Business Models in E-Commerce

7/29/2019 Business Models in E-Commerce

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ebusinessBusinessModels Lecture3


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BusinessModel

AsetofplannedactivitiesdesignedtoresultinaprofitinamarketplaceAsetofplannedactivitiesdesignedtoresultinaprofitinamarketplace

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eCommerce BusinessModel

AbusinessmodelthataimstouseandleveragetheuniquequalitiesoftheInternetandtheWorldWideWeb

AbusinessmodelthataimstouseandleveragetheuniquequalitiesoftheInternetandtheWorldWideWeb


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ComponentsofeBusinessModels

BusinessModel Scope

Price

- Customer value Resources

Capabilities

Implementations

Environment

Internet Performance


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PHASESOFeBUSINESS DEVELOPMENT

Four stage model in eBusiness maturity relates business value to e

Business leverage

Four stage model in eBusiness maturity relates business value to e

Business leverage

Brochurewareand buying / selling

Integrate withcustomers and suppliers

Industry transformation,achieve competitive advantage

Cross IndustrySupplier/Customer Convergence

Channel

Integration

Transformation

Convergence

Busine

ssValue

E- Business Leverage

Over 50% are in the channel phaseof E- Business development with a

web presence but noinfrastructure tie in.

Just under 15%are in theintegration phase. Connectionsto suppliers and customers arefully E- Business enabled.


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EightKeyIngredientsofaBusinessModel

KeyQuestionsBusinessModel

Components

ValueProposition Why

should

the

customer

buy

from

you?

Revenuemodel Howwillyouearnmoney?

Marketopportunity Whatmarketspacedoyouintenttoserve,andwhatisitssize?

Competitiveenvironment Whoelseoccupiesyourintendedmarketspace?

Competitiveadvantage Whatspecialadvantagesdoesyourfirmbringtothemarketspace?

Marketstrategy Howdoyouplantopromoteyourproductstoattractcustomer?

Organizational

development

Whattypesoforganizationalstructureswithinthefirmare

necessarytocarryoutthebusinessplan?

Managementteam What

kinds

of

experiences

and

background

are

important

for

thecompanysleaderstohave?


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ValuePosition

Defineshowacompanysproductorservicefulfillstheneedsofcustomers.

Questions

Whywillcustomerschoosetodobusinesswithyourfirminsteadofanothercompany? Whatwillyourfirmprovidethatotherfirmsdonot

andcannot?


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RevenueModel

Describeshowthefirmwillearnrevenue,produceprofits,andproduceasuperiorreturnoninvestedcapital.

Ecommercerevenuemodelsinclude:

advertisingmodel

subscriptionmodel transactionfeemodel salesmodel affiliatemodel


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RevenueModel

Advertisingrevenuemodel

acompanyprovidesaforumforadvertisementsandreceivesfeesfromadvertisers(Yahoo)

Subscriptionrevenuemodel

acompanyoffersituserscontentorservicesandchargesasubscriptionfeeforaccesstosomeorallofitofferings(ConsumerReports orEquityMaster)


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Transactionfeerevenuemodel acompanyreceivesafeeforenablingorexecutinga

transaction(eBay)

Salesrevenuemodel acompanyderivesrevenuebysellinggoods,

information,orservices(Amazon) Affiliaterevenuemodel

acompanysteersbusinesstoanaffiliateandreceivesareferralfeeorpercentageoftherevenuefromanyresulting

sales (MyPoints)

RevenueModel


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MarketOpportunity

Marketopportunity referstothecompanys intendedmarketspaceandthe

overallpotentialfinancialopportunitiesavailabletothefirminthatmarketspace

definedbytherevenuepotentialineachofthemarketnicheswhereyouhopetocompete

Marketspace theareaofactualorpotentialcommercialvalueinwhicha

companyintendstooperate


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CompetitiveEnvironment

Referstotheothercompaniesoperatinginthesame

marketplacesellingsimilarproducts

Influencedby:

howmanycompetitorsareactive howlargearetheiroperations themarketshareofeachcompetitor howprofitablethesefirmsare howtheypricetheirproducts


