MI S 205: E -BU SI N E SS

LECTURE 1:
INTRODUCTION TO E-BUSINESS AND E-
COMMERCE

Mahbubur Rahman
Lecturer

1
 INTENDED 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,
• 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.

2
 WHAT IS E-COMMERCE?
• e-Commerce:
• All electronically mediated information exchanges between an organization & its
external stakeholders.
• Roughly, refers to buying and selling using the Internet, however it is much more
than electronically mediated financial transaction between organizations and customers.
• Non-financial transactions like customer requests for further information would also be
considered to be part of e-commerce.
• Therefore, electronically transactions at any stage in supply chain, pre-&-post sales
should be considered as e-commerce.
• Types:
• Buy-side e-commerce:
 E-commerce transactions between a purchasing organizations & its suppliers.
 Procurement of resources from suppliers.
• Sell-side e-commerce:
 E-commerce transactions between a supplier organization & its customers.
 Selling products to an organization’s customers.
3
BUY-SIDE VS. SELL-SIDE E-COMMERCE

4
 SELL-SIDE E-COMMERCE: TYPES

1.Transactional e-commerce site

 Sales products.
 Also, provide product information to the customer.
 e.g., retail sites, travel sites, online banking.
2.Services-oriented relationship-building web sites
 Provide detailed information of products that can’t be sold online to stimulate
purchase and build relationship through website or e-newsletters.
3.Brand-building sites
 Support the brand by developing an online experience of the brand.
 e.g., Low-value, high-volume fast-moving consumer goods (FMCG brands).
4.Portal, publisher or media sites
 Provide information, news or entertainment about a range of topics.
 e.g., “Portals” and SNS-> gateway of information.
 Hybrid revenue model from advertising, commission-based sales, sale of 5

customer data.
 WHAT IS E-BUSINESS?

• e-Business:
 All electronically mediated information exchanges, both within an organization
and with external stakeholders supporting the range of business processes.
 The transformation of key business processes through the use of Internet
Technologies. (IBM 1997)
 “when a business has fully integrated Information & Communication Technologies
(ICTs) into its operations, potentially redesigning its business processes around
ICT or completely reinventing its business model….e-business, is understood to
be the integration of all these activities with the internal processes of a
business through ICT”.

• Information & Communication Technology (ICT)

 The software applications, computer hardware and networks used to create e-
business systems.
6
E-COMMERCE VS. E-BUSINESS

w is
v ie
hich listic?
W rea
r e
mo

7
 IT INFRASTRUCTURE OF E-BUSINESS

• The Internet
 Physical network that links computers across the globe.
 Infrastructure of network servers and communication links that are used to
hold and transport information between the client PCs and web servers.
 Network of computer networks.

• World Wide Web (WWW)

 Technique for publishing information on the Internet.
 Connect millions of webpages through web browsers.

• Wireless Communications
 Electronic transactions and communications conducted using mobile devices
such as laptops, PDAs, mobile phones.
8
 IT INFRASTRUCTURE OF E-BUSINESS (CONT’D)

• Intranet:
A private network within a single company using
Internet standards to enable employees to access
and share information using web publishing
technology.
• Extranet
Extended organization’s web services to some
others.
A service provided through Internet and web
technology delivered by extending an intranet
beyond a company to customers, suppliers and
collaboration.
A shared access.

9
 DIGITAL MARKETING

• Digital or electronic marketing refers to the management and execution

of marketing using electronic media such as the web, e-mail, interactive TV
and wireless media in conjunction with digital data about customers’
characteristics and behavior.
• Objectives
 Support marketing activities by achieving profitable acquisition and retention of
customers.
 Allow multi-channel (offline and online) buying process and customer lifecycle.

• Multichannel and Omni-channel marketing

• Customer communications and product distribution are supported by a combination of
digital and traditional channels at different points in the buying cycle. Omni-channel seeks
to provide the customer with a seamless shopping experience to the customer irrespective
of shopping online from a desktop or mobile device, by telephone or in a bricks and mortar
store.
• Customer Centric Marketing 10
REACHING AUDIENCE ONLINE

11
DIGITAL MEDIA CHANNELS

12
BUSINESS OR CONSUMER MODELS OF E-
COMMERCE TRANSACTIONS

13
 E-BUSINESS OPPORTUNITIES
• Introduced new business opportunities for small and large organizations to
compete in the global marketplace.
 Disruptive Internet Technologies: New Internet based communications approaches which
change the way in which information about products is exchanged, which impact the basis for
competition in a marketplace.
• How?
• Reach:
 The potential no. of customers a business can interact with.
 The no. of different categories & products a consumer interface can cover.
• Richness
 Characteristics of the information itself.
 Detailed information about products, prices and availability.
 Also enables more interactivity and customization to engage customer & to provide more up-to-date
information.
• Affiliation
 Effectiveness of links with partners, or formation of partnership for new diverse information services.
14
 DRIVERS OF BUSINESS INTERNET ADOPTION

•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. 15
 BENEFITS OF BUSINESS INTERNET ADOPTION

Tangible benefits Intangible benefits

• Increased sales from new sales leads giving rise to
increased revenue from:
 new customers, new markets
 existing customers (repeat-selling)
 existing customers (cross-selling).
• Marketing cost reductions from:
 reduced time in customer service
 online sales
 reduced printing and distribution costs of marketing
communications.
• Supply-chain cost reductions from:
 reduced levels of inventory
 increased competition from suppliers
 shorter cycle time in ordering.
• Administrative cost reductions from more efficient
routine business processes such as recruitment, invoice
payment and holiday authorization.
• Corporate image communication
• Enhancement of brand
• More rapid, more responsive marketing
communications including PR
• Faster product development lifecycle enabling faster
response to market needs
• Improved customer service
• Learning for the future
• Meeting customer expectations to have a web site
• Identifying new partners, supporting existing partners
better
• Better management of marketing information and
customer information
• Feedback from customers on products

16
HOW TO EVALUATE YOUR COMPANY’S E-
BUSINESS CAPABILITIES?

• Stage Model:
• Used to review how advanced a
company is in its use of information
and communications technology (ICT)
to support different processes.

• Brochureware:
• Websites or web pages invented by
converting all paper-based printed
promotional/advertising materials into
an Internet format.

• Site Optimization:
• Process of maximizing the number of
visitors to a website by ensuring that
intended visitors conveniently find the
site by a search engine.

17
DRIVERS OF CONSUMER INTERNET ADOPTION

•Content:
Detailed and in-depth information to stimulate buying decision.
•Customization:
Provide customize or personalized products/services through e-mail alerts or
recommender systems.
•Community:
Discuss anything through forum like blogs, chat-rooms.
•Convenience:
•Choice:
e.g., Multi-channel marketing, Tesco.com
•Cost reduction:
reduction of transaction cost

18
BARRIERS TO CONSUMER INTERNET
ADOPTION

•No perceived benefit

•Lack of trust
•Security problems
•Lack of skills
•Cost

19
 Question
Please
?
Acknowledgement:
“E-Business and E-Commerce Management: Strategy, Implementation and Practice” by Dave Chaffey
20