Managing Design and eBusiness

1. VDIS10026 Managing
Design and eBusiness
SANGEETA JAIN

3. That is the
power of the
internet

4. And it is only
growing…

7. The Internet
 The internet or Internet is the global system of interconnected
computer networks that use the Internet protocol suite (TCP/IP) to
link devices worldwide. It is a network of networks that consists of
private, public, academic, business, and government networks of
local to global scope, linked by a broad array of electronic, wireless,
and optical networking technologies. The Internet carries an
extensive range of information resources and services, such as the
inter-linked hypertext documents and applications of the World
Wide Web (WWW), electronic mail, telephony, and file sharing.
https://en.wikipedia.org/wiki/Internet

9. The Internet
 This global network of computer networks is nowadays based on
platforms of wireless communication, provides ubiquitous capacity of
multimodal, interactive communication in chosen time, transcending
space. Thus, we can say that humankind is now almost entirely
connected. The virtual life is becoming more social than the physical
life. In almost everything we do, we use the Internet. It is the first thing in
the morning we do- see our notifications and emails. In almost
everything we do, we use the Internet. Ordering a pizza, buying a
television, sharing a moment with a friend, sending a picture over
instant messaging etc.
 Here is an interesting read: “36 ways the Web has changed us”
 https://www.washingtonpost.com/news/arts-and-
entertainment/wp/2014/03/12/36-ways-the-web-has-changed-
us/?utm_term=.c41175faceab

10. The Role of Internet in Business
 Communication: Businesses use internet technologies such as audio/video calls,
email and video conferencing to make communication virtually instant.
 Growth: It gives businesses an opportunity to reach a wider global audience.
Promoting through the internet is also a way to increase sales and reach the
desired growth level. Business can also expand by having an online division.
 Marketing: Most businesses are taking advantage of the internet to market their
products and services to a global audience. The most notable internet
technologies here include search engines such as Google.
 Networking and Recruiting: Social networking websites play a role in business
networking by connecting like-minded professionals. Through the internet,
people have found business partners and great employees.
Article Source: http://EzineArticles.com/6348391

11. The Role of Internet in Business
 Outsourcing services: The internet has helped cut costs by
outsourcing services to countries where it is cheaper to provide
these services. Apart from the cost reduction, outsourcing enables
businesses to concentrate on their core services too.
 Online Shopping Role: One role of internet in business is the birth of
ecommerce websites and online payment solutions that allow
people to shop online from the comfort of their own homes.
 New Opportunities: The internet has opened up new business
opportunities as anyone can now start an online business.
Article Source: http://EzineArticles.com/6348391

12. Evolution of eBusiness
 Electronic Business or e-business is a term which can be used for any
kind of business or commercial transaction that includes sharing
information across the internet. Commerce constitutes the
exchange of products and services between businesses, groups
and individuals and can be seen as one of the essential activities of
any business. Electronic commerce focuses on the use of ICT to
enable the external activities and relationships of the business with
individuals, groups and other businesses or e business refers to
business with help of internet i.e. doing business with the help of
internet network. The term "e-business" was coined by IBM's
marketing and Internet team in 1996.
https://en.wikipedia.org/wiki/Electronic_business

13. Evolution of eBusiness
 Business began using websites for marketing shortly after graphical-
based web design became available in the early 1990s. Most of
these websites provided visitors basic information about a
company's products and services, and included contact
information, such as phone numbers and email addresses, to assist
consumers in contacting a company for services. Online sales
began in 1994 with the ability to encrypt credit card data.
 A new sector of business has evolved around digital products that
are downloaded from company servers via the Internet. The
software market is evolving into an e-business model where
companies offer applications for downloading and no longer sell
the programs on CDs or DVDs.

14. Traditional VS eBusiness
 Purely physical business firms, companies, institutions are referred to
as bricks and mortar. Bricks and clicks is a business model by which a
firm integrates both offline (bricks) and online (clicks) presences.
Companies that are engaged only in eBusiness are considered as
clicks or perhaps clicks and flips, flips referring to e-catalogues.
 eBusiness has brought about a power shift from sellers to buyers.
Both individual and business buyers can be more demanding than
ever because they are just one click away from an abundance of
alternative global suppliers, all vying for their business. In this
environment, buyer attention is the scarce commodity and
customer relationship capital a valued asset.

