khan.

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Published by: Zubair A Khan on Mar 27, 2010
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12/19/2012

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Chapter 13 - E-Commerce and Entrepreneurship
If you don’t believe deeply, wholly, and viscerally that the ‘Net is going to change your business,you’re going to lose. And if you don’t understand the advantages of starting early and learningfast, you’re going to lose.--Gary Hamel and Jeff Sampler In the mental geography of e-commerce, distance has been eliminated. There is only oneeconomy and one market.--Peter Drucker 
Learning Objectives
1.
Describe the benefits of selling on the World Wide Web.
2.
Understand the factors an entrepreneur should consider before launching into e-commerce.
3.
Explain the twelve myths of e-commerce and how to avoid falling victim to them.
4.
Discuss the five basic approaches available to entrepreneurs wanting to launch an e-commerce effort.
5.
Explain the basic strategies entrepreneurs should follow to achieve success in their e-commerce efforts.
6.
Learn the techniques of designing a killer Web site.
7.
Explain how companies track the results from their Web sites.
8.
Describe how e-businesses ensure the privacy and security of the information they collectand store from the Web.
Instructor’s Outline
I.
Introduction
A.
E-commerce is creating a new economy, one that is connecting producers, sellers, andcustomers via technology in ways that have never been possible before.
1.
The result is a whole new set of companies built on business models that areturning traditional methods of commerce and industry on their heads.
2.
The most successful companies are embracing the Internet, not as merely another advertising medium or marketing tool but as a mechanism for transforming their companies and changing
everything 
about the way they do business.
3.
As these companies discover new, innovative ways to use the Internet, computers,and communications technology to connect with their suppliers and to serve their customers better, they are creating a new industrial order.
4.
Perhaps the most visible changes are occurring in the world of retailing.
a)
Companies can take orders at the speed of light from anywhere in the worldand at any time of day.
 b)
The Internet enables companies to collect more information on customers’shopping and buying habits than any other medium in history.
(1)
This ability means that companies can focus their marketing efforts likenever before—for instance selling garden supplies to customers who are
8
 
9
Section IV Small Business Marketing Strategies
most likely to buy them and not wasting resources trying to sell to thosewho have no interest in gardening.
(2)
The capacity to track customers’ Web-based shopping habits allowscompanies to personalize their approaches to marketing and to realize the benefits of individualized (or one-to-one) marketing.
c)
Entrepreneurs who set up shop on the Web will likely never meet their customers face-to-face or even talk to them.
d)
Making a Web-based marketing approach succeed requires a business to strikea balance, creating an e-commerce strategy that capitalizes on the strengths of the Web while meeting customers’ expectations of convenience and service.
5.
In this fast-paced world of e-commerce, size no longer matters as much as speedand flexibility do.
a)
One of the Web’s greatest strengths is its interactive nature, the ability to provide companies with instantaneous customer feedback, giving them theopportunity to learn and to make necessary adjustments.
 b)
Businesses, whatever their size, that are willing to experiment with differentapproaches to reaching customers and are quick to learn and adapt will growand prosper; those that cannot will fall by the wayside.
6.
High-volume, low-margin, commodity products are best suited for selling on theWeb.
a)
Indeed, the items purchased most often online are travel services, computer hardware, clothing, books, and consumer electronics.
 b)
However, companies can—and do—sell practically anything over the Web,from antiques and pharmaceuticals to popcorn and drug-free urine.
c)
The most commonly cited reasons among owners of small and mid-sizedcompanies for taking their companies to the Web are:
(1)
to reach new customers
(2)
to sell goods and services
(3)
to disseminate information more quickly
(4)
to keep up with competitors
(5)
to reach global markets
7.
The number of Internet users worldwide now stands at more than 500 million, upfrom 147 million at the end of 1998.
a)
See Figure 13.1.
 b)
The Web represents a tremendous opportunity that businesses simply cannotafford to ignore.Benefits of Selling on the Web
B.
Although a Web-based sales strategy does not guarantee success, the companies thathave pioneered Web-based selling have realized many benefits, including the following:
1.
The opportunity to increase revenues
2.
The ability to expand their reach into global markets
3.
The ability to remain open 24 hours a day, seven days a week 
4.
The capacity to use the Web’s interactive nature to enhance customer service
5.
The power to educate and to inform
6.
The ability to lower the cost of doing business
 
Chapter 13 - E-Commerce and Entrepreneurship
10
7.
The ability to spot new business opportunities and to capitalize on them
8.
The power to track sales resultsFactors to Consider before Launching into E-Commerce
C.
Overview
1.
Despite the many benefits the Web offers, not every small business owner isready to embrace e-commerce.
a)
Recent surveys by SuperPages.com and the National Federation of Independent Businesses found that only 27 percent of U.S. companies withfewer than 50 employees have Web sites and that only seven percent of smallcompanies actually sell merchandise online.
 b)
Although small companies account for more than half of all retail sales in theUnited States, they generate only 6 percent of on-line retail sales.
c)
For many entrepreneurs, the key barrier is not knowing where or how to startan e-commerce effort, while for others cost concerns are a major issue.
(1)
Other roadblocks include the fear that customers will not use the Web siteand the problems associated with ensuring on-line security.
2.
Whatever their size, traditional companies must realize that selling their productsand services on the Web is no longer a luxury.
a)
Business owners who are not at least considering creating a Web presence or integrating the Web creatively into their operations are putting their companies at risk.
 b)
However, before launching an e-commerce effort, business owners shouldconsider the following important issues:
(1)
How a company exploits the Web’s interconnectivity and theopportunities it creates to transform relationships with its suppliers andvendors, its customers, and other external stakeholders is crucial to itssuccess.
(2)
Web success requires a company to develop a plan for integrating the Webinto its overall strategy. The plan should address issues such as site designand maintenance, creating and managing a brand name, marketing and promotional strategies, sales, and customer service.
(3)
Developing deep, lasting relationships with customers takes on evengreater importance on the Web.
(4)
Creating a meaningful presence on the Web requires an ongoinginvestment of resources—time, money, energy, and talent.
(5)
Measuring the success of its Web-based sales effort is essential toremaining relevant to customers whose tastes, needs, and preferences arealways changing.Doing business on the Web takes more time and energy than many entrepreneurs think.Answering the following questions will help entrepreneurs make sure they are ready to do business on the Web and avoid unpleasant surprises in their e-commerce efforts:
(6)
What exactly do you expect a Web site to do for your company?
(a)
Will it provide information only, reach new customers, increase salesto existing customers, improve communication with customers,

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