1. 2014 Adrian Boucher 1 07 16423 International e-Business Lecture1: 2014 Introduction to e-business MSc International Business

2. 2014 Adrian Boucher 2 Welcome! Croeso!Καλώς ήρθατε ! স্বাগতম ! Bienvenue!Добро пожаловать!Vítejte! Willkommen! Welkom!Tere tulemast! Benvenuto! 歡迎 !Tervetuloa! ¡Recepción!¡Dé la bienvenida! आपका स्वागत है ! Boa vinda! Mottakelse! Selamat Datang! مرحبا ! 欢迎 ! Fáilte! 歓迎 ! 환영 ! Üdvözöljük! أهلا وسهلا! Xoş gəlmisiniz! Hoan nghênh! Ласкаво просимо! Bine ai venit! வருக ! … apologies for omissions.

3. 2014 Adrian Boucher 3 MSc International Business Introduction, Administration, Context and Overview 3 Waves of E-Commerce

4. 2014 Adrian Boucher 4 Books, Online Resources, etc.. Essential Texts: (choice of ONE from): Schneider, G (2013): Electronic Commerce, 10 th Edition, Course Technology (Cengage Learning) [978-1-133-52684-3] Chaffey, D (2011): e-business and e-commerce Management: Strategy, Implementation and Practice, 5 th Edition, Harlow, Pearson Education Ltd. Jelassi T and A Enders (2008): Strategies for e-business, 2 nd Edition, Harlow Pearson Education, FT Prentice Hall. Additional Reading: Laudon, K and C Traver (2011): e-commerce: business, technology, society, 5 th Edition Harlow Essex, Pearson Education Chen, S (2005): Strategic Management of e-business, 2nd Edition, Chichester, John Wiley & Sons Ltd Chaffey, D (2009): e-Commerce, 4th edition, Prentice-Hall See also Reading List (online at Canvas, University Intranet) Other ONLINE references and recent Journal Articles will be provided during the Module and during Lecture sessions Please keep an eye on Canvas for discussions, cases, additional information.

5. 2014 Adrian Boucher 5 Course Road Map 1. Introduction, Administration, Context and Overview: 3 Waves of e-commerce 2. E-business Fundamentals: e-business strategies and options 3. E-business models: Developing and sustaining competitive advantage; value-process framework: supporting infrastructure and technology 4. Internal and External e-business: E-marketing and Customer Relationship Management: selling to Consumers Online (B2C) 5. Supply-Chains and Value Chains: Value “nets”; BPR and value-chain; B2B 6. Impacts of e-business on Industries, Businesses, Government 7. E-business Development: Management of change; Web 2.0/3.0; “the cloud”; m-commerce; Virtual Communities 8. E-business Strategy Implementation: ALIGNMENT of business and ICT Strategies: Web Hosting; Online Payment Systems 9. E-Business Legal, Taxation, Security and Public Policy Issues 10. Implementation: Current and Future Developments, Wrap-up and Conclusions.

6. 2014 Adrian Boucher Road Map What IS e-business, and how has it evolved since the invention of the world-wide web (1993 – Sir Tim Berners-Lee) 1 st Wave; 2 nd Wave; 3 rd Wave … happening NOW Focus on Revenue Models and Analysis of Business Processes in e-business, rather than Business Models Effect of economic forces in creating business environment leading to continuing growth of e-business Use of Value Chains and SWOT analysis to identify and exploit e-commerce opportunities International nature of e-commerce and challenges of operating on a global scale.

