Introduction to
E-business and understanding Business
ITU
Spring 2013
Goals of the course
• The course provides insight into e-business
projects by giving students a high-level
understanding for the interplay between
organization, e-business concepts,
strategies and it solutions.
• After the course, the student will be able to
play an active part in development and
implementation of e-business initiatives.
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Learning Outcomes
• A student who has met the objectives of the course will be able to:
• Define key e-business concepts, strategies, tools, frameworks,
theories, methods and technologies
• Identify trends and developments within e-business for different types
of enterprises and industries
• Characterize relevant e-business concepts in respect to type of
company and industry
• Analyze a specific company´s organization, culture, strategy,
environment and key processes
• Argue for appropriate choice of e-business concepts for a specific
company
• Discuss relevant key issues in managing e-business for a specific
company
• Integrate analysis, chosen e-business concepts and theories and
discussion on managing e-business - into a coherent academic written
business report
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Content
• The class combines theory and practical experience
of conducting e-business projects.
• We examine different business models and discuss
their potentials and challenges. During the course
we work with YOUR cases, that provides better
understanding of possibilities and challenges.
• Subjects: organization, teamwork, business models,
strategies, new technologies within e-business, and
a presentation of new ways to conduct e-business.
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Who am i?
• Ulrik Falktoft
• Msc.it in e-business from ITU
• Worked since 1998 as independent consultant with business
development, strategy, innovation, e-business and more
• External lecturer at CBS and IT-University in perspectives on ebusiness (EBUSS), knowledge management and learning
organizations (Master) and e-business and understanding
business (DMD)
• External lecturer at DTU and AAUK in computer-supported
communication and distributed co-operation, introduction to ebusiness and supervising bachelor og and master thesises 5
Who are Troels?
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Bachelor?
Courses at EBUSS?
Interests?
Thesis?
Other?
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Who are you?
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Different programs and/or courses?
Different profiles?
Different nationalities?
Other…?
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Materials and teaching
• Textbook
– Dave Chaffey: "E-business and E-commerce Management," 5th edition,
Prentice Hall, 2011
• Old Chinese proverb:
- Tell me – and I will forget
- Show me – and I might remember
- Involve me – and I will understand
• So interactive lectures means:
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I don’t want to talk all day
I expect you to discuss and come with input and questions
You will groupwise work and present as we go along
Not mandatory assignments – possibility for getting feedback
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Groups
• We will today make groups
• You will be responsible for presenting as we go along
• Groups does not mean that you should slack!
• Groups mean participation and collective responsibility
• .. If one member fails to deliver - the group is
responsible for providing
• So: act responsible…
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Exam
• 2013-05-15: Submit written report (30-50 pages per group)
• 2012-06-12/13/14/17/18: Oral exam (probably one or two days)
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Any questions so far?
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I have some questions!
• What is e-business?
– Can you come up with examples?
– What is e-commerce?
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E-business is..
• Marketing, buying, selling, delivering, servicing,
and paying for products , services and
information across networks linking an
enterprise and its prospects, customers, agents,
suppliers, competitors, allies and
complementors.
• OR: All aspects of business (using IT)
• IT-infrastructure, Internet, 3G /Edge and other
distributed digital technologies
And e-commerce…?
… plus e-management
E-commerce
E-business
E-Management
So what is new?
• Some say that a e-business revolution is taking
place today
• Migration from place to space
• Which e-business models will succeed with
current channels to customers?
• What are the key challenges facing established
businesses migrating from traditional market
place to a combination of place and space?
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Collapse of the distribution chain
Grower
Transporter
$8.00
Wholesaler
$12.00
Florist
$24.00
Consumer
$60.00
Consumer
$54.00
Disintermediation of consumer
distribution channel
Channel conflicts
• Channel conflicts have always existed but they are amplified by
the Internet
• The myth
• Elimination of all intermediaries
• Easy identification of buyers and sellers - no need for
middlemen
• The reality
• The Internet challenges intermediaries
• New types of intermediaries have appeared
Dis-, re- and countermediation
Types of intermediaries
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Directories (Yahoo)
Search engines
(Google)
Virtual resellers
(Amazon)
Financial
intermediaries
(Nordnet)
Evaluators
(comparison site)
Added value of intermediary
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Payment - credit card, letter of credit
Information - news, reports, use flashes; product information
Trust - relationship, certificates, membership
Pricing - auction, fixed pricing, volume discount
Shipping - services, insurance, custom handling
Mall - list of vendors
Community - chat, discussion groups, conferences
The main functions of markets
• matching buyers and sellers
• facilitating the exchange of information, goods,
services, and payments
• providing a
• Legal
• regulatory framework
Marketplace vs. Marketspace
Marketplace
• Cash
• Checks
• Paper documents
• Store fronts
• Face-to-face meetings
Marketspace
• Information becomes digital
• Costs of replication and
distribution lowered
• Small vs. big company
Motivations for e-business
• Huge growth in e-business
• Most people in developed countries have internet access
• Estimated size of e-business in the US:
• 2001-2002: 330 billion US$ revenue
• 2003-2005: 1 trillion US$ revenue
• Though disintermediation has received a lot of attention ,
intermediaries account for 20% of the revenue within ebusiness
• Growth in dot-coms
• Operate predominantly in space
• Often pioneering and testing new business models
What kind of market models?
