Appendix 4 Opportunities and benefits, barriers and treats, challenges

 

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The E-Business, the E-Customer, their Relationship and Interactivity

 

 

KunnskapskildenE-Business –
E-Business, E-Customer, Relationship and Interactivity

 

Dissertation
The E-Business, the E-Customer,
their Relationship and Interactivity 

Jan Vig

 

Dissertation  av Jan Vig om E.Business, E-Customer, Relationship and Interactivity  (286 sider) i forbindelse med Masterstudie i Information Technology and Communication Juni 2000.

 

The E-Retailer Business, the E-Customer,
their Relationship and Interactivity

Table of Contents

Chapter One Introduction to the study

Chapter Two Business in Cyberspace

Chapter Three E- Retailer Commerce

Chapter Four E-Customer, Relationship and Interactivity

Chapter Five A Successful Case study – Amazon.com

Chapter Six The Future, Critical Success Factors, E-Business Strategy, Results and Conclusion

Appendix

 

7

Appendix 

 

 

Appendix

Appendix 1 Search Strategy Internet
Appendix 2 Key words E-Commerce and one to one Marketing/CRM

Appendix 3 Demographics and online shopping trends
Appendix 4 Opportunities and benefits, barriers and treats, challenges
Appendix 5 Online Promotion Possibilities
Appendix 6 Letter from Jeff Bezos Founder & CEO Amazon.com

Appendix 7 Questions Concerning E-business strategy
Appendix 8 Checklist for evaluation of an E-commerce Web site

 

Appendix 3

Opportunities and benefits, barriers and treats, challenges

 

Opportunities and benefits:

 

1.   Market oriented opportunities     

  • Reach new markets.
  • Find new customers·     
  • Reach new markets.
  • Find new geographically markets
  • Reach new markets.
  • Find new segments /steps in the value chain
  • Reach new markets. Develop exports markets

 

 

 

2. Products and services

  • The E-Retailer products and services are 24 hours available. 7 days a week
  • Offering new products and services. New business opportunities.
    Example: Strategic Internet marketing consultant
  • Offering new products and services Electronic magazine, newspaper and newsletter
  • Offering new products and services. Electronic Malls
  • Offering new products and services.Virtual exhibitions
  • Offering new products and services.
  • Establishing or maintain brand names

 

 

3. Innovation

  • Observation concerning competitors/ new patents
  • Fast decision making by the help of a new communication culture
  • Better opportunity to get the customers actively to participate with the development of the products and services
  • Better opportunity to get the suppliers actively to participate with the development of the products and services
  • Extended enterprise. The E-Retailer see all partners as an integrated part of The E-Retailer organisation. Key Word Extranet
  • Virtual workrooms. Teamwork. Developers from all over the world work together and have immediately access to the same information.

 

 

4. Customer services

  • Improved customer service
  • The E-Retailer can register feedback, analyze and make conclusions
  • The E-Retailer could make a more accurate segmentation.
  •  The E-Retailer could build virtual communities
  • The E-Retailer could make better and faster customer support
  • The E-Retailer could make customer oriented interaction
  • The E-Retailer could teach / coaching the customers
  • The E-Retailer could make individual communication and give every customer individual treatment
  • The E-Retailer could maintain the interests of the customers and encourage them to participate actively
  • The E-Retailer could establish interaction, interactivity and real time communication.
  • The E-Retailer could build up long term customers relationship.
  • The E-Retailer could build up a customer database
  • The E-Retailer could make customer surveys.

 

 

5. Promotion

  • Build trustworthiness·      Improve The E-Retailerr company’s image
  • Support other media campaigns
  • Encourage the user to ask for brochures
  • Publicity. Building relationships with journalists and publishers
  • Distribute information which is changing often

 

 

6.Public relations

  • Building better network with media·      Letting media have a better chance to reach The E-Retailer. The E-Retailer could establish a Press center. 

 

 

7. Advertising

  • The E-Retailer could test the advertisement
  • Test the headlines,
  • Test the banner prices.
  • Measure the response. The E-Retailer could track the customer decision proces
  • The E-Retailer could test why people are not buying.
  • The E-Retailer could integrate sales of advertisement with other media (DM, TV, printed advertisement, postcard etc.)
  • The E-Retailer could get money by selling advertisement space on The E-Retailer site
  • To advertise on Internet is cheaper than by other media

 

 

8. Cost savings , effectiveness and efficiency to the benefit of the customers and The E-Retailer

  • Reduction of costs. Sale and marketing, product support etc.
  • Faster and cheaper processes
  • Better efficiency

 

 

9.   Sale (e-commerce)

  • Generate sales
  • Sale of products and services to both new and old markets
  • Sale of products / services which are difficult to distribute trough traditional channels.

