1. Copyright © 2015 Springer Education 1 Lecture 8 ReF: CH16 L AUNCHING A S UCCESSFUL O NLINE B USINESS AND EC P ROJECTS

2. L EARNING O BJECTIVES 1. Understand the fundamental requirements for initiating an online business. 2. Describe the process of initiating and funding a start-up e-business. 3. Understand adding EC initiatives to an existing business. 4. Describe transforming an organization into an e- business. 5. Describe the process of acquiring websites an evaluate building versus hosting options. 6. Understand the importance of providing and managing content. 7. Evaluate websites on design criteria such as appearance, navigation and performance. 4-2 Copyright © 2015 Springer Education

3. 16.1 GETTING INTO E COMMERCE AND STARTING A NEW ONLINE BUSINESS Copyright © 2015 Springer Education 3

4. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS Getting into E-Commerce: The way on how to get started in EC yourself. You can start an e-commerce venture in any number of ways; the only limit is your imagination. Points to get into E-commerce: Starting a New Online Business. Adding e-commerce initiative(s) to an existing traditional business. Transforming to a complete e-business. Opening a webstore. 4-4 Copyright © 2015 Springer Education

5. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS Online businesses can be: 1. Pure-play companies. 2. Click-and-mortar companies that add online projects. Projects can be, for example, e-procurement, or selling online. G uidelines to avoid e-commerce failures: 1. Easy navigation website design. 2. Customer loyalty and trust. 3. Easy and logical order processing. 4. Appropriate method of payment. 4-5 Copyright © 2015 Springer Education

6. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS Creating a New Company or Adding an Online Project One of the major steps in launching any start up is finding a feasible product (service). Three steps for creating a new company /adding an online project: 1. Identify a consumer or business need in the marketplace. 2. Investigate the opportunity. 3. Determine the business owner’s ability to meet the need. 4-6 Copyright © 2015 Springer Education

7. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS There are some requirements and constraints that an owner of an online business must consider: 1. Understanding the culture of the Internet. e.g., the correct use of graphics in website design attracts visitors). 2. Considering the characteristics of the products and services you plan to sell. e.g., : Digital products (information, music, software), Services (e.g., stock brokering, travel ticket sales), Grocery products, such as fresh vegetables and ice cream do not sell well online. 4-7 Copyright © 2015 Springer Education

8. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS Planning Online Businesses: Business Plan: A written, formal document that specifies a company’s goals, and outlines how the company intends to achieve these goals.  The plan describes the nature and characteristics of the business. Business Plan Elements: 1. Strategic elements (e.g., mission statement, business model, value proposition). 2. Competitive positioning analysis and/or operational elements (e.g., production and operation plans, financial projections) of how a new venture intends to do business. The primary reason for a business plan: It is to use it to secure funding from a bank, an angel investor or a venture capitalist. 4-8 Copyright © 2015 Springer Education

9. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS Similarly, in an existing business, a business case needs to be written for any new large EC project. Business case: A document that is used to convince management to approve the investment of organizational resources in specific EC or other projects.  A business case supports the decision to go or not to go with an EC project.  For a large, resource-intensive EC project, a business case resembles a business plan.  For a small or medium-sized project, the business case can be much simpler and less formal. 4-9 Copyright © 2015 Springer Education

10. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS 4-10 Copyright © 2015 Springer Education Business Case Advantages: The business cases develop a systematic financial justification for projects; 1. They assist in organizing and not forgetting all the necessary data. 2. They point to drawbacks, constraints and risks. 3. Assist in collaboration with relevant partners. 4. Help to determine who needs a business case and how to use one.

11. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS 4-11 Copyright © 2015 Springer Education Funding a New Online Business: Launching an online business can be expensive so,  The entrepreneur is expected to invest personal funds from savings, personal lines of credit, or taking a second mortgage on his or her house.  Entrepreneurs should “bootstrap” as long as possible, before tapping into the venture capital market. If the new venture involves a significant risk, traditional sources of debt financing, such as a bank loan, can be difficult or impossible to obtain.

12. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS 4-12 Copyright © 2015 Springer Education First Round of Initial Funding: 1. Angel Investor: A wealthy individual who contributes personal funds and possibly advice at the earliest stage of business development usually in exchange of equity in the business. 2. Crowd-funding (crowd financing): It is based on using investors to fund start-ups. Each individual invests a small amount of money; the collection channels are Internet-based social

13. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS 4-13 Copyright © 2015 Springer Education First Round of Initial Funding: 3. EC incubator: A company, university, or non-profit organization that supports promising EC businesses in their initial stages of development.  The primary purpose of most incubators is to offer a variety of support services – office space, accounting services, group purchasing programs and information technology consulting at little or no cost.  In return, the incubator receives a modest fee, start- up equity in the company, or both.