15. Traditional VS eBusiness
 The mass market has slowly disappeared and the internet has
prompted marketers to create products and communication to
small target groups due to the easy availability of specialized
products and services.
 Geographic location is no longer a factor when collaborating with
business partners, supply chain firms, or customers, or just chatting
with friends. The Internet made place less important and allows
many buyers and sellers to bypass traditional intermediaries.
 Time is not a factor with Internet communication between firms and
their stakeholders. Online stores can be open 24/7; people can
communicate as their schedules permit; times zones disappear for
managers collaborating with partners on other continents.
https://smartamarketing.wordpress.com/2012/01/26/ebusiness-v-the-traditional-business/

16. Traditional
 Selling in physical stores
 Selling tangible goods
 Internal inventory/production planning
 Paper catalogue/s
 Physical marketplace
 Use of Value Adding Networks
 Value adding services
 Physical auctions
 Broker-based transactions
 Paper-based bidding
 Paper-based tendering
 Push production, starting with demand
forecast
 Mass production (standard products)
 Word-of-mouth, slow and limited
advertisement
 Linear supply chains
eBusiness
 Selling online
 Selling digital products
 Online collaborative inventory forecasting
 Smart electronic catalogue
 Marketspace (electronic)
 Use of the Internet and extranets
 Online auctions, everywhere, any time
 Electronic infomediaries,
 More value-added services
 Electronic billing
 Electronic tendering (reverse auctions)
 Pull production, starting with an order
 Mass customisation, build-to-order
 Affiliated, virtual marketing
 Viral marketing
 Hub-based supply chains
https://smartamarketing.wordpress.com/2012/01/26/ebusiness-v-the-traditional-business/

17. eBusiness Models
A business model is
defined as the
organisation of product,
service and information
flows and the sources of
revenues and benefits
for suppliers and
customers.
An e-business model is
the adaptation of an
organisation’s business
model to the internet
economy.

18. The internet is redefining
the marketplace.

19. Unique features of eBusiness
 Virtual players: automated agents with an online presence
 Virtual products: digitized objects/products/services
 Virtual processes: online ordering/payment process
 Virtual intermediaries:
 Provide certification, quality assurance, copyright clearance, distribution
 Education brokers: bringing instructors and students together online
 Personalized service providers: shoppers, travel agent, financial services
 Virtual companies
 They do not have to be based in a single geographic location
 The value chain is digital

20. eBusiness – Advantage to sellers
 Increased sales of existing products to generate additional profits
 Ability to target their offers to a niche market
 "The store is always open!"
 Establish better relationships with customers
 Low cost information distribution
 Increased speed to market
 Expanded delivery channels
 Global exposure and reach

21. eBusiness – Advantage to buyers
 Convenience
 Informative
 Value presented upfront: Demo and free download
 No long wait times
 Easy flow and navigation
 Search capabilities
 Engaging presentation
 Constant updates
 Easy to buy

22. eBusiness Cycle
Customers Online Ads Online Orders
Standard Orders
Access
Searches
Queries
Surfing
Distribution
Online: soft goods
Delivery: hard goods
Electronic Customer Support
Follow-on Sales

23. Value Chain Model
 A value chain for a product is the chain of actions that are
performed by the business to add value in creating and delivering
the product. For example, when you buy a product in a store or
from the web, the value chain includes the business selecting
products to be sold, purchasing the components or tools necessary
to build them from a wholesaler or manufacturer, arranging the
display, marketing and advertising the product, and delivering the
product to the client.
http://www.simplynotes.in/e-notes/mbabba/electronic-commerce/e-commerce-and-
value-chain-model/

24. Value Chain Model

25. Value Chain Model
 The value chain model, as originally demonstrated by Porter (1985),
identifies nine strategically relevant activities that create value and
reduce cost in a specific business. These nine value-creating activities
consist of five primary activities and four support activities. The primary
activities represent the sequence of bringing materials into the business
(inbound logistics), converting them into final products (operations),
shipping out final products (outbound logistics), marketing, and service.
The support activities include procurement, technology development,
human resource management, and firm infrastructure.
 This model is very helpful for identifying specific activities in eBusiness
where competitive strategies can be applied. Among a host of critical
areas/ factors in the value chain that major organizations have taken
into consideration for establishing a sound e-commerce strategy
include role of intermediaries, value pricing, logistics/purchasing,
fulfilment, and value nets among others.
http://www.simplynotes.in/e-notes/mbabba/electronic-commerce/e-commerce-and-
value-chain-model/

