Contemporary Business - Chapter 07.pdf - po ang - Januszek66

40523_07_c07_p212-250.qxd 9/12/06 6:05 PM Page 212

Chapter 7

Define e-business and discuss how

it can help achieve business success.

Distinguish between a corporate

Web site and a marketing Web site.

List the major forms of business-to-

business (B2B) e-business.

Explain business-to-consumer (B2C)

e-business and identify the products

most often sold online.

Describe some of the challenges

associated with e-business.

Discuss how organizations use the

communication functions of the

Internet to advance their objectives.

List the steps involved in developing

successful Web sites and identify

methods for measuring Web site

effectiveness.

Explain the global scope of

e-business.

40523_07_c07_p212-250.qxd 9/12/06 6:05 PM Page 213

B ecause teenagers and young adults already

spend a lot of time online, it should be easy for

marketers to sell them CDs, games, and high-

fashion clothing on the Internet, right? After all,

they’re already at their computers. Why wouldn’t

they shop there as their parents do?

Selling online to the youth market isn’t quite

as simple as just offering a Web site. Teens might

actually surf fewer hours a week than their par-

ents, because having access at school is limited

or focused on specific tasks, which doesn’t bring

the same freedom to shop that many adults enjoy.

And when online, many teens are busy communicat-

ing—sending instant messages, writing and reading

blogs, and conversing in chat rooms. Further, many teens

are price conscious because their earning power is low

place of the typical dull navigation bar. In addition to

high-fashion clothes for purchase, the site features flashy

Reaching the Elusive Teen Market Online

and few have credit cards. These factors combine to

make it easier for teens to window-shop than to actually

purchase.

Still, retailers see big potential in capturing the atten-

tion of this lucrative—and elusive—market. For one thing,

credit cards for many teens are only a year or two away,

and the purchasing power of this age group is expected

to be high. Within the next few years, roughly 34 million

people will be in their teens in the United States, so they

are an attractive market. Another motivation for venturing

online is the opportunity to build customer loyalty, espe-

cially for big retail operations like Macy’s Thisit.com, Crate

and Barrel’s cb2.com, and Pottery Barn’s pbteen.com.

Young people who begin a relationship online with a

department store such as Macy’s or a home-and-hearth

retailer like Pottery Barn may continue to shop there—

online, in person, or by catalog—for many years. So how

do retail businesses create Web sites that attract teens

and young adults?

Macy’s partnered with Teen Vogue magazine to

develop Thisit.com for girls in the 13- to 17-year-old age

range. The home page features a picture of Times Square

with numbered billboards and a blimp. Hidden behind

the numbers are descriptions of the site’s contents—in

graphics, music and video clips to download, and fash-

ion and grooming advice. The manager of Macy’s online

division says the site is “mostly designed to be about their

lifestyle and communicating with them versus a hard sell

like ‘here’s the merchandise, it’s on sale.’” The site has no

housewares or appliances, for instance, although all

items on Thisit.com can be accessed, presumably by par-

ents, from the company’s main Web site at Macys.com.

Alloy.com, a specialty-clothing site that caters to

female teens, packages polls, contests, sweepstakes, mes-

sage boards, fashion advice, and horoscopes on its site.

The site also features tips and news about trends, books,

movies, and music and film celebrities. The polls and

message boards help give the company feedback; its

buyers can spot emerging trends from posted comments.

Hip Web site http://hollisterco.com , owned by Abercrom-

bie & Fitch, has separate pages for “Dudes” and “Bettys”

in need of fashionable clothes and accessories, as well as

trendy features about pop groups with audio and video

clips on its “Club Cali” page. In contrast, eBay doesn’t

have to dress up its Web site very much to draw teens. In

fact, it’s hard for other companies to compete with eBay

when it comes to entertainment value, and eBay and

Amazon are already top destinations for teen shoppers.

40523_07_c07_p212-250.qxd 9/12/06 6:05 PM Page 214

But making Web sites entertaining and interactive

isn’t all retailers need to do. They must also draw teens

to visit them, often by linking to popular “social network-

ing” sites such as Facebook.com, Quizilla.com, College-

Boards.com, and Xanga.com. Even the education site

SparkNotes.com is considered a good way to reach

teens. One reason is that teens consider social and edu-

cational sites safe and tend to trust information they find

there. Stores are also experimenting with e-mail promo-

tions and ways to use text messaging to reach teens.

