B2C e-Commerce Selection and Value Performance and Service

B2C e-Commerce Selection and Value Performance and Service
E-Commerce Success Factors Selection and Value Performance and Service Look and Feel Advertising and Incentives Personal Attention Community Relationships Security and Reliability Lead a discussion on the factors that help to create success in a B2C e-commerce endeavor. Emphasize the importance of advertising and incentive programs. Emphasize how personal attention helps to drain some of the anxiety from the Web purchase process. Emphasis on security.

B2C e-Commerce How Traditional and Web Marketing Communications Differ in Supporting the Buying Process… Awareness Consideration Preference Purchase Loyalty Buying Process PATIENTLY ALLOW TIME FOR ANIMATIONS TO WORK Use the animated graphic to show how traditional and Web market communications are similar or different throughout the buying process. Give examples of each wherever possible. Traditional Market Communications Television Ads General Interest Magazines Television Ads General Interest Magazines Niche Magazines Collateral Point-of-Sale Promotions Direct Marketing Product Experience Buyers Clubs Web Market Communications Buttons Banners Sponsorships Banners Microsites Brochureware Website Daily Specials Sweepstakes First-time Order Incentives Alerts Newsletters

B2C e-Commerce Amazon.Com: Tops in B2C Retailing
One of the Biggest and Best Virtual Retailers Finally Making Profits Quick Confirmation and Order Processing Adding Goods and Services Wants to be a Next-Generation Retail Commerce Portal The mini-case on Amazon.com describes the success factors that have led the firm to be one of the top companies in B2C retailing.

B2C e-Commerce Steps in the Development of a Web Store
Use the graphic above to discuss the steps in the development of a Web store. Give examples of each whenever possible.

B2C e-Commerce Example of Prodigy.Biz Site
This is a screen shot of the Prodigybiz.com Website-a firm that specializes in Website services.

B2C e-Commerce NTT/Verio Inc.: Website Management
One of the World’s Leading Web Hosting Companies Offers Complete Services to Web Retailers Guarantees 99.9% Uptime 24x7 Server Monitoring and Customer Support Hosts more than 10,000 Web Businesses The mini-case on NTT/Verio Inc. is another firm offering Web hosting and a wide variety of services. They guarantee 99.9% uptime with 24x7 server monitoring and customer support. They host more than 10,000 Web businesses.

B2B e-Commerce The Wholesale and Supply Side of the Commercial Process
Electronic Catalog Systems Electronic Trading Systems Electronic Data Interchange Electronic Funds Transfer Integrating Supply-Chain Management with Customer Relationship Management Introduce the concept of B2B commerce. Explain that it represents the wholesale and supply side of the commercial process. Explain the electronic systems that support B2B commerce.

B2B e-Commerce Cisco Systems: B2B Marketplace Success
70% of Product Sales Occur at Their Website Wide Variety of Service Offerings in the Purchase Process Regular Customers Linked to Back-End Data Systems Strong Post-Sale Customer Support Highly Successful and Widely Used Implementation The Cisco Systems mini-case describes the firm's implementation of B2B commerce through the use of their Website. A strong and customer supporting Website now handles 70% of all their product sales. It was a highly and widely used implementation.

B2B e-Commerce e-Commerce Marketplaces e-Commerce Portals Exchanges
One-to-Many Many-to-One Some-to-Many Many-to-Some Many-to-Many e-Commerce Portals Exchanges Auctions Market Makers Infomediaries Describe the e-commerce market places: One to Many Many to One Some to Many Many to Some Many to Many Explain how e-commerce portals can serve to facilitate these marketplaces. This discussion continues with a graphic on the next slide.

B2B e-Commerce Example of a B2B Web Portal 1 3 2 4
INTERNET BUYERS SELLERS INTERNET AUCTION INTERNET REVERSE AUCTION B2B WEB PORTAL 1 MARKET GENERATOR SERVER 3 PATIENTLY ALLOW TIME FOR ANIMATIONS TO WORK Use the animated graphic to describe the workings of a B2B Web portal. Cite a real world example if you can. CONTENT MANAGER SERVER 2 POST-TRADE MARKET HISTORY SERVER 4 LIVE MARKET SERVER

B2B e-Commerce ChemConnect and Heritage Services: Public and Private B2B Exchanges Public B2B Exchanges ChemConnect – A Chemical Exchange Online Auction Much Quicker than any Other Method Private B2B Exchanges Heritage Built Private Exchange in their Own Web Portal Private Exchanges Offer More Control and Automates Processes The mini-case on ChemConnect and Heritage Services give examples of public and private B2B exchanges. Explain how both can be effective depending upon the individual circumstances.

