E-Business
E-Business
– E-commerce – the buying and selling of goods and
services over the Internet
– E-business – the conducting of business on the
Internet including, not only buying and selling, but
also serving customers and collaborating with
business partners
Advantages of Ebusiness
• Expanding global reach
– It operates 24/7 thus reducing transaction cost
• Opening new markets
– Niche (through personalization & mass customization)
• Reducing costs
– Cost of operations (selling direct to customers, etc)
• Improving operations
– Faster, available & effective communication
• Improving effectiveness
– Revenue generated by the web traffic
– Number of new customers
– Reduction in customer service calls
E-business model
• – an approach to conducting electronic
business on the Internet
Models (cont)
Models Cont.
• Business to Employee
– Normally implemented through intranet
• Government-to-citizen (G2C)
– A person filing income taxes online.
• Government-to-business (G2B)
– Government purchases supplies using Internet-enabled
procurement system.
• Government-to-government (G2G)
– Foreign government accessing U.S. federal regulations
Models (cont)
Business-to-Business (B2B)
• Businesses buying from and selling to each
other over the Internet
• B2B relations tend to be more complex and
have higher security needs
• Account for 80% of all on-line business (E-
business)
Business-to-Business (B2B)
• Electronic
marketplace (e-
marketplace) –
interactive business
communities
providing a central
market where
multiple buyers and
sellers can engage in
e-business activities
Business-to-Consumer (B2C)
• B2C -Businesses that sell their products or
services to consumers over the Internet, avoiding
any intermediaries
• Disintermediation - removal of the intermediary
(middleman) in a sale. Companies can sell
directly to customers (retail or wholesale)
without assistance
– e-shop – a version of a retail store where customers
can shop any time without leaving their home (also
called e-store, e-tailer, on-line store)
B2C: Disintermediation
E - Banking
• Financial institutions offer:
– Online banking
• Management of credit card, checking, and savings
accounts
– Electronic bill pay
• Bill payment online
– Online investing
• Growing in popularity
• Extensive use of Internet for obtaining financial
information
Consumer-to-Business (C2B)
• C2B – any consumer that sells a product or
service to a business over the Internet
• The demand for C2B e-business is expected to
increase over the next few years due to
customer’s desire for greater convenience and
lower prices
Consumer-to-Consumer (C2C)
• C2C – sites primarily offering goods and services to assist
consumers interacting with each other over the Internet
– Online auctions
• Electronic auction (e-auction) - Sellers and buyers solicit consecutive
bids from each other and prices are determined dynamically
• Forward auction - Sellers use the site as a selling channel to many
buyers and the highest bid wins
• Reverse auction - Buyers use the site to purchase a product or
service, selecting the seller with the lowest bid
ORGANIZATIONAL STRATEGIES FOR E-BUSINESS
– Primary business areas taking advantage of e-
business include:
• Marketing/sales
• Financial services
• Procurement
• Customer service
• Intermediaries
Marketing/sales
– Generating revenue on the Internet
• Online ad (banner ad) - box running across a Web
page that contains advertisements
• Pop-up ad - a small Web page containing an
advertisement
• Viral marketing - a technique that induces Web sites
or users to pass on a marketing message
• Mass customization - gives organizations the
opportunity to tailor products or services
Financial Services
– Online consumer payments include:
• Financial cybermediary
• Electronic check
• Electronic Funds Transfer (EFT)
Procurement
• Maintenance, repair, and operations (MRO)
materials (also called indirect materials) –
materials necessary for running an organization
but do not relate to the company’s primary
business activities
– E-procurement - the B2B purchase and sale of
supplies and services over the Internet
– Electronic catalog - presents customers with
information about goods and services offered for sale,
bid, or auction on the Internet
Customer Service
• Customer service is the business process where
the most human contact occurs between a buyer
and a seller
• e-business strategists are finding that customer
service via the Web is one of the most
challenging and potentially lucrative areas of e-
business
• The primary issue facing customer service
departments using e-business is consumer
protection
Consumer Protection
• Illegal or harmful goods, services, and content
• Insufficient information about goods and their
suppliers
• Invasion of privacy
• Cyber fraud
Intermediaries
• Intermediaries – agents, software, or
businesses that bring buyers and sellers
together that provide a trading infrastructure
to enhance e-business
• Reintermediation – using the Internet to
reassemble buyers, sellers, and other partners
in a traditional supply chain in new ways
MEASURING E-BUSINESS SUCCESS
• Most companies measure the traffic on a
Web site as the primary determinant of the
Web site’s success
• However, a large amount of Web site traffic
does not necessarily equate to large sales
• Many organizations with high Web site
traffic have low sales volumes
Web metrics
• Clickstream data tracks the exact pattern
of a consumer’s navigation through a
Web site
– Clickstream data can reveal:
• Number of pageviews
• Pattern of Web sites visited
• Length of stay on a Web site
• Date and time visited
• Number of customers with shopping carts
• Number of abandoned shopping carts
E-business benefits include
– Highly accessible
– Increased customer loyalty
– Improved information content
– Increased convenience
– Increased global reach
– Decreased cost
Demerits
– Protecting consumers
– Increasing liability
– Providing security
NEW TRENDS IN E-BUSINESS:
M-COMMERCE
• Mobile commerce or m-commerce - any electronic
transaction or information interaction conducted
using a wireless, mobile device, and mobile
networks, that leads to transfer of real or
perceived value in exchange for information,
service, or goods (MobileInfo, 2004)
• Mobile commerce - the ability to purchase goods
and services through a wireless Internet-enabled
device
Key Drivers of M-Commerce
• Growth of consumer interest in adoption of the
Internet and e-commerce
• Real-time transfer of data over 3G and 4G cellular
networks
– “Always-on” connectivity
• M-commerce market in the United States grew from
$396 million to $1.2 billion from 2008 to 2009.