7. 2014 Adrian Boucher Module Assessment Individual Assignment – Analysis of an e-enabled organization (details given later) Assignment: 25% of Module Assessment 1 x 3-hour Examination (5 essay-type questions) Answer 3 questions Examination: 75% of Module Assessment

8. 2014 Adrian Boucher 8 Learning Objectives To understand and appreciate the similarities and differences between e-business and e-commerce To distinguish “pure-play” e-business from “clicks and mortar” e-business To understand the classifications of e-business and e-commerce To appreciate the importance of government initiatives worldwide to e-business development To understand the impact of the world-wide web and internet on adoption of EDI and EFT To understand the drivers of, and barriers to e-business adoption Useful source: http://www.ecommerce-guide.com/

9. 2014 Adrian Boucher 9 Learning Objectives (2) To gain an understanding of the current size of worldwide online business and its growth rates To identify the enormous range of useful online resources to help contextualise study of e-business To understand the effects of www and internet growth on industrial structures worldwide To understand the concept of business models and to identify how the www / internet have contributed to the development of “new” business models To understand how much of traditional business practice still applies in the e-business age To identify current and expected future developments: Big Data; “cloud computing”; IPv6; M-commerce; social networking

10. 2014 Adrian Boucher 10 Why Study e-business? E-commerce technology is different from, and more powerful than any of the other technologies that we have seen in the past century. The worldwide web (www) and Internet have been called, “disruptive technologies”, causing major changes in the ways in which many businesses are organised and deployed. E-commerce has challenged much traditional business thinking, has led to many innovative business and revenue models, although the laws of economics still apply.

11. 2014 Adrian Boucher 11 Studying e-business E-commerce has a number of unique features that help explain why we have so much interest in this area: Ubiquity: Martini business, “any time, any place, anywhere” Global reach: trading occurs across all nations, cultures, languages Universal standards: TCP/IP; browser technology; Internet/www Richness: Marcoms messages: text; graphics; video; sound; SMS; blogs, Social Networking Sites (Weibo, FaceBook, Twitter, etc..) Interactivity: Marketers (and online businesses conduct two-way communications, unlike offline marketing) Information density: Massively reduced information costs and increased quality, speed, availability, customisation, e-CRM Personalisation/Customisation: personalisation of marketing messages and products (e.g. Nike, Dell, Ford Cars, etc..) Increasing use of social networking (YouTube, Facebook, LinkedIn) Massively increased use of mobile devices: smartphones, iPad, etc..

12. 2014 Adrian Boucher 12 e-Commerce /e-Business e-commerce: formerly used to describe interactions between business organisations and end-users (customers): buying and selling on the Internet - mainly consumer-oriented (e.g. buying books online: www.amazon.com); information exchange between organisations and external stakeholders; usually focussed on B2C (But see also Amazon Web Services: http://www.aws.amazon.com Amazon’s and other companies’ entry to “cloud computing” and Software as a Service (SaaS) – which is B2B [Business-to-Business]http://www.aws.amazon.com e-business: wider definition - includes all online transactions processing, supply-chain management and streamlining; value-chain analysis; value-chain re-engineering; Internet based business process re-engineering (BPR) and business model transformation; primarily concerned with B2B activities B2B >> B2C (of the order of 20 times to 5000 times greater in $ (and £££) value, depending on source): www.forrester.com; www.dc.com; www.gartner.com; www.kpmg.co.uk; www.accenture.com; www.aberdeen.com; www.ibm.com; www.marketing-online.co.ukwww.forrester.com; www.dc.com www.gartner.comwww.kpmg.co.ukwww.accenture.com; www.aberdeen.com;www.ibm.com

13. 2014 Adrian Boucher 13 e-commerce v e-biz (cont.) EC EB EC = EB EC EB Some degree of overlap between e-commerce and e-business e-commerce and e-business are broadly synonymous e-commerce is a proper subset of e-business Chaffey, D 2011: e-commerce and e-business management 5th edition, FT Prentice-Hall

14. 2014 Adrian Boucher 14 Laudon & Traver’s View

15. 2014 Adrian Boucher Schneider’s View More comprehensive and inclusive view: Becoming the norm

16. 2014 Adrian Boucher Management Issues How do we explain the scope and implications of e-business and e-commerce to staff? What is 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?