14. 16.1 GETTING INTO E-COMMERCE AND STARTING A NEW ONLINE BUSINESS 4-14 Copyright © 2015 Springer Education Second Round Financing: 1. Venture capital (VC): Money invested in a business by an individual, a group of individuals (venture capitalists), or a funding company in exchange for equity in the business. Additional Funding: A Large Partner  As part of a VC investment or after the depletion of VC money, one or more large companies may offer financial assistance.  For example, Yahoo!, IBM, eBay, Microsoft, Facebook, Motorola, Google, Time Warner News Corp., and Oracle have invested in hundreds of EC start-up companies.

15. 16.2 ADDING E-COMMERCE INITIATIVES OR TRANSFORMING TO AN E-BUSINESS Copyright © 2015 Springer Education 15

16. 16.2 ADDING E-COMMERCE INITIATIVES OR TRANSFORMING TO AN E-BUSINESS Adding EC Initiatives to an Existing Business Most organizations have added or plan to add EC initiatives to their existing business: 1. A webstore 2. A portal 3. E-procurement 4. Auctions and reverse auctions 5. M-commerce 6. Social commerce 4-16 Copyright © 2015 Springer Education

17. 16.2 ADDING E-COMMERCE INITIATIVES OR TRANSFORMING TO AN E-BUSINESS Organizational Transformation A comprehensive concept that implies a major organizational change. It is not only a major change, but also a sharp break from the past. Key points in understanding organizational transformation: 1. The organization’s thinking is fundamentally modified. 2. There are major changes to processes and business models. 3. The change makes organizations completely different from the past practices. 4. The behavior of management and employees is completely changed. 5. The change will create new organizational structures and possibly different chains of command. 4-17 Copyright © 2015 Springer Education

18. 16.2 ADDING E-COMMERCE INITIATIVES OR TRANSFORMING TO AN E-BUSINESS How an Organization Can Be Transformed into an E-Business: It must transform several major processes, such as procurement, sales, customer relationship management (CRM), and manufacturing, as well as handle change management efforts.  Companies should spin off EC activities as part of the transformation process. The Transformation Process Should Include: 1. Software Tools for Facilitating the Transformation to E-Business. 2. Change Management. 4-18 Copyright © 2015 Springer Education

19. 16.3 BUILDING OR ACQUIRING A WEBSITE Copyright © 2015 Springer Education 19

20. 16.3 BUILDING OR ACQUIRING A WEBSITE A website is the primary mechanism where any firm doing business on the Internet advertises its products or services and attracts customers.  Many websites also sell products and services. The website may be a webstore, a portal, an auction site, and so on. Websites can be classified according to the level of functionality of the site: Informational website Interactive website Attractors Transactional website Collaborative website A social-oriented website 4-20 Copyright © 2015 Springer Education

21. 16.3 BUILDING OR ACQUIRING A WEBSITE Steps in Building a Website: 1. Select a Web host. 2. Register a domain name. 3. Create and manage content. 4. Design the website. 5. Construct the website and test. 6. Market and promote the website. 4-21 Copyright © 2015 Springer Education

22. 16.3 BUILDING OR ACQUIRING A WEBSITE 4-22 Copyright © 2015 Springer Education

23. 16.4 WEBSITE HOSTING AND OBTAINING A DOMAIN NAME Copyright © 2015 Springer Education 23

24. 16.4 WEBSITE HOSTING AND OBTAINING A DOMAIN NAME 4-24 Copyright © 2015 Springer Education As selling online requires a web-store. An e-business either owns, or rents the web-store in a mall, or at an independent location. Web Hosting Options 1. Store builder service Provides Web hosting, storage space, templates, and other services to help small businesses build a website expeditiously and inexpensively. 2. A Dedicated Hosting Service A Web hosting service is a type of hosting service that allows individuals and organizations to make their website accessible on the Web (providing websites with space on the Internet).  Companies such as Go Daddy, iPage, Shopify, Web.com, and BlueHost offer more and better services than a storebuilder service offers.

25. 16.4 WEBSITE HOSTING AND OBTAINING A DOMAIN NAME 4-25 Copyright © 2015 Springer Education Web Hosting Options 3. Self-Hosting With self-hosting, a company is doing the job inhouse (build your own website). For this purpose, it needs hardware, software, IT staff, and dedicated telecommunications services.  Self-hosting is beneficial when a business has special requirements, or a large and complex site. 4. Free Web Hosting Services Several companies offer free web hosting, but they do not offer the many features offered by the dedicated web hosting companies (e.g., Google “sites” is used to support the website of this book).

