WHY ECOMMERCE? New Channel to increase sales 24/7 Reduce Costs
TRADITIONAL BUSINESS MODELS Traditionally there have been 2 key business models, that of ‘producer’ and that of ‘distributor’. Producer Building products / services to meet market need. Tour Operator Distributor Linking Buyers to Sellers Travel Agent
Those using networked infrastructure (above the line) Producers, Distributors, Portals Those creating the networked infrastructure (below the line) Producers, Distributors, Portals Lets look closer at those using the networked infrastructure.
PRODUCERS Designers and Makers of Products and Services 3 Key types Manufacturers Service Providers Educators Traditional power in economy, but do they keep power in Networked Economy?
MANUFACTURERS Design and Produce Physical Products Examples: Ford, Airbus Effect of Networked Infrastructure Production Lines are extended to integrate their suppliers and their customers. Production methods are streamlined. Manufacturers can forward integrate, reach their end users and make them customers
SERVICE PROVIDERS Provide Services! Examples: Thai Air, American Express, Budget Car Rental, Banks. Effect of Networked Infrastructure For Physical Services (Car Rental, Restaurants) – Same as for Manufacturers, streamlined service delivery integrated with customers and suppliers. For Information Based Services (Travel Agents, Financial Services) – digitised service delivery.
EDUCATORS Create and Deliver Educational Programs Examples: CMU? Effect of Networked Infrastructure New opportunities for moving away from face to face education – elearning, distance learning.
DISTRIBUTORS Link Buyers and Sellers together. 5 Key Types Retailers Market Places Aggregators Infomediaries Exchanges With the internet offering a powerful new distribution channel, will distributors take over the power?
RETAILERS Examples 7-11, Boots Chemist Features Assume control of inventory Set a non-negotiable price Sell physical products Effect of Networked Infrastructure New distribution channel Reduced procurement and inventory costs.
MARKETPLACE Examples Big C, Panthip Plaza, Features Sell products / services without taking control of inventory Non-negotiable price Revenues from commissions / transaction fees Effects of Networked Infrastructure Cost reductions from procurement
AGGREGATORS Examples Me? Blogs… Features Provide information about goods and services Don’t facilitate the exchange Revenues from referrals / advertising Effects of Networked Infrastructure Information is a digital product, so low barriers to entry, increased competition.
INFOMEDIARIES Examples Newspapers, Magazines. Features Unites buyers and sellers of information No physical product Revenues from subscriptions Effects of Networked Infrastructure New distribution channel Digital product, requires ‘extras’ such as analytical tools.
EXCHANGES Examples Ebay Features No set price Links buyers and sellers and facilitates their exchange Effects of Networked Economy Sellers can access a much larger community
PORTALS Portals are ‘gateways’, existing online providing access to a variety of information and online services. Obvious examples are search engines. 3 Key types of Portal; Horizontal Vertical Affinity
HORIZONTAL PORTALS Examples google.com, yahoo.com Features Provide gateway access to a wide variety of information, with tools for finding the appropriate information. Revenues gained from links to ISP’s, advertising
VERTICAL PORTALS Examples WebMD, sawadee.com Features Provide deeper content in a specific area, e.g. tourism. Revenues from advertising or referrals, with better targeted advertising.
AFFINITY PORTALS Affinity Portals are similar to Vertical portals, however they are targeted towards a particular market or customer; Perhaps an affinity portal could provide local information specifically targeted towards travel agents in Phuket.
ONLINE SHOPPING EXPERIENCE How does shopping online differ from real world shopping?