1 Pertemuan 3 Understanding e-Marketplaces Matakuliah: J0324 / Sistem e-Bisnis Tahun: 2005 Versi: 02/02

2 Learning Outcomes Pada akhir pertemuan ini, diharapkan mahasiswa akan mampu : menjelaskan tentang konsep e- Marketplaces

3 Outline Materi Types of Electronic Marketplaces: From Storefronts to Portal Intermediation and Syndication in e- Commerce Electronic Catalogs and Other Market Mechanisms Auction as EC Market Mechanisms

4 Electronic Marketplaces Markets play a central role in the economy facilitating the exchange of: –information –goods –services –payments Markets create economic value for: – buyers –sellers –market intermediaries –society at large

5 Electronic Marketplaces (cont.) Three main functions of markets 1.matching buyers and sellers 2.facilitating the exchange of information, goods, services, and payments associated with market transactions 3.providing an institutional infrastructure, such as a legal and regulatory framework, that enables the efficient functioning of the market

6 Electronic Marketplaces (cont.) In recent years markets have seen a dramatic increase in the use of IT—EC has: –increased market efficiencies by expediting or improving functions –been able to significantly decrease the cost of executing these functions

7 Marketspace Marketspace: A marketplace in which sellers and buyers exchange goods and services for money (or for other goods and services), but do so electronically

8 Marketspace Components Customers Sellers Products Infrastructure Front end Back end Intermediaries Other business partners Support services

9 Marketspace Components ( cont.) Digital products: Goods that can be transformed to digital format and delivered over the Internet Front end: The portion of an e-seller’s business processes through which customers interact, including the seller’s portal, electronic catalogs, a shopping cart, a search engine, and a payment gateway

10 Marketspace Components (cont.) Back end: The activities that support online order- taking. It includes fulfillment, inventory management, purchasing from suppliers, payment processing, packaging, and delivery Intermediary: A third party that operates between sellers and buyers

11 Types of Electronic Markets Electronic storefront: A single or company Web site where products and services are sold Mechanisms necessary for conducting the sale: –electronic catalogs –search engine – e-auction facilities –payment gateway –shipment court –customer services

12 Types of Electronic Markets (cont.) e-mall (online mall): An online shopping center where many stores are located –some are merely directories –some provide shared services (e.g., choicemall.com). –some are actually large click-and-mortar retailers –some are virtual retailers (e.g., buy.com)

13 Types of Electronic Markets (cont.) Types of stores and malls –General stores/malls –Specialized stores/malls –Regional versus global stores –Pure online organizations versus click-and- mortar stores

14 Types of Electronic Markets (cont.) e-marketplace: An online market, usually B2B, in which buyers and sellers exchange goods or services; the three types of e-marketplaces are private, public, and consortia Private e-marketplaces: Online markets owned by a single company; can be either sell-side or buyside marketplaces Sell-side e-marketplace: A private e-market in which a company sells either standard or customized products to qualified companies

15 Types of Electronic Markets (cont.) Buy-side e-marketplace: A private e-market in which a company makes purchases from invited suppliers Public e-marketplaces: B2B markets, usually owned and/or managed by an independent third party, that include many sellers and many buyers; also known as exchanges Consortia: E-marketplaces owned by a small group of large vendors, usually in a single industry

16 Information Portals Information portal: a single point of access through a Web browser to business information inside and/or outside an organization

17 Information Portals (cont.) Six types of portals 1.Commercial (public) portals 2.Corporate portals 3.Publishing portals 4.Personal portals 5.Mobile portals: a portal accessible via a mobile device 6.Voice portals: a portal accessed by telephone or cell phone

18 Intermediation and Syndication in E-Commerce Intermediaries (brokers) provide value- added activities and services to buyers and sellers Intermediaries in the physical world are wholesalers and retailers Infomediaries: electronic intermediaries that control information flow in cyberspace, often aggregating information and selling it to others

19 Infomediaries and Information Flow Model

20 Intermediation and Syndication in E-Commerce (cont.) Roles and value of intermediaries in e-markets –Search costs –Lack of privacy –Incomplete information –Contract risk –Pricing inefficiencies

21 Intermediation and Syndication in E-Commerce (cont.) E-distributors in B2B –e-distributor: An e-commerce intermediary that connects manufacturers (suppliers) with buyers by aggregating the catalogs of many suppliers in one place—the intermediary’s Web site –Maintenance, repair, and operation items (MROs): Routine items that are usually not under regular contract with suppliers

