PRESENTATION ON NEW BUSINESS MODELS FOR INTERNET ECONOMY

PRESENTED BY-Ms. Mandeep HundalMs. Sarita ThakurMs. Deepika Gupta

E- CommerceHistory of E-CommerceE-BusinessImpact of E-commerceE-Commerce modelsInternet Strategies for traditional business

What’s Electronic Commerce?

“A modern business methodology ... to cut costs while improving the quality of goods and services and increasing the speed of service delivery.”

DEFINITION:Exchange of information, goods, service, and payments by electronic means.

Electronic CommerceElectronic Commerce (expanded definition)(expanded definition)

EDI orders from customers

Selling products on-line

Delivering services on-line

Purchasing goods and services electronically

Procurement

Order-to-Cash

Providing product information to

prospective customers

Customer self-help

Pre-Sales

Post-Sales

Exchanging engineering drawings with partners

CommercializationPARTNERSPARTNERS

Reviewing and updating benefits information

Benefits AdministrationEMPLOYEESEMPLOYEES

CCUUSSTTOOMMEERRSS

SUPPLIERSSUPPLIERS

1970s: Electronic Funds Transfer (EFT)Used by the banking industry to exchange account information over secured networks.

Late 1970s and early 1980s: Electronic Data Interchange (EDI) electronic transfer of documents:

Used by businesses to transmit data from one business to another Purchase ordersInvoicesE-payments between firms doing business

Mid 1980s:The growth and acceptance of credit cardsAutomated teller machines (ATM) Telephone bankingAirline reservation system

1990s: the World Wide Web on the Internet provided easy-to-use technology for information publishing and dissemination

Cheaper to do business (economies of scale)Enabled diverse business activities (economies of scope)

UbiquityGlobal reachUniversal StandardsRichnessInteractivityPersonalization/ CustomizationInformation Density

E-business refers to a broader definition of e-commerce, not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, conducting e-learning, and processing electronic transactions. It can take several forms depending on the degree of digitization, which may relate to:• The product (service) sold• The process• The delivery agent (or intermediary).

E-business category

E-banks

E-trade

E-consulting

E-engineer

E-learning

E-mail

E-marketing

E-transactions

Products Electronics & office, movie, music n books, Auto, Furniture, Toys , Sports, Pharmacy, Grocery, gifts etc.

Consumer electronics, clothing, Auto accessories, Jewellery, Musical instruments, stamps, stationary , collectibles etc.

Books andelectronics to tennis rackets and diamond jewellery etc.

Books, mobile phones & mobile accessories, laptops, computer accessories, cameras, movies, music, Apparels, households etc.

Positive impact Makes more money then ever because of the online store they have

Allows to bid, sell, and buy products.

Negative impact Even though more people go online to buy items, the increased number of online businesses have intensified the competition.

Basic Business models of E-CommerceBasic Business models of E-Commerce

B2B

B2C

C2B

C2C

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Business originating from...Business Consumers

Key QuestionsBusiness Model Components

Value Proposition Why should the customer buy from you?

Revenue model How will you earn money?Market opportunity What market space do you intent to serve, and what is its size?

Competitive environment Who else occupies your intended market space?

Competitive advantage What special advantages does your firm bring to the marketspace?

Market strategy How do you plan to promote your products to attract customer?

Organizationaldevelopment

What types of organizational structures within the firm arenecessary to carry out the business plan?

Management team What kinds of experiences and background are important for the company’s leaders to have?

Defines how a company’s product or service fulfills the needs of customers.

Questions Why will customers choose to do business with

your firm instead of another company? What will your firm provide that other firms do

not and cannot?

Describes how the firm will earn revenue, produce profits, and produce a superior return on invested capital.

E-commerce revenue models include: advertising model subscription model transaction fee model sales model affiliate model

Revenue Model Example

Advertising Yahoo.com

Subscription Sportsline.com

Transaction fee Ebay.com

Sales Amazon.com

Affiliate Mypoints.com

Market opportunity refers to the company’s intended marketspace

and the overall potential financial opportunities available to the firm in that market space

Market space the area of actual or potential commercial

value in which a company intends to operate

Refers to the other companies operating in the same marketplace selling similar products

Influenced by: how many competitors are active how large are their operations the market share of each competitor how profitable these firms are how they price their products

Achieved by a firm when it can produce a superior product and/or bring the product to market at a lower price than most, or all, of its competitors

Achieved because a firm has been able to obtain differential access to the factors of production that are denied their competitors -- at least in the short term

Asymmetry exists whenever one participant in a market

has more resources than other participants First mover advantage

a competitive market advantage for a firm that results from being the first into a marketplace with a serviceable product or service

The plan you put together that details exactly how you intend to enter a new market and attract new customers

