1. Chapter 7 E-Business: Doing Business Online Learning Goals 5 1 6 2 7 3
Describe some of the challenges associated with e-business.
Discuss how organizations use Internet communications to advance their objectives.
Discuss Web sites and identify methods for measuring Web site effectiveness.
Explain the global scope of e-business. 5
Define e-business and discuss how it can help achieve business success.
Distinguish between a corporate and a marketing Web site.
List the major forms of B2B e-business.
Explain B2C e-business and identify the products most often sold online. 1 6 2 7 3 4 8

2. WHAT IS E-BUSINESS?
Electronic business (e-business) Conducting business via the Internet.
• E-tailing, or virtual storefronts on Web sites.
• Online business-to-business transactions.
• Electronic data interchange (EDI), the business-to- business exchange of data using compatible software.
• , instant messaging, and other Web-enabled communication tools and their use as media for reaching prospective and existing customers.
• The gathering and use of demographic, product, and other information through Web contacts.

3. Capabilities and Benefits of E-Business
• Global reach. The Net allows goods and services to be sold to customers regardless of geographic location.
• Personalization. Companies can begin the production process when an order is received to better satisfy customer needs and sharply reduce inventory.
• Interactivity. Customers and suppliers negotiate prices online, resulting in an ideal product at the right price that satisfies both parties.
• Right-time and integrated marketing. Online retailers provide products when and where customers want them and can coordinate promotional activities and communication to create a unified, customer-oriented message.
• Cost savings. E-business can markedly reduce the costs associated with operating and starting a business.

4. Business Web Sites
Corporate Web site Web site designed to increase a firm’s visibility, promote its offerings, and provide information to interested parties.
• Attempt to build customer goodwill and assist retailers and other resellers in their marketing efforts.
• Use for a variety of other purposes
• Disseminating financial information to investors
• Enabling prospective employees to apply online for jobs
• Providing communication.
Marketing Web site Web site whose main purpose is to increase purchases by visitors.

5. BUSINESS-TO-BUSINESS (B2B) E- BUSINESS
Business-to-business e-business (B2B) Electronic business transactions between businesses using the Internet.
• B2B transactions account total $2.5 trillion.
• By some estimates, account for 80 percent of all e-commerce activities.
• Can reduce cost of B2B transactions by almost 25 percent.

6. Electronic Data Interchanges, Extranets, and Private Exchanges
Electronic Data Exchange
• Computer-to-computer exchanges of invoices, purchase orders, price quotations, and other sales information between buyers and sellers.
Extranet
• Secure networks used for e-business and accessible through the firm’s Web site by external customers, suppliers, or other authorized users.
Private Exchanges
• A secure Web site at which a company and its suppliers share all types of data related to e-business.
• Sometimes called c-business because of use as a collaborative tool.

7. Electronic Exchanges and E-Procurement
• Electronic exchanges are online marketplaces that bring buyers and sellers together and cater to a specific industry’s needs.
• Initially 15,000 were launched but only 20 percent remain.
• E-procurement is Web- based systems that enable all types of organizations to improve the efficiency of their procurement processes.

8. ONLINE SHOPPING COMES OF AGE
Business-to-consumer e-business (B2C) Selling directly to consumers over the Internet.
• E-tailing accounts for eight percent of all U.S. sales.
• Thirty percent of the U.S. population shops online.
• Services also are important participants in e-business.
E-Tailing and Electronic Store Fronts
Electronic storefronts Company Web site that sells products to consumers.
• Growth of broadband is aiding e-tailing.
• Fifty-five percent of American Internet users have broadband.
• Expected to rise to 70 percent.

9. Who Are the Online Buyers and Sellers?

10. Who Are the Online Buyers and Sellers?
• Online market is changing as customers become more familiar with online shopping.

11. Benefits of B2C e-Business
Lower Prices
• Many products cost less online.
• Internet allows customers to easily compare prices from multiple sellers.
Convenience
• Can order products from around the world anytime day or night.
• Can register customer information to streamline transactions.
Personalization
• Emphasis on personalized, one-on-one marketing to increase repeat purchases.

12. Developing Safe Online Payment Systems
• Response to customer concerns about security of sending credit card information over the Internet.
• Through encryption, data is encoded for security purposes.
• Many companies use Secure Sockets Layer (SSL) technology to increase to encrypt information and verify senders and receivers.
• Others use electronic method payment method, a computer data file at an e- business site’s checkout counter that contains not only electronic cash but credit card information, owner identification, and address.

13. E-BUSINESS CHALLENGES
Privacy Issues
• Privacy is among the top concerns of Internet users.
• E-business sites often require passwords and use electronic signatures, an electronic form of identity verification.
• Companies can track customers’ shopping and viewing habits through cookies.
• Customers usually prefer that companies do not share their personal information. Merchants have responded by joining privacy organizations.
• Privacy protections may soon become legally required.
• Employees also have concerns that employers are monitoring their Internet behavior.
• Companies worry about data theft.

14. Poor Web Site Design and Service
Internet Fraud
• Internet Crime Complaint Center logged more than 207,000 complaints in a recent year, an increase of 67 percent over the prior year.
Phishing Using or pop-up messages to get unsuspecting victims to disclose personal information.
Poor Web Site Design and Service
• Two-thirds of Internet shopping carts are abandoned before any purchase is made.
• Companies that have brick-and-mortar experience often have better success satisfying customers than Internet-only retailers.
Channel Conflicts
• Direct sales to customers can compete with business partners such as retailers and distributors, disputes called channel conflicts.

15. USING THE WEB’S COMMUNICATION FUNCTION
• Web has four main functions: e-business, entertainment, information, and communication.
• Communication is Web’s most popular function.
• Firms use to communicate with customers, suppliers, and other partners.
Spam Popular name for junk .
Online Communities
• Internet forums, newsgroups, electronic bulletin boards, and Web communities that appeal to people who share common interests.

16. Blogs Web-Based Promotions
Blog Short for Web log, an online journal written by a blogger.
• Corporate blogs can help build brand trust.
• Employee blogs present ethical issues.
Web-Based Promotions
• Companies buy banner ads and pop-up ads on Web sites customers are likely to visit.
Search marketing Paying search engines a fee to make sure the company’s listing appears toward the top of search results.
• Companies use online coupons to promote their products.

17. MANAGING A WEB SITE Developing Successful Web Sites
Planning and Preparation
• What is the company’s goal for its Web site?
• Will the site be maintained in-house or by a contractor?
• What will the site be named?
Content and Connections
• Content an important factor for whether visitors return to a site.
• Resources should be relevant, easy to access and understand, updated regularly, and compelling.
• Small businesses may be better off outsourcing to meet their hosting and maintenance needs.

18. Costs and Maintenance • Variety of costs: • Development
• Placing the site on a Web server.
• Maintaining and updating the site.
• Promoting the site.

19. Measuring Web Site Effectiveness
Click-through rates Percentage of people presented with a Web banner ad who click on it.
Conversion rates Percentage of visitors to a Web site who make a purchase.

20. GLOBAL ENVIRONMENT OF E-BUSINESS
• Future growth of many companies is linked to a global strategy that incorporate e-business.
• U.S. leads world in Internet users but ranks only fifth in Internet penetration.
• International competition is growing.
• Can heighten competition in the global marketplace.