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 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.7 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 1.8 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 1.9 Internet risks – what can go wrong with a transactional site?

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.10 E-consultancy Interview How does HP drive traffic to their site? How do they communicate with partners? What do they syndicate? What’s driving their actions? What’s the benefit they can get by doing so? How do they manage user reviews?

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.11 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.12 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 1.13 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 1.14 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.15 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 1.16 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 1.17 What is e-commerce and e-business? Activity 1.3, P. 11 –Discussion—Question 1 Intranet vs. Extranet

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.18 Intranet vs. Extranet P. 11, Activity 1.3 Discussion—Question 1

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.19 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 1.20 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.21 Unique Features of E-commerce Technology 1.Ubiquity 2.Global reach 3.Universal standards 4.Information richness 5.Interactivity 6.Information density 7.Personalization/customization 8.Social technology

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.22 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 1.23 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 1.24 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 1.25 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 1.26 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 1.27 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 1.28 Figure 1.5 First Direct Interactive (

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.29 Figure 1.6 Blendtec viral campaign micro-site (

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.30 Web 2.0 and Beyond Web 2.0 –Features-p. 24 –Web 2 examples Web 3.0 Features-pp 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.31 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 1.32 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 How e-Commerce impact SCM?

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.33 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.34 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 1.35 Mini Case Study P. 27, Betfair –How does Betfair gains profit –What’s the challenges they may face

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.36 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 1.37 E-government What is? What are the benefits?

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.38 E-Business Opportunities what goals does a business can achieve through e-business?

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.39 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.40 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 1.41 Business Adoption of E-Commerce/Business Drivers for Adoption-Profit generation and cost reduction Tangible and Intangible benefits from e- business.-ref. p.31, table 1.3

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.42 Figure 1.10 Usage of different e-business services in European countries Source: European Commission, 2008

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.43 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.44 Figure 1.11 North West Supplies Ltd site ( Source: Opportunity Wales

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.45 E-business Risks and Barriers for Adoption Strategy level issues Practical risks –Ref. p. 35

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.46 Figure 1.12 Barriers to development of online technologies Source: DTI (2002)

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.47 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.48 Evaluating an Organization’s 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.49 Figure 1.13 A simple stage model for buy-side and sell-side e-commerce

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.50 Drivers of consumer adoption DriverMarketing approach

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.51 Barriers to consumer adoption BarrierMarketing approach

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.52 Figure 1.14 Variation in different online activities by gender Source: UK National Statistics (2006) Individuals accessing the Internet – Report from the UK National Statistics Omnibus Survey. Published online at

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.53 Management Responses to E-Commerce This will be addressed in the part 2 of the book

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.54 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, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.55 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 Visit the web site to get a sense on their business

Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Slide 1.56 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?