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Electronic commerce has overcome the tech-wrecks of recent times and is now accepted as the future of business, yet a major barrier to its more widespread and successful implementation remains - the continuing uncertainty among organizations of how best to put e-commerce principles into practice.
Based on research in six economies - the UK, USA, Denmark, Greece, Hong Kong (China) and Australia - the book addresses the documented uncertainties of business and consumers with Internet retailing by presenting the experiences of leading examples of B2C electronic commerce in each economy.
Demonstrating 'best practice' by examining and comparing these international examples of success, the book provides entrepreneurs and senior managers with insights that will help them plan and implement strategy for successful internet-based business innovation.
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This book focuses on business strategies and models in business-to-consumer (B2C) Internet electronic commerce. It analyses the elements of success through intensive study of examples of successful Internet retailing. Major components of each Internet innovation, the organization, customers, website and environment, are examined holistically to identify characteristics that lead to success. Recognizing that the basis of success may differ in different countries, this is an international study. Five success stories are examined in each of six countries on four continents: Asia, Australia, Europe and North America. Through holistic analysis of each implementation of Internet retailing, the questions to be answered by this study are the following.
Which organizational factors influenced the Internet innovation and how?
What characteristics of their websites influenced consumer acceptance of that innovation?
What encourages and discourages their consumers from purchasing over the Internet?
Did environmental factors influence the innovation and, if so, how?
What international/cultural differences arise from the study, and can generalizations be made from these?
The book sets out to investigate these questions and to identify how successful business strategies and models can becreated from interaction of these varied factors. The intention is not to specify a series of golden rules that would, inevitably, lead to success. This is certainly not achievable in an area developing as dynamically as electronic commerce, if at all. The investigation aims to address the great uncertainty that exists about Internet electronic commerce by examining examples of success. Insights arising from the study as it develops answers to the questions listed above may assist entrepreneurs, chief executives and executive management in their strategic planning and implementation for Internet-based electronic commerce.
THE INTERNATIONAL RESEARCH PROJECT
This book is based on an international research project that aimed to assist organizations seeking to apply business-to-consumer electronic commerce through a comparative international study of successful implementations. The study also sought to make a significant theoretical contribution through testing of proposed extensions to current theory on how organizations successfully adopt innovations (see also Chapter 9: Research Model and Theoretical Implications).
The study is significant owing to its intense investigation of a broad range of examples of Internet electronic commerce across different countries. The richness and completeness of the data collected help develop a holistic view of Internet innovations that, previously, has not been available. The firms investigated sell across a spectrum of the most popular Internet products, including books, gifts, groceries, music, technology, tickets and travel but also extend into less likely areas such as building products, home maintenance services, a factory outlet for name-brand fashion and fine wines.
Examination of the interaction between firm, consumer, website and the environment in a single consistent study of Internet innovation acknowledges that at this early stage in our understanding of electronic commerce a narrowly focused investigation of any area in isolation may lead to incomplete and inaccurate conclusions. A major strength of this project is its detailed analysis and direct comparison between consistent research studies conducted in a range of national markets at a comparable period in time.
A summary of the countries, firms, products and researchers is given later in this chapter.
ELECTRONIC COMMERCE DEFINITION AND SCOPE
There are numerous terms and definitions relating to electronic commerce. A simple view has been adopted that reflects its likely level of impact on business, namely as the source of fundamental change to business practice initiated by the substitution of existing arrangements by computer-aided processes. Terms such as electronic business, e-business, Internet business, e-commerce, Internet commerce and new economy are all treated as synonyms for electronic commerce.
A broad scope has been applied to include an extended transaction cycle and all parties critical to a transaction. The transaction cycle extends from a consumer's initial investigation about products and services through payment and receipt of goods to a firm's back-office processing of the transaction including inter-organizational settlement, posting of ledgers and reporting. An e-commerce order fulfilment chain from retailer to customer includes all participants that have a critical role in the transaction, potentially including specialist providers such as telecommunication companies, Internet Service Providers (ISPs), website hosting firms, website mall providers, warehousing and logistics specialists, payment processors and customer service providers. When a customer purchases over the Internet, any firm providing a service that could beneficially or adversely affect the customer's willingness or capability to purchase from an online retailer is considered as critical to the transaction.
This introductory chapter sets the scene for the book, explaining the focus and implementation of the international study and providing background details on strategies and models of electronic commerce. The researchers in each country and authors of the country chapters are introduced.
Chapters 2-7 focus on Internet retailing in a single country: Australia, Denmark, Greece, Hong Kong (China), the United Kingdom and the United States. These chapters provide an overview of the environmental factors in the countries and the firms examined. The five case studies in each country include descriptions of the background, business models and strategies, implementation, critical success factors, innovation factors and processes, website developments and consumer issues. The chapters conclude with a summary of the most important innovation issues in each country.
Chapter 8 looks at the research tools developed specifically for this project to support analysis of website characteristics and consumer experiences. To identify factors leading to success it is necessary to be able to distinguish between firms and to analyse how they implemented the Internet innovation. The Centre for Electronic Commerce (CEC) website evaluation framework was developed for this purpose. A view of consumers' experiences with particular websites helps clarify the most important issues for Internet retailers to address. An Internet-based customer survey was developed for this purpose. Full details of the CEC website evaluation framework and the customer surveys are provided to enable executives to compare their own Internet innovations and customer experiences with those of the firms included in this study.
A secondary aim of this research study was to consider theoretical implications of the examples of Internet electronic commerce. Chapter 9 explains the research model applied by the project teams in each country and, based on the research findings and analysis, proposes an integrated research model for electronic commerce.
