© Marketing Insights Limited 2004 OHT 1.1 Chapter 1 Introduction to e-business and e-commerce

© Marketing Insights Limited 2004

OHT 1.1

Chapter 1Introduction to e-business and e-commerce


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.


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?


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)


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


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


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?


OHT 1.8 Popularity of online purchases

Source: The Internet Monitor, BMRB, November 2001 (www.bmrb.co.uk)


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.


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


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)


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


OHT 1.13 Recap – which is correct?

Figure 1.2 Three definitions of the relationship between e-commerce and e-business


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


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


OHT 1.16 Drivers for e-commerce

Figure 1.6 Attitudes to benefits of online technologies

Source: DTI (2002)


OHT 1.17 Barriers to e-commerce

Figure 1.7 Barriers to development of online technologies

Source: DTI (2002)


OHT 1.18 Answer – the 7 Ss

Figure 1.9 The McKinsey 7S framework

Documents

© Marketing Insights Limited 2004 OHT 1.1 Chapter 1 Introduction to e-business and e-commerce