26. Value Chain Model
Role of intermediaries
 Intermediaries may be more important
now than ever before because most of
the rapidly growing Internet businesses
are essentially middlemen. For example,
companies such as Amazon, can be
thought of as middlemen-resellers of
products provided by some other
source. Intermediaries will continue to be
important because they provide
consumers with selection, specialized
distribution, and expertise. Some internal
disintermediation may take place to the
distribution channel. For example, Dell
has eliminated staff in an attempt to
realize cost savings in certain areas.
Value Pricing
 The Internet allows companies to price
with far more precision than they can off-
line and to create enormous value in the
process. Value pricing involves several
approaches. One approach to pricing
involves businesses offering heavily
discounted prices in an attempt to attract
customers to their web sites. Another
approach involves businesses transferring
their “off-line” prices to the Internet. An
attractive alternative approach is to utilize
the Internet to track customers buying
habits and adjust prices accordingly,
thereby uncovering new market segments.
The Internet allows companies to test
prices continually in real time and measure
customer responses.

27. Value Chain Model
Brand Loyalty
 Pricing is just one of several ways for a
company to differentiate itself from the
competition. Another way in which a
company can differentiate itself is by
promoting brand loyalty. Brand loyalty
encourages repeat customers and
helps to create long-term profitability.
A major benefit of customer loyalty is
that loyal customers often refer new
customers to a supplier.
E-Procurement
 E-procurement is the term currently used to
denote the process of using the Internet to
integrate supply chain partners through
collaboration on key initiatives and to improve
the purchasing process within organizations. A
major benefit of e-procurement is the cost
savings aspect. It also offers organizations the
ability to use the Internet to search for the best
pricing available. The overall advantage of
practising e-procurement is the fact the more
automation allows partners quicker access to
information. E-procurement also results in better
communication among supply chain partners.
Organizations are able to maintain tighter
control over the purchasing process. Only those
suppliers that organizations deem to be
“preferred suppliers” will be able to transact
business with the organization.

28. Value Chain Model
E-Fulfilment
 Today’s marketplace offers new challenges
to organizations. A key initiative
organizations have undertaken to better
compete is that of “E-fulfilment”. It can alter
the way customers purchase as well as the
manner in which manufacturers deliver the
product to consumers. E-Fulfilment contrasts
with traditional fulfilment. Suppliers are now
capable of accepting order online via the
Internet and having the information sent
directly into their order processing systems,
something not possible via traditional
fulfilment. Orders placed via e-fulfilment
tend to be smaller than those placed via
traditional fulfilment channels. The expected
and actual lead times are shorter than those
witnessed via traditional fulfilment.
Value Nets
 Firms are continually seeking out new ways to attract
and maintain customers. A development that has
proven to be effective in attracting and servicing
customers is that of the Value Net. A value net is a
network consisting of partnerships, which assists in the
transfer of information among supply chain partners
on a regular basis. The main benefit of a value net is
the competitive advantage it offers to all
participating organizations. The primary concept
behind a value net is its ability to allow firms to
address and solve customer problems, rather than
just selling a product. A popular trend in the
marketplace to address niche markets is that of the
online-service company. The advantage of this form
of business is that it provides enhanced service to
the customer in the form of direct door-to-door
delivery for customers. This is a distinct competitive
advantage that firms are looking to exploit.

29. eBusiness – The major players
 Consumers
 Retailers
 Credit Card Companies
 Banks
 Government
 Corporates
 Manufacturers
 Suppliers
 Logistic Companies
 Most important of all – Internet Service Providers!

30. Target Audience Analysis
 Target Audience is a section of the population that is identified as
likely to be most interested in buying or being associated with a
product. It is the market segment at whom the message is aimed.
The research and analysis of the customers can help understand
existing customers and also identify potential customers.
 The characteristics that identify a the target audience are called
Demographics. Demographics include age, education level, family
size, household income, etc.
 Points to consider in a target audience analysis include age,
gender, occupation, language, location, culture, lifestyle, interests,
purchasing characteristics etc.

31. Competitive Analysis
 Competitor: is the one who competes with another, as in sports or
business; a rival. In business, a company in the same industry or a
similar industry which offers a same or similar product or service.
 Competitor Analysis: helps to know about an existing or potential
competitor, to be able to think like that competitor so the brand or
company's competitive strategy can be effectively formulated.
 The entrance of new competitors is likely therefore consider the new
competitors in your report.

