Slide 1.

Chapter 1
Introduction to e-business and e-commerce

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Learning outcomes
Define the meaning and scope of e-business and e-commerce and their different elements Summarize the main reasons for adoption of e-commerce and e-business and barriers that may restrict adoption Outline the ongoing business challenges of managing e-business and e-commerce in an organization.

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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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 do we evaluate our current e-business capabilities?

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.1

Google circa 1998

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

Source: Wayback machine archive: [Link]

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E-business innovation and opportunity

Since Google was launched in 1998 which e-business startups have transformed the way we work, live and play?
How has Google innovated in search and its business model? See Table 1.1 for some of major innovators

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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E-business innovation
P. 5, Activity 1.1 Discussion
Which company / website impacted on Internet or the web? How do we measure their success? What made them successful?

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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The impact of the 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)

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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E-business opportunities
Reach
Over 1 billion users globally Connect to millions of products

Richness
Detailed product information on 20 billion + pages indexed by Google. Blogs, videos, feeds Personalized messages for users

Affiliation
Partnerships are key in the networked economy
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Internet risks what can go wrong with a transactional site?

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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E-consultancy Interview
How does HP drive traffic to their site? How do they communicate with partners? What do they syndicate? Whats driving their actions? Whats the benefit they can get by doing so? How do they manage user reviews?

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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What is e-commerce and e-business?

You are attending a role in the e-business team of a global bank You anticipate you may be asked the distinction between e-commerce and e-business. Write down a definition for each E-commerce:

E-business:

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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What is e-commerce and e-business?

E-commerce :
All electronically mediated information exchange between an organization and its external stakeholders (Chaffey) Digitally enabled commercial transactions between and among organizations and individuals

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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What is e-commerce and e-business?

E-business:
All electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business process (Chaffey) Digital enablement of transactions and processes within a firm, involving information systems under firms control. Does not include commercial transactions involving an exchange of value across organizational boundaries (Laudon)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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What is e-commerce and e-business?

P. 10, Activity 1.2 Use Google, Yahoo, and BING to do the search and report the number of hits

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.2

The distinction between buy-side and sell-side e-commerce

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.3

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

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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What is e-commerce and e-business?

Activity 1.3, P. 11
DiscussionQuestion 1

Intranet vs. Extranet

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Intranet vs. Extranet

P. 11, Activity 1.3 DiscussionQuestion 1

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.4

The relationship between intranets, extranets and the Internet

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Why Study E-commerce?

E-commerce technology is different, more powerful than previous technologies

E-commerce bringing fundamental changes to commerce Traditional commerce:
Passive consumer Sales-force driven Fixed prices Information asymmetry
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Unique Features of E-commerce Technology

1. 2. 3. 4. 5. 6. 7. 8. Ubiquity Global reach Universal standards Information richness Interactivity Information density Personalization/customization Social technology
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Origins & Growth of E-commerce

Precursors:
Electronic Data Interchange (EDI)

1995: Beginning of e-commerce

First sales of banner advertisements

Since then, e-commerce fastest growing form of commerce in the United States

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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The Growth of B2C E-commerce

SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b;

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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The Growth of B2B E-commerce

SOURCES: U.S. Census Bureau, 2009a; authors estimates.

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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E-commerce: A Brief History 19952000: Innovation

Key concepts developed Dot-coms; heavy venture capital investment

20012006: Consolidation
Emphasis on business-driven approach

2006Present: Reinvention
Extension of technologies New models based on user-generated content, social networking, services

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Types of E-commerce Selling Side

Transaction e-commerce sites Service-oriented relationship-building site Brand-building sites Portal, publisher or media sites

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Types of E-commerce Digital Marketing The management and execution of marketing using e-media in conjunction with digital data about customer
Involves using digital technology

To achieve these objectives

..