17. 2014 Adrian Boucher 17 e-Business Fundamentals E-business impacts DIRECTLY on ALL aspects of Business Strategy (and Marketing Strategy) These impacts operate both at the macro-environmental level and the micro (individual organisational) level Macro Analysis: PESTEL Framework (not the ONLY technique!) Micro Analysis: SWOT Analysis (not the ONLY technique!) International Analysis: More Difficult! (Porter,1990) : “Diamond”: http://www.quickmba.com/strategy/global/diamond/ http://www.quickmba.com/strategy/global/diamond/ We need a whole range of tools and techniques to understand the “Brave New World” and develop suitable strategies for ensuring that our own organisation(s) can cope effectively with the new order - and develop suitable strategies for: Survival Growth Long-term Business Success

18. 2014 Adrian Boucher 18 Initial Concepts Is our focus on other businesses or consumers? B2B or B2C? - both Fundamentally different business models required. 9-way classification (see next slide) Degree of complexity is a function of business objectives What about other Organisations/Agencies? Government: G2C, G2B and C2G, B2G (new initiatives under development in most countries: good examples - Canada; US; Singapore; Hong Kong; EU; Finland (and rest of Scandinavia); Malaysia; Korea; Australia; NZ; UK; Middle East; BRIC)

19. 2014 Adrian Boucher Classification System E-business: “conduct of business on the internet. Not only buying and selling, but also servicing customers and collaborating with business partners.” http://www.whatis.comhttp://www.whatis.com

20. 2014 Adrian Boucher 20 Major Types of e-commerce MASSIVE growth here: Smartphones, iPad, other mobile devices

21. 2014 Adrian Boucher 21 E-business by product, agent & process physical agent digital product physical product digital agent physical process digital process pure e-commerce traditional commerce Choi et al (1997): The economics of electronic commerce Palgrave Macmillan Pure play e-business rare: McAfee; iTunes, etc.. “Bricks and clicks”: very common: amazon; Tesco; Wal-Mart; GE; etc.. http://www.itraction.nl/documentenhttp://www.itraction.nl/documenten/cherry-tree-research-combined1.pdf

22. 2014 Adrian Boucher 22 How does online business work? We shall not get too involved in the technology and the jargon, except to understand how the Internet and WWW work [Background Notes and Slides are on Canvas for you to examine] We shall investigate “just enough” of the software tools, hardware and networking to understand how e-business has developed and is expected to develop over the next few years We shall explore the e-commerce environment and try to identify areas where opportunities exist for successful adoption and exploitation of these new technologies We shall explore how traditional business models may still apply in the new e-business world, and – We shall also explore areas where existing business models need complete overhaul and re-design to take advantage of the new trading environment

23. 2014 Adrian Boucher 23 Components of e-commerce What is needed to engage in e-business / e-commerce? Exchange of information (or “digital content”) between two or more parties, resulting in exchange of goods, services and money BuyerSeller payment other information request for product / company information product / company information Information good Physical good

24. 2014 Adrian Boucher 24 e-commerce: Into the Third Wave Electronic commerce history Mid-1990s to 2000: rapid growth “Dot-com boom” followed by “dot-com bust” 2000 to 2003: overly gloomy news reports: Massive clear- out of companies 2003: signs of new life Sales and profit growth return Electronic commerce growing at a rapid pace Electronic commerce becomes part of general economy Now taken for granted 2008: Global recession: E-commerce less hurt than most of economy; 2 nd Wave continues onward Handheld devices lead E-business into 3 rd Wave: 3G / 4G

25. 2014 Adrian Boucher 25 E-Commerce & E-Business Electronic commerce Shopping on the Web Businesses trading with other businesses Internal company processes Broader term: electronic business (e-business) Electronic commerce includes: All business activities using Internet technologies Internet and World Wide Web (Web) Wireless transmissions on mobile telephone networks Dot-com (pure dot-com) Businesses operating only online (relatively few: iTunes)

26. 2014 Adrian Boucher Categories of E-commerce Business-to-consumer (B2C) Consumer shopping on the Web Business-to-business (B2B): e-procurement Transactions conducted between Web businesses Supply management (procurement) departments Negotiate purchase transactions with suppliers Activity Task performed by a worker in the course of doing his or her job May or may not be related to a transaction Transaction: exchange of value Purchase, sale, or conversion of raw materials into finished product Involves at least one activity

