E-commerce Environment

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Presentation transcript:

E-commerce Environment Lecture 2 Sue Stocking

Objectives To understand the e-commerce environment Understand the on-line market place To identify changes in businesses due to electronic trading

The Business Environment All organisations operate within an environment The environment influences the way they work The environment influences the strategy of the business Business environments are turbulent

Aspects of the Business environment Customer expectations are always increasing Customer sophistication is increasing Customers expect a multi-channel interaction with businesses (the martini effect, anytime, anyplace, anywhere) Increasing competition and industry change Disaggregation of the value chain Globalisation Changing role of government Nature and roles of channels are changing Technology changes Market structure The value of businesses is volatile Disenfranchisement

The environment in which e-business services are provided (Chaffey,02) Organisations International Economic factors Legal constraints Cultural factors Macro-environment Micro-environment Society Public opinion Moral constraints Ethical constraints Technology Innovation Trends Organisation Country specific Economic factors Legal constraints Cultural factors Supplier Competitors Intermediates Customers

Influences on e-commerce strategy Needs of customers How services are provided to customers through competitors, intermediates and via suppliers Local and international economic conditions Legislation What business practices are acceptable Technological innovations

These influences vary rapidly The environment must be monitored Future trends anticipated This is the role of knowledge management

The e-commerce marketplace Electronic communications have changed relationships between the different parties of commercial transactions This change depends on whether the transaction is B2B or B2C

Comparison of B2B and B2C markets (Rowley,02) Organisational (B2B) Consumer (B2C) Fewer customers and known customers Lots of customers necessary for success Fewer transactions Large numbers of transactions Each transaction of high value Low-value transactions Net worth of each customer is high Cannot predict growth rate Regular transactions Less regular transactions with individual customers Credit rating known Credit rating often not known

B2B Interactions Organisation Channel Partners Channel (suppliers) (organisations) Supplier Organisation Business customers B2B transactions

B2C Interactions Organisation Channel Partners (organisations) Consumer customers Organisation B2C transactions

Summary of transaction alternatives between businesses and consumers B2C Organisation sites (Dell, Amazon) Consumer marketplaces (Kelkoo.com) C2C Auctions (QXL, EBay) Consumer reviews (Bizrate.com) B2B (Dell) Business marketplaces (CommerceOne) C2B Customer bids (LetsBuyit.com)

Summary This lecture has aimed to explain that all business operate in an environment. To identify the differences in trading patterns and marketplace models enabled by e-commerce.