E-commerce business models

and strategies for the future

How best to make internet fundamental part
of their business
• It is thus worthwhile to take a hard look at
what kind of business model and strategies
are attractive in the maturing internet
economy what strategies principle need to be
observed. is the combination brick and click
model likely to be a good strategic positioning
option.
 Business model and strategies for pure dot
-com enterprises
• the internet does not make the rules of
competition obsolete nor does it allow
companies to ignore sound business
fundamentals and strategies making principle
just like traditional companies online
companies must carefully analyze industry
and competitive conditions and craft
strategies well matched to these conditions.
 Successful dot -com strategies
A distinctive strategy that delivers unique value
to buyers
• Build to order product
• Convenience
• Superior product information
• Attentive online service
Differentiation or lower costs or better value
for the money
• Deliberate efforts to engineer a value chain
that enables differentiation lower costs this
mean employing strategies and value chain
approaches that hold potential for low cost
leadership
• Clear focus on limited number of
competencies and relatively specialized
number of value chain activities
• Strong capabilities in cutting – edge internet
technology
• Innovative marketing techniques
• Minimal reliance on ancillary revenue
• An innovative fresh an entertaining website
 The issue of broad versus narrow product
offerings
• Online sellers have to make decisions about
how to position themselves on the spectrum
of broad versus narrow product offerings a
one stop shopping strategy like that employed
by amazon.com have a wide number of items
and a large customer base
 The order fulfillment issue
• Another big strategic issue for dot- com
retailers is whether to performs order
fulfillment activities internally or to outsource
them building central ware houses stocking
them with adequate inventories and and
developing a system to pick pack and ship
individual orders but may result in lower
overall unit costs than would paying the fees
of orders fulfillment specialists.
 Opportunities for unconventional business
models and strategies
• Subscription fees
• Transaction fees
• Pay per use
 Brick and click strategies
• Many traditional retailers using the internet as
a substitute for shopping at a local stores have
opened their own online shopping sites. Toys r
us for example has launched a web site to
combat etoys and other online toy merchants
• Now offers the customers the option of trading
online to discourage commission sensitive
customers from moving their accounts to
cheaper online .
• Option of shopping either online or in stores.
• Competition from pure online retailers
especially when customers sometimes want to
see and touch a product before making a
purchase .
• In banking system brick and click strategy
 Brick and click strategies have two big
appeals
• Expanding a company geographic reach
• They give both existing and potential
customer another choice of how to
communicate with the company product
information make purchases or resolve
customers service problems
Internet strategies for traditional business

• The real strategic issues for a traditional

business boil down to two things
• What specific internet applications to
implement
• How to make the internet a fundamental part
of its strategy
• Some companies use internet applications for
improve the following things
• Operational effectiveness
• Value chain efficiency
• Primary distribution channel
• As secondary distribution channel
 The internet related strategies
• Operating a website that provide existing and
potential customers with extensive product
information
• Distribution channel partner handle orders
and transations
• Sites informs the visitors where nearby retail
stores are located
• This is an attractive marketing positioning
option
• A manufacturer efforts to try to use its
website to sell around its dealers is certain to
anger distribution channel many of whom may
stock the brand of several manufacturer may
to lose more sales through its dealers than its
gain online sale efforts
 Use online sales as a relatively minor
distribution channel
• Achieving incremental sales
• Gaining online sales experience
• Doing marketing research
• Learning more about buyer taste and
preferences
• Testing reaction to new products
 Employing a brick and click strategy to sell
directly to consumers
• Reduces the costs
• allowing the customer to download their
software
• Bigger profit margins
• It help to educate the buyer
 Making greater use of build to order
manufacturing
• Reduce delivery time
• Internet sites permits motor vehicle shoppers
to select the models colors and optional
equipment
• Online music already have options
 Building systems to pick and pack products
that are shipped individually
• Contracting with order fulfillment specialist to
handle this function order fulfillment is
important for companies that opt for brick and
click strategies