Although many teen sites cater to females, retailers

must still grapple with a few gender-related differences of

Internet users. First, although teenage girls spend about

22 percent more time online than boys, teen boys buy

more items online. The kind of merchandise boys buy—

videos, music, games, and high-tech items—doesn’t need

to be tried on. And, as any parent can attest, teen girls

simply like the social aspects of shopping together at the

mall. But if Thisit.com brings the customer to the mall,

Macy’s won’t be complaining. 1

Over the past decade few developments in contempo-

rary business have been as monumental as the Internet

and its related technologies. The Internet offers busi-

nesses and other organizations a source of information,

a means of communication, and a channel for buying

and selling, all rolled into one. With just a few ticks of

the clock and a few clicks of a mouse, the Internet has

revolutionized virtually every aspect of business. Con-

sumers use the Internet for a variety of tasks: to pay

bills, obtain product information, make purchases, and

even consult with their physicians. Businesses use the

Internet to exchange information with customers, adver-

tise products, research market trends, and, of course, buy

and sell a whole range of goods and services. New words

have emerged, such as blog , RSS , extranet , and wiki , and

old words have new meanings: Web, search marketing,

banner, pop-up, and online.

Electronic business (or e-Business) refers to conduct-

ing business via the Internet. The size and scope of

e-business is difficult to understate. For instance, during

a two-week period leading up to Valentine’s Day, U.S.

consumers spent close to $4 billion online, a 30 percent

increase over the previous year. 2 Sigma-Aldrich, a St.

Louis–based chemical company that sells products to

biologists, has seen its online sales rise fiftyfold—from

$4 million to more than $200 million in less than ten

years. Office products retailer Staples reports that more

than half its orders are placed via the company’s Web

site. Meanwhile, Ford Motor Credit recently launched an

Internet portal for receiving and processing credit appli-

cations. Already the portal is processing around half of

all the applications that come from Ford dealers, or more

than 150,000 per day. 3

E-business involves much more than just buying and

selling. Some surveys suggest that the Web is the number

one medium for new-product information, eclipsing cata-

logs, print ads, and trade shows. The Internet allows

retailers and vendors to exchange vital information,

improving the overall functioning of inventory and sup-

ply, which lowers costs and increases profits. Moreover,

an increasing number of Americans now get their news

and information from blogs (short for Web logs , which

are online journals) rather than from traditional media

such as television and newspapers. Consequently, a

growing number of businesses use blogs to put human

faces on their organizations and communicate directly

with customers.

Government agencies and not-for-profit organizations

have also embraced the Internet. On college and univer-

sity Web sites, students can obtain academic program

information, register for courses, check grades, and even

pay their college bills. Many states now allow residents

to renew their car registrations online, saving time and

trips to the motor vehicle office.

In the past decade, the number of Internet users in

the United States and worldwide has grown dramatically.

Today an estimated 200 million Americans—more than

63 percent of the U.S. population—access the Internet at

home, at school, at work, or at public-access sites. Active

at-home Internet users alone exceed 135 million in the

United States today. Worldwide, the number of Internet

users is close to 900 million. 4

While some of the initial

214

Part 2 Starting and Growing Your Business

40523_07_c07_p212-250.qxd 9/12/06 6:05 PM Page 215

novelty has worn off, the Internet has become a significant

presence in the daily lives of a majority of Americans. For

instance, according to recent surveys, the average Inter-

net user spends more time online than watching televi-

sion. 5 Moreover, over half of all Americans accessing the

Internet today use broadband connections—such as DSL

or cable modems—which vastly increase reaction times

and allow nearly seamless graphics and video displays. 6

Experts believe that the continued growth of broadband

is one of the keys to the continued growth and develop-

ment of e-business.

In spite of the past success and future potential of the

Internet, issues and concerns relating to e-business remain.

Some highly touted e-business applications have proven

less than successful, cost savings and profits have occa-

sionally been elusive, and many privacy and security

issues still linger. Nevertheless, the benefits and potential

of e-business clearly outweigh the concerns and problems.

This chapter examines the current state and potential

of e-business. We begin by discussing the capabilities of

e-business, the benefits of e-business, and the ways

organizations use the Web. Next, we focus on business-

to-business (B2B) transactions, which make up the most

e-business transactions today. Then we explore business-

to-consumer (B2C) e-business—online shopping sites

such as Macy’s Thisit.com, described in the opening

vignette. We also consider some of the challenges of

e-business. Next, we explain how organizations use the

Web’s communication functions to advance their objec-

tives. The chapter concludes with discussions of how to

create and maintain an effective Web presence and the

global reach of e-business.

WHAT IS E-BUSINESS?

electronic business

(e-business) conducting

business via the Internet.

