1. P5:
Explain the competitive pressures on selected, contrasting business organisations to develop their use of e-business
M2:
Explain how two selected, contrasting business organisations have responded to competitive pressures to develop their use of e-business
D1:
Evaluate how successful a selected business organisation has been in preparing for the growing use of e-business

2. Lesson objectives Trends in internet development
Increasing speed, falling costs, rise of social networking, growing concerns over data security and increasing worldwide internet usage
Operational implications of trends on organisations
Customer and user expectations of web access, Increased competition and
New providers for old services
eg: music downloads, VoIP, and online shopping
Strategic implications of trends on organisations
Competitive pressures, Closures, Mergers, Takeovers, Relocations, Refocusing of business
Organisational adaptations to trends
Strategic level decisions, location of manufacture, location of service provision, re-engineering of business process, redefining of supply chain, investment in information technology, acquisition or development of appropriate skills
Implications of trends on customers
Loss of non-internet outlets and services; need for technical literacy to access full range of services

3. Trends in internet development
Increasing penetration and speed The internet is a global phenomenon with six billion users The numbers using it grows day by day Increased availability and access to the internet is a major trend that encourages businesses to get online Still parts of the world where internet penetration – that is, the percentage of the population who have regular internet access – is relatively low
Connection speed are increasing as technology improves, which makes it even more desirable for businesses and individuals

4. Trends in internet development
Falling Cost
Other factors can encourage greater access and use of the internet. The cost of broadband connection is falling
Which encourages more people and business to use the web and get more from it
Businesses see opportunities and realize that greater number of people are accessing the web
As costs, speed and reliability continue to improve, the internet evolution is likely to accelerate

5. Trends in internet development
Activity
Global Internet Penetration
The figures for global internet penetration are growing. Do you think that this presents business opportunities? How?

6. Operational Implications of Trends on Organizations
Expectations and product fulfilment
Customer expectations
Increased competition
New providers of old services

7. Operational Implications of Trends on Organizations
Introduction
Day-to-day running of a business is know as operational management
A number of factors deserve consideration before a business sets up a transactional websites
Transactional : Buy and Sell
These factors all affect the way an organisation works.

8. Operational Implications of Trends on Organizations
There can be a number of operational implications for a business that starts to trade online
Expectations and product fulfilment
Customer expectations
Increased competition
New providers of old services

9. Operational Implications of Trends on Organizations
Expectations and product fulfilment
Having a good-quality website can give an organisation a real advantage over rivals
It is crucial that the business considers operational implications
For Instance:
Does it have the background systems and processes that can meet an increase in demand
Possibly from a worldwide customer base?
This means there must be stock available at all times and online orders have to be fulfilled

10. BREAK

11. Operational Implications of Trends on Organizations
Customer expectations
Consumers who shop online are quite demanding
They have expectations that a website will be quick to load in a browser
They will want all site links to work and for the site to have minimum of annoying pop-ups
References to products in catalogues should be up to date and accurate
Prices should be easily available along with terms and conditions
The web shopper also requires a chance to give feedback or view an FAQ page
Finally the online shopper expects privacy and complete security

12. Operational Implications of Trends on Organizations
Increased competition
A business that opens up online immediately makes itself vulnerable to increased competition
Competitors can see entire product range, promotional offers and prices changes
The online business will be subject to online price comparisons
Offline businesses will be attempting to meet and improve upon prices and services

13. Operational Implications of Trends on Organizations
New providers of old services
In some business organisation there has been a change caused by the fact that the business is now operating in new markets on the web
Tesco.com for example, now offers music downloads from its website
Further examples of this include
New telecommunications services offered through VoIP and the huge growth of online shopping for everything from undergarment to household groceries.

14. Strategic Implications of Trends on Organisations
Introduction:
The general direction a business takes involves the bigger issues
These things are not about whether
For example:
To buy paper from one source rather than another, they are about whether to:
Enter new markets
Produce new things
Open or close premises
Relocate or trade online

15. Strategic Implications of Trends on Organisations
Before opening up a new web presence, a business has to consider certain strategic implications. What will be the effect of a big change in direction on that business?
Competitive Pressures
Prices
Recruitment
Relocations, takeovers, closures and mergers
Refocusing business
Competitive Pressures: The huge growth in online trading and the increasing tendency for global businesses to use digital communications technology in increasing competitive pressure. Competition online can increase in a number of areas, including prices and recruitment.
Prices: The web-based business is faced with very competitive pricing. A survey by Sage showed that most business expected a squeeze on profits caused by increased price competition. Businesses deciding to trade online are often obliged to publish lists of their prices. These lists are then quoted by price comparison services such as kelkoo or Dealtime. This is know as price transparency.
Recruitment: When it comes to competitive pressures on business, access to quality staff is still top of the list,, according to the Sage report. The web creates a fiercely competitive recruitment environment.
Relocations, takeovers, closures and mergers: We saw at the beginning of this unit how internet shopping is growing in popularity and looks set to continue growing at a rapid rate. This has caused particular pressure on the retail sector. When firms face declining market share and are unable to compete, there is a tendency to look for ways of strengthening the position. This can include relocations and sometimes takeovers by or of another business. The extreme response is to close an outlet altogether. Alternatively mergers with other firms can sometimes create a stronger business that is better able to compete.
The implications of a decision to close down a business operation can be immense for a region or a community. Jobs are lost that will affect families. This loss of jobs can have a knock-on effect on other businesses in the area. The whole effect can snowball.
Refocusing business: Some business activities have been completely changed in order to take up internet opportunities.

