E Business Strategy Chaffey 1

Digital Business and E-Commerce
Management
Seventh Edition
Part 1
Introduction
Chapter 1
Introduction to digital business
Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Learning outcomes
• Define the meaning and scope of digital
business and the difference between digital
business and e-commerce
• Summarise the main reasons for becoming a
digital business and barriers that may restrict
it
• Outline the ongoing business challenges of
managing digital business in an organisation,
particularly tech start-ups
Management issues
• How do we explain the scope and
implications of digital business to staff?
• What is the full range of benefits of
introducing digital business and what are
the risks?
• How do we evaluate our current digital
capabilities?
Digital business innovation and
opportunity
• Since Google was launched in 1998,
which digital start-ups have transformed
the way we work, live and play?
• How has Google innovated in search
and its business model?
• See Table 1.1 for some of the major
innovators
The impact of digital communications
on traditional businesses
• Impact and time a business takes to react

varies by industry sector
• Andy Grove, Chairman of Intel, one of the
early adopters of digital business, noted that
every organisation needs to ask whether, for
them:
“The Internet is a typhoon force, a ten times force,
or is it a bit of wind? Or is it a force that
fundamentally alters our business?”
(Grove, 1996)
New communications approaches
and consumer behaviour
• Inbound marketing
‒ The consumer is proactive in actively seeking out
information for their needs, and interactions with
brands are attracted through content, search and
social media marketing
• Zero Moment of Truth (ZMOT, Figure 1.2)
‒ A summary of today’s multichannel consumer
decision-making for product purchase where they
search, review ratings, styles, prices and comments
on social media before visiting a retailer
New communications approaches
and consumer behaviour (Continued)
• Content marketing
‒ …the marketing and business process for
creating and distributing relevant and valuable
content to attract, acquire, and engage a
clearly defined and understood target audience
– with the objective of driving profitable
customer action (Pulizzi, 2012)
Figure 1.2 Zero Moment of Truth
Source: Google, Lecinski (2012).
What is digital business and
e-commerce
• You are attending a role in the digital
team of a global retailer
• You anticipate you may be asked the
distinction between e-commerce and
digital business
• Write down a definition for each:
‒ E-commerce
‒ Digital business
The difference between digital
business and e-commerce
• Digital business
‒ The transformation of key business
processes through the use of digital
technologies
• E-commerce
‒ All digital (and electronic) mediated
transactions between an organisation and a
third party
Figure 1.4 The relationship between
intranets, extranets and the Internet
Understanding different types
of digital presence (Activity 1.3)
• Transactional e‐commerce site
• Services‐oriented relationship‐building
website
• Brand‐building site
• Portal or media site
• Social network
‒ These aren’t mutually exclusive, but there is
usually a focus of each website
‒ Examples of each
Digital marketing
• Digital marketing involves:
‒ Applying technologies which create digital channels to market
 For example, Websites, search engines, email, social media sites and text
messaging
• To achieve these objectives
‒ Support marketing activities aimed at achieving profitable acquisition,
conversion and retention of customers within a multichannel buying process
and customer lifecycle
• By using these tactics
‒ Recognising the strategic importance of digital technologies and developing a
planned approach to reach and migrate customers to digital services through
digital and traditional communications
‒ Retention is achieved through improving our customer knowledge (of their
profiles, behaviour, value and loyalty drivers), then delivering integrated,
targeted communications and digital services that match their personal needs
Figure 1.7 The three main options
for online media investment
Figure 1.8 Digital and offline
communications techniques
Figure 1.9 Evolution of web
technologies
Source: Adapted from Spivack (2009)
Figure 1.10 Summary and examples of
transaction alternatives between businesses,
consumers and governmental organisations
Figure 1.11 Gumtree and
Craigslist side by side
Source: sjscreens/Alamy Stock Photo; True Images/Alamy Stock Photo
Figure 1.12 A simple stage model for
buy-side and sell-side e-commerce
Digtial business opportunities
• Reach
‒ Billions of global consumers
‒ Millions of products
• Richness
‒ 100s of billions of pages indexed by search
engines
• Affiliation
‒ Links with partners
Risks in digital business
• Too many customers

• Hacking
• Privacy issues
• Goods/services not being delivered
when outside the control of the digital
business
• Communications not getting to the right
person in the organisation
Drivers
• Cost/efficiency drivers
‒ Increasing speed with which supplies can be obtained
‒ Increasing speed with which goods can be dispatched
‒ Reduced sales and purchasing costs
‒ Reduced operating costs
• Competitiveness drivers
‒ Customer demand
‒ Improving the range and quality of services offered
‒ Avoid losing market share to businesses already
using e-commerce
Activity – drivers and barriers
• You work as an advisor to a local government

organisation that promotes the take-up of e-
commerce amongst small businesses
• List:
‒ Drivers to adoption of sell-side e-commerce by business
and how you can reinforce these by marketing benefits
‒ Barriers to adoption of sell-side e-commerce by
business and how you can reinforce these by stressing
benefits
Summary
• You should be able to define the meaning and
scope of digital business and the difference
between digital business and e-commerce
• You should be able to summarise the main
reasons for becoming a digital business and
barriers that may restrict it
• You should be able to outline the ongoing
business challenges of managing digital
business in an organisation, particularly tech
start-ups

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Digital Business and E-Commerce

• Impact and time a business takes to react

Source: Google, Lecinski (2012).

Source: Adapted from Spivack (2009)

Source: sjscreens/Alamy Stock Photo; True Images/Alamy Stock Photo

• Too many customers

• You work as an advisor to a local government

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