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Define and Explain the Meaning of e-Business. Business can be define as the organized effort of individuals to produce and sell, for profit, products, services that satisfy societys need. E-business(Electronic Business) can be define as the organized effort of individuals to produce and sell, for profit, products, services that satisfy societys needs through the facilities available on the internet
84mn 140mn*
Challenges
Identifying genuine opportunities
Wrong to assume benefits are inevitable Process of understanding nature and consequences is complex
24/7 access to purchasing and other customer related services Providing service to globally distributed customers Providing information to existing and potential customers Ex AOL, Amazon.com,ebay Provides customers a value added services
Revenue streams (Each revenue flowing into the firm) Expense reduction
source
of
Question for Discussion: How can a firm use the Internet to increase revenues and reduce expenses?
Defining e-Commerce
e-Commerce is a part of e-business; the term refers only to the activities involved in buying and selling online.
These activities may include identifying suppliers, selecting products or services, making purchase commitments, completing financial transactions, and obtaining service.
E-commerce was a term originally designed to describe electronic data interchange (EDI)
3-fold classification developed in the mid 1990s: B2C, B2B and intra-organizational. E-commerce became a portmanteau word for doing business online, but also included marketing and servicing activities
E-business is a broader term suggesting a mix of additional pre- and post-sale activities, value chains, value networks and an overall focus upon the strategic, transformational potential of digital technologies for organizations and economies.
Telecommunications Infrastructure Internet Software Producers Online Sellers and Content Providers Global e-Business Small e-Business Applying e-Business Strategies to Managerial, Marketing, and Financial Situations
Customer Relationship Management (CRM) Software solutions that incorporate a variety of means to manage the tasks of communicating with customers and sharing this information with employees in order to create more efficient relationships.
Supply Chain Management (SCM) Software solutions that focus on ways to improve communication between the suppliers and users of materials and components, enabling manufacturers to reduce inventories, improve delivery schedules, reduce costs, and so forth.
Global e-Business
The Internet facilitates communication with customers and suppliers around the world
Small e-Business
Small businesses often focus on serving a niche market that is globally distributed. Question for Discussion: What are some examples of small e-business practices and small businesses that operate globally via the Internet?
useful graphical representation of an economic phenomenon; helpful reminder of technological determinism risks; opportunity to anticipate and influence future stages
Weaknesses
no clear criteria on inflection point timing, risk of being subjective (or deterministic and overly influential); does not directly rate vendor products
Adoption of e-business
E-readiness is a relative rather than an absolute target; rankings not always helpful Countries
EIU E-readiness rankings Western Europe has fallen back in relation to Asian markets in recent years Small vs large Sector differences
Manufacturing vs service B2B vs B2C
Companies
EC E-business scorecard
E-government
Best practice in e-government
Introducing services on a par with those in the commercial sector Develop distinctive public sector competences
E-government
Business-to-Business Model
Business-to-Consumer Model Consumer-to-Consumer Model
A Business Model
A business model is a group of shared or common characteristics, behaviors, and methods of doing business that enables a firm to generate profits through increasing revenues and reducing costs.
Business-to-Business Model
Many e-businesses can be distinguished from others simply by their customer focus. For instance, some firms use the Internet mainly to conduct business with other businesses. These firms are generally referred to as having a business-tobusiness (B2B) model. Currently, the vast majority of e-business is B2B in nature.
Business-to-Consumer Model
In contrast to those firms using a B2B model, firms like Amazon and eBay are clearly focused on individual buyers and so are referred to as having a businessto-consumer (B2C) model.
Consumer-to-Consumer Model
Unlike the B2B and B2C models, which focus on business transactions and communications, the consumer-to-consumer (C2C) model involves the growing popular use of peer-to-peer (P2P) software that facilitates the exchange of data directly between individuals over the Internet.
Question for Discussion: What are some examples of Consumers using the Internet to conduct exchanges with other consumers?
An e-business model that covers online marketplaces in which buyers and sellers are brought together in an organized environment to facilitate the exchange of goods. Ex- ebay.com
An e-business model based on earning revenues in exchange for the display of advertisements on a firms website.
Ex- Yahoo.com, Google.com
An e-business model in which access to a site is controlled by a subscription fee. Forrester.com (Forrester Research)
An e-business model in which access to a site is controlled by a charge to view single items.
Question for Discussion: What are some examples of firms using the pay-per-view e-business model?
An e-business model in which access to a site is controlled by membership fees. Question for Discussion: What are some examples of firms using the membership e-business model?
An e-business model that includes activities of retailers, wholesalers, and manufacturers carrying on business through the Internet. Ex- Amazon.con
An e-business model built around the idea that a group of online users can be regularly brought together at a commonly used website for commercial purposes.
Question for Discussion: What are some examples of firms using the community ebusiness model?
A type of infomediary that earns revenues by drawing users to its site and serving as a gateway or portal to information located elsewhere on the Internet.
Horizontal Portals
Portals that have a wide general reach into different informational topics.
Vertical Portals
Management activities & practices focus on how to organize & coordinate the work carried out by employees so basic business objective like building profitability & maintaining good Customer & supplier relationship can be achieved. Moving management activities to the internet can often improved a firms internal practices & procedures.
Ex. Web based order entry system Sales executive can verify quantities of available inventory & set delivery date Internet based system helps to improve performance
The internet can help provide strategic marketing solutions that reduce customer services & order entry cost, minimize inventory levels, & provide a variety of valuable information to customers. A firms website can provide a wide opportunities for communicating with customers, investors, suppliers & other interested public groups.
Financial application include all matters involving money such as online sock market trading, banking services & the collection of payments for e-commerce transactions.
Business Plan
A document containing detailed descriptions of the fundamental structure of the firm and the activities within it, including sources of revenue, the identity of target customers, pricing, promotion, and other strategies.
e-Business Plan
A business plan or part of a larger business plan that involves a firms Internet business activities.
Disintermediation is a direct consequence of the Internets capabilities to make a wide range of information efficiently available to the end user. Intermediation still relevant online:
Aggregation Providing trust Providing inter-organizational market information Matching suppliers and customers through filtering
intermediation
online
(or
re-
E-business technologies increase the power that individuals have as economic agents in relation to suppliers & markets. Consumer power is a complex phenomenon & has social as well as economics characteristics. Consumer power in internet economy can be considered to have three components Expert power : Sanction power : Legitimate power
E-business economic effects on individuals Search, search costs & consumer power
Example: moneysupermarket.com