16. Strategic Implications of Trends on Organisations
Activity
What other competitive pressures do you think are brought to a business by the internet?

17. Organisational Adaptations to Trends
Strategic level decisions
Location of manufacture
Location of service provision
Re-engineering of business process,
Redefining of supply chain
Investment in information technology
Acquisition or development of appropriate skills.

18. Organisational Adaptations to Trends
Strategic level decisions
Strategic decisions at organisational level have a big impact on which direction a business takes and, of course, on whether it succeeds or fails in its marketplace. The Leeds business Card Corporation took a strategy decision based on e-commerce that intended to make full use of internet technology.

19. Organisational Adaptations to Trends
Location of manufacture and service provision: The Card Corporation website illustrates another aspect of the Internet. People can access data and interact with designs from a distance This means that the potential for online collaboration is significant, as location does not matter.

20. Organisational Adaptations to Trends
Location of manufacture and service provision: In manufacturing, Global businesses are increasingly giving consideration as to where is the best location to carry out production activities. It is often felt that these businesses will relocate only in areas where labour is cheap. One of the major business functions capable of relocation is customer services.
A big incentive to do this is the availability of a large local supply of personnel. The mobile telecoms company. Three Network, offers its customer service provision from India.

21. Organisational Adaptations to Trends
Location of manufacture and service provision:
Some businesses adopted an e-commerce website
Outsourced their customer service function
Example:
Kingfisher Group’s DIY.com outsourcing product enquiries and customer service to another company called Spark Response, at Follingsby Park, Gateshead Customers surfing to placed an order.
Made an enquiry or a request and all of these were dealt with by Spark Response personnel, although there were also B&Q managers on site.

22. Organisational Adaptations to Trends
Re-engineering of business process: The re-engineering of business processes is a systematic method of examining everything a business does, from top to bottom. Why are particular processes done? What is the reason for them? Are they still needed?

23. Organisational Adaptations to Trends
Redefining the supply chain: Supply chains differ for different products. A supply chain for the factory:
The Internet allows firms working together in a supply chain the chance to become much closer in the ways they work. There can be a process of *disintermediation where distributor or wholesalers are no longer needed. The supply chain becomes integrated and shorter. Ideally, customers benefit.
Key term:
*Disintermediation:
The removal of intermediaries (‘middle men’) from the process of getting products to where consumers can buy them.

24. Organisational Adaptations to Trends
Investment in information technology:
Obviously, businesses must invest in IT if they are to succeed in making productive use of the opportunities from e-business.
This investment can include:
Hardware and software requirements
Security issues to consider
Website design and maintenance
Network technologies to weigh up

25. Organisational Adaptations to Trends
Acquisition and development of appropriate skills:
If a business is to go ahead with an e-business strategy, it is even more important that its employees are IT literate.
Many employees can learn on the job by training at their desk.
IT contractors can train staff as part of the initial contract.
IT contractor will be consulted with staff users before a computer system is implemented
…Continue….

26. Organisational Adaptations to Trends
Acquisition and development of appropriate skills: One of the methods by which a business could become more prepared for e-business Is By Setting up individual Personal Development Plans (PDPs) For Staff …Continue…

27. Organisational Adaptations to Trends
Acquisition and development of appropriate skills:
The following sections and questions need to be answered in designing a person’s PDP.
Objective – what do I want the staff member to be able to do, or do better?
Success criteria – how will I measure how successful they have been?
Actions – what actions will I take to get them to achieve the learning objectives in the plan?
Implementation – how will I get the staff members to implement the things they have learned?

28. Implication Of Trends On Customers
Loss of non-internet outlets and services
Need for technical literacy to access full range of services
The Internet offers great opportunities for those who have the skills and understanding, or the cash, to be able to take advantage.
For those who do not have such opportunities, there is disadvantage.
Many people, mostly those already poor or socially disadvantaged in some other way, cannot or do not have access to the new technologies and the opportunities they bring.
… Continue…..

29. Implication Of Trends On Customers
The ‘socially excluded’ – are said to be on the wrong side of the ‘digital divide’ Because they lack the technical literacy skills to access the range of full digital services available to others. …. Continue…

30. Implication Of Trends On Customers
Income, education and age are the biggest factors in creating the digital divide, according to a European Union report (‘e-inclusion revisited: the local dimension of the Information Society’). It reveals that women are taking to technology in greater numbers than ever, and the over-55s are also gaining computer skills. But poor, badly educated people are still lagging behind.
Those who do not have Internet access are the ones with the most to lose if high street businesses are forced out of operation.

31. Implication Of Trends On Customers
Activity
Research the report ‘e-inclusion revisited: the local dimension of the information Society’ (you can find a link to this on Summaries its findings and write a report offering your own conclusions.
‘Poorly educated people have no chance of accessing the Internet properly’. Do you agree with this statement? Explain your response.

32. You have completed P5, M2, & D1
Thank You:
You have completed P5, M2, & D1
If you have any queries\questions, ask your instructor