E Business models

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E Business models
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Introduction

• Business model
• A set of planned activities designed to result
  in a profit in a marketplace
• E-commerce business model
• A business model that aims to use and leverage
  the unique qualities of the Internet and the
  World Wide Web.

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Benefits Of E-business

• Personalization
• - all my accounts
• 2. High quality customer service
• - online customer service, online chat
  sessions, help..
• 3. Improved supply chain management
• - e.g.. Wal-Mart, Dell, etc.,
• - Build to order

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Types of E business models

• Brokerage Model
• Advertising Model
• Infomediary Model
• Merchant Model
• Manufacturer Model
• Affiliate Model
• Community Model
• Subscription Model
• Utility Model

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Brokerage Model

• They bring buyers and sellers together and
• facilitate transactions.
• Types of markets
• - business-to-business (B2B)
• business-to-consumer (B2C)
• consumer-to-consumer (C2C) markets
• make its money by charging a fee for each
  transaction

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Types of Brokerage Models
Buy/Sell Fulfillment Market Exchange Buyer
Aggregator Distributor Virtual Mall
Metamediary Auction Broker Reverse Auction
Classifieds Search Agent
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Brokerage Model
Buy/Sell Fulfillment
Customers place buy and sell orders for
transacting financial instruments The broker
charges the buyer and/or seller a transaction fee
Few models work on volume and low overhead to
deliver the best negotiated prices Example
eTrade , CarsDirect
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Buy/Sell Fulfillment
Brokerage Model
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Brokerage Model
Market Exchange
Increasingly common model in B2B markets
Increasingly common model in B2B markets The
pricing mechanism can be offer/buy,
offer/negotiated buy, or an auction offer/bid
approach Example MetalSite , ChemConnect's
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Brokerage Model
Market Exchange
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Brokerage Model
Market Exchange
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Brokerage Model
Buyer Aggregator
Also called Demand-Sensitive Pricing
Model Bringing together individual purchasers
from across the Internet to transact as a group
to obtain group discounts How this works
Buyers create requests for quotes
(RFQs) Purchasing manager monitors all
aggregated RFQs Manager negotiates through
suppliers Sellers pay a small percentage of each
sale on a per-transaction basis Example Mobshop
, Mercata
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Brokerage Model
Distributor
A catalog-type operation that connects a large
number of product manufacturers with volume and
retail buyers Broker facilitates business
transactions between franchised distributors and
their trading partners Example NECX
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Distributor
Brokerage Model
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Brokerage Model
Virtual Mall
A site that hosts many online merchants The
Mall typically charges set-up, monthly listing,
and/or per transaction fees Example Yahoo!
Stores, ChoiceMall, Women.com's Shopping
Network
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Virtual Mall
Brokerage Model
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Brokerage Model
Auction Broker
A site that conducts auctions for sellers
(individuals or merchants) Broker charges the
seller a fee, which is typically scaled with the
value of the transaction Seller takes highest
bid(s) from buyers above a minimum. Auctions can
vary in terms of the offering and bidding rules
Example eBay, AuctionNet
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Auction Broker
Brokerage Model
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Auction Broker
Brokerage Model
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Brokerage Model
Reverse Auction
The "name-your-price" business model, also called
"demand collection," pioneered and patented by
Priceline Prospective buyer makes a final
(usually binding) bid for a specified good or
service, and the broker seeks fulfillment The
broker's fee is the spread between the bid and
fulfillment price and perhaps a processing charge
Example Priceline
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Brokerage Model
Reverse Auction
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Brokerage Model
Classifieds
A listing of items for sale or wanted for
purchase, typically run by local news content
providers Price may or may not be specified
Listing charges are incurred regardless of
whether a transaction occurs Example
LubbockOnline
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Classifieds
Brokerage Model
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Brokerage Model
Search Agent
An agent (i.e., an intelligent software agent or
"robot") used to search-out the best price for a
good or service specified by the buyer, or to
locate hard to find information Example
MySimon, RoboShopper, R U Sure An employment
agency can act as a search agent broker, finding
work for job-seekers or finding people to fill
open positions listed by an employer Example
Cruelworld ,monster
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Brokerage Model
Search Agent
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Advertising Model
The web advertising model is an extension of the
traditional media broadcasting model The
broadcaster, in this case, a website, provides
content (usually, but not necessarily, for free)
and services (like email, chat, forums) mixed
