Chaffey, E-Business and E-Commerce, Fourth Edition, Activity Answers

CH AP TE R 1

Introduction to e-business and e-commerce

Activity answers
1.1 Innovative e-businesses
1. Think about the innovation that you have witnessed during the time you have used the Internet and World Wide Web. What would you say are the main sites used in your country that have been created which have changed the way we spend our time or buy online. In Table 1.1 are the sites that we believe have had the biggest influence on online business models in the US and Europe with more emphasis on the most recent ones. Answer: Not applicable depends on student opinion and country. 2. We talk about these businesses being !successful" but what is success for a new e#business? For established businesses, success is stable or growing profitability, but startups will rarely be able to achieve this. hat beco!es i!portant are: "ni#ue visitors nu!ber of individuals per !onth $ngage!ent or stic%iness page views per visitor &useful for advertising' and percentage of active or returning visitors &essential for a social networ% such as Faceboo%'. (onetisation is it possible gain revenue, e.g. Ad )evenue fro! visitors *rowth +ublicity this will help fuel the other success !easures given above.

,. What do these sites have in common that you think has made them successful ? All these sites are A!erican, so the funding and publicity they can achieve is significant. .ou will notice that !any of these sites &other than /oost, 0ast.f! and 1%ype which were founded in $urope' were originally developed in the "nited 1tates, with the !a2ority now used around the world. 3ut in each country, si!ilar types of businesses have evolved, for e4a!ple the search engines 3aidu in 5hina and .ande4 in )ussia.
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Chaffey, E-Business and E-Commerce, Fourth Edition, Activity Answers

(eet a funda!ental consu!er need 5lear revenue !odel (e!orable branding and e4perience 6nitially they had a straightforward proposition offering one service *enerally they were first7!overs Notable that !any have ta%en several years before beco!ing widely %nown and used.

Activity 1.2 Whats in a term what do we call this e-thing

Web?

Question 8ne si!ple, but revealing, !ethod of assessing how co!!only these ter!s are used, is to use the *oogle synta4 which returns the nu!ber of pages which contain a particular phrase in their body or title. 9ype into *oogle the following phrases in double #uotes or use intitle: :phrase; for these phrases and note the nu!ber of pages &at the top right of the results page': +hrase &i' :$7business; &ii' :$7co!!erce; &iii' :6nternet !ar%eting; &iv' :$7!ar%eting; &v' :<igital !ar%eting;
At the ti!e of writing, the fo""owing ta#"e shows that of the !arketing$re"ated ter!s, %Internet !arketing& is the !ost 'o'u"ar #ut this !ay change, as it is a !is"eading ter!, which o!its other e"ectronic co!!unication techni(ues) Co!'anies that 'ro!ote their services on"ine wi"" often use keywords on the 'age, which ref"ect the words that are #eing searched for)

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Chaffey, E-Business and E-Commerce, Fourth Edition, Activity Answers

In the *nited +ingdo!, s'ecia"ist e$!arketing agencies and the new !edia 'u#"ications tend to refer to digita" !arketing and their usage of the ter! wi"" eventua""y have an inf"uence) Phrase ,igita" !arketing E$!arketing& Internet !arketing& E$#usiness& E$co!!erce& Pages containing hrase 2,-.0,000 /,/00,000 .0,100,000 12,000,000 1,-00,000 Pages containing tit!e 11 ,000 1-0,000 2,0 0,000 0 ,000 0,0 0,000

Figures collected in <ece!ber 2==> using *oogle synta4 $phrase; and intitle: and then reviewing the nu!bers top right. Additional ter!s for co!parison:
Phrase SEO PPC 3E!ai" !arketing4 Viral marketing Social media Pages containing hrase 2-1,000,000 . ,000,000 1.,200,000 .,-00,000 1./,000 Pages containing tit!e 11,200,000 1,2-0,000 022,000 1/1,000 . ,000