B2B e-Commerce Electronic Data Interchange
EDI an Early Example of IT in e-Commerce EDI Over the Internet Using Secure VPNs is a Growing Application Define how an electronic data interchange (EDI) works. Describe how EDI performs over the Internet using secure virtual private networks. Use the graphic to explain how a typical EDI works.

(Rite Aid and Drugstore.com)
B2B e-Commerce Alternatives and Benefit Tradeoffs in Selecting an e-Commerce System Strategic Partnership (Rite Aid and Drugstore.com) Joint Venture (KBtoys.com) In-House Division (OfficeDepot.com) Spin-Off (Banesandnoble.com) Separation Integration PATIENTLY ALLOW TIME FOR ANIMATIONS TO WORK Use the animated graphic to compare and contrast the benefit trade-offs in the selection of an e-commerce system. Greater Focus More Flexibility Access to Venture Funding Established Brand Shared Information Purchasing Leverage Distribution Efficiencies

Clicks and Bricks in e-Commerce
e-Commerce Integration E-Commerce a Part of the Regular Business Plan Joint Ventures Strategic Partnerships Independent Spin-Offs E-Commerce Channel Choices Explain what is meant by clicks and bricks in e-commerce integration. Describe the various alternative channels that might be followed to facilitate e-commerce in a traditional firm (bricks).

E-Commerce Channel Development Strategies Use the graphic as a checklist for channel development strategy selection.

Citigroup: From Failure to Success in e-Commerce Integration Strategies Launch of e-Citi in 1977 Sought to Attract its Own Customers Electronically Before Someone Else Did Extremely High Costs and had Numerous Problems and Failures Formed New Internet Operating Group in 2000 By 2001 Online Customers Were Up 80% and 100 Websites Trimmed to 38 Saving $1 Billion The Citigroup mini-case demonstrates a colossal failure in e-commerce integration begun in 1977 but after some changes evolved into a highly successful unit. It required the formation of a new Internet operating group in 2000. By 2001 on-line customers were up 80% and 100 Websites were trimmed to 38 saving a billion dollars.

Summary Electronic Commerce E-Commerce Issues B2C E-Commerce
B2B E-Commerce The Citigroup mini-case demonstrates a colossal failure in e-commerce integration begun in 1977 but after some changes evolved into a highly successful unit. It required the formation of a new Internet operating group in 2000. By 2001 on-line customers were up 80% and 100 Websites were trimmed to 38 saving a billion dollars.

KEY TERMS Clicks and Bricks Alternatives E-Commerce Channel
E-Commerce Marketplaces a. Auction b. Catalog c. Exchange d. Portal E-Commerce Success Factors E-Commerce Technologies Electronic Commerce a. Business-to-Business b. Business-to-Consumer c. Consumer-to-Consumer Electronic Data Interchange Electronic Funds Transfer Essential e-commerce Processes a. Access Control and Security b. Catalog Management c. Collaboration and Trading d. Content Management e. Electronic Payment Systems f. Event Notification g. Profiling and Personalizing h. Search Management i. Workflow Management Infomediaries Trends in e-commerce Web Store Requirements

Optional Case Studies Real World Case 1 Real World Case 2
Click to go to Case 1 Real World Case 1 eBay Inc.: Managing Success in a Dynamic Online Marketplace Real World Case 2 Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems Click to go to Case 2 Real World Case 3 E-Trade and Wells Fargo: The Business Case for Clicks and Bricks e-Commerce Click to go to Case 3 Real World Case 4 Providence Washington Insurance and Tharco: The Business Value of an Online Customer Interface Click to go to Case 4

Decision Support Systems
Next... Decision Support Systems Chapter 9

eBay Inc.: Managing Success in a Dynamic Online Marketplace
Case 1 eBay Inc.: Managing Success in a Dynamic Online Marketplace 1- Why has eBay become such a successful, fast growing, and diverse online marketplace? Visit the eBay website to help you answer, and check out their many trading categories, specialty sites, international sites, and other features. Return to Chapter 8 Return to Cases Page