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CompetitiveAdvantage

Achievedbyafirmwhenitcanproduceasuperiorproduct

and/orbring

the

product

to

market

at

alower

price

than

most,orall,ofitscompetitors

Achievedbecauseafirmhasbeenabletoobtain

differential

access

to

the

factors

of

production

that

are

deniedtheircompetitors atleastintheshortterm


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OrganizationalDevelopment

Describeshowthecompanywillorganizetheworkthat

needs

to

be

accomplished

Workistypicallydividedintofunctionaldepartments

Move

from

generalists

to

specialists

as

the

company

grows


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ManagementTeam

Employeesofthecompanyresponsibleformakingthe

businessmodelwork

Strongmanagementteamgivesinstantcredibilitytooutside

investors

Astrong

management

team

may

not

be

able

to

salvage

aweakbusinessmodel

Shouldbeabletochangethemodelandredefinethe

business

as

it

becomes

necessary


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B2C: BusinesstoConsumer

B2B:Business

to

Business

B2G: BusinesstoGovernment

C2C:Consumer

to

Consumer

C2B: ConsumertoBusiness

eBusiness Models


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Businesssellsproductsorservicesdirectlytoconsumers

Eretailers e.g.Croma,Bestbuy,CostcoPureplayeretailers e.g.Amazon.comContentProviderse.g.EquityMaster.com,WSJ.com,crisil.com,

moneyconrol.com

TransactionBrokere.g.Sharekhan.com,Icicidirect.com,Cleartrip.com

VirtualMallsorEmailse.g.MSNshopping,Yahooshopping

BusinesstoConsumer[B2C]


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B2Cstorefronthasvariousmechanismforconductingsale:

Electroniccatalogs(presentationofproductinformationinanelectronicform)

Asearchengine(aprogramthatcanaccessadatabaseofInternetresources,searchforspecificinformation/keywords,

andreporttheresult)An

electronic

shopping

cart:

orderprocessingtechnologythat

allowshopperstoaccumulateitemstheywishtobuywhiletheycontinuetoshop)

Eauctionfacilities

Apayment

gateway

etc.

GeneralCharacteristics


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BusinesstoBusiness(B2B)

VarietyofformslikeB2C BasicStorefrontslikeOfficeDepot,Staples InternetandWebProductssuchasWebsitehosting,

Applicationhosting,Webdesigningetc. Verticalmarketse.g.StockExchanges,NSEandBSEterminals B2Bexchangese.g.Commodities,Energyexchanges MCXetc


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BusinesstoGovernment(B2G)

SimilartoB2Bmodel SellerswantingtodobusinesswithGovernmentagenciese.g.Bidmain


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ConsumertoConsumer[C2C]

Consumers

sell

products,

services

directly

to

otherConsumers

e.g.eBay.in


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ConsumertoBusiness(C2B)

Likeareverseauctionmodel

Customerspecifiesthepriceforaparticularproduct/serviceandinvitesbidsfrompotentialsellerse.g.Airlineticket,Hotelroometc.


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MajorBusinesstoConsumer(B2C)BusinessModels


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MajorBusinesstoConsumer(B2C)BusinessModels


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Summary

ECommerceFrameworkissupportedby5supportareas:

People

RegulatoryPolicy MarketingandAdvt SupportServices BusinessPartnerships


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Direct Marketing Search Jobs Online Banking E- government

E- purchasing B2B Exchanges C- Commerce M- Commerce Auctions

Travel Online Publishing Consumer Services

People:

Buyers, Sellers,

Intermediaries, Service,

IS People & Management

Public Policy:

Taxes, Legal,

Privacy Issue,

Regulations

& Technical Standards

Marketing &

Advertisement:

Market Research,

Promotions,

& Web Content

Support Services:

Logistics, Payments,

Content and Security

System Development

Business Partnerships:

Affiliate Programs,

Joint Ventures,

Exchanges,

E- marketplaces,

and Consortia

(1)

Common Business Services

infrastructure (security,

smart cards / authentication

electronic payments,

directories / catalogs)

(2)

Messaging and information

distribution infrastructure

(EDI, e- mail, hypertext

transfer protocol, chat

rooms)

(3)

Multimedia content

and network

publishing

infrastructure (HTML,

JAVA, XML, VRML)

(4)

Network Infrastructure

(telecom, cable TV wireless,

internet) (VAN, WAN, LAN,

intranet, extranet) access

(cell phones)

(5)

Interfacing

infrastructure (with

databases, business

partners applications)

A FRAMEWORK FOR ELECTRONIC COMMERCE


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Thankyou

Documents

Business Models in E-Commerce