27. 2014 Adrian Boucher Categories of Electronic Commerce (cont’d.) Business processes Group of logical, related, sequential activities and transactions Web helping people work more effectively Telecommuting (telework) Using Web for marketing activities Social Networking: Facebook; Weibo; LinkedIn, etc. Consumer-to-consumer (C2C) Individuals buying and selling among themselves Web auction sites (eBay) Business-to-government (B2G) Business transactions with government agencies Paying taxes, filing required reports

28. 2014 Adrian Boucher E-commerce Categories

29. 2014 Adrian Boucher 29 Internet Statistics, 2012 http://www.internetworldstats.com/stats.htm

30. 2014 Adrian Boucher 30 Internet Users By Region and Population

31. 2014 Adrian Boucher 31 Penetration Rates http://www.internetworldstats.com/stats.htm Also see: http://www.google.co.uk/intl/en/landing/internetstats/http://www.google.co.uk/intl/en/landing/internetstats/

32. 2014 Adrian Boucher 32 Europe: Limitations on e-commerce Uncertain macroeconomic conditions: PIIGS and maybe others Language and cultural barriers – and educational / age barriers multiple currencies, somewhat eased by adoption of the Euro differing tax and VAT regimes. uncertainty over pending legislation on ecommerce taxation lack of cross-border logistical support poor IT infrastructure (improved over past 3-4 years) conservative banking attitudes restricted choice of software, payment service providers and Multiple Application Providers … But all that is changed by the development of cloud computing See http://www.ecommerce-digest.com/resources.htmlhttp://www.ecommerce-digest.com/resources.html

33. 2014 Adrian Boucher 33 Internet Growth Rate Exponential growth No later information found This graph no longer published

34. 2014 Adrian Boucher Cisco’s Forecast: Next 5 Years http://www.theatlantic.com/technology/archive/2012/05/the-future-growth-of-the-internet-in-one-chart-and-one-graph/257811/ Key Message: Tripling of Web Traffic over this period

35. 2014 Adrian Boucher 35 Who is Doing the Business?

36. 2014 Adrian Boucher 36 Top Global Sites by Visitors

37. 2014 Adrian Boucher 37 Q: Where do People go Online? A: Social Networking Sites

38. 2014 Adrian Boucher 38 Growth of e-business: Source

39. 2014 Adrian Boucher Q: How do People Access the Web? A: Increasingly by Mobile Devices

40. 2014 Adrian Boucher Smartphone Growth Rates

41. 2014 Adrian Boucher Still Plenty of Growth Opportunity

42. 2014 Adrian Boucher What About the iPad?

43. 2014 Adrian Boucher But Don’t Forget the Android

44. 2014 Adrian Boucher Smartphones and Tablets: 2-horse Race

45. 2014 Adrian Boucher Mobile Usage: Rapid Growth Rates

46. 2014 Adrian Boucher Mobile Queries to Google (US)

47. 2014 Adrian Boucher Online Advertising Trends

48. 2014 Adrian Boucher Mobile Access and Advertising

49. 2014 Adrian Boucher 49 How Did We Get Here? e-commerce I and e-commerce II E-commerce I: A period of explosive growth and extraordinary innovation; key concepts developed and explored  Begins in 1995, ends in March 2000 when stock market valuations for dot.com companies begin to collapse  Thousands of dot.com companies formed, backed by over $125 billion in financial capital – and never made a profit  Massive rate of failure (“dot-bombs”) in 2001 E-commerce II: Characterized by a reassessment of e-commerce companies and their value  Began in January 2001; ongoing and successful (for some)

50. 2014 Adrian Boucher 50 Visions Behind e-commerce I For computer scientists:  A vindication of the vision of a universal communications and computing environment  Belief that Internet should not be controlled by government, and remain free for all For economists:  Vision of a perfect Bertrand market and friction-free commerce, characterized by low transaction costs, low search costs, price transparency, low menu costs, dynamic pricing, disintermediation, and elimination of unfair competitive advantages

