Bài giảng E-commerce business, technology, society - Chapter 2: E-Commerce Business Models and Concepts

Tweet Tweet: What’s Your Business Model? Class Discussion What characteristics or benchmarks can be used to assess the business value of a company such as Twitter? Have you used Twitter to communicate with friends or family? What are your thoughts on this service? What are Twitter’s most important assets? Which of the various methods described for monetizing Twitter’s assets do you feel might be most successful?

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E-commerce Kenneth C. LaudonCarol Guercio Traverbusiness. technology. society.seventh editionCopyright © 2011 Pearson Education, Inc.Copyright © 2011 Pearson Education, Inc.Copyright © 2007 Pearson Education, Inc.Slide 1-*Chapter 2E-commerce Business Models and ConceptsCopyright © 2011 Pearson Education, Inc.Copyright © 2011 Pearson Education, Inc.Tweet Tweet: What’s Your Business Model? Class DiscussionWhat characteristics or benchmarks can be used to assess the business value of a company such as Twitter?Have you used Twitter to communicate with friends or family? What are your thoughts on this service?What are Twitter’s most important assets?Which of the various methods described for monetizing Twitter’s assets do you feel might be most successful? Slide 2-*Copyright © 2011 Pearson Education, Inc.E-commerce Business ModelsBusiness modelSet of planned activities designed to result in a profit in a marketplaceBusiness planDescribes a firm’s business modelE-commerce business modelUses/leverages unique qualities of Internet and WebSlide 2-*Copyright © 2011 Pearson Education, Inc.8 Key Elements of a Business ModelValue propositionRevenue modelMarket opportunityCompetitive environmentCompetitive advantageMarket strategyOrganizational DevelopmentManagement teamSlide 2-*Copyright © 2011 Pearson Education, Inc.1. Value PropositionWhy should the customer buy from you?Successful e-commerce value propositions:Personalization/customizationReduction of product search, price discovery costsFacilitation of transactions by managing product deliverySlide 2-*Copyright © 2011 Pearson Education, Inc.2. Revenue ModelHow will the firm earn revenue, generate profits, and produce a superior return on invested capital?Major types:Advertising revenue modelSubscription revenue modelTransaction fee revenue modelSales revenue modelAffiliate revenue modelSlide 2-*Copyright © 2011 Pearson Education, Inc.3. Market OpportunityWhat marketspace do you intend to serve and what is its size?Marketspace: Area of actual or potential commercial value in which company intends to operateRealistic market opportunity: Defined by revenue potential in each market niche in which company hopes to competeMarket opportunity typically divided into smaller nichesSlide 2-*Copyright © 2011 Pearson Education, Inc.4. Competitive EnvironmentWho else occupies your intended marketspace?Other companies selling similar products in the same marketspaceIncludes both direct and indirect competitorsInfluenced by:Number and size of active competitorsEach competitor’s market shareCompetitors’ profitabilityCompetitors’ pricingSlide 2-*Copyright © 2011 Pearson Education, Inc.5. Competitive AdvantageAchieved when firm:Produces superior product or Can bring product to market at lower price than competitorsImportant concepts:AsymmetriesFirst-mover advantageUnfair competitive advantageLeverageSlide 2-*Copyright © 2011 Pearson Education, Inc.6. Market StrategyHow do you plan to promote your products or services to attract your target audience?Details how a company intends to enter market and attract customersBest business concepts will fail if not properly marketed to potential customersSlide 2-*Copyright © 2011 Pearson Education, Inc.7. Organizational DevelopmentWhat types of organizational structures within the firm are necessary to carry out the business plan?Describes how firm will organize workTypically divided into functional departmentsAs company grows, hiring moves from generalists to specialistsSlide 2-*Copyright © 2011 Pearson Education, Inc.8. Management TeamWhat kinds of experiences and background are important for the company’s leaders to have?Employees are responsible for making the business model workStrong management team gives instant credibility to outside investorsStrong management team may not be able to salvage a weak business model, but should be able to change the model and redefine the business as it becomes necessarySlide 2-*Copyright © 2011 Pearson Education, Inc.Why do you think Webvan failed? Why are more traditional grocery chains succeeding online today? Why would an online customer pay the same price as in the store plus a delivery charge? What’s the benefit to the customer?What are the important success factors for FreshDirect?Do you think FreshDirect would work in your town?Slide 2-*Insight on Business Online Grocers: Finding and Executing the Right Model Class DiscussionCopyright © 2011 Pearson Education, Inc.Categorizing E-commerce Business ModelsNo one correct wayWe categorize business models according to:E-commerce sector (B2C, B2B, C2C)Type of e-commerce technology; i.e. m-commerceSimilar business models appear in more than one sectorSome companies use multiple business models; e.g. eBaySlide 2-*Copyright © 2011 Pearson Education, Inc.B2C Business Models: PortalSearch plus an integrated package of content and servicesRevenue models: Advertising, referral fees, transaction fees, subscriptionsVariations: Horizontal / GeneralVertical / Specialized (Vortal)Pure SearchSlide 2-*Copyright © 2011 Pearson Education, Inc.How many of you use Google versus Yahoo or Bing? Does the class differ from the overall Web population?Why do you use a particular search engine? Why is Google moving beyond search and advertising into applications?How does Bing try to distinguish itself from Google? Do you think this strategy works?Slide 2-*Insight on Technology Can Bing Bong Google? Class DiscussionCopyright © 2011 Pearson Education, Inc.B2C Models: E-tailerOnline version of traditional