Lecture 1-GV (1)

Chapter 1 Learning Objectives
2.1 Introduction of e-business and e-commerce

2.2 Identify the key components of e-commerce business models.
INTRODUCTION OF E‐BUSINESS 2.3 Classification of e-commerce business models
AND E‐COMMERCE 2.4 Describe the major B2C business models.
2.5 Describe the major B2B business models.
2.6 Understand key business concepts and strategies applicable to
Lecturer: Dr. Le Dien Tuan
e-commerce.
Faculty of E‐commerce
1 2 Copyright © 2020, 2019, 2018 Pearson Education, Inc. All Rights Reserved
Giới thiệu thương mại điện tử Introduction of e‐commerce
MIS Mô hình TMĐT
Xây dựng sự hiện diện

Doanh
TMĐT
nghiệp
Logistics và thanh toán
Marketing Online
Xây dựng chiến lược KD
dựa vào dữ liệu
B2B and B2C E-commerce
3 4
Introduction of e‐commerce Introduction of e‐commerce
Source: Radovilsky, Z. and V. Hegde. Factors Influencing e‐commerce Implementation: Analysis of

Creating monetary value in E-commerce Survey Results, Journal of Academy of Business and Economics, Vol. IV, No.1, 2004, p. 29–37.
5 6
Introduction of e‐commerce Introduction of e‐commerce and e‐business
Thảo luận: Phân biệt sự khác nhau giữa E-commerce và E-business
E-Business
E-Commerce
Commerce
Internet
Commerce
Source: Radovilsky, Z. and V. Hegde. Factors Influencing e‐commerce Implementation: Analysis of

Survey Results, Journal of Academy of Business and Economics, Vol. IV, No.1, 2004, p. 29–37.
7 8
What is e-business
 E-business, is the application of information and communication
E-business E-commerce
technologies (ICT) in support of all the activities of business.
1. E-Business is superset of e- 1. E-commerce is subset of E-business
 E-Business refers to a broader definition of e-commerce, not just the commerce
2. E-business includes all kinds of pre- 2. E-commerce just involves Buying
buying and selling of goods and services, but also servicing customers, sale and post-sale efforts and selling of products and services.
collaborating with business partners, conducting e-learning, and 3. E-business covers internal processes 3. E-commerce covers outward facing
such as production, inventory processes that touch customers,
processing electronic transactions. management, product development, suppliers and external partners.
risk management, finance etc.
 Electronic business methods enable companies to link their internal and
4. E-business involves the use of 4. E-commerce usually requires the use
external data processing systems more efficiently and flexibly, to work CRM’s, ERP’s that connect different of just a Website.
business processes.
more closely with suppliers and partners, and to better satisfy the needs
and expectations of their customers.
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2.1 Introduction of e-business and e-commerce Thảo luận
 E-business challenges Chiến lược tăng doanh thu cho doanh nghiệp xét dưới góc
 Cost
độ là triển khai kinh doanh online.
 Value
Doanh thu=ĐG*Traffic*tỷ lệ mua hàng*số lần mua lặp lại
- Cross-selling and up-selling
 Security
- Marketing online, data-driven marketing
 Leverage existing system
- SEO (title page, URL friendly, content, backlink,
 Interoperability
description,…)
- Google Ad, Facebook Ad
- Tỷ lệ mua hàng <- content, Live chat, Chatbox, CRM,…
- Marketing plan
11 © Prentice Hall 2004 12

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 Business model
• Set of planned activities designed to result in a profit in a
marketplace
 E-commerce business model -> Capstone Project 1
• Uses/leverages unique qualities of Internet and Web
 Business plan
• Describes a firm’s business model
13 Copyright © 2020, 2019, 2018 Pearson Education, Inc. All Rights Reserved
 Eight Key Elements of a Business Model

1. Value proposition
2. Revenue model
3. Market opportunity
4. Competitive environment
5. Competitive advantage
6. Market strategy
7. Organizational development
8. Management team
16 Copyright © 2020, 2019, 2018 Pearson Education, Inc. All Rights Reserved
2.2 Identify the key components of e-commerce business models. 2.2 Identify the key components of e-commerce business models.
1. Value Proposition 2. Revenue Model

 “Why should the customer buy from you?”  “How will you earn money?”
 Successful e-commerce value propositions:  Major types of revenue models:
• Personalization/customization  Advertising revenue model
• Reduction of product search, price discovery costs  Subscription revenue model
• Facilitation of transactions by managing product • Freemium strategy
delivery  Transaction fee revenue model

 Sales revenue model
 Affiliate revenue model
17 Copyright © 2020, 2019, 2018 Pearson Education, Inc. All Rights Reserved 18 Copyright © 2020, 2019, 2018 Pearson Education, Inc. All Rights Reserved
3. Market Opportunity 4. Competitive Environment
 “What marketspace do you intend to serve and what is its  “Who else occupies your intended marketspace?” ->
size?” competitors
• Marketspace: Area of actual or potential commercial • Other companies selling similar products in the same
value in which company intends to operate marketspace
• Realistic market opportunity: Defined by revenue • Includes both direct and indirect competitors
potential in each market niche in which company hopes  Influenced by:
to compete • Number and size of active competitors
 Market opportunity typically divided into smaller niches • Each competitor’s market share
• Competitors’ profitability
• Competitors’ pricing
5. Competitive Advantage 6. Market Strategy