51. 2014 Adrian Boucher 51 Visions and Forces Driving EC I For entrepreneurs, their financial backers and marketing professionals, e-commerce represented an extraordinary opportunity to return far above normal returns on investment based on:  Worldwide access to consumers  New marketing communications technologies that were universal, inexpensive and powerful  Ability to segment market  First mover advantages – by building in switching costs  Network effects (the more connections to the network, the greater the value of the network)

52. 2014 Adrian Boucher 52 How to Burn Money… E-commerce Phase 1 E-commerce Phase 2 begins

53. 2014 Adrian Boucher 53 e-commerce II: 2001-2012 Crash in stock market values for e-commerce companies throughout 2000 marks end of e-commerce I period Reasons for crash:  Run-up in technology stocks due to enormous information technology capital expenditure of firms rebuilding their internal business systems to withstand Y2K (FUD)  Telecommunications industry had built excess capacity in high-speed fibre optic networks  1999 Christmas season provided less sales growth than anticipated and demonstrated e-commerce was not easy (e.g. eToys.com)  Valuations of dot.com and technology companies had risen so high supporters were questioning whether earnings could justify the prices of the shares.

54. 2014 Adrian Boucher 54 e-commerce Today E-commerce I a stunning technological success E-commerce I a mixed success from a business perspective Many visions developed during E-commerce I not fulfilled  Economists’ visions of “friction-free” commerce and Bertrand model of extreme market efficiency (perfect competition) not entirely realised  Entrepreneurs and venture capitalists’ visions have not materialised exactly as predicted either  Massive growth of Social Networking sites (SNS) and Social Marketing

55. 2014 Adrian Boucher 55 Comparison of Phase I and Phase II Source: Laudon & Traver

56. 2014 Adrian Boucher Characteristics of 1 st and 2 nd Waves

57. 2014 Adrian Boucher 57 Additional Information: Jan 2014 “Credit Crunch” - probably started September 2007 ALL countries affected – some more than others US, UK and Europe most exposed (particularly Spain, Ireland, Italy, Greece, Portugal) China, Japan, rest of Asia, India showed rapid slowing of economic growth; China has recovered somewhat; Japan still not buoyant. Latest figures from China suggest some recovery Africa - Zimbabwe (inflation reached 2200m% p.a.), other countries in trouble, but massive growth potential South American growth slowing (especially Brazil) Cause: sub-prime lending; excessive price bubbles (housing and other consumption financed through rising asset prices) Current effect: Absence of credit from banks, etc.

58. 2014 Adrian Boucher 58 Web 2.0 The “new” Web first discussed by Tim O’Reilly, 2005, see: http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web- 20.html http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web- 20.html Applications and technologies that allow users to: create, edit, and distribute content share preferences, bookmarks, and online personas participate in virtual lives Examples YouTube, Renren, Flickr, Bebo, Twitter, Photobucket, iTunes MySpace, Facebook, LinkedIn Second Life (dying) Wikipedia (advised NOT to use as a source for essays, etc.) RSS (Really Simple Syndication); RSSOwl (PC and Mac)

59. 2014 Adrian Boucher 59 Predictions for the Future Technology of e-commerce will continue to permeate through all commercial activity E-commerce prices will rise to cover the real cost of doing business on Web and pay investors reasonable rates of return E-commerce margins and profits will rise to levels more typical of all retailers In B2C and B2B, traditional Fortune 500 companies will play growing and dominant role (already apparent) Number of successful pure online companies will decline and most successful e-commerce firms will adopt mixed “clicks and bricks” strategies Growth of regulatory activity worldwide (already apparent) Expected rapid take-up and growth of m-commerce (Forrester)

60. 2014 Adrian Boucher Actual & Estimated Online Sales (Schneider, 2013)

61. 2014 Adrian Boucher 2 nd Wave of E-Commerce Compared to four waves of Industrial Revolution Electronic commerce first and second wave characteristics Regional scope First wave: mainly United States phenomenon Second wave: international and increasingly emergent econs. Start-up capital First wave: easy to obtain Second wave: companies using internal funds Internet technologies used First wave: slow and inexpensive (especially B2C) Second wave: broadband connections