Today the term e-business describes a wide range of business activities that take place on the

Internet using any of the applications that rely on Internet technology, such as e-mail and vir-

tual shopping carts. E-business can be divided into the following five broad categories:

1. e-tailing, or virtual storefronts on Web sites

2. online business-to-business transactions

3. electronic data interchange (EDI), the business-to-business exchange of data using com-

patible software

4. e-mail, instant messaging, and other Web-enabled communication tools and their use as

media for reaching prospective and existing customers

5. the gathering and use of demographic, product, and other information through Web contacts

E-business provides a foundation for launching new businesses, extending the reach of

existing companies, and building and retaining customer relationships. A Web presence builds

awareness of a company’s products and brands, provides the means for one-on-one communi-

cation with customers, and permits customers to place orders from anywhere in the world, at

any time of day. E-business encompasses all of the following types of activities:

“ They Said It ”

“First and foremost,

the Internet is unique

since it is THE only

interactive medium—

and that’s important

because from a con-

tent, service, and

communications per-

spective, we Web

folks try to take

advantage of that

interactivity.”

—Jerry Yang (b. 1968)

Co-founder, Yahoo!

•

Legally downloading songs from Apple Computer’s iTunes Web site

•

Buying a used laptop computer on the online auction site eBay

•

Accessing Infotrac ( http://www.infotrac.com ) through your college’s wireless network to

find articles to complete a class research assignment

•

Researching new-car models on Edmunds.com ( http://www.edmunds.com ) and getting price

quotes from several local dealers

215

Chapter 7 E-Business: Doing Business Online

40523_07_c07_p212-250.qxd 9/12/06 6:05 PM Page 216

The growth of e-business has attracted an army of

specialized software firms and other service suppliers

that provide expertise for firms taking their first steps

into this competitive arena. Examples include Accen-

ture, IBM, Microsoft, and Oracle. IBM, for instance,

offers its business customers both software and ser-

vices designed to build virtual stores that go far

beyond traditional Web sites. Although IBM was orig-

inally known as a producer of computer hardware, it

now generates more than half its revenue from e-

business and other information technology services. 7

IBM even runs e-business systems for companies

that want to outsource this activity. The firm’s man-

agement believes that much of its future lies in pro-

viding e-business services. As a result IBM sold its

PC manufacturing business. Figure 7.1 illustrates the

types of e-business services offered by IBM.

E-business has also had an impact on governments

and others in the not-for-profit sector. For instance,

MunicipalNet is a growing e-procurement business based in Boston. It focuses on services to

states, local governments, and the businesses that supply them. The city of Torrington, Con-

necticut, recently signed up for the MunicipalNet service. According to Charlene Antonelli, the

city’s purchasing agent, the service has generated far more bids and had an impact on prices.

“We put a request out for a multimedia projector that previously we had a best price of around

$3,700....Through the MunicipalNet service, we got a number of bids in at the $2,000 level,”

noted Antonelli. 8 MunicipalNet can also help governments set up Web sites at which citizens can

federal, state, and local taxes will be collected online within the next few years.

7.1 Services Offered by IBM to Enhance E-Business

Capabilities and Benefits of E-Business

The last years of the 20th century and the early years of the 21st century witnessed the change

from a manufacturing-based industrial economy to its electronic successor—an economy based

on information, the Internet, and other related online technologies. Many people see e-business

as a major component of growth for the rest of the 21st century. Since the Web first opened for

commercial activity in 1993, e-business has had a major impact on both consumers and busi-

nesses. It is estimated that in the United States e-business is currently over 2 percent of GDP.

This figure is expected to increase to more than 5 percent within the next three to five years. 9

Some recent successes in e-business are summarized in Table 7.1.

E-business offers a wide variety of capabilities and benefits to contemporary businesspeople.

“ They Said It ”

“The new information

technology, Internet,

and e-mail have prac-

tically eliminated the

physical costs of com-

munications.”

—Peter Drucker

(b. 1908–2005)

Business author and

strategist

•

Global reach . The Net allows goods and services to be sold to customers regardless of

geographic location. eBay, for instance, is now the nation’s largest used-car dealer. 10 Buy-

ers and sellers throughout the country meet in this virtual used-car marketplace, where

more than $7 billion worth of used vehicles are bought and sold annually.

•

Personalization . Only a handful of Dell computers are waiting for customers at any one

time. The production process begins when an order is received and ends a day or two later

when the PC is shipped to the customer. Not only does this approach better satisfy cus-

tomer needs, but it also sharply reduces the amount of inventory Dell has to carry.

•

Interactivity . Customers and suppliers negotiate prices online in much the same manner as

at a local flea market or car dealership. The result is the creation of an ideal product at the

right price that satisfies both parties.

216

Part 2 Starting and Growing Your Business

Contemporary Business - Chapter 07.pdf

Plik z chomika:

Inne pliki z tego folderu:

Inne foldery tego chomika: