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NTRODUCTION Benefits of eBusiness eCommerce

 Benefits to organizations that use this with their business partners

 Benefits to consumers 
 Benefits to society
..
Limitations

 Technical Limitations
 Non-Technical Limitations

...
 
Basic Basic Benefits of eBusiness eCommerce
Benefits     o increase sales - this is the first thing that people consider 
of           when dealing w e-commerce
eBusiness     o decreasing costs
eCommerce     o provide price quotes
    o increase profits
                 o understanding that profits is not the same as sales
    o Expands the size of the market from regional to national or national to international

    o Contract the market

    o reach a narrow market
               o target market segmentation allows you to focus on a more 
                    select group of customers
               o and therefore have a competitive advantages in satisfying them
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Basic Decreasing costs
Benefits     o costs of creating the product
of     o marketing
eBusiness                  o of promotional material
eCommerce     o costs of distribution

o eg. Netscape allowing you to download instead of waiting to get the

CD by mail

     o costs of processing (orders from the customers)

 
o repeat activities and information processing
o of handling customer phone calls
o of handling sales inquiries
o determine product availability (inventory management)

     o costs of storing information

     o lowers telecommunication costs
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Basic Provide price quotes
Benefits  
of
eBusiness -  with a web site, you can have the prices listed, and change them 
eCommerce              - you simply edit the web page 
- in a printed catalogue you are stuck with the expense of printing a
new version if you need to change many of the prices
 
.
Basic Provide price quotes
Benefits  
of
eBusiness
eCommerce student Andrea L. in MGTD06 at UTSC in Sept 2007 sent a useful
email suggesting several considerations re: price quotes online.

After the class on "Benefits & Limitations", in which Price Quotes

was discussed Andrea said 
"I just had some comments/questions about something you said that
stuck to me (that maybe I should have shared in class) and I was
hoping to share it with you.

The key part that stuck to me was: providing prices online mean potential customers
can do the research/comparisons online and only the ones who are really interested in
buying will come to the store in person. That way the salespeople will be investing time
on those who will most likely purchase, rather than wasting time and getting frustrated
with those who are just browsing (for the first time perhaps).

Richardson says
Yes Andrea, sometimes we can save money by just focusing on customers who are
genuinely interested in the product and know right up front the price, so if they inquire,
we know they can pay the price "no prob"
.
Basic Provide price quotes ....
Benefits
of Andrea added "I know the salesperson side of it firsthand as I've been in retail for like
eBusiness 5 years now. I think it's a very good point you made and retail managers/owners need
eCommerce to realize that benefit! I noticed a lot of retail companies' websites do not provide
prices. Many clothing stores/boutiques don't put prices online (i.e. Jacob, RW & Co,
etc) and none of the cosmetics/make up companies do either (i.e. Dior, Clinique,
MAC,etc). Why is that? From a consumer's standpoint, that's very frustrating when
you are trying to research and compare products. It would save me a trip to the mall
and the effort from going into all those stores to research that little bit of info. As a
saleslady, it would be nice if we didn't have to spend all that time with price-conscious
consumers who like the product(s) but once they find out the price, they leave the
store! Online price quotes can set the expectation. The company that I still work at,
they don't share prices because they don't want competitors to find out so easily and
because they think if they provide that, then less customers will visit the store. Which
means many retailers may be thinking the same thing--that they focus on increasing
store traffic and they think withholding pricing info means more traffic in store. However
to your point, by providing prices, the resulting visitors (which may be more or less
store traffic?) will be informed consumers, who are more likely to purchase."

Richardson says
You are correct Andrea, and some stores do this in different ways, sort of like the
"velvet rope" they have at fancy clubs to make sure only big spenders get in.
see  witiger.com/marketing/CLVandVelvetRopeCustomers.htm
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Basic Facilitating Distribution
Benefits - digital distrubtion, digital rights management, multiplayer and communications
of applications
eBusiness student Jason F. in MGTD06 at UTSC
eCommerce in Nov 2009 sent a useful email
discussing several aspects of
"Benefits & Limitations", in the context
of the gaming industry.

Jason said 
"I was reviewing the "Benefits and
limitations of e-commerce" section on
your website and I would like to share
with you an example that came to my
mind. Low margin on computer
games has plagued the PC gaming
industry for more than 10 years now."
Jason continues "The high development costs and long payback period has slowed the
growth of the industry to almost a standstill.  Moreover, sales were declining year after
year due to the ease of piracy.  One game developer, Valve, came out with a digital
distribution platform called "Steam" in 2002 and it has revolutionized the PC gaming
industry ever since."
.
Basic Facilitating Distribution
Benefits
of - digital distrubtion, digital rights management, multiplayer and communications
eBusiness applications
eCommerce

Jason explains "Steam is a digital distrubtion, digital rights management, multiplayer and
communications application. It is used to distribute a wide range of games directly over the
internet, offering over 837 games by 39 different companies.  As of February 18, 2009,
there are over 20 million user accounts.  There are several benefits to ordering a copy of a
game through Steam. First, the price of the game is lower than you would find on the
shelves of retail stores and is non-taxable.  Additionally, once you purchase a game, it is
forever stored on Steam's servers for you to re-download which eliminates the hassle of
losing your installation discs. I personally use Steam and I find it much more convenient
than going to the store and buying the game, especially on release dates for popular
games that will sell out."

Jason's analysis "As it relates to the course content, I feel that Valve has done a wonderful 
job in cutting costs through e-commerce.  The costs of bandwidth for a game to be
delivered online is much less than that of producing a disc(s), labeling the CD, making and
designing a CD Case, producing and designing a box, and shipping it around the world. 
Their method of delivery offers true "Just in Time" benefits as a shortage or excess of
inventory will no longer exist.  Not only are they cutting costs, they are driving sales by
offering an identical product that is cheaper, and more easily purchasable online than in
store."
Richardson says
"Thanks for the explanation, this serves as a good example of the variety of reasons why
situations are turning to web-based business"
.
Basic Other Benefits ....
Benefits     o Pull-type processing
of                       o enables customization of products
eBusiness     o allows for innovative business models
eCommerce     o allows for a high degree of specialization
      o reduces the time exposure
    o supports BPR - Business Process Reengineering 
    o increases productivity
      o improves customer service (in some cases)

Limitations of ecommerce…!!

•Technical Limitations :

 -Lack of sufficient system's security, reliability, standards, and communication protocols

 -Insufficient telecommunication bandwidth
 -The software development tools are still evolving and changing rapidly

Non Technical Limitations

 -Security and Privacy

•These issues are especially important in the B2C area, and security concerns are not truly so
serious from a technical standpoint Privacy measures are constantly improving too
•Yet, the customers perceive these issues as very important and therefore the EC industry has a
very long and difficult task of convincing customers that online transactions and privacy are, in
fact, fairly secure

 -Lack of trust and user resistance

•Customers do not trust an unknown faceless seller, paperless transactions, and electronic money
•So switching from a physical to a virtual store may be difficult