Chapter 10, the conclusion, brings together the research findings and analysis and looks at lessons for firms. Details of the key factors and processes leading to successful adoption of Internet retailing are described, business models and strategies developed from these factors explained and a conceptual model illustrating the integration required between innovation elements and processes proposed. A comparison of how two products, books and technology, are sold over the Internet by firms in different countries demonstrates similarities and differences in implementations of electronic business.
Finally, a reference list and index complete the book.
This book is intended for several discrete audiences. The primary audience is practitioners-executives and entrepreneurs who see business opportunities from the Internet but who are uncertain how best to proceed to realize those opportunities. The examination of how 30 examples of successful Internet commerce in six countries came to be successful captures the experiences, both good and bad, of those who have led the way. For executives commencing their engagement with e-business, the minicase examples also identify lessons learned and contain advice from the successful companies for other firms. Analysis of the cases reveals further lessons and suggestions for good practice.
Executives can also benefit from the description of the tools developed for this international project. Full details of the CEC website evaluation framework and the Internet consumer survey are shown in Chapter 8. These tools can be used by firms with websites to analyse their current situation and to compare their web features and functions with those of the firms examined.
The second audience segment is comprised of e-business researchers. In parallel with the uncertainty of business leaders about e-commerce is uncertainty within the ranks of researchers. Current theory in many areas of business research is unable to explain the phenomenon of e-commerce and is unable to assist industry to anticipate the directions and outcomes of the transforming impact of the Internet. Researchers may benefit from the intensive, holistic details and analysis of successful Internet firms across different countries and cultures. The research tools for website evaluation and surveying customers provided for executives may be equally important for researchers. An important outcome of this project is the proposal of an integrated, multi-disciplinary research model for e-business that may help a wide range of researchers to place their investigations into context.
The third audience group is students of e-business. The variety of examples and the range of experiences of Internet retailers in different countries will assist students to better understand the transforming impact of e-business, the opportunities for firms and the ways that firms can address these challenges. In many respects the current students of e-business are the most important audience since this group, as graduate employees, will be the people open to new ideas who work to transform firms from 'old economy' organizations into dynamic e-businesses.
SELECTION OF COUNTRIES, SECTORS AND FIRMS
As mentioned above, the objective of this research project was to assist organizations seeking to successfully exploit business-to-consumer electronic commerce through an international, comparative study of successful implementations. The experiences of both firms and their customers were examined in a single, consistent and integrated study in six economies: the United States, the United Kingdom, Denmark, Greece, Hong Kong (China) and Australia. A reasonable question arises: Why these countries?
Any international study of leading examples of electronic commerce or electronic business must examine United States firms. In effect, United States firms such as Amazon, eBay and Yahoo initiated and defined Internet business. In less than seven years, these companies have become household names not only in the United States but internationally. While United States firms are generally considered to lead the world in e-business, some international evaluations (e.g. LSE/Novell 1999, 2000) have ranked European firms as at least equal to the best United States examples. Despite the efforts of the European Union, Europe cannot be viewed currently as a single coherent market. Wide variations in national economies, interests and lifestyles are apparent. Similarly, Internet activity varies markedly in different countries. Scandinavia has had high levels of Internet use for several years while Southern Europe in general has appreciably lower levels of e-business use and experience.
Studies such as the one by NetValue (2000) show Denmark has the highest level of Internet penetration in Europe with over 50% of households connected, the United Kingdom is in second position, with nearly 30%, Germany is in third place with 25.7%, followed by France (17.5%) and Spain (12.7%). Other studies place Italy, Spain and Portugal at the lowest levels of Internet use. Greece is of particular interest since it has been ignored in studies of European Internet activity. Researchers appear to presume that Greek Internet activity is so low as to be of little significance. While acknowledging that Greek firms have been slow to establish themselves in this area, the research team in Athens found significant examples of Internet retailing that add a valuable perspective to the study.
Consequently, countries from north (Denmark) and south (Greece) were examined to capture the range of European experiences and to support analysis of the diversity of success factors. With the largest volume of e-business activity in Europe and several of the top rated Internet sites internationally, the United Kingdom was also included in the study.
Hong Kong's contribution is as a major international business centre, a source of cultural diversity for the international study and a market with a low level of Internet adoption. Australia provides diversity as a developed country with a very high level of Internet adoption that has a small domestic market and is remote from the major markets of Europe and North America.
To help identify the best firms to study, surveys of industry sectors that were most used for Internet purchases were consulted. In the United States these included (in order of significance) travel, books, music CDs, technology sales, gifts, groceries and general merchandise. These sectors were similarly popular in other countries, although the order varied (GVA 1999, Forrester Research 2000a) and consult research series). Financial service providers were not examined since they were not identified in surveys at the time as being leaders in Internet use. Lessons from firms in sectors most experienced with Internet retailing were seen to be most significant in clearing the fog of uncertainty. In addition, firms that were identified by the research teams in each country as making a significant contribution to Internet retailing from other sectors were identified to ensure a broad base for analysis.
In selecting the firms in each sector, efforts were made to include startups and traditional 'bricks and clicks'. The question of which of the thousands of e-tailers to examine was a challenge.
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Foreword by Peter Keen.
Series Preface by Rudy Hirschheim.
Introduction to B2C Strategies and Models (Steve Elliot).
Internet Retailing in Australia (Steve Elliot).
Internet Retailing in Denmark (Niels Bjørn-Andersen).
Internet Retailing in Greece (Nikolaos Mylonopoulus & Katherine Pramataris).
Internet Retailing in Hong Kong, China (Matthew Lee).
Internet Retailing in the United Kingdom (Bob Galliers & Anne Wiggins).
Internet Retailing in the United States (Don Lloyd Cook, et al.).
Evaluating Websites and Surveying Customers Online (Steve Elliot & Niels Bjørn-Andersen).
Research Model and Theoretical Implications (Steve Elliot).
Conclusion (Steve Elliot).