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Ecommerce and Ebusiness Q & A
Kindly refer this link for the difference between ecommerce and ebusiness: Diff between ecommerce and ebusiness
- Define the term ERP
An Enterprise resource planning system is a fully integrated business management system covering functional areas of an enterprise like Logistics, Production, Finance, Accounting and Human Resources. It organizes and integrates operation processes and information flows to make optimum use of resources such as men, material, money and machine.
Enterprise resource planning promises
- one database,
- one application,
- one user interface
for the entire enterprise, where once disparate systems ruled manufacturing, distribution, finance and sales
- List the advantages of SCM.
Supply chain management (SCM) involves the coordination of all supply activities of an organization from its suppliers and delivery of products to its customers
- Improved Service
- Improve Management Decisions
- Cost cutting
- Increase in Profit
- Increase in shareholder value
- New clients
- New Products
- New channels to market
- New suppliers
- Competitive pressure
- Explain in details about the business model
Business Model:
Set of planned activities designed to result in a profit in a marketplace
8 Key Elements of a Business Model:
1. Value proposition
1. Value proposition
2. Revenue model
3. Market opportunity
4. Competitive environment
5. Competitive advantage
6. Market strategy
7. Organizational development
8. Management team
Categorizing E-commerce Business Model:
We categorize business models according to:
- E-commerce sector (B2C, B2B, C2B, C2C)
- Type of e-commerce technology; i.e., m-commerce
A) B2C Business Models
- Portal
- Search plus and integrated package of content & services
- Revenue model
- Adversting, Subscription, Transaction models
- Variation
- Horizontal
- Vertical
- Pure
- E-tailer
- Online version of traditional retailer
- Variation
- Virtual merchant
- Bricks and clicks
- Catalog merchant
- Manufacturer Direct
- Revenue model
- Sales
- Content Provider
- Digital content on the Web (News)
- Revenue Model
- Variations
- Transaction Broker
- Online transaction for consumers
- Revenue Model
- Transaction fee
- Industry using this model
- financial Services
- Job Placement Services
- Travel Services
- Service Provider
- Online Services - Google: Google Docs, Google Sheets etc
- Value Proposition - Valuable, convenient, time saving
- Revenue Model: Subscription fees, advertising fees, sales of market
- Community Provider
- Provides online environment where people with similar interests can transact, share
- Revenue Model: Adversting fees, Subscription fee, sales revenue, transaction fees, affliate fees
- Market Creator
- Use internet technology to bring buyers and sellers together
- Example: Priceline
- Revenue Model
- Transaction fee
- Transaction fee
B) B2B Business Models
- E-distributor
- E-procurement
- Exchanges
- Industry Consortia
C) Consumer-to-consumer
- eBay, Half.com
D) Consumer-to-Business
- Crowdsourcing projects
- Individuals make their items or services and sell them to companies.
- Examples: Site or logo, royalty free photographs, design elements and so on.
Describe the key elements of the business model.
1 Value proposition.:
Which products and or services will the company offer?
Which products and or services will the company offer?
Why should the customer buy from you?
Successful e-commerce value propositions:
Successful e-commerce value propositions:
- Reduction of product search, price discovery costs
- Personalization/customization
- Facilitation of transactions by managing product delivery
2 Market or audience.:
Which audience will the company serve and target with its communications? For example, business-to-business, business-to-consumer or not-for-profit?
Within these categories are there particular audience segments that will be targeted. The scope of geographical markets such as countries, regions or towns needs to be defined.
3 Revenue models and cost base.:
Within these categories are there particular audience segments that will be targeted. The scope of geographical markets such as countries, regions or towns needs to be defined.
3 Revenue models and cost base.:
What are the specific revenue models that will generate different income streams? What are the main costs of the business forming its budget?
How are these forecast to change through time?
How are these forecast to change through time?
Major types:
- Advertising revenue model
- Subscription revenue model
- Transaction fee revenue model
- Web Catalogue/Sales revenue model
- Affiliate revenue model
Who are the direct and indirect competitors for the service and which range of business models do they possess?
5 Value chain and marketplace positioning.
5 Value chain and marketplace positioning.
How is the company and its services positioned in the value chain between customers and suppliers and in comparison with direct and indirect competitors?
6 Representation in the physical and virtual world.
6 Representation in the physical and virtual world.
What is its relative representation in the physical and virtual world, e.g. high-street presence, online only, intermediary, the mixture?
How will the company influence its audience through the buying process through multichannel marketing? For example, how important will be personal interactions such as phone and chat which attract high service costs, but often have higher conversion rates?
7 Organizational structure.
How will the company influence its audience through the buying process through multichannel marketing? For example, how important will be personal interactions such as phone and chat which attract high service costs, but often have higher conversion rates?
