Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.1 Chapter 1 Introduction to e-business and e-commerce

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.2 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.3 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.4 Figure 1.1 Google circa 1998 Source: Wayback machine archive:

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.5 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.6 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.7 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.8 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.9 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 firm’s control. Does not include commercial transactions involving an exchange of value across organizational boundaries (Laudon)

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.10 Figure 1.2 The distinction between buy-side and sell-side e-commerce

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.11 Figure 1.3 Three definitions of the relationship between e-commerce and e-business

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.12 Figure 1.4 The relationship between intranets, extranets and the Internet

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.13 Why Study E-commerce? E-commerce technology is different, more powerful than previous technologies E-commerce bringing fundamental changes to commerce Traditional commerce: Traditional commerce often relies on face to face interaction with consumers and thrives based on word of mouth, networking and customer referrals for new and repeat business. Personal interaction is a key component of businesses experience success with traditional commerce. Many businesses network within the community, establish rapport with city leaders and chambers of commerce and sponsor local events and sports teams to develop a relationship with the community to draw in business.

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.14 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.15 The Growth of B2C E-commerce SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b;

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.16 The Growth of B2B E-commerce SOURCES: U.S. Census Bureau, 2009a; authors’ estimates.

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.17 E-commerce: A Brief History 1995–2000: Innovation –Key concepts developed –Dot-coms; heavy venture capital investment 2001–2006: Consolidation –Emphasis on business-driven approach 2006–Present: Reinvention –Extension of technologies –New models based on user-generated content, social networking, services

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.18 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.19 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.20 Figure 1.5 First Direct Interactive (

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.21 Figure 1.6 Blendtec viral campaign micro-site (

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.22 Web 2.0 and Beyond Web 2.0 Web 2.0 is the term given to describe a second generation of the World Wide Web that is focused on the ability for people to collaborate and share information online. Web 2.0 basically refers to the transition from static HTML Web pages to a more dynamic Web that is more organized and is based on serving Web applications to users. –Web 3.0 (semantic markup and web services) Semantic markup refers to the communication gap between human web users and computerized applications. Web 3.0 would be a “read-write- execute” web.

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.23 Figure 1.7 Evolution of web technologies Source: Adapted from Spivack (2007)

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.24 e-Commerce and SCM What’s Supply Chain Management (SCM) –The coordination of all supply activities of an organization from its supplier and partners to its customers Value Chain Necessarily processing, converting, improving or adding value to a particular product (from its original state) thereby giving more appeal, utility or value to a new product that promises a level of satisfaction to prospective clients or customers.

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.25 How e-Commerce impact SCM?  Cost efficiency E-commerce allows transportation companies of all sizes to exchange cargo documents electronically over the Internet. By using e-commerce, companies can reduce costs, improve data accuracy, streamline business processes, accelerate business cycles, and enhance customer service.  Changes in the distribution system E-commerce will give businesses more flexibility in managing the increasingly complex movement of products and information between businesses, their suppliers and customers.  Customer orientation E-commerce is a vital link in the support of logistics and transportation services for both internal and external customers. E-commerce will help companies deliver better services to their customers, accelerate the growth of the e-commerce initiatives that are critical to their business, and lower their operating costs.  Shipment tracking E-commerce will allow users to establish an account and obtain real-time information about cargo shipments

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.26 Business-Consumer Model of e-Commerce Classified by market relationship –Business-to-Consumer (B2C) example: –Business-to-Business (B2B) Example: manufacturers and wholesalers or between retailers and wholesalers (Bajaj India to Uttara Motors) –Consumer-to-Consumer (C2C) Example: Classified by technology used –Mobile commerce (M-commerce):-The use of wireless handheld devices such as cellular phones and laptops to conduct commercial transactions online.

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.27 Figure 1.8 Summary and examples of transaction alternatives between businesses, consumers and governmental organizations

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.28 Figure 1.9 Betfair peer-to-peer gambling exchange

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.29 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.30 Business Adoption of E-Commerce/Business Drivers for Adoption-Profit generation and cost reduction Tangible and Intangible benefits from e- business.

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.31 Figure 1.11 North West Supplies Ltd site ( Source: Opportunity Wales