Chapter 13 - E business

The Internet is a powerful channel that presents new opportunities for an organization to Touch customers, Enrich products and services with information and reduce costs

How do e-commerce and e-business differ?

E-commerce – the buying and selling of goods and services over the Internet (online transactions)

E-business – the conducting of business on the Internet including, not only buying and selling, but also serving customers and collaborating with business partners (online transactions, serving customers and collaborating with business partner)

E-business model – an approach to conducting electronic business on the Internet

BUSINESS TO BUSINESS (B2B)

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

ELECTRONIC MARKETPLACE 

Electronic marketplaces, or e-marketplaces, present structures for conducting commercial exchange, consolidating supply chains, and creating new sales channels

Their primary goal is to increase market efficiency by tightening and automating the relationship between buyers and sellers

Existing e-marketplaces allow access to various mechanisms in which to buy and sell almost anything, from services to direct materials

BUSINESS TO CONSUMER (B2C)

Common B2C e-business models include:

e-shop – a version of a retail store where customers can shop at any hour of the day without leaving their home or office

e-mall – consists of a number of e-shops; it serves as a gateway through which a visitor can access other e-shops

Business types:

Brick-and-mortar business- operates in a physical store without an Internet presence. Eg: Bata.

Pure-play business- a business that operates on the Internet only without a physical store. Examples include fashionvalet.com.

Click-and-mortar business– a business that operates in a physical store and on the Internet .Eg: Hijabs by Hanami

CONSUMER TO BUSINESS (C2B)

Priceline.com is an example of a C2B e-business model

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

CONSUMER TO CONSUMER (C2C)

Online auctions

Electronic auction (e-auction) - 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

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

BENEFITS OF E-BUSINESS

E-Business benefits include:

-Highly accessible

•Businesses can operate 24 hours a day, 7 days a week, 365 days a year

-Increased customer loyalty

•Additional channels to contact, respond to, and access customers helps contribute to customer loyalty

-Improved information content

•In the past, customers had to order catalogs or travel to a physical facility before they could compare price and product attributes. Electronic catalogs and Web pages present customers with updated information in real-time about goods, services, and prices

E-BUSINESS BENEFITS AND CHALLENGES 

There are numerous advantages and limitations in e-business revenue models including:

§Transaction fees

§License fees

§Subscription fees

§Value-added fees

§Advertising fees