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Overview of an E-Commerce Activity

Week 3

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References• Chapter 3: Launching a Business on the

Internet from Electronic Commerce – From Vision to Fulfillment by Elias M. Awad

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Goals of an On-line Business• Creating and maintaining competitive edge.

• Reduce operational costs.

• Improve employee communications and satisfaction.

• Explore new markets for products and services.

• Improve relationship with collaborating partners.

• Create distinct distribution channels.

• Ensure customer satisfaction.

• Improve supply chain management.

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Life Cycle of an E-Commerce Activity

• Business planning and strategising phase.– Having a vision,– Preparing a business plan,– Defining a target market,– Establishing immediate and long term goals.

• Technology infrastructure phase– Hardware,– Software,– Installation,– Security

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Life Cycle of an E-Commerce Activity (Contd.)

• Design phase– Building a website,– Making the website available,– Making the website attractive and interactive.

• Marketing phase– Advertisement,– User feedback,– Customer service.

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Life Cycle of an E-Commerce Activity (Contd.)

• Fulfillment phase– Selling and shipping the product,– Providing the advertised service.

• Maintenance and enhancement phase– Update website,– Update infrastructure,– Ensure availability and performance.

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Business Planning & Strategising• Strategising

– Evaluating a company’s position and its competition,

– Setting goals for the new few years,– Determining means to achieve these goals.

• Strategising for E-Commerce– Determining the fraction of business to be run

online.– Determining products and services to be provided

online.– Determining when to go online.– Connecting customers to content.

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Traditional vs. Online Business Strategies

Factor Traditional Business E-Business

Barriers to Entry Location Requirements

Time and space, unique products, special skills

Basis of competition Improved products Smarter products, fulfillment measures

Basis of Control Manufacturer Customer

Organisation Hierarchical departments

Specialised teams connected to Internet

Marketing and sales Mass advertising Mass personalisation

Pricing Based on cost of raw materials

Transactions costs on a sliding scale.

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Strategic Planning Considerations for E-Commerce

• Who are the customers?

• Who are the competitors?

• How familiar are you with Internet?

• Does your business focus on sustained growth or short term revenues?

• How good is your online product presentation?

• How do you present product offers?

• How will you manage and process transactions?

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Strategic Planning Considerations for E-Commerce (Contd.)

• How will the product be shipped?

• How will unexpected change be managed?

• How will feedback be obtained and managed?

• Capacity planning.

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Type of E-Commerce Sites• Site differentiated by markets

– Business to Consumer (B2C),– Business to Business (B2B),– Consumer to Consumer (C2C).

• Sites differentiated by products or services.

• Sites differentiated by information content.– Articles,– Stock quotes,– Customer feedback,– Chat,– Investment information.

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Technology Infrastructure Phase• Hardware resources

– Servers,– Routers,– Firewalls,– Based on required capacity, performance and

software requirements.

• Software– Interconnectivity tools,– Search engines,– Servers engines,– Development tools.

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Technology Infrastructure Phase

(Contd.)

• Internet Service Provider (ISP)– Type

• Retail ISP or Bulk ISP.

– Service Level Agreements• Availability, throughput, connection speed

• Security– Access Control,– Monitoring,– Authentication and Authorisation– Encryption

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Design Phase• Finalising the content for the website.• Organising content to facilitate search.• Forms for entering

– Order information,– Product inquiries,– User feedback.

• User tools– Shopping cart,– Catalogues,– Order processing tools.

• Database structure and content.

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Design Phase (Contd.)

• User Navigability and Control

• Consistency and Standardisation

• Recognition rather Recall

• Efficient Design

• Error Recovery

• Help and FAQs

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Typical Alternatives in Development (Contd.)

• In-house Development Vs. Outsourcing– In-house development ensures control over the all

the project phases.– Hiring a consultant or a firm provides professional

experience to the web development project.– Development costs involved in both cases.

• Website Hosting– Reserving a domain name.– Website hosting at an Internet Service Provider.– Website hosting at an internal server.

• Server should have a globally unique IP address.• Company should hire technical services for operations,

maintenance and upgrading of the infrastructure.

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Marketing Phase• e-Store never shuts,

– 24/7 operation.

• Good Site Service and Maintenance– Accurate information.– Product and service demonstration.– Competitive prices.

• Advertising– Registering to search engines.– Collaborate with partners through link sharing.– Ads and banners.– Advertising via e-mail (Beware of SPAM).

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Marketing Phase (Contd.) • Customer Knowledge

– Understanding the customer base.– Collect statistics.

• Monitoring and tracking.

– Surveys.

• Making Sales– Easy to use purchasing functionality

• Shopping carts• Automatic bill and tax calculation

– Providing hints to customers on the basis of previous purchases.

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Marketing Phase (Contd.)

• Making Sales (Contd.)

– Stock Control• Determining availability.• Determining alternatives to offer to the customers.• Determining items in the shopping cart and reserving

them for the customers.– Items in the shopping cart returned to stock if the customer does

not checkout within a specified period.

– Financial Transaction• Minimal offline operations to finalise transactions.

– Offline operations ensure authenticity and security.

• Using credit cards and electronic cash.– Card verification and authentication.– Bank agreement to handle electronic cash transactions.

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Marketing Phase (Contd.)

• Delivery and Follow up– Delivery imminent after purchase.– Soft-goods delivered via Internet immediately

• E.g., media, software, literature, etc.

– Follow up to ensure customer satisfaction.• Product quality• Product performance• Ordering and deliver process

– Marketing essentials for online business• Narrow target customers.• Know your visitors.• Integrate on-line sales with other sales channels.

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Fulfillment Phase• Fulfillment is what happens after a sale is

made.– Packing the merchandise– Shipping the merchandise– Answering inquiries– Billing– Follow up

• Fulfillment effort is a part of an integrated chain– Customers– Warehouses– Suppliers– Couriers

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Fulfillment Phase (Contd.)

• Integrating fulfillment with inventory– Product availability.– Matching products for sale with products in

inventory.– Out-of-stock notice.– Back orders.– Order processing.– Customisation.

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Maintenance & Enhancement• Maintenance

– Ensuring system operation as per specification.

• Enhancement– Implementing changes and upgrades to improve

system’s performance.

• Maintenance ensures usefulness and usability of a website.

• Enhancement ensures customer expectations are fulfilled in accordance with latest standards.

• Requires management of – Customer feedback.– Customer service.

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Maintenance & Enhancement (Contd.)

• Managing Customer Feedback– FAQs on prominent pages of the website.– Convenient access to information.– Efficient page download from a variety of media.– Manage e-mail responses.

• Managing Customer Service– Updating orders.– Order status.– Technical support.– Localisation.– Handling customer expectations.