Chapter 2

Collaborating tools for teamsDoodle - Event planning Facebook - Groups and events Skype - Real-time collaborative work Join.me - Remote access and screen-sharing Google - Calendar, Hangouts, Docs Dropbox - File sharing TeamviewerWhatsappViberLinkedinTwitterTangoLine

Chapter 2 E-BUSINESS MODELSLecture OverviewMarket analysisWhat is E-Business Model? Different E-Business Models

Market analysis

The market analysis is also known as a documented investigation of a market that is used to inform a firm's planning activities, particularly around decisions of inventory, purchase, work force expansion/contraction, facility expansion, purchases of capital equipment, promotional activities, and many other aspects of a company.E-business model The combination of a companys policy, operations, technology & ideology defines its business model.

Revenue Models / E-Business Revenue (never Mix up)Subscription access to contentPay per view content accessCPM display advertisingCPC advertising on siteSponsorship of sections, content or widgetsAffiliate revenue (CPA or CPC)Subscriber data for e-mail marketingAccess to customers for research purposes.

E-business ModelsStore Front ModelAuction ModelPortal ModelDynamic Pricing ModelsName -Your-Price ModelComparison Pricing ModelDemand-Sensitive Pricing ModelBartering ModelRebates Offering Free Products and ServicesB2B E-Commerce and EDIClick-and Mortar BusinessInternet and World Wide Web Resources Two Types Of Storefront Model1. Store front model:Store front model enables merchants to sell products on the Web transaction processing, security, online payment, information storageThis is the basic form of e-commerce where the buyer & seller interact directly.To conduct store front e-commerce, merchants need to organize an online catalog of products, take ordersThrough their Web sites, accept payments in a secure environment, send merchandise to customers and manage customer data(such as customer profiles).They must also market their sites to potential customers.Leading users of store front model: B2C companies.

WWW.TICKETMASTER.COM

Online shopping Malls

Online shopping MallsPresent consumers with a wide selection of products and services.Considered to be more convenient than searching and shopping at independent online storefronts for several items.Consumers can search and shop for a variety of products, and can use malls shopping cart technology to purchase items form many stores in a single transaction.Often act as shopping portals (search engines), directing traffic to different type of companies.

Online shopping Malls

Shopping cart technologyAn order-processing technology allowing customers to accumulate lists of items they wish to buy as they continue to shop

Shopping cart is supported by Product catalog hosted on merchant server in the form of a database

Merchant server the data storage and management system employed by the merchant.

Database technology required to store and report on large amounts of information

Shopping cart technology

Auction ModelOnline auction sites Act as forums through which Internet users can log-on and assume the role of either bidder or seller.Collect a commission on every successful auctionAs a seller, you are able to post an item you wish to sell, the minimum price you require to sell your item and a deadline to close the auction.As a bidder, you may search the site for the availability of the item you are seeking, view the current bidding activity and place a bid(bids are usually in designated increments).Auction sites allow you to add features such as photo graph or description of the items condition.

Two types of AuctionForward Auction/English AuctionReverse Auction/Dutch AuctionAuction Model

Portal modelPortal comes from the word Port point of entry to the country so Web Portal or E-Business portal means Point of entering to the Web.Portal sites give visitors the chance to find almost everything they are looking for in one placeOften offer news, sports and weather as well as ability to search the Web Portal Links customers to online merchants, online shopping malls and auction sites

Portal ModelHorizontal portalsPortals that aggregate information on a broad range of topicsYahoo!, AltaVista, iGoogle

Vertical portals Portals that offer more specific information within a single area of interestWebMD, IMDB, FirstGov

Horizontal portals

Vertical portals

Dynamic Pricing ModelsBuying in bulk has always driven prices down and there are now Websites that allow you to lower the price by joining with other buyers to purchase products in large quantities.

The word dynamic means constantly changing. This is opposite to static pricing models where everyone pays the same price.Dynamic Pricing ModelsBuying in bulk has always driven prices down and there are now Websites that allow you to lower the price by joining with other buyers to purchase products in large quantities.

The word dynamic means constantly changing. This is opposite to static pricing models where everyone pays the same price.Alibaba.com

Name-Your-Price ModelThis model empowers customers by allowing them to choose their price for products and services.

Many of the businesses that offer this service have formed partnerships with leaders of industries such as travel, lending, retail etc.

These industry leaders receive the customers desired price from the intermediary and decide whether or not to sell the product or service.

If the customers price is not reasonable then that customer will be asked to choose another price.Name-Your-Price Model

Comparison Pricing ModelThe comparison pricing Model allows customers to poll a variety of merchants and find a desired product or service at the lowest price.

These sites often get their revenue from partnerships with particular merchants.

These sites allow individuals to see different lists of prices for specific products.Comparison Pricing ModelThe comparison pricing Model allows customers to poll a variety of merchants and find a desired product or service at the lowest price.

These sites often get their revenue from partnerships with particular merchants.

These sites allow individuals to see different lists of prices for specific products.

Demand-Sensitive Pricing ModelThe web has enabled customers to demand better, faster service at cheaper prices.It has empowered buyers to shop in large groups to achieve a group rate.The concept behind the demand-sensitive-pricing business model is that the more people who buy a product in a single purchase, the lower the cost-per-person becomes.Selling the products individually can be expensive because the vendor must price a product.When customers Buy in bulk this cost is shared and the profit margin is increased.Mercata (www.mercata.com) Mobshop (www.mobshop.com)

Bartering ModelA popular method of conducting e-business is bartering or offering one item in exchange for another.Ubarter.com (www.ubarter.com) is a site that allows individuals and companies wishing to sell a product to post their listings.The seller makes an initial offer with the intention of bartering to reach a final agreement with the buyer.A broad range of products & services is available for barter.

Bartering Model

Bartering Model

RebatesRebates can help to attract customers to your site.Many companies offer everyday low prices and specials to keep customers coming back.eBates is a shopping site where customers receive a rebate on every purchase.eBates has formed partnerships with wholesalers and retailers who will offer discounts.The company passes these discounts to customers in the form of rebates.www.ebates.comRebates

Offering Free Products and ServicesMany entrepreneurs are forming their business models around advertising-driven revenue streams.Television networks, radio stations, magazines and print media use advertising to fund their operations & make profit.Many of these sites also form partnerships with companies to exchange products & services for advertising space & vice versa.Skype provide free servicesOffering Free Products and Serviceswww.hsx is a free gaming site where visitors become traders of entertainment stocks & star bonds.The company is able to offer its services free by selling advertising to sponsors.

Offering Free Products and Services

Offering Free Products & Services

B2B and B2C CharacteristicsCharacteristicB2CB2BProportion of adopters with accessLow to mediumHigh to very highComplexity of buying decisionsRelatively simple individual and influencersMore complex buying process involves users, specifies, buyers, etc.ChannelRelatively simple direct or from retailerMore complex, direct or via wholesaler, agent or distributorPurchasing characteristicsLow value, high volume or high value, low volume. May be high involvementSimilar volume/value. May be high involvement. Repeat orders (rebuys) more commonProduct characteristicOften standardized itemsStandardized items or bespoke for sale46Figure 2.5 B2B and B2C interactions between an organization, its suppliers and its customers

47Difference b/w B2B E-Commerce and EDI

B2B E-Commerce:Business-to-business (B2B) iscommercetransactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Contrasting terms are business-to-consumer (B2C) and business-to-government (B2G).E.g.: http://www.alibaba.com/ One of the world's biggest B2B marketplaces.

EDI:Electronic Data Interchange(EDI) is the computer-to-computer exchange of business documents in a standard electronic format between business partners.

Internet and World Wide Web Resources