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ITEC 410Current Technologies
1
Categories of E-Business Models Factors Affecting E-Business Success
Creating a Winning E-Business Second Edition, Chapter 1
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Learning Objectives
Discuss the Five Categories of e-Business Models:
– B2C
– B2B
– B2G
– C2C
– C2B
Creating a Winning E-Business Second Edition, Chapter 1
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Learning Objectives (continued)
Discuss the Factors that affect e-Business
Success
– The Network Effect
– Innovative Marketing Ideas
– Scalability
– Ease of Entry into Electronic Markets
– Ability to quickly adapt to Marketplace Changes
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Basics
E-commerce – Process of buying or selling goods or services across a telecommunications network
E-business – Widest spectrum of business activities using Internet and Web technologies
Many technologies facilitate e-business– Electronic Funds Transfer (EFT)
– Electronic Data Interchange (EDI)
– Internet / World Wide Web
Creating a Winning E-Business Second Edition, Chapter 1
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Business models– How a company conducts business in order to
generate revenue
– Widespread access to the Internet and Web allows companies to adapt old models and create new ones
E-business models are often categorized by type of customer
E-Business Models
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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Business-to-consumer (B2C)– Retail sales (e-retail) including airline tickets,
entertainment venue tickets, hotel rooms, stock purchases, diet and fitness programs
Brick-and-mortar companies are moving to brick-and click companies– Sears, Best Buy, Barnes & Noble, the Gap
Pure-play e-retailers and catalog merchants– Amazon.com, eBags, Harry and David
E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Business-to-business (B2B)– Businesses selling to other businesses
– Online stores, such as Office Depot, Staples
– Internet and Web technologies• Web hosting• Web design• Hardware and software• Consulting
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Business-to-business (B2B) – Online trading communities for vertical markets
– Exchanges, aggregators, auctions• Virtual marketspaces for buyers and sellers• Elance, ATLA Exchange, Business.com,
HedgeHog
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Business-to-government (B2G)– Businesses provide a marketspace for other
businesses and government agencies
– Bidmain, B2GMarkets
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Consumer-to-consumer (C2C)– Consumers sell or exchange products and
services directly with other consumers
– Auctions, online classified ads, expert information exchanges
• eBay, American Boat Listing, TraderOnline.com, AllExperts
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Consumer-to-business (C2B)– Reverse auctions in which a single consumer
names his or her own price for products or services
– Consumer’s offer made to multiple businesses, which can accept or decline offer
– Priceline.com
Creating a Winning E-Business Second Edition, Chapter 1
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E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 2
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Factors AffectingE-Business Success
The network effect– Total value of a product, service, or technology
grows as more and more people use it• Telephone system example
– Single telephone has no value; as more people join the telephone system, the value of each telephone increases
• uBid online auction site example– As more people participate, the auction site becomes
more valuable to buyers and sellers
Creating a Winning E-Business Second Edition, Chapter 2
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Factors AffectingE-Business Success (continued)
Creating a Winning E-Business Second Edition, Chapter 2
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Factors AffectingE-Business Success (continued)
Creating a Winning E-Business Second Edition, Chapter 2
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Factors AffectingE-Business Success (continued)
Innovative marketing ideas– Hotmail and viral marketing example
• Hotmail users grew at a rapid rate because of electronic word of mouth coupled with the network effect
• Electronic word of mouth or viral marketing spreads from user to user in the same way a human virus spreads from person to person
Creating a Winning E-Business Second Edition, Chapter 2
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Factors AffectingE-Business Success (continued)
Creating a Winning E-Business Second Edition, Chapter 2
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Factors AffectingE-Business Success (continued)
Scalability– Ability of a business to function well in the face of
rapid growth• Systems and procedures meet customers needs• AllAdvantage e-business failure example
– E-business idea: Paying for users to browse the Web and view advertising
– Millions of customers signed on; advertisers did not– No scalability with rapid growth in customers
Creating a Winning E-Business Second Edition, Chapter 2
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Factors AffectingE-Business Success (continued)
Ease of entry into electronic markets– Low-cost technologies make it easy to create
new e-businesses
– eBay and online auction example• Easy for consumers to interact at auction site• Web auction software is cheap and easy to
install /maintain• E-businesses earn commissions without having to
manage, warehouse, and distribute products
Creating a Winning E-Business Second Edition, Chapter 2
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Factors AffectingE-Business Success (continued)
Creating a Winning E-Business Second Edition, Chapter 2
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Factors AffectingE-Business Success (continued)
Ability to quickly adapt to marketplace changes– Rapid knowledge transfer
– Need to make decisions quickly
– Exploit new ideas and opportunities
– Handle new challenges• Amazon.com is an example of ongoing evolution
from a basic e-business idea
Creating a Winning E-Business Second Edition, Chapter 2
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Factors AffectingE-Business Success (continued)
End of Lecture 02
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