E-Business Management Lesson 6 PDF

LESSON 06 E-BUSINESS MANAGEMENT Learning Outcomes On completing this lesson, you should know about:  Understanding the concepts of E-Business and E-Commerce  Explain the growth of E-Business  Explain the types of E-Business and related ind...

LESSON 06 E-BUSINESS MANAGEMENT Learning Outcomes On completing this lesson, you should know about:  Understanding the concepts of E-Business and E-Commerce  Explain the growth of E-Business  Explain the types of E-Business and related industries  Explain the key technological factors relevant to E-Business.  Types of e-business models 1. WHAT IS E-BUSINESS? Electronic business (e-business) can be defined as the use of the Internet to network and empower business processes, electronic commerce, organizational communication and collaboration within a company and with its customers, suppliers, and other stakeholders. E- businesses utilise the internet, intranets, extranets and other networks to support their commercial processes. 2. WHAT IS E-COMMERCE? Electronic commerce (e-commerce) is the buying and selling, marketing and servicing of products and services via computer networks. 3. THE RELATIONSHIP BETWEEN E-BUSINESS AND E-COMMERCE Although the terms ‘e-business’ and ‘e-commerce’ are often used synonymously, the distinction between them lies in the broader range of Page | 1 processes in e-business that incorporates internal transactions within an organisation. E-BUSINESS E-COMMERCE Electronic procurement Electronic distribution Online customer service Sell-side e-commerce Electronic marketing Buy-side e-commerce Secure transactions Automation of processes Electronic collaboration Buying and selling electronically  Buy-side e-commerce refers to electronic transactions between a purchasing organisation and its suppliers and sell-side e-commerce refers to electronic transactions between a supplier organisation and its customers. THE GROWTH OF E-BUSINESS The most significant factor that transformed the internet into a global communications phenomenon was the development of the World Wide Web (WWW) in the early 1990s. The internet has created a new communications channel and provides an ideal medium for bringing people together cheaply, efficiently and for a wide range of different reasons. It has also presented opportunities and challenges for the business community. As consumers become more knowledgeable about using the internet to service their needs and wants so the business community has been boosted by the potential the internet presents for extending markets, developing new products and services and achieving a competitive advantage and profitability. Page | 2 This extended the functionality of the Internet by introducing hypertext that linked documents held on the Internet servers. This facilitated access to particular parts of documents or even to other relevant documents held on other servers. 4. TYPES OF E-BUSINESS AND RELATED INDUSTRIES E-business varies in scope and type of activities undertaken. The entire supply chain of many industries has been radically transformed by the development of the Internet and related technologies. BUSINESS-TO-BUSINESS (B2B) ACTIVITIES Some organisations specialise in business-to-business (B2B) activities by providing e-business services across the supply chain or in parts of the supply chain such as e-procurement, logistics, stock control, ordering, payments and distribution. It also includes the organisation of collaboration platforms that allow different organisations to share information and knowledge for mutual benefit. BUSINESS-TO-CONSUMER (B2C) Seeling that sell products or services to customers. The business-to-consumer (B2C) sector has attracted the highest number of entrants as well as some of the most successful e- business ventures such as Amazon.com, e-Bay and Friends Reunited. Page | 3  5. KEY TECHNOLOGICAL FACTORS RELEVANT TO E-BUSINESS. The development of the internet The World Wide Web (WWW) Information infrastructure Industry standards Wireless technology Interactive television Payment systems 6. TYPES OF E-BUSINESS MODELS Brokerages virtual Brokers are intermediaries who bring together buyers and sellers for transactions purposes. There are several forms of brokerage models and they are operated across all e-business markets. Brokerages take on many forms of e-business models, including e-shops, e-malls, e-auctions, trading communities, distributors, virtual communities and buyer aggregators and classifieds.  E-shops E-shops provide firms with a channel of communication to customers and provide valuable information about what products and services are sought by customers.  E-malls An electronic mall is a collection of e-shops. Normally, the e-shops that comprise the e-mall have some commonality between them.  E-Auctions Page | 4 Some auction sites are industry-specific such as eutilia (www.eutilia. com), a European utility marketplace that auctions components in the energy sector. Others focus attention on the consumer market such as onsale.com (www.onsale.com)  Trading communities Sometimes referred to as a ‘vertical web community’, trading communities provide a source of information and communication that is necessary for e- business activity to take place in a particular industry.  Virtual communities Customers are attracted to websites because of the added value they offer. Specialist websites appeal to customers with a particular interest. The shared interest of customers provides the basis for virtual communities to emerge.  Buyer aggregator model The buyer aggregator brings together large numbers of individual buyers so that they can gain the types of savings that are usually the privilege of large volume buyers. Mercata (www.mercata.com) was the first American company to receive a patent for group buying over the internet (Business Wire, 2000). As a group, buyers can potentially wield more economic power and gain discounts on large volume sales from sellers. Page | 5