E COMMERCE & E-BUSINESS FUNDAMENTALS

E commerce & e-business fundamentals

E commerce & e-business fundamentals

Introduction

WH Smith is a typical example of adopting EC as a part of its business. WHSmith is one of the UK's leading retail groups incorporating market-leading companies in retail, publishing and news distribution and the Group has 1,464 stores world-wide and sells in 12 countries. (What we are, 2003) It changes from a traditional high street retailer to partial EC player, which sells products both on street shops and also on Internet. This report includes five parts.

The first part tells us that WHSmith.co.uk takes business-to-customer and business-to-business as its nature of the EC transactions and its primary business model is on line, direct marketing. Applying EC does a lot benefits to its whole groups such as obtaining more customers, saving costs and gaining competitive advantages.

The second part identifies the typical supply chain of WHSmith group and the importance effect of E-commerce to its supply chain. Then it also uses Porter's 5 forces to analyze the effect of EC to the change of WHSmith's industry structure.

The third part describes the characteristics of e-tailing and its EC service. Then it also expresses its benefits and limitation. At last, it tells us some problems of e-tailing in WHSmith.

Part one

Electronic commerce can take several forms depending on the degree of digitization of the product (service) sold, the process and the delivery agent. (Turban, E and King, E, 2002) Chio et al. (1997) created a framework that explains the possible configurations of these three dimensions: A product can be physical or digital, the process can be physical and digital, and the delivery agent can be physical or digital. According to this framework, the three dimensions of traditional commerce are physical and those of pure EC are digital. The partial EC is in the between.

Partial EC player

WHSmith.co.uk is a partial EC because it has a mix of digital and physical dimensions. On line shopping is its newly activities, its primary business is still done in the physical shops.

Nature of EC transactions

WHSmith.co.uk takes business-to-customer and business-to-business as its nature of the EC transactions. They focus on individual customers on line. It sells stationery, gifts & cards, magazines, DVD & Video, game & software and music to individual and families. In addition, it sells goods to retailers and wholesales, which increases the sales of WHSmith.

Business model

Business model is a method of doing business by which a company can generate revenue to sustain itself. (Turban, E and King, E, 2002) Because WHSmith just starts the e-commerce, the business model of it in EC is comparatively simple. It uses on line, direct marketing as its major business model in EC. It purchases goods from suppliers and then uses Internet to sell the goods to customers and retailers. Additionally, WHSmith group has its own book publisher, so it can sells the books directly to the customers to cut the costs of distribution.

Benefits

As the use of EC to selling the stationery, gifts & cards, magazines, DVD & Video, game ...