Focus

• 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.
Timeline of websites indicating innovation in business
model or marketing communication approach
Year Founded Company/Site Category of innovation and Business Model

1994 Amazon Retailer

1995 (March) Yahoo! Directory and Portal
1995 (September) eBay Online Auction
1995 (December) AltaVista (altavista.com) Search Engine
1996 Hotmail (Hotmail.com) Web based Email, Viral Marketing (Using e-mail signature
to promote service)
Purchased by Microsoft in 2003
1998 Google Search Engine
1999 Blogger (blogger.com) Blog publishing platform (Purchased by Google in 2003
2004 Facebook Social Network applications and groups
(facebook.com)
2005 YouTube (youtube.com) Video Sharing and rating
The Impact of the Internet Technology on
Business
• During the same period managers at established businesses have had to
determine how to apply new electronic communication technologies to
transform their organisations.

• Innovation in e-business is relentless, with the continuous introduction of

new technologies, new business models and new communication
approaches.

• To review technologies and communication approaches for their potential

to make their business more competitive and also manage ongoing risks
such as security and performance.
• Organisation’s capability to manage technology-enabled change is the
essence of successfully managing e-business.

• Approaches managers can use to assess the relevance of different e-

business opportunities and then devise and implement strategies to
exploit the opportunities.

• How to manage more practical risks such as delivering a satisfactory

service quality, maintaining customer privacy and managing security.
Figure 1.2 The distinction between buy-side and sell-side e-commerce
Figure 1.4 The relationship between intranets, extranets and the Internet
Different type of Sell-side e-commerce
• Not every product is suitable for sale online, so the way in which a
website is used to market product will vary. The five main type of
online presence for sell-side e-commerce, each have different
objectives and are appropriate for different markets.

1. Transactional e-commerce sites

2. Service-oriented relationship-building websites
3. Brand-building sites
4. Portal, publisher or media sites
5. Social Network
Figure 1.6 Online and offline communications techniques for e-commerce
Search Engine Marketing
• Placing message on a search engine to encourage clickthrough to a
website when the user types a specific keyword phrase.

• Paid Placement or sponsored links using pay-per-click

• Organic listing using search engine optimization (SEO)
Online PR
• Maximizing favourable mention and interaction with company’s
brands, products or website using third party sites such as social
network sites or blogs that are likely to be visited by your target
audience.
Online Partnerships
• Creating and managing long-term arrangements to promote your
online services on third party websites or through e-mail
communication.

• Examples:
• Affiliate Marketing
• Aggregator such as price comparison sites
Interactive Advertising
• Use of online ads such as banners and rich media ads to achieve
brand awareness and encourage clickthrough to a target site.
Opt-in e-mail Marketing
• Renting a e-mail list or placing ads in third-party e-newsletter or the
use of an in-house list for customer activation and retention.
Social Media Marketing
• It involves encouraging customer communication on a company’s
own site, or a social presence such as Facebook or Twitter, or in
specialist publisher site, blogs and forums.

• It is important to participate in customer conservation.

• Aimed at learning more about customers and providing support, so

improving the way a company is perceived.
Figure 1.9 Evolution of web technologies
Source: Adapted from Spivack, 2009.
Business or Consumer Models of e-commerce
transactions
• It is common to describe e-commerce transaction between an
organization and its stakeholder according to whether they are
primarily with consumer (business to consumer – B2C) or other
businesses (business-to-business –B2B).
 Summary and examples of transaction alternatives between businesses,
Figure 1.10
consumers and governmental organizations
E-Government
• It refers to the application of e-commerce technologies to
government and public services.

• It has similar range of applications as for e-business:

• Citizen
• Suppliers
• Internal Communication
Mobile Service Adoption
• Mobile services adoption is increasing rapidly as users purchase the
latest models.
• The table shows how more advanced ‘Smartphone’ devices with
improved functionality and download speed encourage adoption of
the services.
 Internet usage habits among mobile phone subscribers, EU-5 3-month
Table 1.2
average ending March 2010, age 13+
Location Based Mobile Service - Qype
• Qype (www.qype.com) , founded in 2006, is Europe’s largest site for user
generated reviews and recommendations of places, events and
experiences.

• User can read and write view about restaurant, shop, service and
experience.

• Qype App on mobile

• Available in seven languages, pan-European local review with 2.2 million

reviews covering 166,000 cities worldwide.
Figure 1.7 Qype
Source: www.qype.com
 BlendTec uses rich
media and viral
marketing to grow
awareness and sales

Figure 1.8 Blendtec viral campaign micro-site

Source: www.willitblend.com
E-Business Opportunities
• E-business has introduced new opportunities for small or large
organisations to compete in global market.

• One of the biggest changes introduced by electronic communication

is how approaches to transmitting and transforming information can
be used for competitive advantage.
E-Business Opportunities
• Three characteristics of information when combined with internet technologies
can have a major impact on marketplace.

• 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.
• Through providing high quality online services, organization can build
lasting relationship with their stakeholders.

• “Soft-Lock-in”
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:

“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).
Internet Risks – What Can Go Wrong with a
Transactional Site?
Business Adoption of Digital Technologies for
E-Commerce and E-Business
• As managers we need to assess the impact of e-commerce and e-
business on our market place and organisation. Some questions are:

• What are the drivers of changed consumer and business behaviours.

• How we should respond?
• How much do we invest?
• What are our priorities and how quickly we need to act?

• These are essential part of formulating e-business and e-marketing

strategy
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.
Drivers and barriers to retailer’s adoption of internet
technologies to determine the most important factor
for different websites.

• There are different type of websites:

• Static Brochureware
• Active Website – containing product information
• Transactional site where items can be purchased
• Two most important factors which correlate with adoption are:

• Internet target segment – customers in their market are typical

adopters of the internet

• Internet Strategy – defined Internet strategy is in place.

Figure 1.13 Barriers to development of online technologies
Source: DTI, 2002, from Business in the Information Age, International Benchmarking Study 2002 (2002), Crown Copyright material is reproduced with permission under the terms of
the Click-Use Licence
Evaluating an organisation’s e-business
capabilities
Figure 1.14 A simple stage model for buy-side and sell-side e-commerce
Figure 1.15 Variation in different online activities by gender
Source: UK National Statistics (2006) Individuals accessing the Internet – Report from the UK National Statistics Omnibus Survey. Published online at www.statistics.gov.uk
Barrier to Consumer Internet Adoption
• No Perceived benefit
• Lack of Trust
• Security problems
• Lack of skills
• Cost