Bit120 m04 l02 - ecommerce business models

© 2011 Neumont University

e-Commerce

BUSINESS MODELS OF SIGNIFICANCE


Session Overview• What is a Business Model?• The Difference between e-Commerce & e-Business• The e-Commerce Models

– Purpose– Benefits– Application Examples

• Choosing an Effective e-Commerce Business Model• In-class

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• Four interlocking, interdependent elements that, taken together, create and deliver value.

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What is a Business Model?


e-Commerce Defined• Buying and selling goods and services over an electronic system such as the

internet.

• E-commerce is the purchasing, selling & exchanging goods and services over computer networks, or via the internet, wherein transactions or terms of sale are performed electronically.

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e-Commerce vs. e-Business• We use the term e-business to refer primarily to the digital enablement of

transactions and processes within a firm, involving information systems under the control of the firm.

• E-commerce includes commercial transactions involving an exchange of value across organizational boundaries.

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e-Commerce Business Drivers• Expanded & Faster Data Networks• Intense Competition• Increased Globalization• Advancing Technology• Trend Towards More Extensive Automation• Availability of Low-Cost / High-Quality Products & Services

6D.Balaganesh LINCOLN UNIVERSITY COLLGE

DIGITAL


e-Commerce Architecture

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Process of e-Commerce

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Benefits & Challenges• Benefits include:

– Highly accessible – Increased customer loyalty– Improved information content – Increased convenience– Increased global reach – Decreased cost– Ease of search & evaluation– Ease of transaction– Enhanced communication

• Challenges include:– Protecting consumers– Leveraging existing systems– Increasing liability– Providing security– Adhering to taxation rules– Unable to examine products– Not everyone is connected– possibility of credit card theft– Mechanical failures


Business to Business – B2B• B2B e-commerce is simply defined as

ecommerce between companies. About 80% of e-commerce is of this type.

• Application Examples– Intel selling microprocessor to Dell– Heinz selling ketchup to McDonald’s– Amazon selling data analytics / software

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Business to Consumer – B2C• Commerce between companies and

consumers– Customers gather information– Physical goods/services are

purchased and/or received via an electronic network

• Application Examples– Amazon selling books– Dell selling laptops

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Consumer to Consumer – C2C• Commerce between private

individuals or consumers• Application Examples

– Classified Ads– eBay

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Business to Business to Consumer - B2B2C• An emerging e-commerce model that combines Business to Business (B2B) and

Business to Consumer (B2C) for a complete product or service transaction.• The next wave of digital marketing• Application Examples

– Amazon Data Services– Lending Tree– Travelocity

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Software as A Service

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• B2B / B2C• Subscription• Quality / Speed of product• Cloud (no maintenance)• Upfront payments


Software as A Service

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Trends to Watch For• 6 Key Trends in Online Business

– Mobility– Community Building– Social Shopping– Analytical Riches– Search Engine Optimization (SEO)– Segmentation Over Aggregation

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Choosing an Effective Model• Consider an appropriate business model for your new product or service.• Maybe start dealing with physical goods in the beginning.• When you feel the time is right, go for selling digitally.• Consider delivering value-add services to your customers.• Determine whether or not you want to manufacture your product yourself … OR

…• Go for a reliable manufacturer … OR …• Buy from wholesalers, and then sell.• Ensure lower price to your customers than your competitors.• Provide quality products to your customers to establish your brand reputation.

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In-class• Question & Answer• Research Examples• Case Study• Discussion for Complete Understanding

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