E-commerce Environment

1
E-commerce Environment

• Lecture 2
• Sue Stocking

2
Objectives

• To understand the e-commerce environment
• Understand the on-line market place
• To identify changes in businesses due to
  electronic trading

3
The Business Environment

• All organisations operate within an environment
• The environment influences the way they work
• The environment influences the strategy of the
  business
• Business environments are turbulent

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Aspects of the Business environment

• Customer expectations are always increasing
• Customer sophistication is increasing
• Customers expect a multi-channel interaction with
  businesses (the martini effect, anytime,
  anyplace, anywhere)
• Increasing competition and industry change
• Disaggregation of the value chain
• Globalisation
• Changing role of government
• Nature and roles of channels are changing
• Technology changes
• Market structure
• The value of businesses is volatile
• Disenfranchisement

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The environment in which e-business services are
provided (Chaffey,02)
Organisations

• International
• Economic factors
• Legal constraints
• Cultural factors

Macro-environment
Micro-environment

• Society
• Public opinion
• Moral constraints
• Ethical constraints

• Technology
• Innovation
• Trends

Organisation

• Country specific
• Economic factors
• Legal constraints
• Cultural factors

Supplier
Competitors
Intermediates
Customers
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Influences on e-commerce strategy

• Needs of customers
• How services are provided to customers through
  competitors, intermediates and via suppliers
• Local and international economic conditions
• Legislation
• What business practices are acceptable
• Technological innovations

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• These influences vary rapidly
• The environment must be monitored
• Future trends anticipated
• This is the role of knowledge management

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The e-commerce marketplace

• Electronic communications have changed
  relationships between the different parties of
  commercial transactions
• This change depends on whether the transaction is
  B2B or B2C

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Comparison of B2B and B2C markets (Rowley,02)
Organisational (B2B) Consumer (B2C)
Fewer customers and known customers Lots of customers necessary for success
Fewer transactions Large numbers of transactions
Each transaction of high value Low-value transactions
Net worth of each customer is high Cannot predict growth rate
Regular transactions Less regular transactions with individual customers
Credit rating known Credit rating often not known
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B2B Interactions
Channel Partners (suppliers)
Channel Partners (organisations)
Supplier
Organisation
Business customers
B2B transactions
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B2C Interactions
Channel Partners (organisations)
Consumer customers
Organisation
B2C transactions
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Summary of transaction alternatives between
businesses and consumers
B2C Organisation sites (Dell, Amazon) Consumer marketplaces (Kelkoo.com) C2C Auctions (QXL, EBay) Consumer reviews (Bizrate.com)
B2B Organisation sites (Dell) Business marketplaces (CommerceOne) C2B Customer bids (LetsBuyit.com)
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Summary

• This lecture has aimed to explain that all
  business operate in an environment. To identify
  the differences in trading patterns and
  marketplace models enabled by e-commerce.