 

 

10. Research

  • Customer research·      Competitive research
  • Personal research
  • PEST research
  • Take a look on the Log files
  • Market surveys (collecting primary information and secondary information)

 

 

11. Distribution

  • some products lend themselves to electronic distribution (thereby eliminating the middleman)
  • cutting distribution costs to almost zero
  • transfers»selling» function to customers
  • capture of customer information (ethics, security, legal issues) 

 

 

12, Marketing Communications

  • internal and external communications
  • interactive nature conducive to developing customer relationships at both parties convenience
  • available 24 hours a day
  • customized advertising and promotion
  • offers competition on speciality axis rather than price alone
  • price still important for gathering information and making purchase decision

 

 

 

13. General 

  • The E-Retailer could be in contact with the users who want to hear The E-Retailer message. The E-Retailer is interactive with them. They have chosen The E-Retailer.
  • The E-Retailer reaches a global community. People from all over the world could read The E-Retailer information(depends on in which language The E-Retailer information are available)
  • The E-Retailer is accessible 24 hours a day. 7 days a week
  • The E-Retailer could reach a market with high income. Earlier, but also today it is a fact that it is the people with higher education and with better earnings who are online. In the future this will change.
  • The E-Retailer serves a market, which have chosen The E-Retailer among others to compare products/services. Unlike TV Internet is customer driven. Possible customers read what The E-Retailer have of information about The E-Retailer products/services because they want to know more. Other media could not focus the message in the same way.
  • The E-Retailer make business with the customer when they are ready to buy. The customers are coming to The E-Retailer site when they start the buying process. Either they compare The E-Retailer products with The E-Retailer competitors or they have a wish to buy direct from The E-Retailer.
  • The E-Retailer could make special sales messages, which appeal to different types of customers by using their unique slogans by buying. By using the advantage with hyper linked information as pictures, sound and video The E-Retailer could create customer driven sales presentations which influence different senses and appeal to logic, feelings and advantages. The E-Retailer customer can pick out the sales presentation and information they like.
  • The E-Retailer could appeal to customers who don’t like salespeople who press and manipulate them. The customers can use Internet to find the product they need and order them without being afraid of manipulation from aggressive salespeople.
  • The E-Retailer could get a low priced first ticket. Internet is cheaper than printed material. The E-Retailer has an incomprehensible area to describe and demonstrate the whole of The E-Retailer product lines or services.
  • The E-Retailer have low renting costs compared with a traditional shop or other rents, buying facilities. Internet service providers take relatively low payments compared to others.
  • Internet is a valuable tool to make customer surveys quite cheap.

 

 

14. Other opportunities

  • Most online users, big market, good infrastructure
  • To be a new intermediaries
  • Organizing of information leads to new market power
  • The uncertaincy of transaction journey leads to market efficiency
  • Markets will do business with other markets
  • Fast technology development
  • Creativity is asked for. New ways to think and act as WWW is new.
  • Possible to get higher profit (distribution links disappear) – only before the competition comes
  • Virtual communities
  • Internet is a easy and cheap communication channel
  • Reduced errors in informational processing
  • Eliminate delays between different steps of business subprocesses
  • Big numbers of customers
  • Know-how – about customers and trends
  • Speed
  • Cost savings
  • New customers
  • Access to global markets
  • 24-hour shopping
  • The customers want convenience, personalization and timeliness
  • Internet is central in a new global wealth economy
  • Location, tax haven
  • Deregulation and liberation of the market will create new opportunities

 

 

Barriers and treats

(Cunningham, 1999:106 – 136) categorising the barriers in the following way:

 

1. Fundamental barriers

  • Knowing what to do
  • Crossing the Chasm
    “The key here is how and when to move across the chasm from restrained use of specific tools to a fully integrated E- Business”
  • Getting the right people
  • Who do you do it with

 

 

2. Organizational barriers

  • Impact on organization
  • Transition
  • How to organianize E-Business
  • Responsibility
  • Channel conflict 

 

 

3. Operational Barriers

  • Management of security, Authentification and Access
  • Creation and Maintenance of Content
  • Performance and Scalling
  • User Interface Barriers

 

 