Case 1 eBay Inc.: Managing Success in a Dynamic Online Marketplace Discussion Points Would Include: Buyers/Sellers Feedback Rating System eBay’s Fraud Policy PayPal-Electronic eBay Payments Vortex-Draws Products/Players Expansion into B2C and B2B User Voice in Decisions Discussion points would include: Feedback system in which buyers and sellers rate each other on each transaction. EBay’s policing of the listings to control fraud. Its equivalent of a bank, PayPal, that allows buyers to make electronic payments to eBay/sellers who can’t afford a merchant credit card account. A powerful vortex that draws diverse products and players into its profitable economy. Expansion into B2C and B2B activities rather than remaining a pure consumer auction marketplace. User voice in decisions, The Voice of the Customer program, making users feel like owners.

Case 1 eBay Inc.: Managing Success in a Dynamic Online Marketplace 2- Why do you think eBay has become the largest online/offline seller of used cars, and the largest online seller of certain other products, like computers and photo equipment?

Case 1 eBay Inc.: Managing Success in a Dynamic Online Marketplace Discussion Points Would Include: Kruse International Purchase Acquire not Start Marketplace Requires a Different Strategy Include listings-Online AutoTrader.com LLC Arranged Insurance and Warranty Plans Established an Escrow Service Established Shipping/Inspection Services B2C is Similar to C2C Selling Points to include in the discussion would include: The purchase of Kruse International to acquire rather than start a marketplace that would require a different strategy than simply opening a new category. A deal to include listings from online classifieds site AutoTrader.com LLC. Arranged insurance and warranty plans. Established an escrow service. Established shipping and inspection services. Recognizing that companies and consumers sell to other consumers and that B2C is not different than consumer-to-consumer selling.

Case 1 eBay Inc.: Managing Success in a Dynamic Online Marketplace 3- Is eBay’s move from a pure consumer-to-consumer auction marketplace to inviting large and small businesses to sell to consumers and other businesses, sometimes at fixed prices, a good long term strategy? Why or why not?

Case 1 eBay Inc.: Managing Success in a Dynamic Online Marketplace Discussion Points Would Include: Profitability to eBay eBay’s Meets Shift in Demand eBay Maintains-Voice of the Customer IT Delivers Online System Discussion points to include: Profitability to eBay. EBay’s ability to meet the continual shift in demand for products and services. The ability of eBay to maintain its Voice of the Customer program which is one of its most cherished institutions. The ability to provide the IT to deliver the online system in the future at the level of quality expected by the users. CONTINUED… The impact of Trading Assistants on the effectiveness of eBay to continue its growth. Return to Chapter 8 Return to Cases Page

Case 1 eBay Inc.: Managing Success in a Dynamic Online Marketplace Discussion Points Would Include: Profitability to eBay eBay’s Meets Shift in Demand eBay Maintains-Voice of the Customer IT Delivers Online System Trading Assistants Impact on eBay Discussion points to include: Profitability to eBay. EBay’s ability to meet the continual shift in demand for products and services. The ability of eBay to maintain its Voice of the Customer program which is one of its most cherished institutions. The ability to provide the IT to deliver the online system in the future at the level of quality expected by the users. CONTINUATION… The impact of Trading Assistants on the effectiveness of eBay to continue its growth. Return to Chapter 8 Return to Cases Page

Case 2 Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems 1- What is the business value to Corporate Express of integrating its systems with the procurement systems of its customers? Return to Chapter 8 Return to Cases Page

Discussion Points Would Include:
Case 2 Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems Discussion Points Would Include: Half of 75,000 Daily Orders Electronically Smallest of Corporate Express’ 30,000 Customers Log onto E-Way Conduct Purchasing Transactions E-Way Checks Controls Corporate Express Tailors Catalog to User’s Practices Buyer Time/Cost Savings Discussion points would include: More than half of its 75,000 daily orders arrive electronically. The smallest of Corporate Express’ 30,000 customers, which typically lack their own automated procurement systems, log onto E-Way and conduct purchasing transactions rather than from another supplier. E-Way checks budgets, buyer authorizations and other controls for customers thus insuring continual procurement from the customers. Corporate Express tailors its catalog to a user’s format, terminology and buying practices and by doing so becomes the buyer’s system. Time and cost savings by the buyer.

Case 2 Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems 2- What are the business benefits of Corporate Express’ E-Way Web portal to its smaller customers? Its larger customers?

