MODELS. Creators, Producers, Distributors, Users.
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Transcript of MODELS. Creators, Producers, Distributors, Users.
CREATORS PRODUCERS DISTRIBUTORS USERS
EXPERTSINVENTORS
ARTISTSENTERTAINERS
SERVICE PROVIDERSCONTENT SUPPLIERS
INFORMATION& NEWS SERVICES
ADVISORS
Focused Distributors
Consumer
Portals Business
Producers
• Package the work of creators into products, services, and solutions that meet a market need
Note: they may sell and maintain the product or may share that role with others in the value chain
Examples?
Producers
• Service Providers
• Manufacturers
• Educators
• Advisors
• Custom Suppliers
• Information & News Services
Producers- Please visit these Examples
• Service Providers-Progressive
But check eCoverage!!!• Manufacturers-Ford Motor, Micron (Crucial)• Educators-PensarePensare• Advisors-Mainspring Mainspring
Please also check www.ey.com
(Ernst & Young)
Producers- continued examples
• Custom Suppliers-The McGraw Hill Companies
www.mhhe.com
Please check Primis sevices
• Information & News Services—Forrester Forrester • The Wall Street Journal
www.wsj.com
Distributors
Enable buyers and sellers to connect, communicate, and transact business
• Focused Distributors
• Portals
Focused distributors-Examples
• InsWebInsWeb and Quicken InsuranceQuicken Insurance
services and products within the insurance industry
• LandsEnd.comLandsEnd.com
distributor for clothing and accessories
Types of Focused Distributor Business
• Retailers
• Marketplaces
• Aggregators and Infomediaries
• Exchanges
How to differentiate between different types of Focused
Distributor
Ask these questions• Does the business assume control of inventory?• Does the business sell online (mobile included)?• Is the price set outside the market, or is online
price negotiation and bidding permitted?• Is there a physical service or product that must be
distributed?
Assignment
• Compare these focused distributors by obtaining information from their web sites
E-Loan.com (www.eloan.com(www.eloan.com)
INSWEB.com (www.insweb.comwww.insweb.com)
Freemarkets.com (www.freemarkets.com(www.freemarkets.com)
DIGITAL BUSINESS MODELS-LAB ASSIGNMENT I
As a group, by obtaining information from the web sites, compare these businesses:Freemarkets.com www.freemarkets.comwww.freemarkets.comGreyzone http://www.greyzone.com/index2.htmlhttp://www.greyzone.com/index2.htmlE-Loan.com www.eloan.comwww.eloan.comINSWEB.com www.insweb.comwww.insweb.com
For each, if possible, identify these differentiators – Sell online– Price set online– Physical Product/Service– Likely Revenues– Likely Costs )
RETAILERS
• Assume control of inventory
• set a nonnegotiable price to the consumer
• sell physical products online
Example: LandsEnd.com
RETAILERS-continued
The primary revenue model is based on product/service sales
Cost model includes: procurement, inventory management, order fulfillment, customer service (including returns)
Retailers-continued
• Because e-ratailers assume control of physical goods their ratio of tangible to intangible assets is much higher than for a firm that does not assume control of physical inventory
MARKETPLACES
• Do not take control of physical inventory
• Sell products with a nonnegotiable price and complete the sale online
• Procurement and inventory management costs often lower than e-retailer costs
MARKETPLACE Companies
• Sell information based products and services
Example: Insurance
QuickenInsurance
Example: Loans
E-LoanE-Loan
E-marketplaces
• Revenue model includes commission on transaction fee on each sale
Since sale transactions take place online- must electronically link to supplier databases and transaction systems to ensure that transactions can be completed and revenue recognized
E-marketplaces
• Since must electronically link to supplier databases and transaction systems to ensure that transactions can be completed and revenue recognized this might be reflected in cost model
Aggregators
• Provide information on products and services for sale by others in the channel-often enabling comparison of features and pricing- but do not complete the final transaction
Any problems you foresee?
Aggregators
• Revenue model based on referral fees, advertising, and supplemental revenue sources
• Cost model?
Examples:AutowebAutoweb
InsWeb
Infomediaries-a special class of aggregator
• Unites sellers and buyers of information
• No physical product is involved
• Transaction can be completed online
Infomediaries-continued
B2C infomediaries may provide information services for free
B2B infomediaries may charge a company a corporate subscription fee
Infomediaries-continued
Because information is available elsewhere and the cost of packaging and delivering the information is relatively low, barriers to entry are low as well
Infomediaries-continued
Infomediaries quickly evolve from simply brokering information
Example:
Individual.com
EXCHANGES
• May or may not take control of inventory
(tendency is to try to avoid assuming inventory carrying costs whenever feasible)
• May or may not complete the final sales transaction online
EXCHANGES -continued
• Key differentiating feature:
price not set; negotiated by the buyer and seller at the time of the sale
B2B, B2C, C2C
auction exchanges
TRENDS IN THE FOCUSED DISTRIBUTION MODEL
• Creating hybrid businesses that combine several different business models- each of which generates separate revenue stream
• B2B exchanges evolving to vertical and horizontal portals
• E-retailers evolving to vertical portals
PORTALS -continued
Can be differentiated by asking the following
• Does the business provide gateway access to the full range of Internet information and services, including search, e-mail, instant messaging, chat, and other community building tools?
PORTALS -continued
Can be differentiated by asking the following
• Does the business provide access to deep content, products, and services within vertical industry(for example, financial services) or related industries (for example, travel)
PORTALS -continued
Can be differentiated by asking the following
• Does the business provide information and services for all types of users, or are the information services specific to a well defined affiliation group (for example, women, lawyers, etc.)?
Horizontal Portals-continued
• Provide gateway access to the Internet’s vast store of content
• provide a broad range of tools for locating information , communicating with others and developing online communities of interest
Horizontal Portals-continued
Trends
• Extending the model to include multiple vertical solution channels, for example, finance, health, travel so that a new source of revenue is provided from transaction fees
Vertical Portals
Provide
• Deep content
• Place to conduct business
• Set of communication and community building tools
Affinity Portals
Provide• deep content, commerce, community
features as in a vertical portal, but targeted at a specific market segment
Examples:iVillage.com or oxygen.com
Women.com
wfn.com
Trends in the evolution of the portal model
• Emergence of wireless horizontal portals
• Vertical portals as possible destinations where business and consumers communicate, transact business, learn and play
•Enterprise portals
Trends in the evolution of the portal model
• Consequences for focused distributors?
Must establish strong portal relationships otherwise vulnerable to loss of power
E-business models lab assignment II As a group, by obtaining information from the web sites, compare these portals:
www.Yahoo.comwww.Yahoo.comwww.WebMD.comwww.WebMD.com
www.msn.comwww.msn.comIdentify model and model differentiators
–Control inventory–Sell online–Price set online–Physical Product/Service–Likely Revenues–Likely Costs
Prepare an oral and written report