62. 2014 Adrian Boucher 2 nd Wave of E-Commerce (cont) Electronic mail (e-mail) use First wave: unstructured communication Second wave: integral part of marketing, customer contact strategies Revenue source First wave: online advertising (failed) Second wave: Internet advertising (more successful) Digital product sales First wave: fraught with difficulties (music industry) Second wave: fulfilling available technology promise Business online strategy First wave: first-mover advantage Second wave: businesses not relying on first-mover advantage

63. 2014 Adrian Boucher 3 rd Wave Begins*** Accentuated by mobile telephone based commerce (mobile commerce or m-commerce) Smartphone technology and tablet computers make Internet available everywhere Internet technology integration First wave: bar codes, scanners Second wave: Radio Frequency Identification (RFID) devices, smart cards, biometric technologies Increasing integration will lead to more effective B2B Web 3.0: making new Web business possible: Semantic Web (search on Google or other search site)

64. 2014 Adrian Boucher Evolution of Web Technologies

65. 2014 Adrian Boucher Business Models, Revenue Models & Business Processes Business model Set of processes combined to achieve company goal of yielding profit Electronic commerce first wave Investors sought Internet-driven business models Expectations of rapid sales growth, market dominance Successful “dot-com” business models were emulated Michael Porter argued business models did not exist

66. 2014 Adrian Boucher Business Models, Revenue Models, and Business Processes (2) Instead of copying model, examine business elements Streamline, enhance and replace with WWW technology-driven processes REVENUE MODEL emphasised nowadays Specific collection of business processes Identify Customers Market to those Customers Generate Sales Classify revenue-generating activities for communication (with Customers and Suppliers) Analyse results (Key Metrics) and continuously improve (CPI)

67. 2014 Adrian Boucher Role of Merchandising Merchandising Combination of store design, layout, and product display knowledge Salespeople skills Identify customer needs Find products or services meeting needs Merchandising and personal selling Difficult to practise remotely Web site success Transfer merchandising skills to the Web Easier for some products than others

68. 2014 Adrian Boucher Product/Process Suitability for Electronic Commerce Need to evaluate advantages/disadvantages of electronic commerce Suitability is dependent on current state of available technologies These change as new e-commerce tools emerge Technology and practice rapidly developing New analytical tools and practices quickly adopted (by the good businesses)

69. 2014 Adrian Boucher Business Process Suitability

70. 2014 Adrian Boucher Product/Process Suitability for E-Commerce Commodity item: well-suited to e-commerce selling Product or service hard to distinguish from same products or services provided by other sellers Features: standardized and well known Price: distinguishing factor Consider product’s shipping profile Collection of attributes affecting how easily product can be packaged and delivered Note value-to-weight ratio DVD: good example Expensive jewellery: high value-to-weight ratio (BUT …removes Veblen Effect. E.g. Tiffany, LVMH, etc)

71. 2014 Adrian Boucher Product/Process Suitability for E-Commerce (2) Easier-to-sell products have: Strong brand reputation Appeal to small but geographically diverse groups Traditional commerce Better for products relying on personal selling skills Combination of electronic and traditional commerce Business process includes both commodity and personal inspection items

72. 2014 Adrian Boucher E-Commerce: Opportunities, Cautions and Risks Businesses need to exercise caution in weighing risks and benefits of online business B2C: Credit Card Payments – Card Theft, Cloning, etc., Fake Products, Theft of IPR, Security Issues (see later) B2B: Lower Risk – Legal Documents: Contracts, Carriage, Insurance Freight (cif) Dealing with International Customers (later)

73. 2014 Adrian Boucher Opportunities for E-commerce Appeal of electronic commerce potential to boost profits increases sales decreases costs Virtual community: gathering of people online Using Web 2.0 technologies Conduct Interactive Dialogue with potential and existing Customers: WOM Marketing; Social Networking Marketing