Smaller Companies: Case 2
Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems Smaller Companies: Smallest of Corporate Express’ 30,000 Customers Log onto E-Way Conduct Purchasing Transactions E-Way Checks Controls Corporate Express Tailors Catalog to User’s Practices Buyer Time/Cost Savings Smaller companies: The smallest of Corporate Express’ 30,000 customers, which typically lack their own automated procurement systems, log onto E-Way and conduct purchasing transactions rather than from another supplier. The smaller companies have placed many of their unique procurement rules into E-Way. E-Way checks budgets, buyer authorizations and other controls for customers thus insuring continual procurement from the customers. Corporate Express tailors its catalog to a user’s format, terminology and buying practices and by doing so becomes the buyer’s system. Time and cost savings by the buyer.

E-Way Integrated into the Processing Fabric of Company
Case 2 Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems Larger Companies: E-Way Integrated into the Processing Fabric of Company Tailored Buyer’s Catalog Buyer Time/Cost Savings Larger companies: E-Way has integrated E-Way into the processing fabric of the company’s internal procurement systems allowing the company to leverage the integration features offered by their own e-commerce software. The buyer’s catalog is tailored to fit their company’s procurement needs. E-Way’s ability to send all invoices to a central point for payments, its buying controls and its order-tracking ability. Time and cost savings by the buyer.

Case 2 Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems 3- Should every business that has an e-commerce website integrate its systems with the procurement systems of its business customers? Why or why not? Return to Chapter 8 Return to Cases Page

E-Commerce Web Site Integrated System Company Commitment to IT Support
Case 2 Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems Discussion Points Would Include: E-Commerce Web Site Integrated System Company Commitment to IT Support Current Customer Base Breakdown Discussion points would include: Company’s ability to integrate customers, old and new, into an e-commerce web site integrated system. Commitment of the company to support the IT operation. Corporate Express went from 12 to more than 300 IT employees. Breakdown of the company’s current customer base and the desire of the customers to move toward an Internet-based procurement system. CONTINUED… Performance and scalability issues. Return to Chapter 8 Return to Cases Page

E-Commerce Web Site Integrated System Company Commitment to IT Support
Case 2 Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems Discussion Points Would Include: E-Commerce Web Site Integrated System Company Commitment to IT Support Current Customer Base Breakdown Performance and Scalability Issues Discussion points would include: Company’s ability to integrate customers, old and new, into an e-commerce web site integrated system. Commitment of the company to support the IT operation. Corporate Express went from 12 to more than 300 IT employees. Breakdown of the company’s current customer base and the desire of the customers to move toward an Internet-based procurement system. CONTINUATION… Performance and scalability issues. Return to Chapter 8 Return to Cases Page

Case 3 E-Trade and Wells Fargo: The Business Case for Clicks and Bricks e-Commerce 1- What lessons in business strategy can be applied to development of the e-commerce channels of other companies from the experience of E-Trade? Return to Cases Page

Diversify With Selective Acquisitions
Case 3 E-Trade and Wells Fargo: The Business Case for Clicks and Bricks e-Commerce Lessons that Could be Applied Would Include: Diversify With Selective Acquisitions Implement Cost Reduction Programs Business-not Internet-based Lessons that could be applied would include: Diversification through selective acquisitions Implementation of cost reduction programs. Viewed itself as a business and not an Internet-based business that was exempt from all the rules of business.

Case 3 E-Trade and Wells Fargo: The Business Case for Clicks and Bricks e-Commerce 2- What is the business value of the C.E.O. online wholesale banking portal to Wells Fargo?

25% Internet Recession Growth-Wells Fargo’s
Case 3 E-Trade and Wells Fargo: The Business Case for Clicks and Bricks e-Commerce Discussion Points Would Include: 25% Internet Recession Growth-Wells Fargo’s C.E.O. Banking Portal Improved Expose Clients-Sign up for More Focused on Customer Want Discussion points would include: In a recession Wells Fargo’s Internet-based revenues grew 25 percent. The C.E.O. banking portal improved and enhanced the client relationships. The more that clients are exposed to all of Wells Fargo’s banking products when they log on, the more likely the customer is to sign up for additional services. Wells Fargo focused on what the customers wanted – convenience, instantaneous account information, and most of all, industrial-strength security and access controls.

