e-commerce ©david whiteley/mcgraw-hill, 2000 1 chapter 16: e-business
TRANSCRIPT
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 1
Chapter 16: e-Business
bu sin ess e
e
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 2
Introduction The important differences between e-Commerce
applications are: How they fit into the consumer market, How they are supported by the supply chain Their potential to alter the role of players in that
supply chain.
e-Vendor
Supply Chain Infrastructure
Consumer
Market
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 3
Introduction The sectors examined in the book are:
1. Bookshops;
2. Grocery Supplies;
3. Software Supplies and Support;
4. Electronic Newspapers;
5. Banking;
6. Auctions;
7. Share Dealing;
8. Gambling.
These sectors exemplify the range of consumer e‑Commerce services that are available.
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 4
Internet BookshopsGeneral One of the first applications of e-Commerce
Books have four advantages for the online retailer: They can be adequately described online. They are moderately priced. Many customers will wait for delivery. Delivery is manageable/affordable.
Reactions of other players have included: Large existing players that set up their own
e‑Bookstores; New operators have entered the online market; Conventional bookshop have been up-rated.
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 5
Internet Bookshops
Supply Chain e-Commerce has not altered the supply chain.
All bookshops have two main sources of supply: Book wholesalers. Direct supply from the publisher.
(some e-fulfilment is direct from the wholesalers)
Bookshop Publisher Wholesaler Customer
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 6
Internet Bookshops
Requirements/Facilities Warehouse (as opposed to retail) premises
Packaging and despatch
IT infrastructure / Web site: A large database of books. A search engine for author, title, subject, etc.; Online access to details of stock Record of the readers’ interest Integration into the supply chain
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 7
Internet Bookshops
Examples
Amazon www.amazon.com,www.amazon.co.uk
Barnes and Noble www.barnsandnoble.com
Bertelsmann AG www.bol.com
Blackwellwww.bookshop.blackwell.co.uk
Chapters www.chapters.ca
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 8
Internet Bookshopsamazon.com Amazon opened for business in July ’95
By 1999 Amazon had: Four despatch bases in the US Operations in Germany and the UK
As of 1998, turnover was US$610 million(a growth of 313% over the previous year).
Amazon has never made a profit: The loss for the third quarter of 1999 was US$79 million on sales
of US$356 million.
Amazon has diversified into selling: Recorded music Videos Electronic equipment and several other product areas
TM
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 9
Grocery Supplies
General Going to the supermarket can be just a chore - how
much easier if, with just a few clicks of the mouse, the weekly shop could done.
The logistics of an online supermarket are a bit different from other online stores: The supermarket stocks several thousand lines The customer may well select (say) 60 of them. Groceries are both bulky and perishable Common practice is to arrange a delivery slot
with the customer.
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 10
Grocery Supplies
Supply Chain The home delivery grocery business requires local
depots and it needs the same supply chain infrastructure, co-ordinated by EDI, that the supermarkets have in place.
A home delivery operation can use a depot rather than a retail facility. However many existing players are using their local retail facilities for e-fulfilment.
Supermarket /Local Depot Supplier Regional
Depot Customer
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 11
Grocery Supplies
Examples
Peapod www.peapod.com
Homestore www.homestore.com
Sainsbury www.sainsbury.co.uk
Tesco www.tesco.net
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 12
Grocery Suppliespeapod.com Peapod started selling groceries in 1989.
Peapod depots stock a full range of groceries.
Items can be found through the classification / menu system or using a search.
Shopping lists can be stored.
Orders have to be put in at least a day in advance of delivery time.
Peapod currently operate in six metropolitan areas in the US.
Peapod is a software company – the depots are operated as franchises.
TM
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 13
Internet Banking
General Customer services typically include:
Online balances and statements. Credit transfers so that bills can be paid online. Maintenance of standing orders and direct debits
… but exclude any transactions involving cash
For the bank, online transactions are cheaper than telephone banking and much cheaper than branch transactions.
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 14
Internet Banking
Supply Chain Using e-banking reduces usage of the branch
network (although a branch or ATM machine will still be required).
For online banking, security is obviously an issue.
Supplier Customer Branch /
ATM
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 15
Internet Banking
Examples
Bank of Scotland www.rbs.co.uk
The Co-operative Bank www.smile.co.uk
First National Bank of the Internet
www.fnbinternet.com
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 16
Internet Bankingsmile.co.uk The Co-operative Bank:
Grew out of the Co-operative movement Has about a 5% UK market share. Has a very small branch network.
The bank’s online offering is called ‘smile’ ☺.(one of the UK’s first operational online banks)
Smile’s banking service include: A full range of accounts; Online money transfer; Flexible paying in arrangements; Online payment of bills; Standing orders and direct debits; Use of ATM machines; Conventional cheques; A guarantee of reimbursement
TM
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 17
Online Share DealingGeneral The Internet can make available to the private
investor: Up-to-the-minute information. Immediate access to the market. Reduced trading costs.
‘The investor is able to deal at a price viewed immediately, whereas using more traditional dealing services an investor will often have to wait in a telephone queuing system to get through to the dealing desk and when trading may have to wait for the price of the trade to be confirmed.’
(Allgood, 1999)
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 18
Online Share Dealing
Supply Chain
The supply chain for share dealing is unchanged, the use of the net just speeds up the whole process (and that can be vital in some share dealing).
Broker Investor
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 19
Online Share Dealing
Examples
E*Trade www.etrade.com,www.etrade.co.uk
Market Eye www.market-eye.co.uk
Charles Schwab www.schwab.co.uk
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 20
Online Share Dealingetrade.com E*Trade started online trading in 1983.
Available on CompuServe and AOL in 1992.
Net version online in 1996.
The services they list are: Free real-time quotes; Market news and research; Choice of order types; Low commission rates; Portfolio tracking; Customer accounts; Discussion groups.
TM
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 21
e-Diversity The technology for online operation and the issue of
payment security is much the same whatever the trade sector.
Differences between products and services include: How adequately the product can be described
online, The ease with which the product can be
delivered to the customer, The extent to which the price to the consumer
can be cut by operating online, The possibility of offering an enhanced service
by operating electronically. The ability of virtual operators to avoid tax and
other regulations.
e c o m m e r c e
electronic commerce
strategy
technologies and
applications
E-Commerce ©David Whiteley/McGraw-Hill, 2000 22
Chapter 16 – Exercise 1
Investigate further one of the sectors outlined in the report. Take, for instance, electronic newspapers and checkout a range of papers. Look at the newspaper, the use of adverts and any background information that the sites might give. Identify how the different newspapers use the web and try to establish how this might complement (or compete with) their conventional paper publication.
Identify a sector not covered in the chapter and carry out a similar investigation. Sectors that might be chosen are insurance, fashion, cosmetics, etc. Choose a sector that sells tangible goods and one that offers a service and contrast the two.