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Chapter 1 Introduction to e-business and e-commerce 39

5 Choice – The web gives a wider choice of products and suppliers than via conventional distri-
bution channels. The success of online intermediaries such as Kelkoo (www.kelkoo.com)
and Screentrade (www.screentrade.com) is evidence of this. Similarly, Tesco.com provides
Tesco with a platform to give consumers a wider choice of products (financial, travel, white
goods) with more detailed information than are physically available in-store.
6 Cost reduction – The Internet is widely perceived as a relatively low-cost place of purchase.
Often customers expect to get a good deal online as they realize that online traders have a
lower cost-base as they have lower staff and distribution costs than a retailer that runs a
network of high-street stores. A simple price differential is a key approach to encouraging
usage of online services. In the late 1990s, low-cost airline easyJet encouraged the limited
change behaviour required from phone booking to online booking by offering a £2.50
discount on online flight bookings.
Note that the 7 Cs of Rayport and Jaworski (2003) provide a similar framework of Context,
Content, Community, Customization, Communication, Connection and Commerce.

Barriers to consumer Internet adoption

An indication of some of the barriers to using the Internet, in particular for consumer pur-
chases, is clear from a survey (Booz Allen Hamilton, 2002) of perceptions in different
countries. It noted that consumer barriers to adoption of the Internet included:
No perceived benefit
Lack of trust
Security problems
Lack of skills
Cost.
This lack of demand for Internet services from this group needs to be taken into account
when forecasting future demand.

Management responses to e-commerce and e-business

A primary aim of this book is to consider the management issues when businesses look to
take advantage of the opportunities afforded by e-commerce and e-business. How should an

e-business strategy be developed? To what extent can we use existing business and IS strat-
egy models? What are the main changes that need to be made to the organization as part of
implementing the strategy? These issues are explored in more detail in Part 2. Before we can
develop e-business strategy a foundation is needed. This is provided in Part 1 of the book.

Part 1: Introduction

Part 1 describes the background to e-business as follows:
Chapter 1: Introduction to e-business and e-commerce. Definition of the meaning and scope
of e-business and e-commerce. Introduction to business use of the Internet – what are the
benefits and barriers to adoption and how widely used is it?
Chapter 2: E-commerce fundamentals. Introduction to new business models and market-
place structures enabled by electronic communications.
Chapter 3: E-business infrastructure. Background on the hardware, software and telecom-
munications that need to be managed to achieve e-business.
Chapter 4: E-environment. Describes the macro-environment of an organization that pres-
ents opportunities for and constraints on strategy and implementation.