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SMEs and e-Business

Explore the classification of SMEs and analyze the adoption steps and competitive threats of e-business in the market. Discover strategic options and benefits, limitations, and wider societal impacts of e-business for organizations and consumers.

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SMEs and e-Business

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  1. SMEs and e-Business SME (Small and Medium Size Enterprises)

  2. Types of SME (graph as cited in KITE, 1999 http://kite.tsa.de)

  3. Classification of SMEs • Gazelles are growth-oriented companies that have achieved a minimum of 20% compound sales growth each year over the past five years, starting from a base of at least 100,000 euros. They are primarily medium-sized enterprises. • Baby gazelles are micro- and small enterprises that have been identified as having the greatest potential to become gazelles. • Mice are micro- and small enterprises comprised of quality-of-life companies. Owners of mice have little or no interest in growing or creating a large company that would eventually have a high value. • Gophers are micro- and small enterprises that are more enterprising than mice, but still value quality of life over growth.

  4. Adoption steps of e-business services Adoption steps of e-business services (Chaffey)

  5. Competitive threats acting on the e-business Competitive threats acting on the e-business (Chaffey)

  6. Grid of product suitability against market adoption for transactional e-commerce (online purchases) Grid of product suitability against market adoption for transactional e-commerce (online purchases) (Chaffey)

  7. Strategic options for a company in relation to the importance of the Internet as a channel Strategic options for a company in relation to the importance of the Internet as a channel (Chaffey)

  8. SMEs and business issues What happens where there is no e-business strategy? • Missed opportunities for additional sales on the sell-side and more efficient purchasing on the buy-side • Fall behind competitors in delivering online services – may become difficult to catch up, e.g. Tesco, Dell • Poor customer experience from poorly integrated channels

  9. Ten strategic options for retailers • Information only • Export • Subsume into existing business • Treat as another channel • Set up as separate business • Pursue on all fronts • Mixed system • Switch fully • “Best of both” • Revitalise and buck the trend

  10. E-Business benefits to organisations • Expands marketplace to national and international markets • Decreases the cost of creating, processing, distributing, storing and retrieving paper-based information • Ability for creating highly specialised businesses • Allows reduced inventories and overhead by facilitating “pull”-type supply chain management • Enables expensive customisation of products and services • Reduces the time between the outlay of capital and the receipt of products and services • Initiates business process reengineering projects • Lowers telecommunications cost • Other (improved image, improved customer service, compressed cycle and delivery time, reduced transportation cost, flexibility)

  11. E-Business benefits to consumers • Enables shopping/transactions 24h a day, all year round • Removes any location constraints • Provides more choice • Facilitates quick price comparisons • Allows quick delivery • Allows instant retrieval of product information • Virtual auctions • Virtual communities • Facilitates competition, which results in substantial discounts

  12. E-Business: wider benefits? • To society • Enables teleworking/teleshopping resulting in less traffic therefore less air pollution • Allows less affluent people to buy more and increase their living standards • Provides people in rural areas and Third World countries to have access to products and information, even learn professions and acquire college degrees • Facilitates delivery of public services such as health, care, education and distribution of government social services at a reduced cost and improved quality

  13. E-Business: some technical limitations • Lack of system security, reliability, standards, and some communication protocols • Insufficient telecommunication bandwidth • Difficulties in integrating the Internet and EC software with legacy systems, existing applications and databases • Vendors requirements include special Web servers and other infrastructures in addition to any network servers • Incompatibilities between e-business software and hardware, operating systems or other components

  14. Activity

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