Setting the Scene: The Internet and E-Commerce Impact of the INTERNET What is the difference between E-COMMERCE & E-BUSINESS

IMPACT OF THE INTERNET E-commerce and e-business existed before the Internet burst onto the business scene. However it is the ubiquitous nature of the Internet which gives it much of its power. It is ubiquitous because it is affordable technology. Therefore it opens up new opportunities to small and large firms alike. (true or false?)

E-COMMERCE & E-BUSINESS This is a much disputed topic. It has been argued that there is little or no meaningful difference between the two. However, there is a plethora of definitions in the literature. You must define what YOU are talking or writing about!

E-COMMERCE ‘E-commerce covers outward-facing processes that touch customers, suppliers and external partners, including sales, marketing, order taking, delivery, customer service, purchasing of raw materials and supplies for production and procurement of indirect operating-expense items, such as office supplies. It involves new business models and the potential to gain new revenue or lose some existing revenue to new competitors.’ [Bartels 00]

E-BUSINESS (i) ‘E-business includes e-commerce but also covers internal processes such as production, inventory management, product development, risk management, finance, knowledge management and human resources. E-business strategy is more complex, more focused on internal processes, and aimed at cost savings and improvements in efficiency, productivity and cost savings.’ [Bartels 00]

E-BUSINESS (ii) “E-Business is what happens when you combine the broad reach of the Internet with the vast resources of traditional information technology systems. It is dynamic and interactive.” (IBM)

To avoid confusion we will adopt the convention: E-COMMERCE = E-BUSINESS

STRATEGY The Internet opens up NEW STRATEGIC OPTIONS regarding how and where firms compete and how they organise. Porter’s Five Forces reveals some of the threats and opportunities.

The Company Traditional Rivals Threats of New Entrants Threats of Substitute Products & services Bargaining Power of Customers Bargaining Power of Suppliers Porter’s Five Forces Model