E-business - An Into Duct Ion
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Transcript of 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