E-business MANAGEMENT AND STRATEGY Chapter - 3 Dr. BALAMURUGAN MUTHURAMAN

Defining e-business E-business can be defined as the use of the internet to network and empower business processes, electronic commerce, organizational communication and collaboration within a company and with its customers, suppliers, and other stakeholders E-business utilize the internet, intranets, extranets and other networks to support their commercial processes 2

Meaning of E-business E-commerce is the buying and selling, marketing and servicing of products and services via computer networks E-business and e-commerce are often used synonymously Chaffey (2004)  e-commerce can best be conceived as a subset of e-business 3

THE RELATIONSHIP BETWEEN E-BUSINESS AND E-COMMERCE Buying and selling electronically Electronic distribution Online customer service Electronic marketing Secure transactions Automation of processes Electronic collaboration 4 Sell-side e-commerce Buy side e-commerce

An Internet Framework (Hanson, 2000) 5 The Web is fundamentally about individuals using a network to access digital products Marketing TechnologyEconomics Internet Marketing Digital Networked Individuals

DIFFERENT TYPES OF E-BUSINESS Business-to-business (B2B) Business-to-Consumer (B2C) Business-to-Government (B2G) Consumer-to-Consumer (C2C) Mobile commerce (M-commerce )

THE GROWTH OF E-BUSINESS FirmConsumers Ease of access Ease of use Access to wider marketAccess to market information Potential economies of scaleConvenience Marketing economiesLower prices Improved logisticsPersonalisation Automated processesCustomisation Network externalities Improved costomer knowledgeOne-to-one customer service Lower costsAccess to internet community Increased efficiencyempowerment 7

KEY BUSINESS DECISIONS Product – What type of product should be produced? Production – How should the product be produced? Promotion – How should the product be promoted? Financing – How should the company obtain funds to finance the cost of producing the product? 8

BUSINESS DECISIONS 9

KEY STAKEHOLDERS Owners – Entrepreneurs – Co-owners – Stockholders Creditors Employees – Managers Suppliers Customers 10

CREATING A BUSINESS IDEA Identify a competitive advantage. Differentiate the product or service from competitors. Determine necessary resources. Assess feasibility of the idea. 11

SUCCESS STORIES Domino’s Pizza – Managhans bought bankrupt pizza parlor – Started with little funding – Now generates sales of $1 billion per year Jeremy’s Micro Batch Ice Cream – Applied microbrewery concept to ice cream – Makes ice cream in small batches, sold in limited editions Glow Dog, Inc. – Sells light-reflective clothing for pets – After two years, average annual sales of $1 million 12

IMPACT OF TECHNOLOGY E-business or e-commerce – Use electronic communications to produce or sell products and services Sales to individual customers B2B e-business: transactions between a business and its suppliers Generates $301 billion in revenue and creates 1.2 million jobs each year 13

SUCCESSFUL E-BUSINESSES Started out small Created to sell a product or service that was not offered by competitors Transformed how traditional firms conducted business – Improved communication with customers – Improved information flow – Improved efficiency – Complemented traditional business operations 14

E-BUSINESS EXAMPLES Yahoo! – Internet search engine and the most visited site on the Web – Offers variety of services - free , web page hosting, custom-designed start-up pages – Generates revenue by selling advertising eBay – Online auction service 15

KEY FUNCTIONS OF BUSINESS Management – Means by which employees and other resources are used by the firm Marketing – Means by which products and services are developed, priced, distributed, and promoted to customers Finance – Means by which firms obtain and use funds for their business operations 16

KEY FUNCTIONS OF BUSINESS Accounting – Summary and analysis of the firm’s financial condition – Used to make various business decisions Information systems – Information technology, people, and procedures that provide appropriate information to make effective decisions 17

How Business Decisions Affect a Firm’s Earnings 18

CAPABILITIES AND BENEFITS OF E-BUSINESS Global Reach. Goods and services can be sold to customers worldwide. Personalization. Companies can customize products and reduce inventory. Interactivity. Customers and suppliers can negotiate prices online. Right-time and integrated marketing. Online retailers provide products when and where customers want them and promotions can be directed to individual customers. Cost savings. E-business can reduce costs.

BUSINESS APPLICATIONS Instant messaging Online shopping and order tracking Online banking Shopping cart software Teleconferencing Electronic tickets

DISADVANTAGES E-BUSINESS  Any one, good or bad, can easily start a business. And there are many bad sites which eat up customers’ money.  There is no guarantee of product quality.  Mechanical failures can cause unpredictable effects on the total processes.

ONLINE SHOPPING Online shopping is the process of buying goods and services from merchants who sell on the Internet Online consumers are evenly split between men and women and tend to be better educated, younger, and more affluent than the general population

HOW DO YOU BUY SOMETHING