Business Skills for E-Commerce

1. Business Skills for E-Commerce Part 1A DyalaRousan

2. What is E-Commerce? • Electronic commerce, commonly known as e-commerce or e-Commerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. • The concept of e-commerce is all about using the Internet to do business better and faster. It is about giving customers controlled access to your computer systems and letting people serve themselves. • E-Commerce can be between two businesses transmitting funds, goods, services and/or data or between business and customer, or between customer and customer.

3. Examples of e-Commerce Here are some different businesses, see if you can work out which are involved in e-Commerce and why: • EBay • Tesco • iTunes • Microsoft • McDonalds

4. Examples of e-Commerce cont As you will have noticed by now everything we do is part of e-commerce. This is because everything now can be done online as well as in the shops. • EBay –An online based auction room • Tesco –Also does internet shopping • iTunes –Buy music online. • Microsoft –Downloads, sales and technical advice online. • McDonalds –Only advertises online.

5. Why e-Commerce?????? • E-Commerce is growing so fast because of its quickness- whereas in years gone by people would send a cheque to the company and then the company would cash the cheque before dispatching the goods we can now use instant transactions to transfer money from account to account in a number of seconds.

6. Why e-Commerce?????? cont. Another popular factor of e-Commerce is its wide availability – people from everywhere can buy- not just those the company can afford to send a leaflet to, also it means that the internet can be used as an extra income for your spare time. E-Commerce is very low maintenance- you just have to wait for people to buy and then send the goods; simple as!!!

7. The Dangers of e-Commerce As with every industry there are downfalls- in the case of e-commerce these downfalls are a way for criminals to make vast amounts of cash with minimal effort- this can happen because: • Sellers never send the goods. • Sellers steal credit card details. • Buyers use a fraudulent account which they cease once they have received the goods , therefore cancelling a payment. • Buyers payments or details are lost due to an error on the servers.

8. USER How It All Works WEBSITE BUYS ITEM CREDIT CARD DETAILS GIVEN DETAILS SENT TO A PAYMENT COMPANY e.g. PAYPAL ORDER RECEIVED + PAYMENT CLEARED GOODS SENT!!!

9. E-Commerce Business Models Many e-commerce business model, and more are being invented everyday. There are a variety of different types of e-commerce. The major generic types of business models that have been developed for the e-commerce area: • B2C – Business-to-Consumer • B2B – Business-to-Business • C2C – Consumer-to-Consumer (eBay!) • M-commerce (Mobile Commerce)

10. B2C – Business-to-Consumer • Businesses that sells its products or services to consumers over the internet for their own use. • Online Retailers (Amazon.com) • Online Banking • Travel Services • Health information • Real Estate

11. B2B – Business-to-Business • Companies buying from and selling to each other online,such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. • The volume of B2B (Business-to-Business) transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supplychain there will be many B2B transactions involving sub components or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer. • For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windscreens, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.

12. C2C – Consumer-to-Consumer • A consumer sells products and services to another consumer via the internet. • A common example is the online auction, in which a consumer posts an item for sale and other consumers bid to purchase it

13. M-commerce (Mobile Commerce) • Mobile commerce or M-commerce, refers to the use of wireless digital devices to enable transactions on the web. Mobile consumers can conduct many types of transactions, including stock trade, in store price comparisons, banking, travel reservations, and more. • Example, wireless mobile devices such as PDA’s(personal digital assistants) or cell phone.

14. Who is Involved in Business Activity?

15. Since different businesses attempt to do different things, different type of people are responsible for starting them in the first place. • Three main types of businesses(organizations) need to be considered. These are: • Public Sector Organization • Private Sector Organization • Voluntary Sector Organization(eg Charities)

16. Public Sector Organization

17. Public Sector – is owned and run by the state (Government) for the people. People pay taxes to the Government and this money is used to finance most of the public sector. • AIMS:- • To provide essential public services. • To use resources well for the benefit of the community.

18. The two most important parts of the State are:-

24. Private Sector Organization

28. Voluntary Groups

31. Business Aims & Objectives

32. Business Aims • An aim or goal is a statement of purpose • Business Objectives show what a business aims to achieve. • The aims is what a business sets to itself so that it can measure how successful it has been in reaching its targets. • We can usually find out the business objectives by looking at their MISSION STATEMENT.

33. Mission Statement • A mission statement is a written statement making clear to all stakeholders a firm’s overall aims and values • It describes what the company wants to achieve and how it wants to act • It sets out the vision and values of a business • It enables the stakeholders of a business to understand why the business is doing what it is doing!