Through using these marketing tactics

..
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.5

First Direct Interactive ([Link])

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.6

Blendtec viral campaign micro-site ([Link])

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Web 2.0 and Beyond Web 2.0

Features-p. 24 Web 2 examples

Web 3.0 Features-pp. 24-25 Box 1.1

Research the web to discover what Web 3.0 technology and features have been used by which company

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.7

Evolution of web technologies

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

Source: Adapted from Spivack (2007)

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e-Commerce and SCM Whats Supply Chain Management (SCM)

The coordination of all supply activities of an organization from its supplier and partners to its customers

Value Chain How e-Commerce impact SCM?

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Business-Consumer Model of e-Commerce P. 26, Fig. 1.8 Classified by market relationship

Business-to-Consumer (B2C)
Business-to-Business (B2B) Consumer-to-Consumer (C2C)

Classified by technology used

Peer-to-Peer (P2P), e.g., BitTorrent and Napster

Mobile commerce (M-commerce)

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Summary and examples of transaction alternatives between businesses, consumers and governmental organizations
Figure 1.8
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Mini Case Study P. 27, Betfair

How does Betfair gains profit

Whats the challenges they may face

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.9

Betfair peer-to-peer gambling exchange

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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E-government What is? What are the benefits?

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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E-Business Opportunities what goals does a business can achieve through e-business?

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Business Adoption of E-Commerce/Business

Activity: You are in a team of advisers at a
local business link List
Drivers to adoption of sell-side e-commerce by business and how you can reinforce these by marketing benefits Barriers to adoption of sell-side e-commerce by business and how you can reinforce these by stressing benefits

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Cost/efficiency and competitiveness drivers

Cost/efficiency drivers
Increasing speed with which supplies can be obtained Increasing speed with which goods can be dispatched Reduced sales and purchasing costs Reduced operating costs

Competitiveness drivers
Customer demand Improving the range and quality of services offered Avoid losing market share to businesses already using e-commerce
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Business Adoption of E-Commerce/Business Drivers for Adoption-Profit generation and cost reduction

Tangible and Intangible benefits from ebusiness.-ref. p.31, table 1.3

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.10

Usage of different e-business services in European countries

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

Source: European Commission, 2008

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Case Study

P. 33, Case Study 1.2 North West Supplies

Read the case and discuss the questions on p. 35

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.11

North West Supplies Ltd site ([Link])

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

Source: Opportunity Wales

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E-business Risks and Barriers for Adoption

Strategy level issues Practical risks

Ref. p. 35

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.12
Source: DTI (2002)

Barriers to development of online technologies

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Potential Limitations on B2C E-commerce*

Expensive technology Sophisticated skill set Persistent cultural attraction of physical markets and traditional shopping experiences Persistent global inequality limiting access to telephones and computers Saturation and ceiling effects
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Evaluating an Organizations E-business Capability Is any company ready for e-commerce? Stage model of e-commerce
Ref. p. 37 Fig. 1.13

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.13

A simple stage model for buy-side and sell-side e-commerce

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Drivers of consumer adoption

Driver
1

Marketing approach

2 3 4 5 6

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Barriers to consumer adoption

Barrier
1

Marketing approach

2 3 4 5 6

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Figure 1.14

Variation in different online activities by gender

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

Source: UK National Statistics (2006) Individuals accessing the Internet Report from the UK National Statistics Omnibus Survey . Published online at [Link]

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Management Responses to E-Commerce

This will be addressed in the part 2 of the book

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Case Study

Case Study 1.3. eBay Read the case and discuss the question on page 46.

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Next Class
McKinsey 7S framework was referenced but not introduced in detail. Research the Internet to find some background information about it and bring back your discovery to next class.
Preview Chapters 2

Read the Real-world E-Business Experience Interview on pp.53-57.

Visit the [Link] .com web site to get a sense on their business
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009

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Next Class
Be prepared to discuss these questions:
What type of business does MoreTh>n do? What key issues has the interview covered? Why people would go online than offline according to the interview? Do you see a similar business model in Canada?

Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, Marketing Insights Limited 2009