1. E-commerce Environment
Lecture 2
Sue Stocking

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

3. 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

4. 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

5. 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

6. 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

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

8. 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

9. 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

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

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

12. 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)

13. 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.