74. 2014 Adrian Boucher Opportunities (2) E-commerce buyer opportunities Increase purchasing opportunities Identifies new suppliers and business partners Efficiently obtain competitive bid information Easier to negotiate price and delivery terms Increases speed, information exchange accuracy Wider range of choices available 24 hours a day Immediate access to prospective purchase information Multimedia product displays: Video; 3D; Audio Use of FAQs for Customer Support and Feedback Online Chat

75. 2014 Adrian Boucher Cautions and Concerns Poor choices for electronic commerce: Perishable foods and high-cost, unique items Disadvantages will disappear when: E-commerce matures Becomes more available to and accepted by general population Critical masses of buyers become equipped, need to be willing to buy through Internet Online grocery industry example – slow start, now entering mainstream (Tesco, Ocado, Sainsbury, etc)

76. 2014 Adrian Boucher Cautions and Concerns (2) Predictability of Costs and Revenues: inherent problems Calculating return on investment (Difficult) Recruiting and retaining employees Technology Integration Issues Difficulty integrating standard processes with online systems Uncertain outcome when integrating systems Becoming easier with Cloud Developments Cultural and Legal Concerns Consumers resistant to change Cultural differences: security, privacy and payments Ambiguous and conflicting laws

77. 2014 Adrian Boucher Identifying E-Commerce Opportunities Focus on specific business processes Break business down Series of value-adding activities Combine to generate profits, meet firm’s goal Commerce conducted by firms of all sizes Firm Multiple business units owned by a common set of shareholders or company Industry Multiple firms selling similar products to similar customers

78. 2014 Adrian Boucher Evaluating Business Unit Opportunities SWOT analysis Strengths, weaknesses, opportunities, and threats Consider all issues systematically First: look into business unit Identify strengths and weaknesses (INTERNAL, CONTROLLABLE) Then: review operating environment (EXOGENOUS) Identify opportunities and threats presented Take advantage of opportunities Build on strengths Avoid threats Compensate for weaknesses

79. 2014 Adrian Boucher SWOT Questions

80. 2014 Adrian Boucher SWOT Example: Dell.com

81. 2014 Adrian Boucher 81 Disciplines Concerned with e-commerce Technical Approaches  Computer scientists and information system researchers  Management scientists Behavioural Approaches  Information system researchers  Economists and statisticians  Marketing Theorists and practitioners  Management theorists and Senior Managers  Finance and Accounting practitioners  Sociologists  Legal scholars

82. 2014 Adrian Boucher Buy-Side and Sell-Side e-commerce Source: Chaffey (2011)

83. 2014 Adrian Boucher Drivers of e-commerce Adoption Think about these and complete. DriverMarketing approach 1 2 3 4 5 6

84. 2014 Adrian Boucher Barriers to e-commerce Adoption BarrierMarketing approach 1 2 3 4 5 6

85. 2014 Adrian Boucher Tangible and Intangible Benefits Tangible benefitsIntangible 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

86. 2014 Adrian Boucher 86 Reading and Online Activity Chaffey, Chapter 1 Schneider, Chapters 1 & 2 Chen, Prefaces + Chapters 1 & 2 Jelassi and Enders, Preface, Chaps 1 - 3 Laudon and Traver, Preface + Chaps 1-3 Beynon-Davies, Preface + Part 1 http://www.online-commerce.com/ http://www.ecominfocenter.com/ http://e-comm.webopedia.com/ http://www.statistics.gov.uk/downloads/theme_economy/ecommerce_report_ 2006.pdf http://www.statistics.gov.uk/downloads/theme_economy/ecommerce_report_ 2006.pdf http://www.ecommerce-digest.com/ecommerce-prospects-europe.html

87. 2014 Adrian Boucher 87 Summary Provided an overview and context within which e-commerce / e-business occurs Distinguished common forms of e-business: B2B: (by far the most important but least discussed in the press: processes are complex and often difficult to understand) B2C: in the public eye (very simple: do not even need to own a computer) C2C: sometimes called P2P (peer-to-peer) – transactions between individual citizens C2B: Reverse auctions (relatively uncommon) Assessed the present state and growth of e-business