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Chapter 2, e-Business Models
Outline 2.1 Introduction 2.2 Storefront Model 2.2.1 Shopping-Cart Technology 2.2.2 Online Shopping Malls 2.3 Auction Model 2.4 Portal Model 2.5 Dynamic-Pricing Model 2.5.1 Name-Your-Price Model 2.5.2 Comparison-Pricing Model 2.5.3 Demand-Sensitive Pricing Model 2.5.4 Bartering Model 2.5.5 Rebates 2.5.6 Offering Free Products and Services 2.6 B2B e-Commerce and EDI 2.7 Click-and-Mortar Businesses
2001 Prentice Hall, Inc. All rights reserved.
Inc.1 Introduction • In this chapter we explore the many business models currently being implemented on the Web Models include: – – – – – – – The Storefront Model The Auction Model The Portal Model The Name-Your-Price Model The Comparison Pricing Model The Demand Sensitive Pricing model The B2B Exchange Model 2001 Prentice Hall. All rights reserved. .2 2.
Inc. All rights reserved.1 Introduction • e-Business – A company that has an online presence • E-commerce businesses allow customers to sell. technology and ideology define its business model 2001 Prentice Hall. . trade and barter over the Web • A company’s policy. operations.3 2.
all day everyday. . security. worldwide • An e-commerce storefront should include: – – – – Online catalog of products Order processing Secure payment Timely order fulfillment 2001 Prentice Hall.2 Storefront Model • Storefront model enables merchants to sell products on the Web – Transaction processing. All rights reserved. Inc.4 2. information storage • E-commerce allows companies to conduct business 24-by-7. online payment.
.5 2.1 Shopping Cart Technology • Shopping Cart – An order-processing technology allowing customers to accumulate lists of items they wish to buy as they continue to shop • Shopping cart is supported by – Product catalog – Merchant server – Database technology • Combine a number of purchasing methods to give customers a wide array of options 2001 Prentice Hall.2. All rights reserved. Inc.
2.2 Online Shopping Malls • Wide selection of products and services • Offers greater convenience than shopping at multiple online shops • Consumers can make multiple purchases in one transaction 2001 Prentice Hall. All rights reserved.6 2. Inc. .
3 Auction Model • Online auction sites – Act as forums through which Internet users can log-on and assume the role of either bidder or seller – Collect a commission on every successful auction – Sellers post items they wish to sell and wait for buyers to bid • Reserve price – The minimum price a seller will accept in a given auction • Reverse auctions – Allow the buyer to set a price as sellers compete to match or even beat it 2001 Prentice Hall. All rights reserved. Inc.7 2. .
8 2. (These materials have been reproduced by Prentice Hall with the permission of eBay.) 2001 Prentice Hall. Inc. All Rights Reserved.3 Auction Model eBay home page. All rights reserved. INC. . Inc. COPYRIGHT© EBAY.
Inc. (These materials have been reproduced by Prentice Hall with the permission of eBay. Inc. All rights reserved. . COPYRIGHT© EBAY.) 2001 Prentice Hall.3 Auction Model Placing a bid on eBay.9 2. All Rights Reserved. INC.
4 Portal Model • Portal sites – Give visitors the chance to find almost everything they are looking for in one place • Horizontal portals – Portals that aggregate information on a broad range of topics – Yahoo!.10 2. Inc. IMDB. FirstGov 2001 Prentice Hall. Google • Vertical portals – Portals that offer more specific information within a single area of interest – WebMD. . All rights reserved. AltaVista.
Inc. .5 Dynamic Pricing Models • The Web has changed the way products are priced and purchased • Comparison pricing model – Web sites using shopping bot technology to find the lowest price for a given item • Demand-sensitive pricing model – Group buying reduces price as volume of sales increase • Name-your-price model – Name-your-price for products and services 2001 Prentice Hall.11 2. All rights reserved.
com 2001 Prentice Hall. isolve.12 2. . FreeSamples. Inc. All rights reserved.5 Dynamic Pricing Models • Bartering Model – Individuals and business trade unneeded items for items they desire – Ubarter. Start Sampling.com • Rebate Model – Sites offer rebates on product at leading online retailers in return for commission or advertising revenues – eBates • Free offering model – Free products and services generate high traffic – Freemerchant.com.
Inc.13 B2B E-commerce and EDI • B2B e-business – The electronic business relationship between two or more companies • Traditional EDI uses a value-added network or VAN – A closed network that includes all members of a production process • XML (eXtensible Markup Language) – A development technology similar to HTML (Hypertext Markup Language) – Improves the compatibility between disparate systems. creating new market opportunities 2001 Prentice Hall. All rights reserved. .
All rights reserved.14 B2B E-commerce and EDI • B2B e-commerce and the use of exchange sites allow businesses to reach their markets faster and more efficiently • Lead time – The time it takes to receive a product from a supplier after an order has been placed • Long lead times increase inventory costs. . Inc. increase worker stress levels and strain relationships between the manufacturer and the supplier 2001 Prentice Hall.
excara. Webmethods. tibco. . Inc.com 2001 Prentice Hall. mercator.com. Freemarkets.com. All rights reserved.com.com.6 B2B E-commerce and EDI • JIT (just-in-time) inventory management – Supplies arrive at the exact time they are needed.15 2. commerceone. thereby limiting any unnecessary inventory expense • Enterprise Application Integration (EAI) – The process of integrating traditional EDI systems with the Web • Business-to-business integrators (B2Bi) – Companies that use XML and similar technologies to help other companies integrate their current systems with the Web – www.com.
All rights reserved.7 Click-and-Mortar Businesses • Brick-and-mortar – Companies that operate solely offline with traditional business practices • Click-and-mortar – Companies operating with both an online and offline presence • Click and mortar companies have brand recognition. Inc.com 2001 Prentice Hall. .16 2. and an established customer base – Barnesandnoble.com – Bestbuy.
Inc. product type or manufacturer – Increases competitive pricing 2001 Prentice Hall.17 2. All rights reserved. dealers and consumers in a single marketplace – Decreases lead time and production costs • Key benefits to electronics industry – Provides access to thousands of components from hundreds of electronic suppliers – Provides ability to search by part number.7 Click-and-Mortar Businesses • Key benefits to automotive industry – Combined supplier base – Connects automobile manufacturers. .
18 2.7 Click-and-Mortar Businesses • Key benefits to energy industry – Provides real time pricing data on energy commodities – Provides access to hundreds of energy commodities – Allows regional energy providers to gain access to a worldwide market • Key benefits to food industry – Reduced lead time preserves perishables – Provides access to real time pricing data – Online auction technology allows for alternative pricing 2001 Prentice Hall. . All rights reserved. Inc.
more reliable transactions • Benefits to construction industry – Contracting and subcontracting are made simpler by online bidding – Construction companies can find raw materials from suppliers worldwide 2001 Prentice Hall. Inc. .7 Click-and-Mortar Businesses • Benefits to chemical industry – Access to millions of chemical products from thousands of suppliers – Integrated supply chains provide faster.19 2. All rights reserved.
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