Slide 1.1
Chapter 1
Introduction to e-business and
e-commerce
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.2
Learning outcomes
• Define the meaning and scope of e-business
and e-commerce and their different elements
• Summarize the main reasons for adoption of
e-commerce and e-business and barriers that
may restrict adoption
• Outline the ongoing business challenges of
managing e-business and e-commerce in an
organization.
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.3
Management issues
• How do we explain the scope and implications
of e-business and e-commerce to staff?
• What is the full range of benefits of
introducing e-business and what are the
risks?
• How do we evaluate our current e-business
capabilities?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.4
Figure 1.1
Google circa 1998
Source: Wayback machine archive: http://web.archive.org/web/19981111183552/google.stanford.edu
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.5
E-business innovation and
opportunity
• Since Google was launched in 1998 which
e-business startups have transformed the way
we work, live and play?
• How has Google innovated in search and its
business model?
• See Table 1.1 for some of major innovators
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.6
The impact of the Internet on
business
• Andy Grove, Chairman of Intel, one of the
early adopters of e-commerce, has made a
meteorological analogy with the Internet.
• He says:
Is the Internet a typhoon force, a ten times
force, or is it a bit of wind? Or is it a force that
fundamentally alters our business? (Grove,
1996)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.7
E-business opportunities
• Reach
– Over 1 billion users globally
– Connect to millions of products
• Richness
– Detailed product information on 20 billion +
pages indexed by Google. Blogs, videos,
feeds…
– Personalized messages for users
• Affiliation
– Partnerships are key in the networked
economy
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.8
What is e-commerce and e-business?
• E-commerce :
– All electronically mediated information
exchange between an organization and its
external stakeholders (Chaffey)
– Digitally enabled commercial transactions
between and among organizations and
individuals
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.9
What is e-commerce and e-business?
• E-business:
– All electronically mediated information
exchanges, both within an organization and with
external stakeholders supporting the range of
business process (Chaffey)
– Digital enablement of transactions and
processes within a firm, involving information
systems under firm’s control. Does not include
commercial transactions involving an exchange
of value across organizational boundaries
(Laudon)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.10
Figure 1.2
The distinction between buy-side and sell-side e-commerce
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.11
Figure 1.3
Three definitions of the relationship between e-commerce and e-business
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.12
Figure 1.4
The relationship between intranets, extranets and the Internet
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.13
Why Study E-commerce?
• E-commerce technology is different, more
powerful than previous technologies
• E-commerce bringing fundamental
changes to commerce
• Traditional commerce:
Traditional commerce often relies on face to face interaction with consumers and
thrives based on word of mouth, networking and customer referrals for new and
repeat business. Personal interaction is a key component of businesses
experience success with traditional commerce. Many businesses network within
the community, establish rapport with city leaders and chambers of commerce
and sponsor local events and sports teams to develop a relationship with the
community to draw in business.
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.14
Origins & Growth of E-commerce
• Precursors:
– Electronic Data Interchange (EDI)
• 1995: Beginning of e-commerce
– First sales of banner advertisements
• Since then, e-commerce fastest growing
form of commerce in the United States
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.15
The Growth of B2C E-commerce
SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b;
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.16
The Growth of B2B E-commerce
SOURCES: U.S. Census Bureau, 2009a; authors’ estimates.
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.17
E-commerce: A Brief History
• 1995–2000: Innovation
– Key concepts developed
– Dot-coms; heavy venture capital investment
• 2001–2006: Consolidation
– Emphasis on business-driven approach
• 2006–Present: Reinvention
– Extension of technologies
– New models based on user-generated content, social
networking, services
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.18
Types of E-commerce
• Selling Side
– Transaction e-commerce sites
– Service-oriented relationship-building site
– Brand-building sites
– Portal, publisher or media sites
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.19
Types of E-commerce
• Digital Marketing
• The management and execution of marketing
using e-media in conjunction with digital data
about customer
– Involves using digital technology
– To achieve these objectives
– Through using these marketing tactics
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.20
Figure 1.5
First Direct Interactive (www.firstdirect.com)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.21
Figure 1.6
Blendtec viral campaign micro-site (www.willitblend.com)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.22
Web 2.0 and Beyond
• Web 2.0
Web 2.0 is the term given to describe a second generation of the
World Wide Web that is focused on the ability for people to
collaborate and share information online. Web 2.0 basically
refers to the transition from static HTML Web pages to a more
dynamic Web that is more organized and is based on serving
Web applications to users.
– Web 3.0 (semantic markup and web services)
Semantic markup refers to the communication gap between human web
users and computerized applications. Web 3.0 would be a “read-writeexecute” web.
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.23
Figure 1.7
Evolution of web technologies
Source: Adapted from Spivack (2007)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.24
e-Commerce and SCM
• What’s Supply Chain Management (SCM)
– The coordination of all supply activities of an organization from
its supplier and partners to its customers
• Value Chain
• Necessarily processing, converting, improving or adding value to a
particular product (from its original state) thereby giving more
appeal, utility or value to a new product that promises a level of
satisfaction to prospective clients or customers.
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.25
How e-Commerce impact SCM?
 Cost efficiency
E-commerce allows transportation companies of all sizes to exchange cargo documents electronically over the
Internet. By using e-commerce, companies can reduce costs, improve data accuracy, streamline business
processes, accelerate business cycles, and enhance customer service.
 Changes in the distribution system
E-commerce will give businesses more flexibility in managing the increasingly complex movement of products and
information between businesses, their suppliers and customers.
 Customer orientation
E-commerce is a vital link in the support of logistics and transportation services for both internal and external
customers. E-commerce will help companies deliver better services to their customers, accelerate the growth of the
e-commerce initiatives that are critical to their business, and lower their operating costs.
 Shipment tracking
E-commerce will allow users to establish an account and obtain real-time information
about cargo shipments
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.26
Business-Consumer Model of e-Commerce
• Classified by market relationship
– Business-to-Consumer (B2C)
example: www.amazon.co.uk
– Business-to-Business (B2B)
Example: manufacturers and wholesalers or between retailers and wholesalers (Bajaj India to
Uttara Motors)
– Consumer-to-Consumer (C2C)
Example: www.bikroy.com
• Classified by technology used
– Mobile commerce (M-commerce):-The use of wireless handheld
devices such as cellular phones and laptops to conduct commercial
transactions online.
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.27
Summary and examples of transaction alternatives between businesses,
consumers and governmental organizations
Figure 1.8
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.28
Figure 1.9
Betfair peer-to-peer gambling exchange
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.29
Cost/efficiency and competitiveness
drivers
• Cost/efficiency drivers
– Increasing speed with which supplies can be
obtained
– Increasing speed with which goods can be
dispatched
– Reduced sales and purchasing costs
– Reduced operating costs
• Competitiveness drivers
– Customer demand
– Improving the range and quality of services offered
– Avoid losing market share to businesses already
using e-commerce
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.30
Business Adoption of E-Commerce/Business
• Drivers for Adoption-Profit generation and
cost reduction
• Tangible and Intangible benefits from ebusiness.
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 1.31
Figure 1.11
North West Supplies Ltd site (www.northwestsupplies.co.uk)
Source: Opportunity Wales
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009