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Kunnskapskilden – E-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 3 |
The E-Retailer Commerce |
Chapter Three E- Retailer Commerce3.1 Introduction |
3.2 |
The E-Commerce Opportunities, Barriers and Challenges |
3.2.1 SWOT
The E-retailer success in business depends on knowing the customer, the industry and the competitors inside out. The E-retailer has to do a SWOT analysis to identify the strengths, weaknesses, opportunities and treats.
Strengths are those things the E-retailer is doing well and set the E-retailer apart from competitors. Weaknesses are those areas the E-retailer has to improve upon, especially if the E-retailer do not want the competitors to capitalize on them. Opportunities include everything that can benefit the E-retailer, such as increased customer base, other businesses closing the doors, shift in customers attitude or special services that only the E-retailer can offer. Threats are those things that can hurt the E-retailer. Like a major shift in trends, other Industries opening similar services, a price increase from suppliers, new privacy policy or demand of skilled people can not be met
This dissertation will cover the opportunities and benefits and barriers and threats and point out the challenges an E-retailer has by doing business online.
3.2.2 Opportunities and benefits
The Web offers Businesses the opportunity and benefits to extend commerce into cyberspace, using direct marketing to sell their products directly to the customer.
The retailer industries that have grown up with print, radio and television in the past five decades have only just started to shape the Web. As professional businesses study what the E-Customer and users want, innovative strategies will evolve and make today’s success stories seem small compared to tomorrow’s E-retailing breakthroughs.
The goals of reducing costs, speeding time to market, and improving customer satisfaction is at the core of business today. Customers demand lower prices, greater options and customisation, higher levels of service, and more personalisation. To meet those needs, companies are reconsidering all aspects of their operations in light of E-Business opportunities.
A lot of companies seem to think that the key to success on the Internet is learning how to sell things with some type of online credit transaction. But the Internet is much more than simple a tool to sell products online. The real key is that the Internet is a marketing tool, not just a tool for selling. That means the Internet opens a lot of different opportunities, which the companies have to be aware of to succeed.
Opportunities and benefits could be seen both from the demand side and supply side. Here in this chapter we see it from the E-retailer’s point of view.
Below some of the differences in the “real world” and the virtual world, which shows how the advantages the E-Retailers have in the digital world.
Source: Birch, Gerbert and Schneider (2000: 56)
Figure 3.1 Advantages of an established retailer in the virtual world
It is five things a business can do to capitalize on the opportunities for business in cyberspace: (Deloitte Research, n.d.)
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PwC (n.d.) argues that “E-business enables companies to create more dynamic and efficient processes by improving the way they operate today and preparing the organisation for the marketplace of tomorrow”
A Company can:
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Behind in the Appendix 4 a table with the opportunities and benefits for the E-Retailer are mentioned.
3.2.3 Barriers and Treats
The vast growth potential of Internet-based commerce is tempered by legitimate concerns over the security of such a system. Despite the potential rewards of conducting business on the Internet, major corporations have been slow to embrace this technology–and with good reason. The number one rated concern for both businesses and customers in establishing and participating in e-commerce is the potential for loss of assets and privacy due to breaches in the security of commercial transactions and corporate computer systems. A single publicized security breach can erode confidence in the business and not only damage the reputation of the firm, but also hurt the e-commerce industry as a whole. (Ghos, 1998: 9)
According to Anderson Consulting the main barriers to E-Business is the following
Figure 3.2 Main barriers to E-Business (Cunningham & Friedrich, 1999: 101)
According to a study by PwC (n.d.) managers point out the following 5 barriers to success:
Huge and uncertain costs of implementation, more pressing corporate priorities, lack of proven benefits within the industry, lack of accepted standards, and the current low use of the Internet by customers and suppliers. Additionally, companies acknowledge that they are not up to speed on many of the key privacy, legal, taxation, and emerging intellectual property issues that their own E-Businesses are creating. It has to be warned that the cost of E-Commerce should not be underestimated as a lot of E-Commerce companies have experienced.
According to Amor (2000: 357) the threats on the Internet can be classified in one of the following four categories:
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Concern for going online is according to Amor (2000: 22-23)
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Table 3.1 Concern for going online
In general the E-Retailer will experience:
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According to a survey conducted by CommerceNet: (Weiss, 1999)
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As seen above individuals and businesses have a number of concerns about using the Internet for commercial purposes as lack of a predictable legal environment, concerns that governments will overtax, overregulate, or censor the Internet and uncertainty about the Internet’s performance, reliability and security. Customers concerns are more about security of transactions and the privacy of electronic information. All this has a great impact on the selling in cyberspace and has to be taken very serious by the E-Retailers if they want to succeed.
3.2.4 Challenges
One of the common errors that companies make is to underestimate the challenges facing Internet commerce. The E-Retailer has a lot of different challenges. One differentiation in categories could be the following one:
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Mougayar (1998: 51-81) suggests a company has to consider a number of general observations before approaching the challenges:
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For most organisations, taking advantage of the opportunities of the E-Economy means facing some combination of the following challenges:
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According to Clarke (1998) we have do deal with four key issues in business to customer commerce:
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Other things that are hard about E-Commerce and important for the E-Retailers to have a strategy on are:
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Another real big challenge for the E-Retailer is not technological but in figuring out a home-delivery method that makes sense. As customers turn to the Internet for buying products and services for their homes, physical products must be delivered, and physical services must be performed.
In the Appendix 4 the challenges are divided into different categories.
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