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© Marketing Insights Limited 2004
OHT 1.2
Learning objectives
• Define the meaning and scope of e-business and e-commerce and their different elements;
• Summarise 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.
© Marketing Insights Limited 2004
OHT 1.3
Issues for managers
• How do we explain the scope and implications of e-business and e-commerce to staff?
• What are the full-range of benefits of introducing e-business and what are the risks?
• How great will the impact of the Internet be on our business? What are the current and predicted adoption levels? How do we assess the validity of forecasts?
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OHT 1.4
The impact of 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:
• Is 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)
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OHT 1.5
The impact on one industry - banking
Metric May 1995 Dec. 2002
Financial institutions with Web banking (WW) 1 6,000
Financial institutions with Web sites (WW) 50 14,000
Total online banking households (WW) 5 million 100 million
Total online banking households (US) 300,000 28 million
Monthly bank and credit card Web traffic (US) 100,000 50 million
Monthly credit apps submitted via Web (US) 0 1.5 million
Table 1.1 7.5 years of web banking. Source: Online banking report, Number 89, December 10, 2002. Source: Online Banking Report estimates, +/- 25%, 11/02
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OHT 1.6
UK adults online?
31% 41% 51% 61%
16-24 year olds online?
50% 60% 80% 90%
Percentage bought groceries online?
6% 16% 26% 36%
Source: www.statistics.gov.uk Oct 2002
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OHT 1.7
The Internet’s impact on you
• How many of you have purchased something on the Internet in the last 6 months?
• How many times have you used the Internet as an information source, before buying offline?
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OHT 1.8 Popularity of online purchases
Source: The Internet Monitor, BMRB, November 2001 (www.bmrb.co.uk)
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OHT 1.9
Definitions
• You are asked to distinguish between e-commerce and e-business at a job interview.
• Write down your definitions.
• Use examples to illustrate your points.
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OHT 1.10
E-commerce defined
• ‘All electronically mediated information exchanges between an organization and its external stakeholders’
• Examples:– Buying books online (transactional)– Selecting a car online (informational)– Interacting with brand online (relationship building /
experiential, e.g. www.tango.com) – Asking a customer service query, e.g.
www.easyJet.com
© Marketing Insights Limited 2004
OHT 1.11
E-business defined
• All electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business processes
• Examples:– Purchasing from suppliers (e-procurement)– A company intranet (defined in Ch 3)– Supplying partners with information through an
extranet (see Ch 3)
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OHT 1.12 The distinction between buy-side and sell-side e-commerce
Figure 1.1 The distinction between buy-side and sell-side e-commerce
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OHT 1.13 Recap – which is correct?
Figure 1.2 Three definitions of the relationship between e-commerce and e-business
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OHT 1.14
Driver Marketing approach
1 Reduced costs Give real examples
2 Increase reach to new markets Give examples of SME
3 Customer demand Data on those researching and buying online
4 Competitive threats Ditto
5 Barriers to entry Show some real examples
6
Business drivers to going online
© Marketing Insights Limited 2004
OHT 1.15
Barrier Marketing approach
1 Security Reassurance
2 No need Illustrate with data of businesses researching and buying online
3 Costs Illustrate low cost options
4 Skills Summarise skills alternatives
5
6
Business barriers to going online
© Marketing Insights Limited 2004
OHT 1.16 Drivers for e-commerce
Figure 1.6 Attitudes to benefits of online technologies
Source: DTI (2002)
© Marketing Insights Limited 2004
OHT 1.17 Barriers to e-commerce
Figure 1.7 Barriers to development of online technologies
Source: DTI (2002)
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