M I S 2 0 5 : E- B U S I N E SS

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

Mahbubur Rahman
Lecturer

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 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.

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 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.

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 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. 4
BUY-SIDE VS. SELL-SIDE E-COMMERCE

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 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 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 customer data.
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 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.
 “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.

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E-COMMERCE VS. E-BUSINESS

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 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.

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 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.

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 ELECTRONIC COMMUNICATIONS ON BUSINESS

• Popularity of social networks (e.g., Facebook, Twitter), virtual worlds (e.g., Second life), and blogs.
• Rich media such as online video & interactive applications.
• Proliferation and growth of mobile commerce enabled by ubiquitous technologies.
• Location-based tracking of goods and inventory services.
• Terminology:
• Social networks: A site that facilitates peer-to-peer communication within a group or between individuals through developing
UGC or exchanging messages & comments.
• Virtual worlds: An online environment simulates interaction between online characters called Avatars. e.g., MMOGs.
• Blog: Personal online diary, journal or news compiled by one person, an internal team or external guest authors.
• Rich media: Digital ads that includes advanced features like video, audio, animation that encourages viewers to interact and
engage customers with the content.
• Mobile commerce: Electronic transactions and communication conducted using mobile devices.
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 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.

• Strategies
 Identify the importance of digital technologies & developing a planned approach to reach and migrate customers to online
services through e-communications and traditional communications.
 Retention is achieved through improving customer knowledge (of their profiles, behavior, value & loyalty drivers).
 Deliver integrated, targeted communications and online services that match their individuals needs .
 Support a combination of digital and traditional channels of marketing.
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BUSINESS OR CONSUMER MODELS OF E-
COMMERCE TRANSACTIONS

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 CLASSIFICATION OF E-BUSINESS MODELS
1. B2C
i. e-tailer: Amazon, Dell.com, etc. 1. B2B
ii. Community Provider: iVillage, Babycenter.com i. Net Marketplace
iii. Content Provider: WSJ.com, CNN.com, ESPN.com a. E-distributor: Partstore.com
iv. Portal: Google, Yahoo, MSN b. E-Procurement: Ariba, PerfectCommerce
v. Transaction Broker: Expedia, Tripadvisor c. Exchange: OceanConnect
vi. Market Creator: Amazon.com d. Industry Consortium: Exostar
vii. Service Provider: VisaNow.com, RockeLawyer ii. Private Industrial Network: Walmart, Procter & Gamble
2. C2C: eBay,
3. Peer-to-Peer: Betfair.com
4. M-Commerce:

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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.

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 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

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RISKS AND BARRIERS OF E-BUSINESS
ADOPTION ( R EF. D I T, 2 0 0 2 )

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

• Stage Model:
• Review how advanced a company is in
its use of ICT to support different
business 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.

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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

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BARRIERS TO CONSUMER INTERNET
ADOPTION

•No perceived benefit

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

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MCKINSEY 7S FRAMEWORK

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 STRATEGIES OF E-BUSINESS AND E-
COMMERCE MANAGEMENT
Element Capability
Strategy Contribution of EB & EC in
influencing & supporting org’s
strategy.
Structure Modification of organizational
structure to support EB.
Systems Development of specific
processes, procedures and
Information Systems to support
EB.
Staff Categorizing of the staffs based
on experience and expertise.
Style Integration of supervisor’s roles
in achieving org’s goals, and
values, culture and norms of the
organization.
Skills Distinctive capabilities of key
staffs plus specific skill-sets of
team members.
Superordin Guiding concepts of the
ate goals organization which are also part
of shared values and culture.
Key Issue
• Gaining appropriate budget and demonstrating value &
ROI from budget.
• Techniques for aligning EC strategy with organizational
and marketing strategy.
• Integration of EC teams with other teams.
• Insourcing Vs. Outsourcing.
• Managing/sharing customer & supply chain information.
• Integration of the web into marketing campaign planning.
• Staff recruitment and retention.
• Staff development, training and virtual working.
• Role of EB team in influencing strategy- (dynamic,
influential or conservative).
• Staff skills in specific areas of EB.
• Improving the perception of the importance and
effectiveness of the digital marketing team amongst senior
managers and staff it works with (marketing generalists and
IT)/
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 Question
Please
?
Acknowledgement:
“E-Business and E-Commerce Management: Strategy, Implementation and Practice” by Dave Chaffey
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