4. Financial Barriers

  • Costs
  • Pricing
  • Billing
  • Collection and Payment
  • Digital Cash
  • Accounting Systems
  • Taxes

 

 

5. Technology Barriers 

  • Security
  • Standards
  • Integration

 

 

6. Language Barriers

  • Language

 

 

7. Legal Barriers

  • Copyrights and Trademarks
  • Licensing
  • Government Regulations

 

 

8. Other barriers 

  • Choosing a location where the Industry is getting disadvantages compared to competitors
  • Knowledge of Internet as a marketplace
  • Delaying factors as speed, availability and secureness.
  • Competition- As the industry is booming the Industry will probably getting hard competition on Internet.
  • Supply from different companies – Without suppliers, who are able to deliver what the business need, at the right time and in the right quality the industry will have problems when the sale suddenly is booming.
  • Technology
  • Privacy
  • Expenses
  • Wrong marketing channel – Internet could be difficult at the beginning (security reason and other reason), but because the Industry is adapting the Internet very fast and the services and products are within the Internet trends it shouldn’t be a problem.
  • Customer base
  • Trends – at the moment the market for this is booming. This can change when the trend is going in the direction of avoiding giving away private data and the legislation is changing to protect customers privacy more than today.
  • Price – Are the customer willingly to pay what the Industry and others are demanding?

 

 

Who is most threatened by the World Wide Web opportunities

 

  1. Generally the businesses/industries who is sleeping and not monitoring the competitors, customers changing buying habits and the trends within their Industry or the generally trends within the global business world.
  • Missing or too late engagement
  • Mistakes done by the accomplishing of the take on to Internet
  • (Unknown) changes in the market situation
  • Cost pressure from competitors who is on Internet
  1. The businesses/industries who don’t monitor the new competitors online. If your competitors are using the possibilities which Internet offer faster and better than yourself you will probably have a problem. This is especially dangerous for industries that customers today can reach directly by Internet. Here a lot of businesses can loose valuable market shares. That means e.g. Media, entertainment, and information Technology companies. 
  2. Businesses and organization, who cover certain joint in the value chain and see competitors who extend their activities to other joint in the value chain (vertical integration)
  3. Local dealers, local businesses. Internet is a global media and barriers are falling or the admission to the markets will be easier.
  1. Companies who are handling mail orders. It will come an extra competition through different demands for competence by e-commerce. A lot of Internet catalogue companies will be established and the prices will be forced reduced.
  1. Because of the information transparency the companies who is not using Internet or databases to do Business Intelligence, Market Intelligence. Personal Intelligence etc. will have problems.
  1. Companies with high prices or poor quality or long delivery time. The reason is that the customers within a short time can compare a lot of offers. Use of intelligent agents. Competitors could use Internet to reduce their prices.
  1. Companies who are not willingly to think in a new way or have manager in the age of 45 and older who is afraid because they have to little knowledge about the computer world compare with the next generation or does not understand the rapid grow of Internet.
  2. Companies who don’t understand that to do business over Internet demands a Strategic Internet marketing plan /-approach, which are supporting their goals and business ideas.

 

 

 

Challenges:

Challenges divided in categories according to (Mougayar, 1998: 51-81)

 

Technological 

  • Strength of security
  • Availability/interoperability of payment instruments
  • Interoperability of technologies and applications
  • Comparative buying capabilities
  • Richness and depth of content
  • Lack of reliable network infrastructure services
  • Lack of standards
  • Deployment of public key infrastructure (PKI)
  • Technical integration with existing applications
  • Bandwidth costs

 

 

Organizational and Business 

  • Lack of business process integration
  • Lack of understanding of potential value (i.e., perception of «no need to do anything different about it»)
  • Not enough proven business models
  • Not enough best practices documented
  • Unpredictable cost justification
  • Corporate structures as barriers to change
  • Not enough qualified individuals within the organization
  • Initial and ongoing costs of implementations
  • Channel conflict on-line or off-line
  • Not all members of value chain on-line
  • IT management vs. business management:
    Who is the barrier?
  • Limited executive vision

 

 

 

Legal and Regulatory 

  • Lack of consistent rules policies
  • Customs and tax uncertainties
  • The role of governments and nations
  • Other regulatory issues

 

 

 

Behavioral and Educational

  • Trust and privacy
  • Complexity of PKI
  • Fraud
  • Hype
  • Awareness about availability of services
  • E-money laundering

 

 

 

Other Challenges 

  • Channel conflict
  • Critical mass
  • Fulfillment Process

 

 

Download Dissertation

 

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