Best business concepts will fail if not properly marketed to potential customers

Describes how the company will organize the work that needs to be accomplished

Work is typically divided into functional departments

Move from generalists to specialists as the company grows

Employees of the company responsible for making the business model work

Strong management team gives instant credibility to outside investors

A strong management team may not be able to salvage a weak business model

Should be able to change the model and redefine the business as it becomes necessary

Business originating from…Business Consumers

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Bu

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Publishers order paper supplies

from paper companies

Amazon orders from publishers

Consumers search out

sellers, offers and initiate

purchases from Amazon

Consumers resell copies on eBay

Consumers buy thousands of Harry Potter books from

Amazon

Full spectrum of e-commerce that can occur between two organizations.For e.g.: Intel vs Dell, Heinz vs Mc Donald CISCO, General Electric

B2c is the direct trade between the company and consumers.

For example: www.amazon.com, www.flipkart.com, , www.priceline.com,

Offer free classifieds, auctions, and forums where individuals can buy and sell. For e.g.: PayPal where people can send and receive money online with ease. eBay's auction service is a great example of where person-to-person transactions taking place everyday since 1995, www.owners.com, www.fabmart.com,

Making eBay India's Preferred e-Commerce Brand.flv

consumers band together to present themselves as a buyer in group.For e.g. : www.planetfeedback.com, www.consumer-voice.org, www.cj.com,www. ups.surveyrouter.com,

Networks allow businesses to bid on government requests for proposals, paying online taxes and fees online.For e.g.: www.b2gconnect.org, www.importexportplatform.com, www.lockheedmartin.com, Support science, technology, engineering and math initiatives including a partnership with Delhi Technological University’s award winning UAV design team. Sponsor Science and Inventor’s Fairs.Lockheed Martin and Tata Advanced Systems have formed a joint venture company in India.Tata Lockheed Martin Aero structures, for manufacturing airframe components

C2GApplications usually include tax payment, issuance of certificates or other documents etc.For e.g.: www.egovamc.com,

e-government.com

G2BProvide information about business rules, requirement and permission needed for starting a new business, and other specifications.Forms downloaded and submitted online or offline.For e.g.: www.incometaxindia.gov.in, www.business.gov.in, www.india.gov.in,

G2CProvide information of all govt. departments, Different welfare schemes, application forms to be used by the citizens.www.gswan.gov.in (Gujarat state wide area network), www.humanservices.gov.au, www.india.gov.in, www.ncdrc.nic.in, www.consumeraffairs.nic.in, http://www.rbi.org.in,

G2GElectronic sharing of data and/or information systems between government agencies, departments or organizationsFor e.g.: www.disasterhelp.com, www.india.gov.in, www.tn.gov.in, http://finmin.nic.in, http://commerce.nic.in,

A powerful new channel for buying great

IBM product.• Now it's easier than ever for IBM customers

to purchase advanced IBM hardware, software and services, thanks to a revolutionary channel that can integrate with the internal e-procurement systems.

• With the IBM B2B Direct e-commerce program, one can research products, view entitled pricing and make purchases through a protected Web connection, allowing speed up of procurement processes to become more efficient and cut costs.

eSpark has developed several client service models in order to provide the teamwork and partnership needed to create effective and cost-effective software solutions. This enables eSpark Corp to provide service and support that is verstile, flexible and reliable.

...On Site Service ModelOffshore Development ModelHybrid Development ModelFixed Cost Development ModelRight to hire ModelConsulting Service Model

An enabling technology – a powerful set of tools that can be used, wisely or unwisely in almost any industry and as part of almost any strategy.

- Porter

Know Your Website Audience.Focus on Monitoring & Research, no need for PR firm.Research using LinkedIn as word of mouth remains the primary trigger to gain business.Give Before You Get, giving useful information away for free appears tempting the reader.Nurture Your Customer Data.Protect Your Prices.Collaborations with other websites.

Think Keywords which describe your business so that a prospective customer would type into Google to find your website.Use Internet technology to communicate and collaborate closely with suppliers and distribution channel allies.Reengineer company and industry value chains to revamp how certain activities are performed and to eliminate or by pass others.Make greater use of build-to-order manufacturing and assembly.

Build systems to pick and pack products that are shipped individually.Adopt Internet as an integral distribution channel for accessing new buyers and geographic markets.Gather real-time data on customer tastes and buying habits, doing real-time market research, and use results to respond more precisely to customer needs and wants.Use Internet to give both existing and potential customers another choice of how to interact with the company.

E-business has been around for 20+ years, but the opportunities have been accelerated by the Internet and the web. Business is still business

The Internet hasn’t changed that – though for a while many thought it might have.

Web services may be the “next big thing”, but EDI, IVR, etc. will probably still be around.