22 Intermediation and Syndication in E-Commerce (cont.) Disintermediation and reintermediation –Disintermediation: Elimination of intermediaries between sellers and buyers –Reintermediation: Establishment of new intermediary roles for traditional intermediaries that were disintermediated

23 Intermediation and Syndication in E-Commerce (cont.) Syndication as an EC mechanism –Syndication: The sale of the same good (e.g., digital content) to many customers, who then integrate it with other offerings and resell it or give it away free

24 The Interdisciplinary Nature of EC Major EC disciplines –Computer science –Marketing –Consumer behavior –Finance –Economics –Management information systems

25 The Future of EC 2004—total online shopping and B2B transactions in the US between $3 to $7 trillion by 2008: –number of Internet users worldwide should reach 750 million –50 percent of Internet users will shop –EC growth will come from: B2C B2B e-government e-learning B2E c-commerce

26 E-commerce Business Models Business models—a method of doing business by which a company can generate revenue to sustain itself Examples: –Name your price –Find the best price –Dynamic brokering –Affiliate marketing

27 E-commerce Business Plans and Cases Business plan: a written document that identifies the business goals and outlines the plan of how to achieve them Business case: a written document that is used by managers to garner funding for specific applications or projects; its major emphasis is the justification for a specific investment

28 Structure of Business Models Business model: A method of doing business by which a company can generate revenue to sustain itself

29 Structure of Business Models (cont.) Revenue model: description of how the company or an EC project will earn revenue –Sales –Transaction fees –Subscription fees –Advertising –Affiliate fees –Other revenue sources

30 Typical Business Models in EC 1.Online direct marketing 2.Electronic tendering systems tendering (reverse auction): model in which a buyer requests would-be sellers to submit bids, and the lowest bidder wins 3.Name your own price: a model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price

31 Typical Business Models in EC (cont.) 4.Affiliate marketing: an arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to the selling company’s Web site 5.Viral marketing: word-of-mouth marketing in which customers promote a product or service to friends or other people

32 Typical Business Models in EC (cont.) 6.Group purchasing: quantity purchasing that enables groups of purchasers to obtain a discount price on the products purchased 7.SMEs: small to medium enterprises 8.Online auctions

33 Typical Business Models in EC (cont.) 8.Product and service customization customization: creation of a product or service according to the buyer’s specifications 8.Electronic marketplaces and exchanges 9.Value-chain integrators 10.Value-chain service providers

34 Typical Business Models in EC (cont.) 12.Information brokers 13.Bartering 14.Deep discounting 15.Membership 16.Supply chain improvers Business models can be independent or they can be combined amongst themselves or with traditional business models

35 Benefits of EC Global reach Cost reduction Supply chain improvements Extended hours: 24/7/365 Customization New business models Vendors’ specialization Rapid time-to-market Lower communication costs Efficient procurement Improved customer relations Up-to-date company material No city business permits and fees Other benefits Benefits to organizations

36 Benefits of EC (cont.) Ubiquity More products and services Cheaper products and services Instant delivery Information availability Participation in auctions Electronic communities “Get it your way” No sales tax Benefits to consumers

37 Benefits of EC (cont.) Benefits to society –Telecommuting –Higher standard of living –Hope for the poor –Availability of public services

38 Limitations of EC

39 Barriers of EC Security Trust and risk Lack of qualified personnel Lack of business models Culture User authentication and lack of public key infrastructure Organization Fraud Slow navigation on the Internet Legal issues

40 Major Business Pressures and the Role of EC

41 Major Business Pressures (cont.) Societal and environmental pressures  Changing nature of workforce  Government deregulation of banking and other services  Shrinking government subsidies  Increased importance of ethical and legal issues  Increased social responsibility of organizations  Rapid political changes

42 Major Business Pressures (cont.) Technological pressures  Rapid technological obsolescence  Increase innovations and new technologies  Information overload  Rapid decline in technology cost vs. performance ratio

43 The Networked Organization

44 Source : Turban, Efraim, David King, Jae Lee and Dennis Viehland. Electronic Commerce. A Managerial Perspective (2004). Prentice Hall. PPT for Chapter : 2