Transcript OHT 1.4 The impact of Internet on business

OHT 1.1
Chapter 1
Introduction to e-business and e-commerce
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OHT 1.2
Learning objectives
• Define the meaning and scope of e-business and
e-commerce and their different elements;
• Summarise the main reasons for adoption of
e-commerce and e-business and barriers that may
restrict adoption;
• Use resources to define the extent of adoption of the
Internet as a communications medium for consumers
and businesses;
• Outline the business challenges of introducing ebusiness and e-commerce to an organization.
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OHT 1.3
Issues for managers
• How do we explain the scope and implications
of e-business and e-commerce to staff?
• What are the full-range of benefits of
introducing e-business and what are the risks?
• How great will the impact of the Internet be on
our business? What are the current and
predicted adoption levels? How do we assess
the validity of forecasts?
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OHT 1.4
The impact of Internet on business
• Andy Grove, Chairman of Intel, one of the
early adopters of e-commerce, has made a
meteorological analogy with the Internet. He
says:
• Is the Internet a typhoon force, a ten times
force, or is it a bit of wind? Or is it a force that
fundamentally alters our business? (Grove,
1996)
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OHT 1.5
The impact on one industry - banking
Metric
May 1995
Dec. 2002
Financial institutions with Web banking (WW)
1
6,000
Financial institutions with Web sites (WW)
50
14,000
Total online banking households (WW)
5 million
100
million
Total online banking households (US)
300,000
28 million
Monthly bank and credit card Web traffic (US)
100,000
50 million
Monthly credit apps submitted via Web (US)
0
1.5 million
Table 1.1 7.5 years of web banking. Source: Online banking report, Number 89, December 10, 2002.
Source: Online Banking Report estimates, +/- 25%, 11/02
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OHT 1.6
UK adults online?
 31%
41%
51%
61%
16-24 year olds online?
 50%
60%
80%
90%
Percentage bought groceries online?
 6%
16%
26%
36%
Statistics.gov.uk
Source: www.statistics.gov.uk Oct 2002
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OHT 1.7
The Internet’s impact on you
• How many of you have purchased something
on the Internet in the last 6 months?
• How many times have you used the Internet
as an information source, before buying
offline?
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OHT 1.8
Popularity of online purchases
Source: The Internet Monitor, BMRB, November 2001 (www.bmrb.co.uk)
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OHT 1.9
Definitions
• You are asked to distinguish between ecommerce and e-business at a job interview.
• Write down your definitions.
• Use examples to illustrate your points.
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OHT 1.10
E-commerce defined
• ‘All electronically mediated information exchanges
between an organization and its external
stakeholders’
• Examples:
– Buying books online (transactional)
– Selecting a car online (informational)
– Interacting with brand online (relationship building /
experiential, e.g. www.tango.com)
– Asking a customer service query, e.g.
www.easyJet.com
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OHT 1.11
E-business defined
• All electronically mediated information exchanges,
both within an organization and with external
stakeholders supporting the range of business
processes
• Examples:
– Purchasing from suppliers (e-procurement)
– A company intranet
– Supplying partners with information through an
extranet
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OHT 1.12
Business drivers to going
online
Driver
Marketing approach
1 Reduced costs
Give real examples
2 Increase reach to new markets
Give examples of SME
3 Customer demand
Data on those researching and
buying online
4 Competitive threats
Ditto
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OHT 1.13
Business barriers to going
online
Barrier
Marketing approach
1 Security
Reassurance
2 No need
Illustrate with data of businesses
researching and buying online
3 Costs
Illustrate low cost options
4 Skills
Summarise skills alternatives
5
6
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OHT 1.14
Drivers for e-commerce
Figure 1.6 Attitudes to benefits of online technologies
Source: DTI (2002)
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OHT 1.15
Barriers to e-commerce
Figure 1.7 Barriers to development of online technologies
Source: DTI (2002)
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OHT 1.16
Answer – the 7 Ss
Figure 1.9 The McKinsey 7S framework
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