ECOMMERCE

1
E-COMMERCE

• A Synopsis of Chapter 12 Additional Readings

By Rochelle Clark
2
E-Commerce Overview

• What is e-commerce (EC)?
• The EC process
• The EC value chain
• Advantages of EC growth
• International comparisons of EC growth
• Limitations of international EC growth
• Strategies for global EC growth
• A four step strategy for a local-to-global EC
  approach

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What is EC?

• E-Commerce
• Is a process of shopping, buying and selling
  goods and services online ranging from purchase
  influence to ordering and payment settlement
  (Hanson).
• Enhances communications and transactions with all
  of the business stakeholders (Watson, Berthon
  and Zinkhan).
• Is an internet-enabled business activity that
  transforms internal and external relationships to
  create value and exploit market opportunities
  (Drobik).

4
The EC Process

Customer
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The EC Value Chain

• Buy more
• Tell others
• Make suggestions

Value Proposition
Customer Loyalty
Customer Experience

• Customer need
• Product quality
• Price

• Meets needs
• Price competitive
• Personal contact

Revenue Growth
Increased Profits
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Advantages of EC Growth

• From a Macro-Economic Perspective
• The Internets ability to boost innovation
• Technological diffusion through increased flows
  of information
• International markets more easily accessible.
• The Internets ability to increase market
  efficiency
• Through real-time marketing
• Linking vast numbers of buyers and sellers
  through intermediaries
• The Internets new dimensions of trade
• Services as well as products become accessible
  through the net
• Global reach to export goods

7
Opportunities of EC Growth

• From a Micro-Economic Perspective
• Realise customised service
• Global knowledge about customer preferences
• Customise and integrate services globally
• Increase a firms efficiency
• Global selection of suppliers
• Electronic supply chain integration
• E.g. Dell and Safeway
• Create new distribution channels
• Amazonic distribution
• Dellphic distribution

8
Opportunities of EC Growth Continued

• From a Micro-Economic Perspective
• Most likely results from these opportunities
• Lower consumer prices
• Customised products and services
• Shorter lead times
• Increased flexibility to react to customer
  request

9
International Comparisons of EC Growth

• There is increasing pressure for firms to invest
  in EC
• It is vital to understand the e-environements
  within specific countries as its a key component
  to overall success.
• Trends
• B2B EC is much larger than B2C EC
• USA is dominant player in B2B EC worldwide
  followed closely by Europe
• Predictions by Ovum Inc.
• The USA market will saturate after 2002
• Continued global growth will take place in
  developed sections of Western Europe and Asia
• In Asia, Japan will dominate the net with highly
  educated users

10
International EC Growth Limitations

• Cultural differences
• Reluctance and lack of trust
• Language
• Government regulations and policies
• Privacy and data protection
• Taxation
• Government support
• Infrastructure
• Development of infrastructure
• Payment methods
• Problems with order fulfillment

11
International EC Growth Limitations Continued

• Market specifications
• Size of the home market
• Local selling practices
• Availability of venture capital

12
Strategies for EC Growth
13
A Four Step Strategy for a Local to Global EC
Approach

• The following are steps an EC firm should
  consider in order to enter foreign markets
• Address the globalisation issue at the beginning
• E.g. IM (pre 1999)
• Set up the logistics for global order fulfillment
• E.g. Peter Alexander
• Understand the local culture
• E.g. Dell
• Build Partnerships
• E.g. Amazon.com