1.3 nderstanding e-commerce and e-business

1) Identify the different co!'onents of e$#usiness descri#ed in this s'eech and assess their re"ative i!'act on the organi5ation) 6he artic"e identifies se""ing to custo!ers using the Internet 7%e$8e""&9 and 'urchasing fro! its su''"iers using the Internet and reverse auctions 7%e$:uy&9) 6he Internet is a"so used for !anaging interna" 'rocess 7%e$Make&9) A"though now dated, in 2001, on"ine sa"es of ;20 #i""ion are esti!ated on a turnover of ;110 #i""ion 710). 'er cent9) ;12 #i""ion in on"ine auctions is a"so significant, given that other 'urchases wi"" a"so #e !ade on"ine that are not auction$re"ated) 2) <here do other %e& ter!s such as e$C=M, e$!arketing, e$"ogistics, e$'rocure!ent, e$tai" and e$govern!ent fit within this descri'tion> ?ou wi"" have noted that the ter!s tend to descri#e a range of #usiness activities within an organi5ation) 6hey ty'ica""y refer to #usiness 'rocesses that for! 'art of the va"ue chain fro! in#ound "ogistics and 'urchasing 7e$'rocure!ent9 to out#ound "ogistics 7e$fu"fi"!ent9 and !anaging the custo!er re"ationshi' through e$!arketing and e$C=M) E$govern!ent is discussed "ater in the cha'ter, essentia""y it is on"ine 'rovision of govern!ent services) It a"so refers to govern!ent de'art!ents ado'ting e$#usiness) For a fu""er definition of the !ain ter!s see the section E-commerce defined)

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Chaffey, E-Business and E-Commerce, Fourth Edition, Activity Answers

1.! nderstanding e-commerce and e-business

Question ?isit each of the sites below and then place the! into one of the four categories of online presence according to their pri!ary focus: 1. 9ransactional e7co!!erce site. 2. 1ervices oriented relationship building web site ,. 3rand building site. @. +ortal or !edia site. .ou should also indicate their secondary focus in ter!s of these four site types. 1. Transactional e-commerce site. 3an%, e.g. A135 &www.hsbc.co!', secondary purpose is relationship building or brand building. 9ravel co!pany, 9ho!as 5oo% &www.tho!ascoo%.co!', secondary purpose as for A135 online retailer such as A!aBon &www.a!aBon.co!'. 1econdary ob2ectives are to be a portal? 2. Services oriented relationship building web site. (anage!ent consultants such as +ricewaterhouse5ooper &www.pwcglobal.co!' and Accenture &www.accenture.co!'. 1econdary ai! brand building An end7product !anufacturer such as ?au4hall &www.vau4hall.co.u%'.n 1econdary ob2ectives are building brand and referring leads or transactions to offline sources. ,. Brand building site. 0ingerie !anufacturer, e.g. *ossard &www.gossard.co!'. 1econdary ob2ectives are, lin%ing to transactional sites. 3everage !anufacturers, e.g. 9ango &www.tango.co!', *uinness &www.guinness.co!'. 1econdary ob2ectives are, supporting relationship building @. Portal or media site. 3usiness site: 1ilicon &www.silicon.co!' &secondary transactional site for subscriptions' 5onsu!er site .ahooC &www.yahoo.co!'. .ahooC is !ore than a search engine it is an online portal. 1econdary ob2ectives are encouraging transactions.

1." A##lying the $% &ramewor' to e-business initiatives

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Chaffey, E-Business and E-Commerce, Fourth Edition, Activity Answers

1tructure how will the e7business change be !anaged? 6s a separate division re#uired or can the change be !atri4 !anaged &%hapter 1&'? 1yste!s do new operating procedures or business processes need to be introduced? 5an e4isting 61 be used to i!ple!ent change or will new syste!s be re#uired? 1tyle is the current, possibly conservative, style of the co!pany consistent with the way the co!pany wants to pro2ect its i!age? ill decisions be !ade fast enough? ill ris%s be ta%en to trial new business !odels and new technology? 1taff is the appropriate !i4 of staff available? 1%ills are the correct s%ills available internally? outsource so!e services? hat training is re#uired? <o we need to

1uperordinate goals this refers to the higher goals of the co!pany that !ay be encapsulated in the !ission state!ent. 6n !odern parlance, do the senior !anagers :get; the significance of the 6nternet and will they act?

A possible criticis! of the D1 !odel is that it is internally focused. Aow well the co!pany for!s and leverages partnerships with suppliers and custo!ers is now seen as a %ey ele!ent of strategy. )elated to this is how well the co!pany responds to the industry restructuring that has occurred as part of e7co!!erce. 5an it ta%e advantage of disinter!ediation and reinter!ediation within the industry &%hapter ''?

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