Chapter 7 E-Business: Doing Business Online Learning Goals
Define e-business and discuss how it can help achieve business
success. Distinguish between a corporate and a marketing Web site.
List the major forms of B2B e-business. Explain B2C e-business and
identify the products most often sold online. Describe some of the
challenges associated with e-business. Discuss how organizations
use Internet communications to advance their objectives. Discuss
Web sites and identify methods for measuring Web site
effectiveness. Explain the global scope of e-business. 1 2 3 5 6 7
4 8 Slide 2 WHAT IS E-BUSINESS? Electronic business (e-business)
Conducting business via the Internet. E-tailing, or virtual
storefronts on Web sites. Online business-to-business transactions.
Electronic data interchange (EDI), the business-to- business
exchange of data using compatible software. E-mail, instant
messaging, and other Web-enabled communication tools and their use
as media for reaching prospective and existing customers. The
gathering and use of demographic, product, and other information
through Web contacts. Slide 3 Capabilities and Benefits of
E-Business Global reach. The Net allows goods and services to be
sold to customers regardless of geographic location.
Personalization. Companies can begin the production process when an
order is received to better satisfy customer needs and sharply
reduce inventory. Interactivity. Customers and suppliers negotiate
prices online, resulting in an ideal product at the right price
that satisfies both parties. Right-time and integrated marketing.
Online retailers provide products when and where customers want
them and can coordinate promotional activities and communication to
create a unified, customer-oriented message. Cost savings.
E-business can markedly reduce the costs associated with operating
and starting a business. Slide 4 Business Web Sites Corporate Web
site Web site designed to increase a firms visibility, promote its
offerings, and provide information to interested parties. Attempt
to build customer goodwill and assist retailers and other resellers
in their marketing efforts. Use for a variety of other purposes
Disseminating financial information to investors Enabling
prospective employees to apply online for jobs Providing e-mail
communication. Marketing Web site Web site whose main purpose is to
increase purchases by visitors. Slide 5 BUSINESS-TO-BUSINESS (B2B)
E- BUSINESS Business-to-business e-business (B2B) Electronic
business transactions between businesses using the Internet. B2B
transactions account total $2.5 trillion. By some estimates,
account for 80 percent of all e-commerce activities. Can reduce
cost of B2B transactions by almost 25 percent. Slide 6 Electronic
Data Interchanges, Extranets, and Private Exchanges Electronic Data
Exchange Computer-to-computer exchanges of invoices, purchase
orders, price quotations, and other sales information between
buyers and sellers. Extranet Secure networks used for e-business
and accessible through the firms Web site by external customers,
suppliers, or other authorized users. Private Exchanges A secure
Web site at which a company and its suppliers share all types of
data related to e-business. Sometimes called c-business because of
use as a collaborative tool. Slide 7 Electronic Exchanges and
E-Procurement Electronic exchanges are online marketplaces that
bring buyers and sellers together and cater to a specific industrys
needs. Initially 15,000 were launched but only 20 percent remain.
E-procurement is Web- based systems that enable all types of
organizations to improve the efficiency of their procurement
processes. Slide 8 ONLINE SHOPPING COMES OF AGE
Business-to-consumer e-business (B2C) Selling directly to consumers
over the Internet. E-tailing accounts for eight percent of all U.S.
sales. Thirty percent of the U.S. population shops online. Services
also are important participants in e-business. E-Tailing and
Electronic Store Fronts Electronic storefronts Company Web site
that sells products to consumers. Growth of broadband is aiding
e-tailing. Fifty-five percent of American Internet users have
broadband. Expected to rise to 70 percent. Slide 9 Who Are the
Online Buyers and Sellers? Slide 10 Online market is changing as
customers become more familiar with online shopping. Slide 11
Benefits of B2C e-Business Lower Prices Many products cost less
online. Internet allows customers to easily compare prices from
multiple sellers. Convenience Can order products from around the
world anytime day or night. Can register customer information to
streamline transactions. Personalization Emphasis on personalized,
one-on-one marketing to increase repeat purchases. Slide 12
Developing Safe Online Payment Systems Response to customer
concerns about security of sending credit card information over the
Internet. Through encryption, data is encoded for security
purposes. Many companies use Secure Sockets Layer (SSL) technology
to increase to encrypt information and verify senders and
receivers. Others use electronic method payment method, a computer
data file at an e- business sites checkout counter that contains
not only electronic cash but credit card information, owner
identification, and address. Slide 13 E-BUSINESS CHALLENGES Privacy
Issues Privacy is among the top concerns of Internet users.
E-business sites often require passwords and use electronic
signatures, an electronic form of identity verification. Companies
can track customers shopping and viewing habits through cookies.
Customers usually prefer that companies do not share their personal
information. Merchants have responded by joining privacy
organizations. Privacy protections may soon become legally
required. Employees also have concerns that employers are
monitoring their Internet behavior. Companies worry about data
theft. Slide 14 Internet Fraud Internet Crime Complaint Center
logged more than 207,000 complaints in a recent year, an increase
of 67 percent over the prior year.Internet Crime Complaint Center
Phishing Using e-mail or pop-up messages to get unsuspecting
victims to disclose personal information. Poor Web Site Design and
Service Two-thirds of Internet shopping carts are abandoned before
any purchase is made. Companies that have brick-and-mortar
experience often have better success satisfying customers than
Internet-only retailers. Channel Conflicts Direct sales to
customers can compete with business partners such as retailers and
distributors, disputes called channel conflicts. Slide 15 USING THE
WEBS COMMUNICATION FUNCTION Web has four main functions:
e-business, entertainment, information, and communication.
Communication is Webs most popular function. Firms use e-mail to
communicate with customers, suppliers, and other partners. Spam
Popular name for junk e-mail. Online Communities Internet forums,
newsgroups, electronic bulletin boards, and Web communities that
appeal to people who share common interests. Slide 16 Blogs Blog
Short for Web log, an online journal written by a blogger.
Corporate blogs can help build brand trust. Employee blogs present
ethical issues. Web-Based Promotions Companies buy banner ads and
pop-up ads on Web sites customers are likely to visit. Search
marketing Paying search engines a fee to make sure the companys
listing appears toward the top of search results. Companies use
online coupons to promote their products. Slide 17 MANAGING A WEB
SITE Developing Successful Web Sites Planning and Preparation What
is the companys goal for its Web site? Will the site be maintained
in-house or by a contractor? What will the site be named? Content
and Connections Content an important factor for whether visitors
return to a site. Resources should be relevant, easy to access and
understand, updated regularly, and compelling. Small businesses may
be better off outsourcing to meet their hosting and maintenance
needs. Slide 18 Costs and Maintenance Variety of costs: Development
Placing the site on a Web server. Maintaining and updating the
site. Promoting the site. Slide 19 Measuring Web Site Effectiveness
Click-through rates Percentage of people presented with a Web
banner ad who click on it. Conversion rates Percentage of visitors
to a Web site who make a purchase. Slide 20 GLOBAL ENVIRONMENT OF
E-BUSINESS Future growth of many companies is linked to a global
strategy that incorporate e-business. U.S. leads world in Internet
users but ranks only fifth in Internet penetration. International
competition is growing. Can heighten competition in the global
marketplace.