e-business - an into duct ion

8/3/2019 E-business - An Into Duct Ion

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E-BUSINESS MANAGEMENT


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Course Objectives

To understand various business models ofinternet firms or dotcoms

To understand impact and uses of internettechnologies on traditional business

To Learn key technologies and infrastructurerequired for e-business

To understand Security and Legal issues in e-business


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Suggested Readings Text:

Electronic Commerce A managerial perspectiveTurban, Lee et al, Pearson Education

References: Introduction to Electronic Commerce: Turban, King,

Lang, 2nd edition, Pearson Education.

E-commerce: An Indian Perspective Joseph P.T., S.J.

Electronic commerce Bharath Bhasker, Tata Mcgraw

Hill Appelgate, Austin et al, Corporate Information Strategy

and Management: Text and cases, Sixth Edition, TataMcGraw Hill, 2007.

Other reading Materials and cases (refer course pageat lms.mim.ac.in)


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Internal Evaluation Midterm: 20

Mini Project (Developing a case): 15(Presentation+Report)

Quiz: 15

Total: 50


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Case study:

B2C:

Guruji.com: Indian Search engine : evaluating businessmodel

Flipkart.com

B2B:

Indiamarkets.com

ITC E-choupal

Doubleclick.com: Internet Privacy and Legal issue in e-business


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E-business in India

In 2007, out of 1000 crore e-commerce transactions 800 crorewere B2B transactions and the rest were from retail internet.(NASSCOM)

Growing users of internet and increase in owners of mobile and

personal computers Service sector: BFSI (Banking Finance and Insurance) Travel

and Hospitality

Retailing sector finally sees some action (Flipkart,Futurebazaar.com)

Majors like Telco, Hindustan Motors, Coke, Hindalco save 5 to10 percent of total cost from e-procurement

Focus from the current government (IT Act 2000, Amendment:IT Act 2008)- Legal Foundation for ebusiness in India


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Governments Initiatives to promote e-business: Intitialstage

IT Act 2000 & controller of CA(Certifying Authority)Appointed

Telecom Infrastructure Improvement ISPs given license to setup international gateways and lay under

sea cables

Permission to access providers to lay optical fiber networksalong national highways and other road

Decrease in the tariffs in telecom sector and competition With 3G Networks, mobile commerce is the next huge

opportunity for business

100% FDI has been allowed in B2B e-commerce

Government is moving online


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Internet Users Profile: India Internet Penetation:

As of September 2011, there will be 112 Mn claimedInternet users (88 Mn urban and 24 Mn rural) growth of

13% over last year

Frequency of Usage: Of 112 Mn claimed Internet users, there are 90 Mn (70 Mn

urban and 20 Mn rural) users that use Internet at least oncea month

Of active Internet users, 87% of Urban Internet users useinternet at least once a week.

Source: Internet and Mobile Association of India, Internetin India report (November 2011)


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Internet Users Profile: India Access point:

Home as access point has grown by a large

percentage compared to 2009. The usage ofCyber Caf for Internet access has reduced thisyear.

Of the active Internet users in urban cities, 26.3Mn access Internet through their mobile phones.This has been the most recent change in theaccess behavior.


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Internet Users Profile: IndiaDemographics:

Youngsters in India continue to drive Internet

Usage in India. In usage of School Going Kids(below 18 years) has seen a substantial rise.

School going kids 21%

College going students- 27%

Young men 27%Older men 11%

Working women 7%

Non-working women 8%


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Internet Users Profile: India Purpose of use :

Urban cities, Emails - 89% ,

social networking activities- 71% search education-related content- 64% ,

use Internet for chatting purposes - 55%

access videos, music and images - 49%

Rural Internet users accessing music, videos and images - 46%

email and communication activities - 38% ,

general information - 29%

Education related content 27%


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Internet Users Profile: India Income group:

Penetration in Lower Income groups are on rise

(25% with people from SEC C status and 11% forthe ones with SEC D and E status).

Internet usage in Smaller towns continue to spiketheir dominance over Top 8 metros with a

combined usage of more than 60%


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What is E-Business ?

E-marketing refers to using internet as channel tomarket products/services

E-commerce refers to buying and selling on theinternet.

