SME (Small and Medium Size Enterprises) SMEs and e-Business SME (Small and Medium Size Enterprises)

Types of SME (graph as cited in KITE, 1999 http://kite.tsa.de)

Classification of SMEs Gazelles are growth-oriented companies that have achieved a minimum of 20% compound sales growth each year over the past five years, starting from a base of at least 100,000 euros. They are primarily medium-sized enterprises. Baby gazelles are micro- and small enterprises that have been identified as having the greatest potential to become gazelles. Mice are micro- and small enterprises comprised of quality-of-life companies. Owners of mice have little or no interest in growing or creating a large company that would eventually have a high value. Gophers are micro- and small enterprises that are more enterprising than mice, but still value quality of life over growth. KITE

Adoption steps of e-business services Adoption steps of e-business services (Chaffey)

Competitive threats acting on the e-business Competitive threats acting on the e-business (Chaffey)

Grid of product suitability against market adoption for transactional e-commerce (online purchases) Grid of product suitability against market adoption for transactional e-commerce (online purchases) (Chaffey)

Strategic options for a company in relation to the importance of the Internet as a channel Strategic options for a company in relation to the importance of the Internet as a channel (Chaffey)

SMEs and business issues What happens where there is no e-business strategy? Missed opportunities for additional sales on the sell-side and more efficient purchasing on the buy-side Fall behind competitors in delivering online services – may become difficult to catch up, e.g. Tesco, Dell Poor customer experience from poorly integrated channels

Ten strategic options for retailers Information only Export Subsume into existing business Treat as another channel Set up as separate business Pursue on all fronts Mixed system Switch fully “Best of both” Revitalise and buck the trend E-shock

E-Business benefits to organisations Expands marketplace to national and international markets Decreases the cost of creating, processing, distributing, storing and retrieving paper-based information Ability for creating highly specialised businesses Allows reduced inventories and overhead by facilitating “pull”-type supply chain management Enables expensive customisation of products and services Reduces the time between the outlay of capital and the receipt of products and services Initiates business process reengineering projects Lowers telecommunications cost Other (improved image, improved customer service, compressed cycle and delivery time, reduced transportation cost, flexibility) Turban15

E-Business benefits to consumers Enables shopping/transactions 24h a day, all year round Removes any location constraints Provides more choice Facilitates quick price comparisons Allows quick delivery Allows instant retrieval of product information Virtual auctions Virtual communities Facilitates competition, which results in substantial discounts Turban16

E-Business: wider benefits? To society Enables teleworking/teleshopping resulting in less traffic therefore less air pollution Allows less affluent people to buy more and increase their living standards Provides people in rural areas and Third World countries to have access to products and information, even learn professions and acquire college degrees Facilitates delivery of public services such as health, care, education and distribution of government social services at a reduced cost and improved quality Turban16

E-Business: some technical limitations Lack of system security, reliability, standards, and some communication protocols Insufficient telecommunication bandwidth Difficulties in integrating the Internet and EC software with legacy systems, existing applications and databases Vendors requirements include special Web servers and other infrastructures in addition to any network servers Incompatibilities between e-business software and hardware, operating systems or other components Turban16

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