E-Business Models

E-Business Models

The emphasis is on business in e-businessPart 1 – B2C

Adomas SvirskasVilnius University

October 2005

Adomas Svirskas, Vilnius University 2

Agenda

• E-business is about business firstly• Variety of options for the same single goal• Business to Consumer (B2C)• Business to Business (B2B)

– Supply Chain– Hub and spoke– Many to many– E-Procurement

• Business to Government (B2G)


The Vision

• "In a few years' time, there will be no Internet companies - there will just be companies - and all companies that will operate in the future, will be Internet companies." Dr. Andrew Grove, Chairman, INTEL Corporation, September 20, 1999: http://www.intel.com/pressroom/archive/speeches/cn092099.htm

http://www.intel.com/pressroom/archive/speeches/cn092099.htm

http://www.intel.com/pressroom/archive/speeches/cn092099.htm


Putting the Business First

• Any business considering engaging into e-business must ask themselves:– How does the use of the Internet technologies

fit into the overall business strategy? (Do we have a strategy anyway…?)

– What business channels will benefit most from the technology?

– How does the use of technology impact the bottom-line?

– What are the new opportunities?


E-Business Strategy

• It is the key to e-business success• It is not primarily about technology

(although is informed by the latter)• It outlines how the business will take

advantage of the new environment• It defines clear measurable goals (more

customers/better service/new markets..)• It maps out the ROI plan• It is a journey, not a destination


Variety of the Options

• The goal is one: supporting business growth• The options depend on:

– Business size, industry sector, locale, partnerships, customer base and their demands

– Readiness for e-business• Awareness• Executive support• IT readiness

– Investment potential and strategy– Availability of outside infrastructure, standards, tools


An Example

• Many customers would hardly make a purchase decision on an expensive complex product purely online

• However, they would definitely appreciate a possibility to track the progress of fulfillment of their order online

• Therefore, investment into clear and accurate online tracking is needed rather than into sophisticated online product configurator.


Business Website and e-mail

• Increases business visibility• Improves product information accuracy

and timeliness (sometimes this matters most)

• Allows to collect feedback and shape user communities (via forums)

• Improves support and cuts its costs• Relatively simple and cheap from the

technical standpoint


Using e-mail

• Dominant majority of businesses use it

• It is a very powerful marketing tool (when used with care)

• Choice of the audience and style matters most

• The trick is to make the customer to value the newsletters and product/service info

• Spam is walking fine line with the law


Tracking the Success and Impact

• Number of visitors

• E-visit profile: pages visited, time spent

• Visitor’s profile: origin, personal data (if possible)

• Reshaping and restructuring the website according to the findings

• Preparing the next step: from brochure-style website to orders online


Business to Consumer (B2C)

• An important category of e-business solutions allowing business transactions with consumers through the Internet

• Requires feasibility analysis:– B2C solutions of the competitors– Risk of ignoring B2C solution– New marketing opportunities– Investment needed to support business model



• Involves:– Web Marketing, pre-sales support– E-Catalogue management– Campaigns, promotions, volume and loyalty

discounts, gift vouchers…– Payment (reaches into B2B)– Order fulfillment, customer support (reaches into B2B)– Delivery logistics (reaches into B2B)– Inventory management (reaches into B2B)– Suppliers integration (reaches into B2B)



• Success factors:– Quality of the solution

• User experience (Customer Relationship Management (CRM) domain)

– Overall satisfaction– Trust

• Reliability• Scalability• Availability

– Cost of the solution


Integrated B2C e-business [1]


E-Catalogue

• The face of any B2C solution

• Must be:– Efficient and accurate– Easy to navigate– Easy to manage and maintain– Scalable– Internationalized


CRM in B2C e-business

• E-CRM is quite different from conventional one

• E-Users are much more mobile, dynamic, demanding and loyalty is fragile – the competition is just few clicks away…

• Personalization matters

• Data mining helps to analyze the patterns and predict future trends


Order Placement

• This is one of the crucial steps of B2C• The process should be as smooth for the

consumer as possible, here is where the trust is being strengthened (provided that e-catalogue developed initial trust)

• Sales taxes, shipping fees should be clearly indicated

• Wish lists, persistent shopping carts do matter


Payment in B2C

• Very important and challenging step• Security considerations:

– Ensuring the payment mechanism is secure– Presenting it as trustworthy to the customer

• Links with financial institutions• Payment mechanisms

– Money transfer– Credit cards– Escrow services– Intermediaries (e.g. PayPal)

• Fraud prevention, Identity protection


Inventory Management

• The key is to keep inventories (hence costs) down yet ensure prompt fulfillment

• On-demand approach• Inventory costs:

– Costs to place purchase order/start production

– Production/acquisition costs– Stocking costs– Costs of unfulfilled demant


Fulfillment and Delivery

• It is about arriving of the good intact and on time agreed during order placement

• An important trust building factor• Involves:

– Warehouse operation and pulling the goods– Packing of the goods– Operating/outsourcing delivery service– Tracking deliveries– Dealing with returns– Dealing with seasonal peaks


Customer service in B2C

• An important customer base and loyalty building tool

• Thorough and accurate product information

• Overall level of information – FAQ, forums, background material

• Professional handling of occurring problems


Conclusions on B2C

• B2C lifts retail business to a new level

• B2C is integrated mechanism of quite complex processes and should be viewed as such

• B2C must be aligned with overall business strategy

• B2C implementation prepares business to reach into B2B domain


References

• [1] USHER project http://www.usherproject.org.uk/

• [2] Kotok, A., Weber R.R. ebXML – The new global standard for doing business on the Internet

http://www.usherproject.org.uk/

Documents

E-Business Models