34. Difference Between Aims & Objectives • Aims • General statement of purpose • E.g. we want to grow business in European markets • Objectives • Measurable target • E.g. we want to achieve sales of €10 million in European markets in 2004

35. Why Set Objectives • Objectives give business a clearly defined target • Plans can then be made to achieve these targets • Can help motivate employees • Enables business to measure progress towards to its stated aims

36. Criteria for Business Objectives The most effective business objectives meet the following criteria: • S – Specific – objectives are aimed at what the business does, e.g. a hotel might have an objective of filling 60% of its beds a night during October, an objective specific to that business. • M - Measurable – the business can put a value to the objective, e.g. €10,000 in sales in the next half year of trading. • A - Agreed by all those concerned in trying to achieve the objective. • R - Realistic – the objective should be challenging, but it should also be able to be achieved by the resources available. • T- Time specific – they have a time limit of when the objective should be achieved, e.g. by the end of the year.

37. Typical Business Objectives • Profit maximization: • A financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses. • try to make the most profit possible – most like to be the aim of the owners and shareholders. • market share: • Market share is just simply the number of people which purchase your product in relation to all people who purchase that same product.  • Example: if you are a barber or a hair dresser and you want to know what your market share is then you simply look at how many people come for a haircut at your salon in every year (or any other timeframe), and you compare that with the total number of people who cut their hair in that same period.  So if we say that in 1 month, 10,000 people cut their hair in all of Jordan and if you offer 1,000 haircuts per month, then your share of the market is 1,000/10,000= 0.10 or 10%.

38. Typical Business Objectives • Sales growth: • Measured by an increase in sales or by market share. • Customer Service: •  is the provision of service to customers before, during and after a purchase. • Return on Capital Employed (ROCE) or Return on Investment: • Return on investment is the profit you get on the capital you employ. • Example: if you invest 100 dollars in the stock market and in 1 year your 100 dollars worth of stock becomes 150 dollars then you have made a??????% return on investment.

39. PEST Analysis Stands for • P – Political • The current and potential influences from political pressures • E - Economical • The local, national and world economic impact • S - Social • The ways in which changes in society affect the project • T - Technological • How new and emerging technology affects our project / organization

40. PEST analysis PEST is an analytical tool which considers external factors and helps you to think about their impacts  • Is a useful tool for understanding the “big picture” of the environment in which you are operating • By understanding your environment, you can take advantage of the opportunities and minimize the threats. • The PEST analysis is the different kinds of factors a company has to take into consideration when undertaking their business activities.

41. PEST Analysis: Political A company will have to take into consideration political factors such as laws, regulations, unions and labour issues before proceeding with anything. You must consider issues such as: • How stable is the political environment? • What is the government's position on marketing? • What is the government's policy on the economy? • Does the government have a view on culture and religion? • Is the government involved in trading agreements such as EU etc.

42. Example: A real estate company will have to take into consideration the city planning and the municipality’s vision for a specific area:  the rules and regulations that state that a building can’t be taller than 14m, or that each house needs to have a front lawn, or that the roads must be 20m wide.  Other political factors can be legal such as requirements for investing in a country.  A foreign investor may not be able to invest his money in a country (such as North Korea), or might be able to invest in a country but can’t take his money out of the country after he brings it in (capital controls which is a political and economic policy)

43. PEST Analysis: Economic • Economic factors include economic growth, interest rates, exchange rates. These factors have major impacts on how businesses operate and make decisions. • For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy

44. PEST Analysis: Social The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include: • What is the dominant religion? • What are attitudes to foreign products and services? • Does language impact upon the diffusion of products onto markets? • How much time do consumers have for leisure? • What are the roles of men and women within society? • How long are the population living? Are the older generations wealthy? • Do the population have a strong/weak opinion on green issues?

45. Example: Social factors can include the community in which the company will be operating, such as British Airways and how they wanted to expand Heathrow Airport.  The expansion of an airport will need to take the community into consideration since airplanes make lots of noise pollution and their effects on the surrounding environment is strongly felt

46. PEST Analysis: Technological Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points: • Does technology allow for products and services to be made more cheaply and to a better standard of quality? • Do the technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones, etc? • How is distribution changed by new technologies e.g. books via the Internet, flight tickets, auctions, etc? • Does technology offer companies a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc?

47. Example: Technological factors include the kind of technology which is available in a country or in a certain place.  You are most likely not going to be able to undertake genetic analysis in a hospital in rural Nigeria because the infrastructure there does not allow you to do so.  A manufacturer of cars will need to be in an area where global supply chains can reach since a car will have parts from all over the world.  It will also need to be close to a port where they can easily export the cars all over the globe.  The technological analysis will take into account all the different technological advancements that are required by the company, and how easily they can obtain them in a certain place.

48. Quiz : 20 mins • Define e-commerce. • What are E-commerce types? • What are business types? • What are aims of business organization? • What dose the PEST analysis stand for?