with advertising messages in the form of banner
ads Types Generalized Portal Personalized
Portal
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Advertising Model
Generalized Portal
high-volume traffic driven by generic or
diversified content or services Example search
engines and directories like Excite, AltaVista
and Yahoo! Example content driven sites like
AOL
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Advertising Model
Generalized Portal
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Advertising Model
Personalized Portal
The generic nature of a generalized portal
undermines user loyalty Allows customization of
the interface and content Increases loyalty
through the user's own time investment in
personalizing Example My.Yahoo!, My.Netscape
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Personalized Portal
Advertising Model
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Advertising Model
Specialized Portal
Here volume is less important than a well-defined
user base 0.5-5 million visits per month
Example iBoats
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Specialized Portal
Advertising Model
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Advertising Model
Attention / Incentive Marketing
The "pay for attention" model -- pays visitors
for viewing content and completing forms, or
sweepstakes, or frequent flyer-type point
schemes. The concept was pioneered by CyberGold,
with its "earn and spend community" that brings
together advertisers interested in
incentives-based marketing with consumers looking
to s Example Netcentives,MyPoints
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Attention / Incentive Marketing
Advertising Model
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Attention / Incentive Marketing
Advertising Model
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Advertising Model
Free Model
Give users something for free site hosting,web
services, Internet access, free hardware,
electronic greeting cards Example FreeMerchant
, BlueMountain
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Free Model
Advertising Model
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Free Model
Advertising Model
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InfomediaryModel
Function as infomediaries by collecting and
selling information about consumers and their
buying habits Example NYTimes.com , Gomez
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InfomediaryModel
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InfomediaryModel
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Merchant Model
Comprises of "e-tailers Sales may be made based
on list prices or through auction. In some cases,
the goods and services may be unique to the web
and not have a traditional "brick-and-mortar"
storefront Types Virtual Merchant Catalog
Merchant Click and Mortar
The broadcaster, in this case, a website,
provides content (usually, but not necessarily,
for free) and services (like email, chat, forums)
mixed with advertising messages in the form of
banner a
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Virtual Merchant
A business that operates only over the web and
offers either traditional or web-specific goods
or services The method of selling may be list
price or auction Example Amazon, eToys,
Eyewire
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Virtual Merchant
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Catalog Merchant
The migration of mail-order to a web-based order
business Example jcrew , LandsEnd
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Catalog Merchant
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Click and Mortar
Traditional brick-and-mortar establishment with
web storefront ExampleGap , BN , Walmart
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Click and Mortar
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Manufacturer Model
Allows manufacturers to reach buyers directly
eliminating wholesalers and retailers The
manufacturer model can be based on efficiency ,
improved customer service, and a better
understanding of customer preferences Example
Intel, Apple , Dell
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Manufacturer Model
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Affiliate Model
Provides purchase opportunities wherever people
may be surfing It is a pay-for-performance
model Example AffiliateWorld
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Affiliate Model
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Community Model
Business Trading Community -- or "vertical web
community," a concept pioneered by VerticalNet
VerticalNet's communities contain product
information in buyers' guides, supplier and
product directories, daily industry news and
articles, job listings and classifieds
etc. Example Buzzsaw.com, Guru.com
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Community Model
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Subscription Model
Users pay for access to the site. High
value-added content is essential A 1999 survey
by Jupiter Communications found that 46 percent
of Internet users would not pay to view content
on the web Example eDiets, Wall St. Journal,
Consumer Reports
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Subscription Model
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Utility Model
The utility model is a metered usage or pay as
you go approach Its success may depend on the
ability to charge by the byte Example FatBrain,
Authentica
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Utility Model
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References
E business and e commerce for managers. Deitel
Deitel http//johnmolson.concordia.ca/gkersten/e-b
usiness_new/ebusiness_models.html www.walmart.com
www.gap.com, www.bn.com,www.lubbockonline.com www.
affiliate world.com,ww.dell.com Etc., (all
commercial websites in the slides)