b07_ebusiness
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b07_eBusinessTRANSCRIPT
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BUSINESS B7
E-Business Models
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Learning Outcomes
1. Describe the business-to-business (B2B) and business-to-consumer (B2C) e-business models
2. Describe the four main areas where companies conduct business online
3. Differentiate between a vertical marketplace and a horizontal marketplace
4. Summarize the current and future trends for e-business models
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Introduction
Pure play – an Internet retailer that has no physical store, such as Expedia.com and Amazon.com
E-business – conducting business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners
E-business model – an approach to conducting electronic business through which a company can become a profitable business on the Internet
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The four main areas where companies conduct business online
1. Direct marketing, selling, and services
2. Financial and information services
3. Maintenance, repair, and operations (MRO)
4. Intermediaries
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Direct Marketing, Selling, & Services
Key to success: Marketing – create site visibility and demand
Sales – allow personalized content and adaptive selling processes, integrate with back-office
Services – automate customer service features such as customer feedback, customer inquires, tracking information, and customized services
using the Internet to contact customers directly
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Financial and Information Services
Online banking Paying bills Making transfers between accounts Trading stocks, bonds, and mutual funds
Online billing Internet-based bill delivery services saves money
Secure information distribution – Business can safeguard information
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Maintenance, Repair, & Operations (MRO)
MRO goods include – office suppliers, office equipment, furniture, computers, and replacement parts
The Internet can transform corporate purchasingfrom a labor and paperwork inten sive processinto a self-service application
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Intermediaries
Intermediaries – agents, software, or businesses that bring buyers and sellers together that provide a trading infrastructure to enhance e-business
Reintermediation – using the Internet to reassemble buyers, sellers, and other partners in a traditional supply chain in new ways
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Intermediaries
Content providers – companies that use the Internet to distribute copyrighted content, including news, music, games, books, movies, and many other types of information
Online brokers – intermediaries between buyers and sellers of goods and services
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Intermediaries
Portals - Central hubs for online contents
Market makers – intermediaries that aggregate three services for market participants A place to trade Rules to govern trading An infrastructure to
support trading
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Intermediaries
Infomediary – provides specialized information on behalf of producers of goods and services and their potential customers
Application service providers – sell access to Internet-based software applications to other companies
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E-Business Models
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Business-to-Business (B2B) Models
Business-to-business (B2B) – applies to businesses buying form and selling to each other over the Internet
E-procurement – the B2B purchase and sale of supplies and services over the Internet
Systematic sourcing – involves buying through prenegotiated contracts with qualified suppliers
Spot sourcing – businesses buy transaction-oriented commodity-like products and rarely involves a long-term or ongoing relationship between buyers and sellers
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B2B: Marketplace classifications
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B2B exchanges are new organizational forms in digital space that can take place in the following:
Buyer model (few buyers, many sellers)
Marketplace model (many buyers, many sellers)
Longer term relationship model (few buyers, few sellers)
Seller model (few sellers, many buyers)
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B2B exchanges
Buyer Model - Reverse auction – the winning bid is the lowest, rather than the highest
Seller model – appropriate when the supplier hosts value-added services on its Web site such as suppliers’ product catalog and customers’ order information
Longer term relationship model – items requiring a high degree of planning between buyers and sellers either in the design stage or in fulfillment
Marketplace model – allows a virtually infinite number of businesses to transact electronically with minimal cost
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Consumer-to-Business (C2B)
Consumer-to-business (C2B) – applies to any consumer that sells a product or service to a business over the Internet
C2B facilitates the following: Social interaction Personal finance management Purchasing products and information
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Consumer-to-Consumer (C2C)
Consumer-to-consumer (C2C) – appliers to sites primarily offering goods and services to assist consumers interacting with each other over the Internet
C2C communities thriving on the Internet: Communities of interest Communities of relations Communities of fantasy
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E-Business Challenges
Cost Value Security Leverage existing systems Interoperability
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Current Trends: E-Marketplaces and E-Markets
e-marketplaces – are interactive business communities providing a central market space where multiple buyers and sellers can engage in e-business activities
Horizontal marketplaces – connect buyers and sellers across many industries, primarily by simplifying the purchasing process
Vertical marketplaces – provide products that are specific to trading partners in a given industry
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Advantages and limitationsof various e-marketplace revenue models
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The “Content” Perspective ofE-Marketplaces Content and product description establish the
common understanding between parties in a transaction
The accessibility, usability, accuracy, and richness of the content directly affects the transaction
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Future Trends: E-Channels,E-Portals, and E-Government e-channel – Web-based business channel
e-portal – a single gateway through which to gain access to all the information, systems, and processes used by stakeholders of an organizations
e-government – the use of strategies and technologies to transform government(s) by improving the delivery of services and enhancing the quality of interaction between the citizen-consumer within all branches of government(s)
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Extended E-Business Models
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Specific e-business models as they relate to e-government
Consumer-to-government (C2G) – constitutes the areas where a consumer (or citizen) interacts with the government
Government-to-business (G2B) – includes all government interaction with business enterprises
Government-to-consumer (G2C) – governments dealing with consumers/citizens electronically
Government-to-government (G2G) – governments dealing with governments electronically
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Closing Case One Questions
1. eBay is one of the only major Internet “pure plays” to consistently make a profit from its inception. What is eBay’s e-business model and why has it been so successful?
2. Other major Web sites, like Amazon.com and Yahoo!, have entered the auction e-marketplace with far less success than eBay. How has eBay been able to maintain its dominant position?
3. eBay has long been an e-marketplace for used goods and collectibles. Today, it is increasingly a place where major businesses come to auction their wares. Why would a brand name vendor set up shop on eBay?