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CHAPTER 14

Ebusiness

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LEARNING OUTCOMES

14.1 Compare ecommerce and ebusiness

14.2 Compare the four types of ebusiness

models

14.3 Describe the benefits and challenges

associated with ebusiness

14.4 Explain the differences among eshops, emalls, and online auctions

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EBUSINESS

• The Internet is a powerful channel that presents new opportunities for an organization to:– Touch customers– Enrich products and services with

information– Reduce costs

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EBUSINESS

• How do ecommerce and ebusiness differ?– Ecommerce – the buying and selling of

goods and services over the Internet – Ebusiness – the conducting of business on

the Internet including, not only buying and selling, but also serving customers and collaborating with business partners

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EBUSINESS

Industries Using Ebusiness

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EBUSINESS MODELS

• Ebusiness model – an approach to conducting electronic business on the Internet

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EBUSINESS MODELS

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Business-to-Business (B2B)

• Electronic marketplace (emarketplace) – interactive business communities providing a central market where multiple buyers and sellers can engage in ebusiness activities

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Business-to-Consumer (B2C)

• Common B2C ebusiness models include:– eshop – a version of a retail store where customers

can shop at any hour of the day without leaving their home or office

– emall – consists of a number of eshops; it serves as a gateway through which a visitor can access other eshops

• Business types:– Brick-and-mortar business– Pure-play business– Click-and-mortar business

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Consumer-to-Business (C2B)

• Priceline.com is an example of a C2B ebusiness model

• The demand for C2B ebusiness will increase over the next few years due to customer’s desire for greater convenience and lower prices

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Consumer-to-Consumer (C2C)

• Online auctions– Electronic auction (eauction) - Sellers and

buyers solicit consecutive bids from each other and prices are determined dynamically

– Forward auction - Sellers use as a selling channel to many buyers and the highest bid wins

– Reverse auction - Buyers use to purchase a product or service, selecting the seller with the lowest bid

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Consumer-to-Consumer (C2C)

• C2C communities include:– Communities of interest - People interact with each

other on specific topics, such as golfing and stamp collecting

– Communities of relations - People come together to share certain life experiences, such as cancer patients, senior citizens, and car enthusiasts

– Communities of fantasy - People participate in imaginary environments, such as fantasy football teams and playing one-on-one with Michael Jordan

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EBUSINESS BENEFITS AND CHALLENGES

• Ebusiness benefits include:– Highly accessible – Increased customer loyalty– Improved information content – Increased convenience– Increased global reach – Decreased cost

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EBUSINESS BENEFITS AND CHALLENGES

• Ebusiness challenges include:– Protecting consumers– Leveraging existing systems– Increasing liability– Providing security– Adhering to taxation rules

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EBUSINESS BENEFITS AND CHALLENGES

• There are numerous advantages and limitations in ebusiness revenue models including: – Transaction fees– License fees– Subscription fees– Value-added fees– Advertising fees

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MASHUPS

• Web mashup - a Web site or Web application that uses content from more than one source to create a completely new service– Application programming interface

(API) - a set of routines, protocols, and tools for building software applications

– Mashup editor - WSYIWYGs (What You See Is What You Get) for mashups

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CHAPTER FOURTEEN Opening Case Study Questions

1. Identify the type of ebusiness model WTC is using for the Ironman and explain why it has been so successful

2. What advantages would WTC have in opening up an Ironman emarketplace?

3. What would be an example of WTC using a mashup for the Ironman?

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CHAPTER FOURTEEN CASEeBiz

• There are numerous ways to make money on the Internet

– Million dollar home page

– One red paperclip

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CHAPTER FOURTEEN CASE QUESTIONS

1. How else can you use the Internet to raise money?

2. What types of businesses could benefit from trading on the Internet?

3. Can you think of any other disruptive or non-traditional ways that you could use the Internet?