• There are four basic market models for e-commerce:
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Store front model
Auction model
Portal model
Dynamic pricing model
Store front sites
• Combines seller and buyer directly
• A single or company web site where products and services are sold
• Mechanisms necessary for conducting the sale:
– Browsing online product catalogue
– Adding products to shopping chart
– Checking out products
– Paying online
– Physical products are usually shipped directly to customers’ home
address
• An online shopping center where many stores are located
– some are merely directories
– some provide shared services
– some are actually large click-and-mortar retailers (a store that exists
online and in the physical world)
– some are virtual retailers
Auction sites
• A place for buyers and sellers to negotiate a price for a product
• Auctions can be done:
– online or off-line
– at public sites (eBay) or at private sites (by invitation)
• Different models
– Traditional auctioning (buyers bid)
– Reverse auctioning (sellers bid)
– Dutch auctioning (price falls constantly)
• Commission paid to the site
Portals
• A place where you can find everything
• Horizontal portals
– Broad range of information, Yahoo
• Vertical portals
– Single area of interest, WebMd.com
• Commission from advertisers or percentage of sale
Dynamic price sites
• Name-your-price model
– E.g. Peters pris
• Comparison pricing model
– E.g. hi-fi priser, Kelkoo
• Bartering model
– E.g. Swap.com
• Offering free products and services model
– E.g. telephone operators
Some conclusions
• Several examples of e-business pioneers will drive
traditional businesses to conduct e-business as well
• These traditional businesses will evolve from current
business models to a combination of place and space
• E-business often amplify channel conflicts
• E-business enables a total reengineering of all internal and
inter-organizational business processes, and will
fundamentally challenge industry structures
DOT-com (or DOT-death)
• To optimistic prospects around 1999-2001
• A lot ordinary businesses that just went electronic did not make
it
• Other transformed into new ways of doing their business
• And change and transformation - that is the real challenge when
going from ”old” business to e-business
• An example of a good transformation…
The second wave of e-business
• Three important characteristics:
• Lower, more realistic, stock market valuations
• Existing firms will transform to an e-business model (place and
space)
• Cheaper , higher quality services
• Distinctions between B2B, B2C and C2C will disappear
The third wave
• Cloud, SaaS and last but not least – smartphones (in all shappes
and forms)
• What is different from cloud and smartphone apps – something
we didn’t see 10 years ago?
We must still understand business
• Way to many business fail when trying to transform into ebusiness
• That is often because they don’t understand the basics of their
own organization, strategy, culture and leadership
• It furthermore takes a new understanding of customers
• An how to transform and change – while the environment
change..
Customers
Waves of change
Form groups
• Form af group of 6 persons with 4 other Belbin
types
• Do a short presentation of each individual
• Tell the others is you know that there are days
during these three weeks, where you cannot
show up
• Talk about how you individually prefer to do
group work (and not about that you may not
prefer group work..)
An e-business idea
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Think individually about an e-business idea
Present all the ideas in the group
Discuss which ideas you find interesting
It is ok to combine ideas into new ideas
Come up with a e-business concept that all in
the group find interesting
Presentation
• Prepare a short presentation of your idea for an
e-business concept for the class
Validate e-business concept
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Why is it an e-business concept?
How can you create value on the idea?
Who are the potential customers?
What could be the competition?
Is the technology available or…?
• Desirable – Feasible - Viable
End of day
• Use the knowledge you get from the book and
forthcomming chapters, to develop you idea further
• Think, reflect, be open to new ideas and perspectives
• Next time: Read chapter 2 and skim chapter 1 to recap
• Remember to use proper references in your
presentation. It will help you keeping the overview and
it is mandatory in the final report.