Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models L E C T U R E 4 INTRODUCTION TO E-BUSINESS Models

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Store Front Model In this model, merchants need to organize an online catalogue of products, take orders through their web site, accept payments in a secure environment, send merchandise to customers, and manage customer data(such as customer profiles). Merchants must also market sites to potential customers. Shopping Cart Technology Shopping Mall Model

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Shopping cart technology: –Shopping cart is an order-processing technology that allows customers to accumulate items they wish to buy as they continue to shop. –Supporting the shopping cart is a product catalogue, which is hosted on the merchant server in the form of a database. –A database is a part of the merchant server designed to store and report on large amounts of information.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models –E.g. a database for an online clothing retailer would typically include product specifications such as item description, size, availability, shipping information, stock levels and on-order information.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models –Database also store customer information such as names, addresses, credit-card information and past purchases.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Shopping Mall model: –Online shopping malls present consumers with a wide selection of products and services. –They are often considered to be more convenient than searching and shopping at independent online storefronts. –Consumers can search and shop for a variety of products and rather than making several separate purchases, they can use the mall’s shopping cart technology to purchase items in a single transaction.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Examples are: Shopping cart technology –More.com –Amazon.com –Etoys.com Shopping Mall model –Mall.com –Shopnow.com –Dealshop.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Auction Models Auction Model: –Auction sites act as forums through which Internet users can log-on and assume the role of either bidder or seller. –As a seller, you are able to post an item you wish to sell, the minimum price you require to sell your item and a deadline to close the auction. –Some sites allow you to add features such as a photograph or a description of the item’s condition.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models –As a bidder, you may search the site for availability of the item you are seeking, view the current bidding activity and place a bid.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Reverse Auction Model: –This model allows the buyer to set a price as sellers compete to match or even beat it. –A reverse price is the lowest price that the seller will accept in any type of auction. –Sellers can set the reverse price higher than the minimum bid. –If no bid meets the reverse price, the auction is unsuccessful.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models –Auction sites are only a forum for online buying and selling. –They don’t involve themselves in payment or delivery. –After the auction has been completed, both the seller and the bidder are notified and the method of payment and the cost of delivery is then worked out between the two parties.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Examples are: Auction Model Ebay.com Auctions.yahoo.com Fairmarket.com UbidLive.com Reverse Auction Model Liquidprice.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Portal Model Giving visitors the chance to find almost everything they are looking for at one place (News, sports, weather, searching, shopping etc.)

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Horizontal portals: –When most people hear the word portal they think of search engines. –Search engines are horizontal portals or portals that aggregate information on a broad range of topics. –Examples are: Yahoo.com, Altavista.com, hotbot.com, msn.com, google.com, ask.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Vertical Portals: –These portals are more specific, offering a great deal of information pertaining to a single area of interest. –Vertical portals offer a large amount of information in one subject area and are often described as community sites. –Medicine—webmd.com, medscape.com, drkoop.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models –Cars - mycarportal.net, thecarportal.com –Clothes - theclothingportal.com, dress-sense.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Dynamic Pricing Models Many companies enable customers to name their prices for travel, homes, automobiles and consumer goods. Buying in bulk has always driven prices down and there are now websites that allow you to lower the price by joining with other buyers to purchase products in large quantities. Another pricing strategy used by many e-business is to offer products and services for free.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Bartering and offering rebates are other ways companies are keeping prices down on the Internet. Dynamic Pricing Models include: –Name-Your-Price Model/ Comparison Pricing model –Demand sensitive pricing model –Bartering model –Rebate model –Free services model

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Name-Your-Price Model This model empowers customers by allowing them to choose their price for products and services. Many of the businesses that offer this service have formed partnerships with leaders of industries such as travel, lending, retail etc. These industry leaders receive the customer’s desired price from the intermediary and decide whether or not to sell the product or service.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models If the customer’s price is not reasonable then that customer will be asked to choose another price. Examples are: Priceline.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Comparison Pricing model This model allows customers to poll a variety of merchants and find desired product or service at the lowest price. These sites often get their revenue from partnerships with particular merchants. Examples are: Bottomdollar.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Demand sensitive pricing model The concept behind this model is that the more people who buy a product in a single purchase, the lower the cost-per-person becomes. Selling products individually can be expensive because the vendor must price a product so that it covers selling and overhead cost while still generating a profit. When customers buy in bulk, this cost is shared and the profit margin is increased.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Examples are: Mercata.com mobshop.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Bartering model Bartering or offering one item in exchange for another. Companies and individuals wishing to sell a product post their listings. The seller makes an initial offer with the intention of bartering to reach a final agreement with the buyer. A broad range of products and services is available for barter.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Examples are: Ubarter.com isolve.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Rebate model Rebates can help attract customers to your site. Many companies offer “everyday low prices” and specials to keep customers coming back. Companies offer a rebate to customers on every purchase. These companies have formed partnerships with wholesalers and retailers who will offer discounts.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models The company passes these discounts to customers in the form of rebates. Examples are: Ebates.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Free Services model Many entrepreneurs (industrialists) are forming their business models around advertising-driven revenue streams. Television networks, radio stations, magazines and print media use advertising to fund their operations and make a profit. Many sites on the Web have formed partnership with companies to exchange products and services for advertising space and vise versa.

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Examples are: Freestuff.com iwon.com free-programs.com emazing.com

Office Management Tool-IIInstitute of Management Sciences Muhammad Shahzad Ali Lecture 4: Introduction to E-Business Models Other Models ONLINE TRAVEL SERVICES: –web surfers can search for and arrange all of their travel and accommodations online and can often save money doing so. –You will find the lowest prices, best times and the best accommodations available to you. Examples are: Travelocity.com Expedia.com Cheaptickets.com Getthere.com