32. Competitive Analysis
Points to consider for Competitor Research & Analysis:
 Who are the competitors?
 Features and pricing of their product/service
 Their marketing and promotional strategy
 Their strength(s) and weakness(s)
 The threats they may pose to your brand
 Get information on how your competitors operate
 Learn how customers compare you with your competitors
 Analyze three of your most important competitors

33. Your competitor is just
one-click away

34. Challenges in eBusiness
While the benefits of having an e-commerce website are numerous,
there are some challenges as well. First of all, the e-commerce industry
has become so fierce, that surviving has become a matter of concern.
Some other challenges are:
 Lack of Verification Measures
Once a customer signs up in an e-business portal, the portal is
unaware about the customer except the information he/she
entered. The credibility of the customer is questionable. This
heightens when the customer issues a Cash-on-Delivery (COD)
purchase which have resulted in huge revenue losses for many e-
commerce players.

35. Challenges in eBusiness
 Lack of Integration
Order management system, customer support system, dispatch
system, order tracking system, etc are applications that can
streamline the experience of the customer across the buying
journey. But if these systems are disparate it could ruin customer
experience.
 Customer Loyalty
A lot of businesses have lost customers because their rivals have a
better quality of customer service, or better discounts. Customers
demand consistent and seamless experience across all channels,
and players that refuses to deliver fail to retain customers.
Consumers will develop new behaviours.

36. Challenges in eBusiness
 Competitiveness
The Internet is a great equalizer: little e-businesses compete right
along side large companies. Low startup costs mean that new
businesses can be just as competitive and responsive as those that
have been around for years.
 Security
The security of a website is always a worry because if a virus or
hacker attacks, one could lose important data, customers and
might even have the site come down. The main disadvantage is the
time required to learn about good security measures, including
digital signatures and encryption which does not exist in the
traditional mode of business.

37. Cost for setting up an eBusiness
 Hardware costs
It will include the cost of computer systems and peripherals (printers,
keyboards, computer mouse, etc.). Hosting the website will include
the price of servers and other equipment.
 Software costs
The software costs will depend on the business objectives. But there
are simple ways to reduce these costs by finding open-source
software that is freely available to the public. There are open-source
software for practically every application. However, their quality
and ease of use is often below that of proprietary software. Software
can be purchased on a subscription basis.

38. Cost for setting up an eBusiness
 Technology Maintenance Cost
Computers, software, networks and other technology must be
maintained and serviced regularly. The cost is conditional to and if
troubleshooting your hardware and software in-house or through an
on-call maintenance provider? Troubleshooting can often be done
remotely via the web, but some problems need to be solved in
person.
 Internet Service Provider
You need to access the internet through your Internet service
provider (ISP). The price of this service will vary significantly on the
speed of the Internet service.

39. Cost for setting up an eBusiness
 Website Design and Architecture
Website design and architecture is always a critical issue. It requires
to invest time and money to create a well-designed, effective
website. The goal is "usability"—the ease with which visitors can
move around the site. Usability affects traffic and the overall
effectiveness of a website. Another key consideration is search
engine optimization. Websites can be created for free using online
templates. However, it's often worth spending a few thousand
dollars on a freelance site designer or a design firm who can
organize it to make it more effective.

40. Cost for setting up an eBusiness
 Online store
The website needs to include a shopping cart and payment
processing. Choices for stores vary from custom designed e-
commerce solutions that take a one-time charge of several
thousand dollars, to free template-based services that take a
commission on sales.
 Content creation
Content is the core of your website. This work can be delegated to
freelancers, specialized firms or marketing agencies who can help
you create content for the eBusiness website or even find that a mix
of all these solutions is the best way to go.

41. Cost for setting up an eBusiness
 The Cost of Marketing
Projecting unique visitors to the website is a matter of marketing
analysis. Is based on determining an average Cost Per Visitor (CPV)
based on the CPV of other similar e-commerce sites. Visitors won't
come to the site unless you spend money or time on marketing the site.
This involves running lots of promotions until the brand is established and
a loyal customer base of repeat visitors is formed.
 Website Maintenance Cost
Website management can also be a significant cost. This job can be
given contracted out or performed by someone in-house. The goal is to
keep your site dynamic by regularly adding useful content such as tips,
news or training information—to encourage repeat visits.