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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
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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
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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
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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).
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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
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Figure 1.4 The relationship between

intranets, extranets and the Internet
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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
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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
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Figure 1.7 The three main options

for online media investment
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Figure 1.8 Digital and offline

communications techniques
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Figure 1.9 Evolution of web

technologies
Source: Adapted from Spivack (2009)
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Figure 1.10 Summary and examples of

transaction alternatives between businesses,
consumers and governmental organisations
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Figure 1.11 Gumtree and

Craigslist side by side
Source: sjscreens/Alamy Stock Photo; True Images/Alamy Stock Photo
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Figure 1.12 A simple stage model for

buy-side and sell-side e-commerce
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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
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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
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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
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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
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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
24
12

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3/20/2024

Digital Business and E-Commerce

• Define the meaning and scope of digital

• How do we explain the scope and

Digital business innovation and

The impact of digital communications

• Impact and time a business takes to react

New communications approaches

New communications approaches

Figure 1.2 Zero Moment of Truth

Source: Google, Lecinski (2012).

What is digital business and

The difference between digital

Figure 1.4 The relationship between

Understanding different types

• To achieve these objectives

Figure 1.7 The three main options

Figure 1.8 Digital and offline

Figure 1.9 Evolution of web

Source: Adapted from Spivack (2009)

Figure 1.10 Summary and examples of

Figure 1.11 Gumtree and

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

Figure 1.12 A simple stage model for

Digtial business opportunities

Risks in digital business

Activity – drivers and barriers

• You should be able to define the meaning and

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