Case 3 E-Trade and Wells Fargo: The Business Case for Clicks and Bricks e-Commerce 3- What can other companies learn from the successes and mistakes of the Wells Fargo e-commerce system? Return to Cases Page

E-commerce Systems Expensive Internet Systems Allows Cross Selling
Case 3 E-Trade and Wells Fargo: The Business Case for Clicks and Bricks e-Commerce Lessons Would Include: E-commerce Systems Expensive Internet Systems Allows Cross Selling Learn Customers Wants What lessons could be learned would include: An e-commerce system is not cheap. Maintaining an Internet system for customers allows cross selling other services which improves customer relationships. Learn what the customers want and do not want from the e-commerce site and meet their needs. CONTINUED… Users of a successful e-commerce site will become dependent upon it. Return to Cases Page

E-commerce Systems Expensive Internet Systems Allows Cross Selling
Case 3 E-Trade and Wells Fargo: The Business Case for Clicks and Bricks e-Commerce Lessons Would Include: E-commerce Systems Expensive Internet Systems Allows Cross Selling Learn Customers Wants Users Depend on Successful E-commerce Site What lessons could be learned would include: An e-commerce system is not cheap. Maintaining an Internet system for customers allows cross selling other services which improves customer relationships. Learn what the customers want and do not want from the e-commerce site and meet their needs. CONTINUATION… Users of a successful e-commerce site will become dependent upon it. Return to Cases Page

Case 4 Providence Washington Insurance and Tharco: The Business Value of an Online Customer Interface 1- What are the business reasons why even “in a tight budget year, e-commerce projects have not lost their appeal” and are still highly ranked by IT leaders from many companies? Return to Cases Page

Improving Order Taking Tuning the Sales Channel
Case 4 Providence Washington Insurance and Tharco: The Business Value of an Online Customer Interface Business Reasons Would Include: Improving Order Taking Tuning the Sales Channel Creating Business Partner Portals Cost Reduction Business reasons would include: Improving order taking or sales-lead management. Tuning the sales channel. Creating business partner self-service portals. Cost reduction.

Case 4 Providence Washington Insurance and Tharco: The Business Value of an Online Customer Interface 2- What is the business value of Providence Washington’s extranet portal? Of Tharco’s Web-based order processing system?

Providence Washington’s:
Case 4 Providence Washington Insurance and Tharco: The Business Value of an Online Customer Interface Providence Washington’s: Speed Delivery-Weeks to Minutes Automated the Sales Process Tharco’s: Interactive Web-based Ordering System Cost Savings Reduces Errors Provide Real-time Order System Providence Washington’s: Sped up the accurate delivery of bids for custom business insurance companies. Going from weeks to minutes. Automated the sales process and saved money on internal paper-shuffling. Tharco’s: Reduced the company’s reliance on the customer service representatives receiving orders by phone or fax and keying orders into the system with an interactive web-based ordering system. Cost savings. Reduces errors. Provides to customers a real-time system for every order.

Case 4 Providence Washington Insurance and Tharco: The Business Value of an Online Customer Interface 3- What lessons on developing successful e-commerce projects for small businesses can be gained from the information in this case?

Improved Productivity/ Increased Revenues
Case 4 Providence Washington Insurance and Tharco: The Business Value of an Online Customer Interface Lessons for Small Business Would Include: Improved Productivity/ Increased Revenues Check Financial Status of Vendors, etc. Allow Extra Time for Project Completion Lessons for small businesses would include: Payback should come from a combination of improved internal productivity and increased revenues. Businesses need to check out the financial status of software vendors and consultants. Businesses should allow extra time for project completion. You must be prepared for problems that shouldn’t happen, but will likely occur when you are interfacing multiple systems together. CONTINUED… Aggressively market the project to the customers including showing them how to use the system, training of their employees, and letting them try it for free. Return to Cases Page

Improved Productivity/ Increased Revenues
Case 4 Providence Washington Insurance and Tharco: The Business Value of an Online Customer Interface Lessons for Small Business Would Include: Improved Productivity/ Increased Revenues Check Financial Status of Vendors, etc. Allow Extra Time for Project Completion Aggressively Market Project Lessons for small businesses would include: Payback should come from a combination of improved internal productivity and increased revenues. Businesses need to check out the financial status of software vendors and consultants. Businesses should allow extra time for project completion. You must be prepared for problems that shouldn’t happen, but will likely occur when you are interfacing multiple systems together. CONTINUATION… Aggressively market the project to the customers including showing them how to use the system, training of their employees, and letting them try it for free. Return to Cases Page

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