retailerRevenue model: SalesVariations:Virtual merchantBricks-and-clicksCatalog merchantManufacturer-direct Low barriers to entrySlide 2-*Copyright © 2011 Pearson Education, Inc.B2C Models: Content ProviderDigital content on the WebNews, music, videoRevenue models: Subscription; pay per download (micropayment); advertising; affiliate referral feesVariations:Content ownersSyndicationWeb aggregatorsSlide 2-*Copyright © 2011 Pearson Education, Inc.B2C Models: Transaction BrokerProcess online transactions for consumersPrimary value proposition—saving time and moneyRevenue model: Transaction feesIndustries using this model:Financial servicesTravel servicesJob placement servicesSlide 2-*Copyright © 2011 Pearson Education, Inc.B2C Models: Market CreatorCreate digital environment where buyers and sellers can meet and transactExamples: PricelineeBayRevenue model: Transaction feesSlide 2-*Copyright © 2011 Pearson Education, Inc.B2C Models: Service ProviderOnline servicese.g. Google: Google Maps, Gmail, etc.Value proposition Valuable, convenient, time-saving, low-cost alternatives to traditional service providersRevenue models:Sales of services, subscription fees, advertising, sales of marketing dataSlide 2-*Copyright © 2011 Pearson Education, Inc.B2C Models: Community ProviderProvide online environment (social network) where people with similar interests can transact, share content, and communicate E.g. Facebook, MySpace, LinkedIn, TwitterRevenue models:Typically hybrid, combining advertising, subscriptions, sales, transaction fees, affiliate feesSlide 2-*Copyright © 2011 Pearson Education, Inc.B2B Business ModelsNet marketplacesE-distributorE-procurementExchangeIndustry consortiumPrivate industrial networkSingle firmIndustry-wideSlide 2-*Copyright © 2011 Pearson Education, Inc.B2B Models: E-distributorVersion of retail and wholesale store, MRO goods and indirect goodsOwned by one company seeking to serve many customersRevenue model: Sales of goodsExample: Grainger.comSlide 2-*Copyright © 2011 Pearson Education, Inc.B2B Models: E-procurementCreates digital markets where participants transact for indirect goodsB2B service providers, application service providers (ASPs)Revenue model:Service fees, supply-chain management, fulfillment servicesExample: AribaSlide 2-*Copyright © 2011 Pearson Education, Inc.B2B Models: ExchangesIndependently owned vertical digital marketplace for direct inputsRevenue model: Transaction, commission feesCreate powerful competition between suppliersTend to force suppliers into powerful price competition; number of exchanges has dropped dramaticallySlide 2-*Copyright © 2011 Pearson Education, Inc.B2B Models: Industry ConsortiaIndustry-owned vertical digital marketplace open to select suppliersMore successful than exchangesSponsored by powerful industry playersStrengthen traditional purchasing behaviorRevenue model: Transaction, commission feesExample: ExostarSlide 2-*Copyright © 2011 Pearson Education, Inc.Private Industrial NetworksDesigned to coordinate flow of communication among firms engaged in business togetherElectronic data interchange (EDI)Single firm networks Most common form Example: Wal-Mart’s network for suppliersIndustry-wide networks Often evolve out of industry associations Example: AgentricsSlide 2-*Copyright © 2011 Pearson Education, Inc.Other E-commerce Business ModelsConsumer-to-consumer (C2C)eBay, CraigslistPeer-to-peer (P2P)The Pirate Bay, CloudmarkM-commerce: Technology platform continues to evolveiPhone, smartphones energizing interest in m-commerce appsSlide 2-*Copyright © 2011 Pearson Education, Inc.Insight on Society Where R U? Not Here! Class DiscussionWhy should you care if companies track your location via cell phone? What is the “opt-in” principle and how does it protect privacy?Should business firms be allowed to call cell phones with advertising messages based on location?Slide 2-*Copyright © 2011 Pearson Education, Inc.E-commerce Enablers: The Gold Rush Model E-commerce infrastructure companies have profited the most:Hardware, software, networking, securityE-commerce software systems, payment systemsMedia solutions, performance enhancementCRM softwareDatabasesHosting services, etc.Slide 2-*Copyright © 2011 Pearson Education, Inc.How the Internet and the Web Change BusinessE-commerce changes industry structure by changing:Basis of competition among rivalsBarriers to entryThreat of new substitute productsStrength of suppliersBargaining power of buyersSlide 2-*Copyright © 2011 Pearson Education, Inc.Industry Value ChainsSet of activities performed by suppliers, manufacturers, transporters, distributors, and retailers that transform raw inputs into final products and services Internet reduces cost of information and other transactional costsLeads to greater operational efficiencies, lowering cost, prices, adding value for customersSlide 2-*Copyright © 2011 Pearson Education, Inc.E-commerce and Industry Value ChainsFigure 2.5, Page 105Slide 2-*Copyright © 2011 Pearson Education, Inc.Firm Value ChainsActivities that a firm engages in to create final products from raw inputsEach step adds valueEffect of Internet:Increases operational efficiencyEnables product differentiationEnables precise coordination of steps in chainSlide 2-*Copyright © 2011 Pearson Education, Inc.E-commerce and Firm Value ChainsFigure 2.6, Page 106Slide 2-*Copyright © 2011 Pearson Education, Inc.Firm Value WebsNetworked business ecosystem Uses Internet technology to coordinate the value chains of business partnersCoordinates a firm’s suppliers with its own production needs using an Internet-based supply chain management systemSlide 2-*Copyright © 2011 Pearson Education, Inc.Internet-Enabled Value WebFigure 2.7, Page 107Slide 2-*Copyright © 2011 Pearson Education, Inc.Business StrategyPlan for achieving superior long-term returns on the capital invested in a business firm Four generic strategiesDifferentiation CostScopeFocusSlide 2-*Copyright © 2011 Pearson Education, Inc.All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice HallCopyright © 2011 Pearson Education, Inc.