E-business refers to using internet technologies toimprove relationship with customers, suppliers,

employees and other stakeholders

E-marketingE-commerce

E-Business


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E-business vs. e-commerce

E-marketing

Home page

E-commerceE-Business

On-line catalog On-line order taking

Procurement

Manufacturing/Distribution

Logistics Planning and Scheduling

Customer Service

HR & Financial Management


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E-business: Everyone Online

Employees (Intranet)

- book their own travel, enter expenses,get vacation sanctioned, bonus information

Customers

- Orders, Billing, Service and Support Suppliers

- Inventory and supply chain management


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TYPES/Business Models OF E-COMMERCE

(Based on participants in the transaction) Business to Consumer (B2C)

Business to Business (B2B)

Customer to customer(C2C)

Business to Employee(B2E)

Customer to Business Others like G2C(Government to Citizen)


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Customer to Business (C2B)

Reverse auction or demand collectionmodel where buyer sets his own price

(often binding) and the highest bid isselected

Ex:

Priceline.com(travel) Bid2win.com

Reverseauction.com (travel,auto)


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Business Model: KeyComponents


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Electronic Commerce BusinessStrategies

Business Strategies come in one of the followingthree types. All require a sound business models tobe successful


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Brick-and-Mortar & Click-and-Mortar Strategies

Brick-and-Mortar

Operate a firm solely in traditional physicalmarkets

Approach business activities traditionallyby operating physical locations (e.g.stores, offices, manufacturing plants)

Click-and-Mortar

Operate a firm in physical locations and has

added an EC component to their business Requires maximization of business

opportunities in both the physical and virtualenvironments

This strategy requires a significant investmentin systems and space


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Click-Only Strategy Business transactions are only conducted virtually

Can require significant expertise and investment intechnology and systems staff

There are different revenue models


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Benefits of E-business

- Business benefits reduction in sales and marketing costs

Increased reach

Lower procurement processing costs Reduction in inventories

Reduce business cycle times

Better customer service

Develop new channels to reach customers

Develop new business models and alternativesources of revenue


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Benefits of E-business contd..

-Consumer benefits

Increased choice of vendors and products

Increased price and product comparisoncapabilities.

More competitive prices

Convenience

Greater information accessibility

Greater customization in the delivery ofservices


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Impact of ElectronicCommerce on Business

Disintermediation and Re-intermediation (new intermediariesproviding value added information services)

Direct Marketing (New marketing channel)

Means to establish brand or corporate image

Customisation of products: Fords case

One to one marketing: Personalised marketing

Leading to development of new business models

HR: Changes in Training and Recruitment methods Finance: Newer types of payment instruments/methods
http://ford%20sync%20feature%20demo%20videos/ford%20online%20purchase.pptxhttp://ford%20sync%20feature%20demo%20videos/ford%20online%20purchase.pptx


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Disintermediation

Manufacturer

orServiceProvider

Intermediary(Middleman)

Customer(Consumeror

Business)

Disintermediation

Removal of the intermediary (middleman) in a sale. Companies can sell directly to customers (retail or

wholesale) without assistance using the Internet

Sell Direct - Disintermediation

Example

Airlines selling directly to flyers without a travelagent or customer service representative


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Disintermediation..

Though, Traditional companies cannotcompletely remove intermediaries,

internet provides new channel to reachcustomers


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Commerce (8000 B.C.)

BUYERFINDS

SELLER

NEGOTIATION

PAYMENT

SALE

DELIVERY

POST-SALEACTIVITY

SELECTIONOF GOODS

INFORMATION

PHYSICAL+INFORMATION


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eCommerce

BUYERFINDS

SELLER

NEGOTIATION

PAYMENT

SALE

DELIVERY

POST-SALEACTIVITY

SELECTIONOF GOODS

SEARCH ENGINE

SHOPPING BOT

AGGREGATOR

ON-LINE CATALOG

AUTOMATED AGENTS

TRACKING AGENT

ON-LINE HELP

CRM

CUSTOMER PREFERENCES

BARGAINING STRATEGIES

PRICE SENSITIVITIES

CREDIT/PAYMENT INFORMATION

ON-LINE PROBLEM REPORTS

FOLLOW-ON SALES OPPORTUNITIES

SOME TECHNOLOGIES USED: SOME INFORMATION GATHERED:

BROWSING BEHAVIOR

DELIVERY REQUIREMENTSE-PAYMENT SYSTEMS

CONFIGURATOR

RECOMMENDER AGENT

TRANSACTION PROCESSOR

DATA INTERCHANGE

CRYPTOGRAPHY

MARKET BASKET

PERSONAL DATA

CUSTOMER SATISFACTION

SEARCH BEHAVIOR

EFFECTIVENESS OF PROMOTIONS

INFORMATION

PHYSICAL+INFORMATION


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Limitations/Barriers to EC

Security And Lack of trust

Telecommunication bandwidth (DevelopingCountries)

Difficulty in Integration with legacy systems Initial cost and justification of benefits

User resistance

Lack of touch and feel

Digital Divide (Urban Vs Rural) Government regulations and legal standards

Lack of support services

e-business - an into duct ion

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