7 Organizational structure.
How will the organization be internally structured to create, deliver and promote its service?
How will it partner with other companies to provide services, for example through outsourcing?
8 Management.
8 Management.
What experience in similar markets and companies do the managers have?
What is their profile which can be helpful to attract publicity?
What is their profile which can be helpful to attract publicity?
Describe e-business revenue model and its type.
How will the firm earn revenue, generate profits, and produce a superior return on invested capital?
Major types of revenue models:
1. Advertising revenue model
Fees are generated from advertisers in exchange for advertisements, which is ultimately the classic principal among the revenue models besides sales.
2. Subscription revenue model
The subscription business model is a business model where a customer must pay a subscription price to have access to a product or service.
3. Transaction fee revenue model
The revenue is generated through transaction fees by the customer paying a fee for a transaction to the operator of a platform. The company is a marketplace operator providing the customer with a platform to place his transactions.
4. Sales revenue model
A company receives commissions based on volume for enabling or executing transactions. The revenue is generated through transaction fees by the customer paying a fee for a transaction to the operator of a platform. The company is a marketplace operator providing the customer with a platform to place his transactions.
5. Affiliate revenue model
The affiliate program is an online distribution solution which is based on the principle of commission. Merchants advertise and sell their products and services through links to partner-websites
Explain SWOT analysis with an example.
Example
Strengths:
- What advantages does your organization have?
- What do you do better than anyone else?
Weaknesses:
- What could you improve?
- What should you avoid?
- What factors lose your sales?
Opportunities
- What good opportunities can you spot?
- What interesting trends are you aware of?
Threats
- What obstacles do you face?
- What are your competitors doing?
Explain SOSTAC framework.
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| SOSTAC framework |
Describe different elements in e-business procurement system.
The electronic integration and management of all procurement activities including purchase request, authorization, ordering, delivery and payment between a purchaser and a supplier.
The different elements of e-procurement are as follows:
i. Catalogue content:- At the heart of every e-procurement process lies an electronic catalogue. Similar to a traditional mail-order catalogue, electronic catalogues contain detailed information on products or services available for sale. Suppliers customize the content to address the specific needs of targeted buyers. This content is manipulated and imported into a database that the e-procurement application integrates into web pages.
There are three types of catalogues that address various buyer needs:
a. Product catalogues: Contain data on tangible items such as office products, medical supplies, rolls of steel, etc.
b. Service catalogues: Offer professional service “intangibles” such as office maintenance services, temporary personnel services, etc.
c. Commodity-specific catalogs: Offer specific product families or groups such as chemicals, paper, or other raw materials.
ii. E-procurement Processes:- In addition to creating an electronic catalog, existing procurement processes need to be “electrified” end-to-end to support the entire e-procurement process. This includes requisition and order management, real-time tracking and receiving, online order fulfilment, automatic billing, invoicing and payment, as well as workflow management, commerce transactions, and reporting and analysis tools.
iii. User Maintenance:- Closely related to the two preceding process management components, user maintenance includes defining the individuals authorized to use the e-procurement system, how these users will be enrolled, and how to provide them access to the trading community. This component serves as the foundation for managing the complex buyer-supplier relationships that will occur within the marketplace.
E-procurement user maintenance must address two primary tasks:
- Establish user profiles, access rules, catalog filters, and workflow.
- Allow for unique pricing and contractual relationships between a buyer and supplier
iv. Establishing Buyer/Seller Relationships:- This component has two phases: managing supplier relationships and managing pricing. Buyers and sellers may be linked based on their previous buying relationship or based on the buyer’s unique needs. Buyers may make purchases based on negotiated contracts or choose the specific commodities they need from customized catalogues. Price lists too may be customized for a buyer or buying group. For example, prices may be established by adding filters that dynamically calculate a price as a markup or discount of the list price. Or groups of buyers may be categorized into classes with filters applied for each group.
v. Billing Management:- E-procurement revenues are generally based on transaction fees. A billing management system will calculate usage charges and generate and distribute statements or invoices to buyer-seller members of the e-procurement network. Suppliers may also use the billing system to calculate ordering charges or to distribute operating costs for specific orders. These functions must directly interface with back office invoicing systems to automatically generate bills.
