Lecture 2: Benefits and Limitations of E-Commerce PDF

Benefits and Limitations of E-Commerce  Learning Objectives Outline the strengths and weaknesses of conducting business/trading or product, service and information online. How to create an effective business presence on the Web? What factors enhance Web site usability? How co...

Benefits and Limitations of E-Commerce  Learning Objectives Outline the strengths and weaknesses of conducting business/trading or product, service and information online. How to create an effective business presence on the Web? What factors enhance Web site usability? How companies use the Web to connect with customers? 2-1  The Benefits of EC Benefits to Organizations Expands the marketplace to national and international markets Decreases the cost of creating, processing, distributing, storing and retrieving paper-based information Allows reduced inventories and overhead by facilitating pull-type supply chain management 2  Benefits of EC (cont.) (Organizations) The pull-type processing allows for customization of products and services which provides competitive advantage to its implementers Reduces the time between the outlay of capital and the receipt of products and services Supports business processes reengineering (BPR) efforts Lowers telecommunications cost - the Internet is much cheaper than value added networks (VANs) 3  Benefits of EC (cont.) (Consumers) Benefits to Consumers Enables consumers to shop or do other transactions 24 hours a day, all year round from almost any location Provides consumers with more choices Provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons 4 Benefits of EC (cont.)(Consumers) Allows quick delivery of products and services (in some cases) especially with digitized products Consumers can receive relevant and detailed information in seconds, rather than in days or weeks Makes it possible to participate in virtual auctions Allows consumers to interact with other consumers in electronic communities and exchange ideas as well as compare experiences 5  Benefits of EC (cont.) (Society) Benefits to Society Enables individuals to work at home, and to do less traveling for shopping, resulting in less traffic on the roads, and lower air pollution Allows some merchandise to be sold at lower prices, benefiting less affluent people Enables people in Third World countries and rural areas to enjoy products and services which otherwise are not available and accessible to them Facilitates increases effectiveness, and/or improves quality 6  Technical Limitations of EC There is a lack of universally accepted standards for quality, security, and reliability The telecommunications bandwidth is insufficient Software development tools are still evolving Difficulties in integrating the Internet and EC software Special Web servers in addition to the network servers are needed (added cost) Internet accessibility expensive and/or inconvenient 7 Creating an Effective Business Presence Online  Public image conveyed to stakeholders Stakeholders include customers, suppliers, employees, stockholders, neighbors, and general public (However, most companies not concerned about image until they grow to a significant size)  Effective Web presence critical even for smallest and newest Web operating firms 8 Web presence objectives and strategies 9 Making Web Presence Consistent with Brand Image  Different firms, even within the same industry, establish different Web presence goals trusted corporate image consistent brand image 10 10  Not-For-Profit Organizations Web sites’ key goals is information dissemination Successful site key elements Integrate information dissemination with fund-raising Provide two-way contact channel Web sites used to stay in touch with existing stakeholders and identify new opportunities for serving them 11  Web Site Usability Few businesses accomplish all goals with current Web presences Most fail to provide visitors sufficient interactive contact opportunities Can improve Web presence by making sites accessible to more people and easier to use Web sites needs to encourage visitors’ trust and foster feelings of loyalty toward the organization Success dependent on how this information offered 13  Varied Motivations of Web Site Visitors Visitors arrive for many different reasons including: Learning about company products or services Buying products or services Obtaining warranty, service, and repair policy information Identifying people and obtaining contact information Following a link for related information Addressing needs helps convert visitors into customers 14 15 Goals for business Web sites 16  Trust and Loyalty 80/20 rule: An increase in customer loyalty can yield profit increase Service element can be a powerful differentiating factor customers will pay extra for Delivery, order handling, help selecting product, and after-sale support Repeated satisfactory service builds customer loyalty Customer service weaknesses No integration between call centers and Web sites Growing disappointment in responsiveness 17  Usability Testing Testing/evaluation of Web site to ensure ease of use by visitors Avoids Web site frustration (difficulty and confusion) Simple site usability Contact information and call center staffing Focus groups provide info about customer needs 18  Customer-Centric Web Site Design Focus on meeting all site visitors’ needs Makes visitors’ Web experiences more efficient, effective, memorable Special considerations for mobile devices 19 Business communication modes 20 The Nature of Communication on the Web (cont.)  Characteristics of communication modes  Mass media: one-to-many communication model  Seller is active; buyer is passive  Personal contact: one-to-one communication model  Interchange in framework of existing trust relationship  The Web: one-to-one, many-to-one, and many-to- many communication models  Buyer as active participant in determining length, depth, and scope of search 21