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WRITE UP ON E BUSINESS

SUBMITTED TO:
Prof. Rekha Prasad

Faculty of Management Studies


Banaras Hindu University

SUBMITTED BY:
Samil Jugli
MBA (Marketing) 3rd semester
Roll No – 30
Faculty of Management Studies
Banaras Hindu University
LEARNING OBJECTIVES

1. Introduction
2. Identify the key components of e-commerce business
models.
3. Describe the major B2C business models.
4. Describe the major B2B business models.
5. Recognize business models in other emerging areas
of e-commerce.
6. Understand key business concepts and strategies
applicable to e-commerce.
 INTRODUCTION
Electronic business, commonly referred to as "eBusiness" or "e-business", may
be defined as the utilization of information and communication technologies (ICT)
in support of all the activities of business

 COMPONENTS OF E-BUSINESS MODELS


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 Price for books and CDs sold on the Internet less than
conventional channel

– Average 9-16%

 Price increments

– Price change on the Internet is smaller than


conventional channel
 Price dispersion

– Substantial differences in price across retailers on the


Internet

– Heterogeneity in consumer awareness

– Heterogeneity in retailer branding and trust

 DRIVING FACTORS
 Lower buyer search costs

– Promote price competition

 Low entry costs or low operational costs

 Other factors

– Tax

– Shipping and handling fees

 E-COMMERCE BUSINESS MODELS


 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.

 MAJOR BUSINESS-TO-CONSUMER (B2C) BUSINESS


MODELS

 MAJOR BUSINESS-TO-CONSUMER (B2C) BUSINESS


MODELS
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 MAJOR BUSINESS-TO-CONSUMER (B2C) BUSINESS


MODEL

PORTAL
 offers powerful search tools plus an integrated package of content and
services

 typically utilizes a combines subscription/advertising


revenues/transaction fee model

 may be general or specialize (vortal)

 E-TAILER
 online version of traditional retailer

 includes

 virtual merchants (online retail store only)

 clicks and mortar e-tailers (online distribution channel for a


company that also has physical stores)

 catalog merchants (online version of direct mail catalog)

 online malls (online version of mall)

 Manufacturers selling directly over the Web

 CONTENT PROVIDER
 information and entertainment companies that provide digital content
over the Web

 typically utilizes an advertising, subscription, or affiliate referral fee


revenue model

 TRANSACTION BROKER
 processes online sales transactions

 typically utilizes a transactions feel revenue model


 MARKET CREATOR
 uses Internet technology to create markets that bring buyers and
sellers together

 typically utilizes a transaction fee revenue model

 E.g. Auction

 English auction

 Dutch auction

 Sealed-bid auction

 Double auction

 ENGLISH AUCTIONS
 The bidders announce their bids until no higher bid is forthcoming

– ‘going . . . going . . . gone!’

– Ascending-price auctions

– Typically set a closing time in advance

 Minimum bid plus a reserve price

 Early buyout price

 DUTCH AUCTIONS
 Bidding starts at a high price and drops until a bidder accepts the price

– Descending price auctions

 SEALED-BID AUCTIONS
 Bidders submit their bids independently and are usually prohibited from
sharing information with each other

 First-price sealed-bid auction

– The winner pays his amount

 Second-price sealed-bid auction


– The winner pays one increment over the second-highest bid received

 DOUBLE AUCTIONS
 Buyers and sellers submit bids to an auctioneer

 The auctioneer matches the seller’s offers to the buyer’s offer

– E.g. New York Stock Exchange

 SERVICE PROVIDER

 offers services online

 Community Provider

 provides an online community of like-minded individuals for networking


and information sharing

 revenue is generated by referral fee, advertising, and subscription

 E-BUSINESS MODELS

 DYNAMIC PRICING MODELS


– Name-Your-Price Model

– Comparison-Pricing Model

– Demand-Sensitive Pricing Model

 NAME-YOUR-PRICE MODEL
 Allows customers to state the price they are willing to pay

 Priceline.com

– Demand collect systems

» Use shopping bot that takes customer’s bid to the Priceline


partners to see whether they will accept the prices for the
requested products/services

– Intelligent agents

 COMPARISON-PRICING MODEL
 Allows customers to poll a variety of merchants and find a desired
product/service at the lowest price

 Mysimon.com

– Uses intelligent-agent technology

– Offers discussion groups, customer ratings, and comparison shopping

 DEMAND-SENSITIVE PRICING MODEL


 Group purchasing

– Individual buyers to shop in large groups to obtain group discount

» The more people who buy a product in a single purchase, the


lower the cost per person becomes

– Mercata.com, mobshop.com, demandline.com

 How it works

– Buyers create requests for quotes (RFQs)

– Purchasing manager monitors all aggregated RFQs

– Manager negotiates through suppliers.

 MAJOR BUSINESS-TO-BUSINESS (B2B)


BUSINESS MODELS
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 B2B HUB

 also known as marketplace/exchange

 electronic marketplace where suppliers and commercial purchasers


can conduct transactions

 may be a general (horizontal marketplace) or specialized (vertical


marketplace)

 E-DISTRIBUTOR

 supplies products directly to individual businesses


 MAJOR BUSINESS-TO-BUSINESS (B2B) BUSINESS MODELS

 B2B SERVICE PROVIDER

 sells business services to other firms

 MATCHMAKER

 links businesses together

 charges transaction or usage fees

 INFOMEDIARY

 gather information and sells it to businesses

 SEVEN UNIQUE FEATURE OF E-COMMERCE


TECHNOLOGY

 UBIQUITY
 Alters industry structure by creating new marketing channels and
expanding size of overall market

 Creates new efficiencies in industry operations and lowers cost of


firms’ sales operations

 Enables new differentiation strategies

 GLOBAL REACH
 Changes industry structure by lowering barriers to entry, but greatly
expands market at the same time

 Lowers cost of industry and firm operations through production and


sales efficiencies

 Enables competition on global scale

 UNIVERSAL STANDARDS
 Changes industry structure by lowering barriers to entry and
intensifying competition within an industry
 Lowers costs of industry and firm operations by lowering computing
and communications costs

 Enables broad-scope strategies

 RICHNESS
 Alters industry structure by reducing strength of powerful distribution
channels

 Change industry and firm operations costs by lessening reliance on


sales force

 Enhances post-sale support strategies

 INTERACTIVITY
 Alters industry structure by reducing threat of substitutes through
enhanced customization

 Reduces industry and firm costs by lessening reliance on sales force

 Enable differentiation strategies

 PERSONALIZATION/CUSTOMIZATION
 Alters industry structure by reducing threats of substitutes, raising
barriers to entry

 Reduces value chain costs in industry and firm by lessening reliance on


sales forces

 INFORMATION DENSITY
 Changes industry structure by weakening powerful sales channels,
shifting bargaining power to consumer

 Reduces industry and firm operations costs by lowering costs of


obtaining, processing, and distributing information about suppliers and
consumer