Lecture 1 – Introduction to eCommerce eBusiness

eBusiness

Lecture 1 - Introduction to eCommerce

Introduction to eCommerce Lecture 1 - 1.2

Introduction to Lecture 1
Topics covered:
• Categories of eCommerce
• Business models
• Advantages and disadvantages
• Identifying eCommerce opportunities
• International issues

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Definition of eCommerce
“All business activities that use internet
technologies, the world wide web, and
other technologies
g such as wireless
transmissions on mobile phones or a
personal digital assistant.”

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Lecture 1 – Introduction to eCommerce eBusiness

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Main Elements of
eCommerce

Schneider, G. (2007) Electronic Commerce 7th Ed, p.6

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Categories of eCommerce
Business-to- Businesses sell products or
consumer (B2C) services to individual consumers
Business-to-business Businesses sell products or
(B2B) services to other businesses
Processes supporting Businesses maintain, use and
buying and selling share information
Consumer-to- Participants in online markets
consumer (C2C) buying and selling to each other
Business-to- Businesses selling goods or
government (B2G) services to govt. agencies

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Introduction to eCommerce Lecture 1 - 1.6

Volumes of Online Sales

B2C Sales B2B Sales
$ Billions $ Billions

2007 240 6800

2006 190 5300
2005 150 4100
2004 130 2800

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Merchandising
• Creating a store environment that
convinces the customer to buy
• Combination of store design, layout and
product knowledge
• Identifying and exploiting customer needs

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Suitability to eCommerce
Well suited to eCommerce and
eCommerce Traditional Commerce
Books and CDs Automobiles

Online delivery of software Online banking

Online shipment tracking Real estate sale and

purchase
Investment and insurance High value jewellery and
products antiques

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Advantages of eCommerce
• Can increase sales and decrease costs
• Advertising can get promotional message
out to a worldwide audience
• Creates virtual communities
• Increases purchasing opportunities for
buyers
• Digital products can be delivered directly

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Disadvantages of
eCommerce
• Some products not suited to eCommerce
• Critical mass of potential buyers required
with internet access
• Return on Investment (ROI) can be difficult
to calculate
• Problems in integrating software
• Cultural and legal obstacles

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Transaction Costs

“Total of all costs that a buyer and seller

incur as they gather information and
negotiate a purchase-sale transaction.”

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Identifying eCommerce
Opportunities
• Focus on specific business processes
• Break the business down into series of
value adding activities
• Analyse business activities as a sequence
of activities that create value

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Example of Value Chain

Schneider, G. (2007) Electronic Commerce 7th Ed, p.27

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SWOT Analysis
Strengths Weaknesses
• What does the company • What does the company
do well? do poorly?
• Is the company strong in •What problems could be
its market? avoided?
Opportunities Threats
• Do new markets exist for • What are competitors
the company? doing well?
• Can new technologies be • Are there changes in the
exploited? business environment?

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Introduction to eCommerce Lecture 1 - 1.15

International Issues of
eCommerce
• Trust
• Language
• Culture
• Government control
• Infrastructure

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Summary
• Variety of eCommerce business models – the most
common being B2C and B2B
• Not all products and services are suitable for
eCommerce
• Need to analyse business activities and processes
to identify opportunities
• Value chains and SWOT analysis are useful tools
• Range of international issues to consider

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Topic 1 – Introduction to eCommerce

Any Questions?

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