vi. Price Establishment:- Effective pricing enables buyers to negotiate the best possible deals and sellers to liquidate excess inventory. Two major pricing options are used: Dynamic Pricing and Fixed Pricing. Dynamic pricing: Allows buyers and sellers in an Internet market to trade goods and services at prices determined by market forces instead of by a predetermined price list or catalogue. An example of dynamic pricing includes business services such as auctions, reverse auctions, and exchanges: Fixed pricing: Based on a predetermined price list or catalogue prices negotiated between a buyer and seller
vii. Data Transmission:- Transmitting data over the Internet involves two facets: messaging agents and security. Data and messaging tools enable the Internet-based exchange of transactional data between different buyers and suppliers in the e-procurement marketplace. To do this, transactions are sent via the Internet as “messages” and then integrated into a supplier’s or buyer’s back-office system, enabling financial postings that coincide with the receipt, payment, and invoicing processes. Data messaging tools are also used to cancel transactions and log failures when messages can’t be delivered within a predefined time period or following a specified number of attempts. The most important aspect of the messaging tool is that it enables real-time communication between buyers and sellers.
viii. System Management:- Maintaining an e-procurement system involves configuring and monitoring performance usage, average response time, transaction sources, and traffic patterns. To maximize the benefits and strategic opportunities e-procurement systems offer, this information should be used to analyze growth patterns, session times, and ultimately to fine-tune the system’s performance to fit specific market communities or technical environments.
What is e-procurement and 5 rights of e-procurement
The electronic integration and management of all procurement activities including purchase request, authorization, ordering, delivery and payment between a purchaser and a supplier.
5 rights of e-procurement:
5 rights of e-procurement:
1. at the right price
2. delivered at the right time
3. of the right quality
4. of the right quantity
5. from the right source
2. delivered at the right time
3. of the right quality
4. of the right quantity
5. from the right source
What is a generic strategic process model
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| Generic Strategic framework |
Explain the difference between IT strategy and e-strategy
IT strategy
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E-Strategy
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An IT strategy is typically a long-term action plan for achieving a goal
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It defines both your short-term and long-term e-business goals and involves careful and skilled planning
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IT strategy is a comprehensive plan that outlines how technology should be used to meet IT and business goals
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An e-business strategy is essential to any organisation conducting business over the Internet.
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IT strategy requires strong IT leadership; To work closely with business, budget and legal departments as well as with other lines of business to achieve its success.
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E-Business strategy is part of your corporate strategy and business plan, and also interconnects with other plans including your marketing, organisational and IT strategic plans.
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the most effective IT strategies are those which not only link to a business strategy but also combine tactics and logistics.
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the most effective business strategies are those which link goals.
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Difference between strategy and tactics. Explain five force model and importance of value chain
| BASIS FOR COMPARISON | TACTICS | STRATEGY |
|---|---|---|
| Meaning | A carefully planned action made to achieve a specific objective is Tactics. | A long range blueprint of an organization's expected image and destination is known as Strategy. |
| Concept | Determining how the strategy be executed. | An organized set of activities that can lead the company to differentiation. |
| Nature | Preventive | Competitive |
| What is it? | Action | Action plan |
| Focus on | Task | Purpose |
| Formulated at | Middle level | Top level |
| Risk involved | Low | High |
| Approach | Reactive | Proactive |
| Flexibility | High | Comparatively less |
| Orientation | Towards the present conditions | Future oriented |
Value Chain:
- A model that considers how supply chain activities can add value to products andservices delivered to the customer.
• A tradition value chain model was proposed by Porter in 1980
• A new value chain model was proposed by Deise et all in 2000
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| Value Chain |
Five Porters Force Model
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| Porter's five forces |
1. Entry of new competitors – E-business can help companies enter into new markets. Through the internet, small and medium organisations can think of gaining new customers by reaching people in other parts of the world. By using standard and open systems, switching costs will reduce for customers and suppliers. Capital requirements will also decrease to enter a new market.
2. Bargaining power of buyers – To strengthen the relationship between buyers and suppliers using high software investments were things in the past. Modern technologies allow forward and backward incorporation in the value chain. The intermediaries are under pressure e-business enables to have direct links across various levels in the supply chain. Due to this there is increased transparency in the market.
3. Bargaining power of suppliers – Effects mentioned above for the ‘power of buyers’ can be replicated to describe the power of suppliers. In order to find, expand and retain relationships with customers, suppliers will have to raise their efforts.
4. Threat of substitutes – Due to the increased transparency of markets it is easier for organisations to develop substitutes for other markets. A huge amount of market data can be collected and analysed by applying new internet technologies. Also because of decreased switching costs, new substitutes are more likely to enter the markets.
5. Rivalry among existing competitors – As mentioned above, e-business permits companies from other industries or various countries to enter into new industries. This gives rise to more players in the same market and eventually increases competition (Hooft et al, 2001)
Differentiate between buy sides and sell side e-commerce with the help of example
i. Buy side e-commerce:
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|---|---|
Building an Ecommerce Website in 7 Simple Steps:
Choose a domain for your eCommerce website
Choose the Right Platform and Hosting
Design Your Store
Set Up Payments
Add Products
Test the Checkout
Look After SEO and Analytics
Michael Porter’s value chain (VC) is a well-established concept for considering key activities that an organization can perform or manage with the intention of adding value for the customer as products and services move from conception to delivery to the customer (Porter, 1980). The value chain is a model that describes different value-adding activities that connect a company’s supply side with its demand side. We can identify an internal value chain within the boundaries of an organization and an external value chain where activities are performed by partners. By analysing the different parts of the value chain managers can redesign internal and external processes to improve their efficiency and effectiveness.
