A01 chaf6542 06 se fm indd

Cost/efficiency drivers

1 

Increasing speed with which supplies can be obtained

2 

Increasing speed with which goods can be dispatched

3 

Reduced sales and purchasing costs

4 

Reduced operating costs

Competitiveness drivers

5 

Customer demand

6 

Improving the range and quality of services offered

7 

Avoiding losing market share to businesses already using e-commerce

More recently, in interviews with Australian businesses, Perrott (2005) identifies four key 

areas driving performance:  cost–  benefit, competitive pressures, market advantage and  value- 

 adding, i.e. improving customer satisfaction while building strong relationships.

When reviewing potential benefits, it is useful to identify both tangible benefits (for which 

monetary savings or revenues can be identified) and intangible benefits (for which it is 

more difficult to calculate cost savings). The types of potential benefits are summarised in 

Table 1.2.

Doherty et al. (2003) researched the drivers and barriers to retailers’ adoption of Internet 

technologies to determine the most important factors. Table 1.3 summarises the rank-

ing in importance for different degrees of Internet adoption from static 

brochureware 

(A), 

through an active website containing product information (B) to a transactional site where 

items can be purchased (C). You can see that the two most important factors which corre-

late with adoption are ‘Internet target segment’, i.e. customers in their market are typically 

adopters of the Internet, and ‘Internet strategy’, i.e. a defined Internet strategy is in place. 

This suggests, as would be expected, that companies that do not have a coherent Internet or 

digital business strategy are less likely to use higher levels of Internet services. Many larger 

organisations that have responded to the challenge of digital business have created a separate 

Brochureware

Brochureware describes 

a website to which a 

company has migrated 

its  existing   paper‑  based 

promotional literature 

without recognising the 

differences required by 

this medium.

M01_CHAF6542_06_SE_C01.indd   30

7/23/14   11:07 AM

---

31

Chapter 1 Introduction to digital business and e‑commerce

e-commerce plan and separate resources to implement it. This book covers what needs to go 

into such a plan and the issues to consider when implementing it.

Case study 1.2 illustrates the benefits of setting up an online operation for an SME. It also 

highlights some of the challenges of managing an online business and highlights the need for 

continued investment to refine online services and the marketing needed to attract visitors 

to the website.

Table 1.2

Tangible and intangible benefits from e‑commerce and digital business