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McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-1 BUSINESS DRIVEN TECHNOLOGY Business Plug-In B7 E-Business Models.

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Presentation on theme: "McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-1 BUSINESS DRIVEN TECHNOLOGY Business Plug-In B7 E-Business Models."— Presentation transcript:

1 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-1 BUSINESS DRIVEN TECHNOLOGY Business Plug-In B7 E-Business Models

2 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-2 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

3 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-3 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

4 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-4 E-Business: Commerce on the Internet The four main areas where companies conduct business online include: 1.Direct marketing, selling, and services 2.Financial and information services 3.Maintenance, repair, and operations (MRO) 4.Intermediaries

5 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-5 DIRECT MARKETING, SELLING, AND SERVICES Keys 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

6 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-6 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

7 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-7 MAINTENANCE, REPAIR, AND OPERATIONS (MRO) MRO goods include – office suppliers, office equipment, furniture, computers, and replacement parts Internet transforms corporate purchasing from a labor-and paperwork-intensive process into a self-service application

8 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-8 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

9 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 7-9 INTERMEDIARIES Common 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 – Market makers –intermediaries that aggregate three services for market participants A place to trade Rules to govern trading An infrastructure to support trading

10 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved INTERMEDIARIES Types of Intermediaries

11 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved E-BUSINESS MODELS Business-to-business (B2B) Business-to-consumer (B2C) Consumer-to-business (C2B) Consumer-to-consumer (C2C)

12 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved 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

13 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved BUSINESS-TO-BUSINESS (B2B) MODELS 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

14 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved BUSINESS-TO-BUSINESS (B2B) MODELS Marketplace classifications 1.MRO hubs 2.Yield managers 3.Catalog hubs 4.Exchanges

15 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved BUSINESS-TO-BUSINESS (B2B) MODELS 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)

16 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Buyer Model (Few Buyers, Many Sellers) Reverse auction – the winning bid is the lowest, rather than the highest English auction – the highest bid offer wins

17 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Marketplace Model (Many Buyers, Many Sellers) Marketplace model – allows a virtually infinite number of businesses to transact electronically with minimal cost

18 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Longer Term Relationship Model (Few Buyers, Few Sellers) Longer term relationship model – items requiring a high degree of planning between buyers and sellers either in the design stage or in fulfillment

19 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Seller Model (Few Sellers, Many Buyers) Seller model – appropriate when the supplier hosts value-added services on its Web site such as suppliers’ product catalog and customers’ order information

20 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved BUSINESS-TO-CONSUMER (B2C) BUSINESS MODELS Business-to-consumer (B2C) – appliers to any business that sells its products or services to consumers over the Internet – e-shops (e-stores, e-tailers) – a version of a retail store where customers can shop at any hour of the day without leaving home or office – e-mall – consists of a number of e-shops

21 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved CONSUMER-TO-BUSINESS (C2B) BUSINESS MODELS 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

22 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved CONSUMER-TO-BUSINESS (C2B) BUSINESS MODELS 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

23 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved E-BUSINESS CHALLENGES Cost Value Security Leverage existing systems Interoperability

24 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved 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

25 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Current Trends: E-Marketplaces and E-Markets

26 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved E-MARKETPLACE BENEFITS AND REVENUE MODELS Advantages and limitations of various e- marketplace revenue models

27 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved THE “CONTENT” PERSPECTIVE OF E- 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

28 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved 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)

29 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Future Trends: E-Channels, E-Portals, and E-Government Extended E-Business Models

30 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Future Trends: E-Channels, E-Portals, and E-Government Specific e-business models as they relate to e- government include: – 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

31 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Closing Case One eBay.com is the world’s largest e-marketplace, offering everything from its trademark Pez dispensers and Beanie Babies to automobiles and homes eBay.com enables trade on a local, national, and international basis with customized sites in markets around the world

32 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved 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?

33 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Closing Case Two Mail with PostalOne United States Postal Service’s (USPS) productivity has grown by only 11 percent over the past three decades USPS is pursuing several e-business projects to help increase growth including: – NetPost Mailing Online – Post Electronic Courier Service – NetPost.Certified – EBillPay

34 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Closing Case Two Questions 1.Do you think the USPS’s steps are far-reaching enough to ensure its relevance in e-business? 2.What other strategic alliances, akin to its partnership with CheckFree, can the Postal Service develop to stay competitive? 3.Why would the USPS compete in a market that private companies already serve well?


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