Benefits for the customer are created by reducing cost and adding value to customers:
- within each element of the value chain such as procurement, manufacture, sales and distribution;
- at the interface between elements of the value chain such as between sales and distribution.
In equation form this is:
Value = (Benefit of each VC activity – Its cost) + (Benefit of each interface between VC activities – Its cost)
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| Porter's value chain |
What is E- CRM? How do you use E-CRM in each of the stages of the customer lifecycle?
E-CRM: Using digital communications technologies to maximize sales to existing customers and encourage continued usage of online services.
Five main stages with the typical customer lifecycle.
1. Reach:
This is the initial stage of the customer lifecycle. The primary goal at this phase is to bring awareness to your brand and to entice the consumer to want to learn more about your goods or services. Ultimately, you want to generate high-quality leads.
You should have a clearly defined brand messaging strategy and use a variety of marketing techniques, such as social media marketing, banner advertising and content marketing. It is crucial to analyze the effectiveness of each marketing strategy during this stage. This analysis will enable you to adjust your marketing strategies if necessary.
2. Acquisition:
At this stage, you are able to obtain prospective customer's contact information, such as email addresses, phone numbers or social media profiles. This signifies that the consumer is interested in your goods or services but not quite ready to take the leap and make a sale. This is one of the most critical points in the customer lifecycle.
You can now start to foster relationships with the customers through strategic engagement. Since you now have their contact information; you can focus on targeted and personalized marketing strategies. Email marketing, sales calls, social media marketing and content marketing all work well at this stage of the life cycle. Don't solely focus on making a sale. Instead, focus on building trust and fostering relationships.
3. Conversion:
This is the phase when you convert a prospective customer into an actual paying customer. You have been able to convince the consumer that they need your goods or services to the point that they make a sale. The most important thing to focus on at this stage is to make sure your customer has a pleasant buyer's experience.
Having customer-friendly processes in place, such as an easy-to-use website, a secure payment method and an efficient customer service strategy, are vital to enhancing the buyer's overall experience. This also is the time to analyze the effectiveness of your marketing techniques up to this point. Determine what strategies are working best to make this conversion happen and where adjustment may need to take place.
4. Retention:
Don't make the mistake of thinking that the customer lifecycle stops once the sale is made. The truth is that you are only halfway to your ultimate goal. It is now time to continue building on the customer relationships developed during the acquisition stage. Regular engagement with the consumer will help to keep your brand fresh in their mind and to encourage repeat purchases. Sales techniques like cross-selling, up-selling and loyalty programs are very effective at retaining customers.
5. Advocacy:
Creating advocates for your company should always be your ultimate goal. These are loyal customers who not only make regular purchases but also are willing to promote your goods or services to others. They will refer their friends and family members to your business and post positive reviews online. This type of customer loyalty doesn't happen overnight. You have to develop strong relationships throughout the entire customer lifecycle.
Defining the five main stages of the customer lifecycle will allow you to create an effective CRM strategy that attracts, converts and retains customers, as well as transitions them into advocates for your business. Whether you are focusing on marketing strategies, customer engagements or sales figures, understanding these five life cycle stages will help you boost sales while fostering customer relationships.
Discuss 7s strategic framework for change management
A useful framework for reviewing an organizations capability to manage e-Business related change also called as 7S framework can be described as follows:
i. Strategy: The contribution of e-Business in influencing and supporting organizations strategy
ii. Structure: The modification of an organizational structure to support e-Business.
iii. Systems: The development of specific processes, procedures or information systems to support internal marketing.
iv. Staff: The breakdown of staff in terms of their background, age, sex and characteristics such as IT vs. marketing, use of contractors/consultants.
v. Style: Includes both the way in which key managers behave in achieving the organization’s goal and cultural style of the organization as a whole.
vi. Skills: Distinctive capabilities of key staff, but can be interpreted as specific skill sets of team members.
vii. Superordinate: The guiding concepts of e-commerce organization which are also part of shared values and culture. The internal and external perception of these goals may vary.
References:
http://www.ques10.com/
dave-chaffey-e-business-and-e-commerce-management-strategies-4th-edition
dave-chaffey-e-business-and-e-commerce-management-strategies-4th-edition
1 comment:
Very nice & useful Thanks
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