Presentation on theme: "“E-commerce: Business Models” Academic Year 2015."— Presentation transcript:
“E-commerce: Business Models” Academic Year 2015
Traditional and Electronic Commerce The traditional Commerce is based on the following rules: It needs to hire sales executive, sales managers, accountants, and other staffs. Operates at business hours within a certain period of time. Requires location renting/purchasing, staff employment, advertising, inventory shipping and handling all sums up the high-cost equation which makes many people negate from starting a business entirely. No sharing of the information with the competitors. The basis of a traditional business depends on the frequency of new and old customers buying from them to keep the business running.
Traditional and Electronic Commerce E-Commerce is based on the following rules: It involves an agreement between the involved parties to continue with the succeeding phases. Order is made for the goods after an agreement is concluded E-payment systems on the internet are used for receiving payments. Goods are delivered to the customers. If it is a tangible product, it is sent by transportation.
E-Commerce Advantages Advantages to Organizations – Expansion of market to national and international – Ability to reach greater audience easily and cheap – Reduction of cost of paper based Information – Better customer service Advantages to Consumers – 24x7 support – Easier and secure transaction – Review products/Availability of Information – Increase in completion can lead to reduction in price
Business Models of E-Commerce Business to Consumer (B2C) Business to Business (B2B) Consumer-to-Consumer or Peer-to-Peer (C2C/P2P) Other notable: C2B, B2G, G2B, G2C
B2C Product are sold directly to customer. Involves E-tailing E.g. Amazon.com, Muncha, Bhatbhatenionline
B2B Product are sold to intermediate buyer who then sells product to final customer (wholesale -> retail -> customer) E.g. Alibaba, Amazon Supply, Grepsr
C2C Consumer sell their assets like residential property, cars etc. or rent a room by publishing their information on the website. E.g. E-bay, Quickr, Hamrobazaar
Other notable models C2B A consumer approaches website showing multiple business organizations for a particular service /A consumer places an estimate of amount he/she wants to spend for a particular service. B2G A variant of B2B model Used by government to trade and exchange information with various organizations
Activities of B2C E-Commerce ORDERING B2C E-commerce SERVICE & SUPPORT FULFILLMENT Information Sharing PAYMENT Company Website Online Catalogs E-mail Online advertisement Message board system Newsgroup and Discussion groups Credit Cards Electronic cheque Digital Cash 1 2 3 45
Models of B2C 1.Auctions 2.Online Stores 3.Online Services
1. Auctions Auction/Online auction: Buying and selling goods or services by offering them up for bids. E.g. www.ebay.com Advantages: – Convenience: No place or time limitation for bidder participation – Flexibility: Asynchronous bidding – Increased reach: Global – Economical to operate: Cheaper infrastructure costing Disadvantages: – Inspection of goods – Potential for fraud
2. Online Stores Marketing of company’s products through web to promote or to actually sell the products through this virtual store – Amazon.com
3. Online Services Providing of internet based electronic commerce infomediary solutions E.g. Makethemove.com, e-banking
Major Challenges of B2C 1.Getting browsers to buy things 2.Building customer trust/privacy 3.Building customer loyalty 4.Fulfillment
All e-commerce transactions between two organizations. Includes: – Purchase – Procurement – Supplier management – Channel Management – Sales activities – Payment management – Service and support E.g. Companies that specialize in marketing strategies, advertising, email companies, internet consultants, website development…
Key technologies Electronic Data Interchange (EDI) – Inter exchange of business documents in a structured and standard electronic format. Internet Intranet Extranet Back-End Information System Integration
Development scenario of B2B e-commerce Stage 1: A company to stay competitive thinks of getting on-line (no existing website or online communication) Stage 2: The company starts using net for research, marketing and communication tool (Still no link between any web activity and existing back office systems) Stage 3: The company uses net to interact with customers and offer full service storefront and integration with its back systems Stage 4: Company starts moving towards a more integrated on-line relationship with trading partners. (information can be easily gathered from online storefront, manufacturing and fulfillment) Stage 5: The business joins online exchanges, e-marketplace and related services using the net to connect with others.
Types of B2B Markets Independent e-marketplace Buyer oriented e-marketplace Supplier oriented e-market place Vertical and horizontal e-marketplace
Independent/Intermediary e-marketplace online platform operated by a third party which is open to buyers or sellers in a particular industry. By registering on an independent e-marketplace, you can access classified ads or requests for quotations or bids in your industry sector. There will typically be some form of payment required to participate. E.g. Alibaba.com
Supplier oriented e-marketplace Manufacturer-driven electronic stores Same store as used by individual consumers and business corporations. (B2C, B2B) May involve auctions run by the supplier. E.g.: – Cisco Connection Online: Networking equipment – Dell: PC and servers
Buyer-oriented e-marketplace Buyer opens a market on its server Invites potential suppliers to bid on the RFQ (Request for quotes) E.g: GE Lightning Trading Process Network, http://www.exostar.com