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

OHT 1. 2 Learning objectives • Define the meaning and scope of e-business and 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 ebusiness and e-commerce to an organization. © Marketing Insights Limited 2004

OHT 1. 3 Issues for managers • How do we explain the scope and 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? © Marketing Insights Limited 2004

OHT 1. 4 The impact of Internet on business • Andy Grove, Chairman of 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) © Marketing Insights Limited 2004

OHT 1. 5 The impact on one industry - banking Metric May 1995 Dec. 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 © Marketing Insights Limited 2004

OHT 1. 6 © Marketing Insights Limited 2004 OHT 1. 6 © Marketing Insights Limited 2004

OHT 1. 7 The Internet’s impact on you • How many of you have 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? © Marketing Insights Limited 2004

OHT 1. 8 Popularity of online purchases Source: The Internet Monitor, BMRB, November 2001 OHT 1. 8 Popularity of online purchases Source: The Internet Monitor, BMRB, November 2001 (www. bmrb. co. uk) © Marketing Insights Limited 2004

OHT 1. 9 Definitions • You are asked to distinguish between ecommerce and e-business OHT 1. 9 Definitions • You are asked to distinguish between ecommerce and e-business at a job interview. • Write down your definitions. • Use examples to illustrate your points. © Marketing Insights Limited 2004

OHT 1. 10 E-commerce defined • ‘All electronically mediated information exchanges between an organization 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. easy. Jet. com © Marketing Insights Limited 2004

OHT 1. 11 E-business defined • All electronically mediated information exchanges, both within an 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) © Marketing Insights Limited 2004

OHT 1. 12 The distinction between buy-side and sell-side e-commerce Figure 1. 1 The 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 © Marketing Insights Limited 2004

OHT 1. 13 Recap – which is correct? Figure 1. 2 Three definitions of OHT 1. 13 Recap – which is correct? Figure 1. 2 Three definitions of the relationship between e-commerce and e-business © Marketing Insights Limited 2004

OHT 1. 14 Business drivers to going online Driver Marketing approach 1 Reduced costs OHT 1. 14 Business drivers to going online 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 © Marketing Insights Limited 2004

OHT 1. 15 Business barriers to going online Barrier Marketing approach 1 Security Reassurance OHT 1. 15 Business barriers to going online 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 © Marketing Insights Limited 2004

OHT 1. 16 Drivers for e-commerce Figure 1. 6 Attitudes to benefits of online 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 OHT 1. 17 Barriers to e-commerce Figure 1. 7 Barriers to development of online technologies Source: DTI (2002) © Marketing Insights Limited 2004

OHT 1. 18 Answer – the 7 Ss Figure 1. 9 The Mc. Kinsey OHT 1. 18 Answer – the 7 Ss Figure 1. 9 The Mc. Kinsey 7 S framework © Marketing Insights Limited 2004