26. 16.4 WEBSITE HOSTING AND OBTAINING A DOMAIN NAME 4-26 Copyright © 2015 Springer Education Selecting and Registering a Domain Name Domain Name: A name-based Internet address (owned by a person or an organization) that identifies a specific website and its Internet-connected server.  It is an “online identity,” which allows users to identify one or more IP addresses.  Most domain names are assigned by an agency called Domail Name Systems, or DNS.  Usually, a domain name is designated by the portion of the address that comes right before the “.com” or “. org” (or other top level designation), and it includes the “.com” or “.org” portion.

27. 16.4 WEBSITE HOSTING AND OBTAINING A DOMAIN NAME 4-27 Copyright © 2015 Springer Education The Essentials of Domain Names  A domain name should be easy to remember.  The domain name system (DNS) maps a domain name to a corresponding IP address (e.g., 211.180.338).  Each domain name must include: A. A top-level domain (TLD) (e.g.,.com,.net,.org), B. Or a country-code top-level domain (ccTLD; e.g.,.au for Australia,.jp for Japan). C. Most ccTLDs also have a second-level domain name that indicates the type of organization (e.g., yahoo.co.jp ).  On the left side of the domain name is the organization’s name.

28. 16.5 WEB CONTENT CREATION AND MANAGEMENT Copyright © 2015 Springer Education 28

29. 16.5 WEB CONTENT CREATION AND MANAGEMENT 4-29 Copyright © 2015 Springer Education Web Content: A content (the text, images, sound, and video) that is included on a Web page.  Creating and managing content is critical to website success because it presents the company and its products to customers.  The Web content should include both primary and secondary content. Primary Content: Information about the product itself. Secondary Content: Information about marketing opportunities, such as the following: Cross-selling Up-selling Promotions Comments

30. 16.5 WEB CONTENT CREATION AND MANAGEMENT 4-30 Copyright © 2015 Springer Education Content Management: The process of collecting, publishing, revising, updating, and removing content from a website to keep content fresh, accurate, compelling, and credible. Content Management Software: Enables nontechnical contributors to create, edit, and delete content on a company’s website.  This way, companies empower and induce content owners to manage their own content.  There are numerous software packages available on the market that help with content management.

31. 16.6 WEBSITE DESIGN Copyright © 2015 Springer Education 31

32. 16.6 WEBSITE DESIGN 4-32 Copyright © 2015 Springer Education Website Design Includes information architecture, navigation design, use of colors and graphics, and maximizing site performance.  The purpose of this section is to enable users to understand and possibly contribute to the design of a website when working with Web designers. Information Architecture Website Describes how a site is organized. It lists all the components of a site and how they are connected together.  The most common site structure is hierarchical.

33. 16.6 WEBSITE DESIGN 4-33 Copyright © 2015 Springer Education

34. 16.6 WEBSITE DESIGN 4-34 Copyright © 2015 Springer Education Site Navigation Purpose: Helping visitors quickly and easily find the information they need on a website. Questions should be considered in the creation of site navigation: How will visitors access a site? How will visitors use the site? How will they find what is available at the site? How will they go from one page to another and from one topic to another? How will visitors find what they are looking for?  Site navigation has to help visitors find information efficiently, because visitors do not want to take the time to figure out how to access a site.

35. 16.6 WEBSITE DESIGN 4-35 Copyright © 2015 Springer Education Navigation Bar Provides the visitor with an opportunity to link to frequently accessed destinations (e.g., homepage, “about us”) and major sections of the website (e.g., product catalog, customer support). Site Map and Navigation A navigation bar usually appears at the top of the page where it will load first in the browser window  But if the page contains banner ads, then the navigation bar may be placed below the ads. Why?  Because frequent Web users develop “banner ad blindness” and they ignore banner ads.  A duplicate navigation bar may appear at the bottom of every page.

36. 16.6 WEBSITE DESIGN 4-36 Copyright © 2015 Springer Education

37. 16.6 WEBSITE DESIGN 4-37 Copyright © 2015 Springer Education Performance (Speed) A number of factors affect the page speed, some of which are 1. Out of the control of the Web designer (e.g., the visitor’s modem speed). 2. The factors that are under the control of the Web designer relate to the content and design of the page. E.g., videos and large images should be minimized. Colors and Graphics Rich media that includes colors, images, sound, and videos can improve the attractiveness of websites. Therefore, designers try to find what visitors like in rich media and give it to them.

38. 16.6 WEBSITE DESIGN 4-38 Copyright © 2015 Springer Education Website Usability Usability refers to how well users can learn and use a product to achieve their goals. It also refers to how satisfied users with that process.  Usability measures the quality of a user’s experience when interacting with a product or system, including: Websites Software applications Mobile technologies Any user-operated device

39. 16.6 WEBSITE DESIGN 4-39 Copyright © 2015 Springer Education Usability is a Combination of Factors It is important to realize that usability is not a single, one- dimensional property for visitors to the website. Usability factors include: Intuitive design Ease of learning Efficiency of use Memorability Error frequency and severity Subjective satisfaction