E-Business and E-Commerce

Definition: Electronic Business �(U.S. Census Bureau)

• An process that an organization conducts over a computer-mediated network
• Production – procurement, ordering, stock replenishment, payment processing, production control, etc.
• Customer-focused – marketing, selling, customer order processing, etc.
• Internal or management-focused – employee service, training, recruiting, information sharing, etc.

Definition: Electronic Commerce

• Any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services.
• Completed transactions may have a zero price.

Definition: Electronic-Business Infrastructure

• The share of total economic infrastructure used to support e-business processes and conduct e-commerce transactions.
• Hardware
• Software
• Telecommunication networks
• Support services
• Human resources

Definition: Computer-Mediated Networks

• Electronically-linked devices that communicate interactively over network channels.
• Computers, personal digital assistants, web TV
• Internet-enabled cellular phones, interactive telephone systems
• Internet, intranets, extranets, telecommunication networks, EDI

New Business Rules from �E-Business

• Customers determine everything.
• Knowledge and information become more valuable than physical assets.
• People want more choices of products and services.
• Time is present time, distance is zero.
• Technology and network determine how the business is conducted.

What Are the Potential Benefits of E-Business?

Potential Benefits of E-Business

• More product/service selections
• Higher Productivity
• Improved accessibility and convenience
• Better availability of information
• Shorter lead time
• Improved communication
• Stronger competitive position

Examples of E-Business Applications?

Categories of E- Business Applications (BW, Nov. 24, 2003)

• Collaboration
• Customer Service
• Customization
• Streamlining
• Management
• Cutting Edge

Examples of E-Business Applications

• Cisco (financial management)
• Nike (product design)
• Jet Blue Airlines (customer service & ticketing)
• Dell Computer (customer ordering & service)
• Boeing (flight manuals, maintenance documents, spare parts to order)
• Garden.com (drop ship)
• AlliedSignal (operations scheduling & supply chain)
• Starbucks (smart cards & web access)

How Can An Automobile Manufacturer Apply E-Business?

How Can An Automobile Manufacturer Apply E-Business?

• Sales
• Customer Service
• Supplier management
• Marketing
• Product Design
• Financing
• Employees Training

The Internet’s Influence on Industry Structure – Michael Porter

• Bargaining power of supplier
• Bargaining power of buyers
• Rivalry among existing competitors
• Barriers to entry
• Threat of substitute products or services

Launching E-Business Initiatives

• Define what an e-business initiative means for the organization.
• Ask key questions to develop a strategy.
• Communicate the plan to executives and employees extensively.
• Prepare for mistakes and develop effective recovery systems.

Types of E-Commerce

• Customer-to-Customer (C2C)
• Business-to-Customer (B2C)
• Business-to-Business (C2C
• Government-to-Business (G2B)
• Government-to-Citizens (G2C)

Examples of E-Commerce?

Examples of E-Commerce

• Retailing and Marketing
• Entertainment and Travel
• Education and Learning
• Banking and Investment
• Health-Care
• Auction
• Personal and Business Service

Who Are Potential E-Commerce Supply Chain Members?

Potential Supply Chain Members of E-Commerce

• End users
• E-store
• payment processor
• Distributors’/Producers’ supply chain
• Transportation/logistics providers
• Customer service providers

Application of the Internet in Value Chain (Michael Porter)

• Improving operational effectiveness versus improving strategic positioning
• Effects on stages in the value chain
• Inbound Logistics
• Operations
• Outbound Logistics
• Marketing and Sales
• After-Sales Service

Basic E-Commerce Strategies �(P. Evans & T. Wurster, HBR, 1999)

• Reach (access and connection with customers)
• Richness (depth and detail of information to/from customers)
• Affiliation (advancing customers’ interests)

Key Business Drivers of�E-Commerce

• Internet
• Information
• Collaboration
• Agility
• Speed
• Service

Competitive Advantages of �E-Commerce

• Offers personalized products/services
• Enables customer self-service
• Reduces lead time
• Reduces overall cost for seller and customers
• Improves utilization of resources throughout the supply chain
• Increases customer satisfaction and loyalty
• Expands to global marketplace

What Could Be the Tasks Performed by Customers?

Tasks Performed by Customers

• Browse catalogs
• Conduct research on products/services
• Configure and place orders
• Look up pricing
• Look up lead time and order status
• Access invoicing information
• Access customer service information

B2C E-commerce Implementation Strategies

• Educate the customer
• Make the shopping fun
• Serve customers well
• Personalize the sales pitch
• Cross sell and up sell
• Low price
• Painless returns

Ways to Improve E-Commerce Operations

• Technology (hardware and software)
• Business Process Reengineering
• Agile production (mass customization)
• Just-in-time system
• Supply chain management
• Business intelligence
• Customer relationship management