“E-commerce: Business Models” Academic Year 2015
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- E-commerce: Business Models Academic Year 2015
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- Traditional and Electronic Commerce The traditional Commerce is
based on the following rules: It needs to hire sales executive,
sales managers, accountants, and other staffs. Operates at business
hours within a certain period of time. Requires location
renting/purchasing, staff employment, advertising, inventory
shipping and handling all sums up the high-cost equation which
makes many people negate from starting a business entirely. No
sharing of the information with the competitors. The basis of a
traditional business depends on the frequency of new and old
customers buying from them to keep the business running.
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- Traditional and Electronic Commerce E-Commerce is based on the
following rules: It involves an agreement between the involved
parties to continue with the succeeding phases. Order is made for
the goods after an agreement is concluded E-payment systems on the
internet are used for receiving payments. Goods are delivered to
the customers. If it is a tangible product, it is sent by
transportation.
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- Difference
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- E-Commerce Advantages Advantages to Organizations Expansion of
market to national and international Ability to reach greater
audience easily and cheap Reduction of cost of paper based
Information Better customer service Advantages to Consumers 24x7
support Easier and secure transaction Review products/Availability
of Information Increase in completion can lead to reduction in
price
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- Business Models of E-Commerce Business to Consumer (B2C)
Business to Business (B2B) Consumer-to-Consumer or Peer-to-Peer
(C2C/P2P) Other notable: C2B, B2G, G2B, G2C
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- B2C Product are sold directly to customer. Involves E-tailing
E.g. Amazon.com, Muncha, Bhatbhatenionline
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- B2B Product are sold to intermediate buyer who then sells
product to final customer (wholesale -> retail -> customer)
E.g. Alibaba, Amazon Supply, Grepsr
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- C2C Consumer sell their assets like residential property, cars
etc. or rent a room by publishing their information on the website.
E.g. E-bay, Quickr, Hamrobazaar
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- Other notable models C2B A consumer approaches website showing
multiple business organizations for a particular service /A
consumer places an estimate of amount he/she wants to spend for a
particular service. B2G A variant of B2B model Used by government
to trade and exchange information with various organizations
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- B2C
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- Activities of B2C E-Commerce ORDERING B2C E-commerce SERVICE
& SUPPORT FULFILLMENT Information Sharing PAYMENT Company
Website Online Catalogs E-mail Online advertisement Message board
system Newsgroup and Discussion groups Credit Cards Electronic
cheque Digital Cash 1 2 3 45
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- Models of B2C 1.Auctions 2.Online Stores 3.Online Services
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- 1. Auctions Auction/Online auction: Buying and selling goods or
services by offering them up for bids. E.g. www.ebay.com
Advantages: Convenience: No place or time limitation for bidder
participation Flexibility: Asynchronous bidding Increased reach:
Global Economical to operate: Cheaper infrastructure costing
Disadvantages: Inspection of goods Potential for fraud
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- 2. Online Stores Marketing of companys products through web to
promote or to actually sell the products through this virtual store
Amazon.com
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- 3. Online Services Providing of internet based electronic
commerce infomediary solutions E.g. Makethemove.com, e-banking
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- Major Challenges of B2C 1.Getting browsers to buy things
2.Building customer trust/privacy 3.Building customer loyalty
4.Fulfillment
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- B2B
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- All e-commerce transactions between two organizations.
Includes: Purchase Procurement Supplier management Channel
Management Sales activities Payment management Service and support
E.g. Companies that specialize in marketing strategies,
advertising, email companies, internet consultants, website
development
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- Key technologies Electronic Data Interchange (EDI) Inter
exchange of business documents in a structured and standard
electronic format. Internet Intranet Extranet Back-End Information
System Integration
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- EDI
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- Development scenario of B2B e-commerce Stage 1: A company to
stay competitive thinks of getting on-line (no existing website or
online communication) Stage 2: The company starts using net for
research, marketing and communication tool (Still no link between
any web activity and existing back office systems) Stage 3: The
company uses net to interact with customers and offer full service
storefront and integration with its back systems Stage 4: Company
starts moving towards a more integrated on-line relationship with
trading partners. (information can be easily gathered from online
storefront, manufacturing and fulfillment) Stage 5: The business
joins online exchanges, e-marketplace and related services using
the net to connect with others.
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- Types of B2B Markets Independent e-marketplace Buyer oriented
e-marketplace Supplier oriented e-market place Vertical and
horizontal e-marketplace
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- Independent/Intermediary e-marketplace online platform operated
by a third party which is open to buyers or sellers in a particular
industry. By registering on an independent e-marketplace, you can
access classified ads or requests for quotations or bids in your
industry sector. There will typically be some form of payment
required to participate. E.g. Alibaba.com
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- Supplier oriented e-marketplace Manufacturer-driven electronic
stores Same store as used by individual consumers and business
corporations. (B2C, B2B) May involve auctions run by the supplier.
E.g.: Cisco Connection Online: Networking equipment Dell: PC and
servers
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- Buyer-oriented e-marketplace Buyer opens a market on its server
Invites potential suppliers to bid on the RFQ (Request for quotes)
E.g: GE Lightning Trading Process Network,
http://www.exostar.com