E-B USINESS

LEARNING OBJECTIVES WHAT IS E-BUSINESS ? WHAT IS COMMERCE ? WHAT IS STRATEGY ? MODELS OF E-BUSINESS ADVANTAGES AND DISADVANTAGES APPLICATIONS IN TURKEY AND WORLD

W HAT IS E-B USINESS E-business, or electronic business, systems use a number of information technology-based business practices to enhance relationships between the business and the customer. E- business includes changes in marketing communication, distribution systems, and business models.

E VOLUTION OF E - BUSINESS 1997: Introduction of a brand new phrase – e- business 1999: The emphasis of e-business shifted from B2C to B2B 2001: The emphasis shifted from B2B to B2E, c- commerce, e-government, e-learning, and m- commerce 2004: Total online shopping and transactions in the United States between $3 to $7 trillion

E VOLUTION OF E - BUSINESS 2007: Business.com acquired by R.H. Donnelley for $345 million.Business.comR.H. Donnelley 2010: Groupon reportedly rejects a $6 billion offer from Google. Instead, the group buying websites went ahead with an IPO on 4 November It was the largest IPO since Google 2012: US eCommerce and Online Retail holiday sales reach $33.8 billion, up 13 percent 2014: India’s e-commerce industry is estimated to have grown more than 30% from a year earlier to $12.6 billion in 2013

W HY E-B USINESS Lack of time at public or consumer Flexibility in timings for payment Easy delivery at door steps Planning for payment Safe transactions

E- COMMERCE E-commerce – Process of buying or selling goods or services across a telecommunications network

E-B USINESS I NDUSTRY T ERMS (1) Internet: A global network of computer networks that use a common interface for communication. World Wide Web: A graphically based Internet standard that allows easy access to information from around the world. E-Business: This is the process of using information technology (IT) to support a fuller operation of a business.

E-B USINESS I NDUSTRY T ERMS (2) E-Commerce: Uses electronic information based systems to engage in transactions or commerce online. Extranet: An Internet based connection between a business and its suppliers, distributors, and partners. This is not open to the general public. Intranets: Internal private network that use the same types of hardware, software, and connections as the Internet.

T HE T RADITIONAL B USINESS S YSTEM Target Customers Communication Information Flow Payment Flow Product Price Distribution Flow Distribution Flow

E-B USINESS S YSTEMS E-Business Systems are fostering a number of changes to the marketing system: Customized production. Increasing price pressure resulting in lowering prices. Shorter channels of distribution dominated by facilitators. Extranet-enhanced supply chain management. Non-linear promotions. Electronic transfer of funds. Database information management systems.

E-B USINESS S YSTEMS Market-of-One Customer Customized Non- Linear Promotion Customized Production Dynamic Pricing Shorter Channels Dominated by Facilitators Knowledge Management & Data Warehousing Knowledge Management & Data Warehousing Electronic Payments

E- BUSINESS S TRATEGY

S TRATEGY : Definition of the future direction and actions of a company defined as approaches to achieve specific objectives.

E- BUSINESS STRATEGY AND PLANNING INCLUDES THE FOLLOWING : E-risk management Web site technology, applications, infrastructure, security, resources and budget. Web site content - Information architecture, customer experience, design, branding and marketing. Marketing planning and budgeting. E-Commerce planning

Figure 1. A generic strategy process model

Figure 2. Elements of strategic situation analysis for the e-business

Figure 3. Elements of strategic objective setting for the e-business

Figure 4. Elements of strategy definition for the e- business

Figure 5: Elements of strategy implementation for the e-business

W HY IS AN E - BUSINESS STRATEGY IMPORTANT ? While e-business can help you increase your visibility, profits and competitive advantage, it is much more than just a website. Before jumping headfirst, it is important to understand the basics, recent models and applications that can help you grow your business.

W HAT HAPPENS WHERE THERE IS NO E - BUSINESS STRATEGY

Missed opportunities for additional sales on the sell-side and more efficient purchasing on the buy-side Fall-behind competitors in delivering online services – may become difficult to catch-up. Poor customer experience from poorly integrated channels.

E-B USINESS M ODELS Business models How a company conducts business in order to generate revenue Widespread access to the Internet and Web allows companies to adapt old models and create new ones E -business model is an approach to conducting electronic business on the Internet.E-business transactions take place between two major entities—businesses and consumers. E-business models are often categorized by type of customer

Major the e-business models: Business-to-business Business-to-consumer Consumer-to-consumer Consumer-to-business

TYPES OF E-BUSINESS:

B USINESS - TO -B USINESS (B2B) Business-to-business (B2B) applies to businesses buying from and selling to each other over the Internet. Online access to data, including expected shipping date,delivery date, and shipping status, provided either by the seller or a third-party provider is widely supported by B2B models. Electronic marketplaces represent a new wave in B2B e-business models.

