SMEs & online business


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Possibilities for SMEs to manage their business online.

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SMEs & online business

  1. 1. E-business for S mall and M edium Entreprises [ SME s] Reem Faisal
  2. 2. Content <ul><li>SMEs </li></ul><ul><li>Why SMEs </li></ul><ul><li>DefiningE-business </li></ul><ul><li>E-business Classification </li></ul><ul><li>E-business Strategy </li></ul><ul><li>Incentives & Opportunities for SMEs </li></ul><ul><li>Challenges & Threats </li></ul><ul><li>Q & A </li></ul>E-BUSINESS CLASSIFICATION
  3. 3. SME s <ul><li>SMEs are companies whose headcount or turnover falls below certain limits. </li></ul><ul><li>In EU: Fewer than 10 employees is considered &quot; micro “, </li></ul><ul><li>Fewer than 50 employees is &quot; small &quot;, Fewer than 250 is &quot; medium &quot; </li></ul><ul><li>Small medium organizations need to have between 20 - 500 employees </li></ul>
  4. 4. SME s <ul><li>Definitions in use today define thresholds in terms of employment , turnover and assets </li></ul><ul><li>An enterprise is any entity engaged in an economic activity, irrespective of its legal form. </li></ul>
  5. 5. Why SMEs <ul><li>In most economies, smaller enterprises are much greater in number . </li></ul><ul><li>In the EU, SMEs comprise approximately 99% of all firms </li></ul><ul><li>and employ between them about 65 million people. </li></ul>
  6. 6. Continue Why SMEs <ul><li>In many sectors, S ME s are also responsible for driving I nnovation and C ompetition. </li></ul><ul><li>Globally S ME s account for </li></ul><ul><li>99% of b usiness n umbers and </li></ul><ul><li>40% to 50% of G D P . </li></ul>
  7. 7. D efining E- Business <ul><li>B uying and selling, servicing customers, collaborating with business partners, and conducting electronic transactions within an organization </li></ul><ul><li>R efers primarily to the d igital enablement of t ransactions and p rocesses within a firm, involving only the information systems under the control of the firm </li></ul>
  8. 8. <ul><li>Based on Type of buyer and seller in the transaction </li></ul><ul><ul><li>B 2 C example </li></ul></ul><ul><ul><li>B 2 B Cisco </li></ul></ul><ul><ul><li>C 2 C e-bay </li></ul></ul><ul><ul><li>C 2 B individual offering their services </li></ul></ul>E-BUSINESS CLASSIFICATION
  9. 9. <ul><li>Based on Type of </li></ul><ul><li>Product, </li></ul><ul><li>Process, and </li></ul><ul><li>Delivery agent </li></ul>E-BUSINESS CLASSIFICATION
  10. 10. <ul><li>E-business strategy is </li></ul><ul><li>The D eployment of E nterprise R esources </li></ul><ul><li>To capitalize on technologies </li></ul><ul><li>for reaching specified objectives that ultimately </li></ul><ul><li>I mprove P erformance and </li></ul><ul><li>C reate S ustainable C ompetitive A dvantages. </li></ul>E-business strategy E-BUSINESS CLASSIFICATION
  11. 11. <ul><li>Venkatraman (2000) suggests a five-stage strategy process for what he describes as a 'dot-com strategy', for existing businesses intending to make use of new digital media. The f ive s tages are presented as five questions for a management team </li></ul>E-business strategy E-BUSINESS CLASSIFICATION
  12. 12. <ul><li>What is your strategic vision? </li></ul><ul><li>How do you govern dot-com operations? </li></ul><ul><li>How do you allocate key resources for the dot-com operations? </li></ul><ul><li>What is your operating infrastructure for the dot-com operations? </li></ul><ul><li>Is your management team aligned for the dot-com agenda? </li></ul>E-business strategy E-BUSINESS CLASSIFICATION
  13. 13. <ul><li>Level 0 No web site or presence on the Web </li></ul><ul><li>Level 1 Basic web presence </li></ul><ul><li>Level 2 Simple static informational </li></ul><ul><li>Level 3 Simple interactive </li></ul><ul><li>Level 4 Interactive supporting transactions </li></ul><ul><li>Level 5 Fully interactive </li></ul>E-business development Stage Model (Quelch and Klein 1996) Chaffey et al. (2003)
  14. 14. <ul><li>New market opportunities . (distance becomes less important, create more demand) </li></ul><ul><li>New products (tracking customer’s buying patterns more quickly) </li></ul><ul><li>Better Service </li></ul><ul><li>Less logistic requirements (Whs, delivery through suppliers) </li></ul><ul><li>Database tracking & managing </li></ul>Incentives & Opportunities for SMEs through adoption of E-Business
  15. 15. <ul><li>Internal Threats </li></ul><ul><li>Investment in suitable IS/IT </li></ul><ul><li>Appropriate re-engineering and redesign of business processes </li></ul><ul><li>Effective marketing and CRM </li></ul><ul><li>Efficient and effective acquisition and management of resources and relationships </li></ul><ul><li>The development and management of effective and efficient logistics and distribution capabilities </li></ul>Challenges & Threats
  16. 16. <ul><li>External Threats </li></ul><ul><li>New e-commerce entrants. ( ) </li></ul><ul><li>New digital products (Kodak reduced demand for traditional film by increasing its range of digital cameras to enhance this revenue stream and by providing online services for customers to print and share digital photographs.) </li></ul><ul><li>New business models ( the rival e-businesses can innovate and undertake new product development and introduce alternative business and revenue models with shorter cycle times than previously. This again emphasizes the need for continual environment scanning.) </li></ul>Challenges & Threats
  17. 17. <ul><ul><li>Lack of information and support (32%) </li></ul></ul><ul><ul><li>Too much red tape (27%) </li></ul></ul><ul><ul><li>Lack of resources to expand (21%) </li></ul></ul><ul><ul><li>The language barrier (13%) </li></ul></ul><ul><ul><li>Inward looking (7%) </li></ul></ul>Challenges for SMEs
  18. 18. <ul><li> </li></ul><ul><li>Stephen Chen, Strategic Management of e-Business, </li></ul><ul><li>2nd Edition, John Wiley & Sons Ltd, 2005. </li></ul><ul><li>- Turban, Efraim, David King, Jae Lee and Dennis Viehland (2004) Electronic Commerce: A Managerial Perspective 2004. Pearson Prentice Hall, New Jersey </li></ul><ul><li>- Laudon, Kenneth C & Carol Guercio Traver (2003) E-Commerce: Business, technology and society. 2nd edition. Pearson Addison Wesley, Boston </li></ul>References
  19. 19. Thank you Q & A