B USINESS - TO -B USINESS (B2B) B USINESS M ODEL “B2B” is business-to- business commerce conducted over the Internet(called B2B e- commerce space, or e-marketplaces)

Electronic marketplaces, or e -marketplaces, are interactive business communities providing a central market where multiple buyers and sellers can engage in e-business activities. They present structures for conducting commercial exchange, consolidating supply chains, and creating new sales channels. Their primary goal is to increase market efficiency by tightening and automating the relationship between buyers and sellers. Existing e-marketplaces allow access to various mechanisms in which to buy and sell almost anything, from services to direct materials.

B2B A PPLICATIONS Advertising Auctioning Procurement Channel management E-commerce

B USINESS - TO -C ONSUMER (B2C) Business-to-consumer (B2C) applies to any business that sells its products or services to consumers over the Internet. The business-to-consumer, or B2C, model of e-business sells products directly to retail consumers online.. The e-business has only an online identity through which it offers a range of products to customers. Most B2C models generate revenue from direct sales and processing fees. B2C also is known as electronic retail or e-tail.

B2C A PPLICATIONS Electronic storefront Electronic malls Advertising online Service online selling books, toys, computers e-banking (cyber banking) online stock trading online job market, travel, real estate

C ONSUMER - TO -B USINESS (C2B) Consumer-to-business (C2B) applies to any consumer that sells a product or service to a business over the Internet. One example of this e-business model is Priceline.com where bidders (or customers) set their prices for items such as airline tickets or hotel rooms, and a seller decides whether to supply them. The demand for C2B e-business will increase over the next few years due to customer’s desire for greater convenience and lower prices.

C2B model, also called a reverse auction or demand collection model, enables buyers to name their own price often binding, for a specific good or service generating demand. The website collects the demand bids and then offers the bids to the participating sellers.

C2B A PPLICATION For example, when a consumer writes reviews, or when a consumers gives a useful idea for new product development, then this individual is creating value to the firm, if the firm adopts the input. Excepted concepts are crowd sourcing and co-creation. Another form of C2B is the electronic commerce business model, in which consumers can offer products and services to companies and the companies pay them. We can see this example in blogs or internet forums where the author offers a link back to an online business facilitating the purchase of some product (like a book on Amazon.com), and the author might receive affiliate revenue from a successful sale.electronic commerceblogsinternet forumsAmazon.com

C ONSUMER - TO -C ONSUMER (C2C) Consumer-to-consumer (C2C) applies to sites primarily offering goods and services to assist consumers interacting with each other over the Internet. auctions.C2C online communities, or virtual communities, interact via groups,Web-based discussion forums. C2C business models are consumer driven and opportunities are available to satisfy most consumers’ needs, ranging from finding a mortgage to job hunting. They are global swap shops based on customer-centered communication.

C2C A PPLICATION eBay, the Internet’s most successful C2C online auction Web site, links like-minded buyers and sellers for a small commission Gittigidiyor.com

1. Y OU CAN BE Y OUR O WN B OSS Have full control over what you sell Charge the amount you want for your products and/or services Keep 100% of the profits

2. N O NEED TO R ENT A B UILDING FOR A S TORE OR H IRE S ALES S TAFF

3. Y OU CAN O PERATE Y OUR O NLINE B USINESS I N THE C OMFORT OF Y OUR O WN H OME You don’t have to worry about the long commute to work.

4. Y OU CAN S ELL D IRECTLY F ROM Y OUR W EBSITE Your customers can order your products directly from your website and you can ship them to your customers from one central location.

5. Y OU CAN R EACH A L ARGER T ARGET A UDIENCE You are not restricted to selling to consumers located in your neighbourhood or local region. Your consumers can be located all around the world.

6. YOU DO NOT NEED A LOT OF MONEY Internet business are fast, cheap and easy to set up. Reduced cost.

7. Y OU DO NOT N EED A L ARGE A DVERTISING B UDGET You can promote your online business for FREE very easily by producing a video, submitting articles to article directories, interacting with other users on social networks, and creating slideshow presentations.

A DVANTAGES ( COUNT.) Widen the availability of information Closer relationship Enhance work integration up to the world level Free samples. Media breaks. Time to market. Customer loyalty. Save time, movement, space and papers.

1.Promoting an Online Business can be very Difficult New online business owners may find it very difficult to establish their websites on the internet.

2. Competition with Large Businesses You will be competing with large businesses that have far greater resources than you do to attract customers to their

3. You may have Trouble Developing Relatıonships with your Customers Having an internet business means that you may have trouble developing relationships with your customers because you do not deal with them face to face. This could hurt your business because your customers may be inclined to make an in- person purchase rather than visiting your online store.

E-B USINESS C HALLENGES Privacy 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.

R ISKS Web sites that fail because of spike in visitor traffic Hacker penetrating the security of the system A company s customer without receiving their permission Problems wth fulfilment customer-service enquiries from the web site don’t reach the right person