 “What special advantages does your firm bring to the
 “How do you plan to promote your products or services
marketspace?”
• Is your product superior to or cheaper to produce than to attract your target audience?”
your competitors’? • Details how a company intends to enter market and
 Important concepts:
attract customers
• Asymmetries
• First-mover advantage, complementary resources • Best business concepts will fail if not properly
• Unfair competitive advantage marketed to potential customers
• Perfect markets
7. Organizational Development 8. Management Team
 “What types of organizational structures within the firm  “What kind of backgrounds should the company’s leaders
have?”
are necessary to carry out the business plan?”
 A strong management team:
 Describes how firm will organize work • Can make the business model work
• Typically, divided into functional departments • Can give credibility to outside investors
• Has market-specific knowledge
• As company grows, hiring moves from generalists to • Has experience in implementing business plans
specialists
2.3 Classification of e-commerce business model 2.3 Classification of e-commerce business model
 Categorizing E-commerce Business Models

 No one correct way to categorize
 Text categorizes according to:
• E-commerce sector (e.g., B2B)
• E-commerce technology (e.g., m-commerce)
 Companies may use multiple business models (e.g.,
eBay)
…
2.4 The major B2C business models. 2.4 The major B2C business models.
 E-tailer B2C Models: E-Tailer
 Community provider (social network)  Online version of traditional retailer

 Revenue model: Sales
 Content provider
 Low barriers to entry
 Portal
 Transaction broker
 Market creator
 Service provider
B2C Models: Community Provider B2C Models: Content Provider
 Provide online environment (social network) where people  Digital content on the Web:
with similar interests can transact, share content, and • News, music, video, text, artwork
communicate  Revenue models:
• Use variety of models, including advertising,
• Examples: Facebook, LinkedIn, Twitter, Pinterest subscription; sales of digital goods
 Revenue models: • Key to success is typically owning the content
• Typically hybrid, combining advertising, subscriptions,
sales, transaction fees, and so on
B2C Business Models: Portal B2C Models: Transaction Broker

 Search plus an integrated package of content and  Process online transactions for consumers
services • Primary value proposition-saving time and money
 Revenue models:  Revenue model:
• Advertising, referral fees, transaction fees, • Transaction fees
subscriptions for premium services
 Industries using this model:
• Financial services
• Travel services
• Job placement services
B2C Models: Market Creator B2C Models: Service Provider

 Create digital environment where buyers and sellers can  Online services
meet and transact • Example: Google-Google Maps, Gmail, and so on
• Examples: Priceline, eBay  Value proposition
• Revenue model: Transaction fees, fees to merchants • Valuable, convenient, time-saving, low-cost
alternatives to traditional service providers
for access
 Revenue models:
 On-demand service companies (sharing economy): • Sales of services, subscription fees, advertising,
platforms that allow people to sell services sales of marketing data
• Examples: Uber, Airbnb
2.4 The major B2C business models. 2.5 The major B2B business models.
B2C Models: Service Provider  B2B Business Models

Bài toán liên quan đến hỗ trợ khách du lịch lựa chọn điểm đi du  Net marketplaces (also referred as hubs)
lịch dựa vào số người tham gia và ngân sách cụ thể. • E-distributor
- Input: Danh sách các địa điểm ưa thích của khách du lịch • E-procurement
- Output: Lộ trình, chi phí giá vé, chi phí đi lại, tư vấn các khách • Exchange
sạn, quán ăn phù hợp,… • Industry consortium
 Private industrial network
Input Model Output
Decision support system
35 36 Copyright © 2020, 2019, 2018 Pearson Education, Inc. All Rights Reserved
2.5 The major B2C business models. 2.5 The major B2B business models.
 B2B Models: E-Distributor  B2B Models: E-Procurement
 Version of retail and wholesale store, and indirect goods  Creates digital markets where participants transact for
indirect goods
 Owned by one company seeking to serve many • B2B service providers, SaaS and PaaS providers
customers • Scale economies
 Revenue model:
 Revenue model: Sales of goods
• Service fees, supply-chain management, fulfillment
services
 Example: Ariba
2.5 The major B2B business models. 2.5 The major B2B business models.
 B2B Models: Exchanges  B2B Models: Industry Consortia

 Independently owned vertical digital marketplace for direct  Industry-owned vertical digital marketplace open to select
inputs suppliers
 Revenue model: Transaction, commission fees  More successful than exchanges
 Create powerful competition between suppliers • Sponsored by powerful industry players
 Tend to force suppliers into powerful price competition; • Strengthen traditional purchasing behavior
number of exchanges has dropped dramatically  Revenue model: Transaction, commission fees
2.5 The major B2B business models. 2.6 Key business concepts and strategies applicable to e-commerce
 Private Industrial Networks  How E-commerce Changes Business
 Digital network used to coordinate among firms engaged  E-commerce changes industry structure by changing:
in business together • Rivalry among existing competitors
 Typically evolve out of large company’s internal • Barriers to entry
enterprise system • Threat of new substitute products
• Key, trusted, long-term suppliers invited to network • Strength of suppliers
 Example: Walmart’s network for suppliers • Bargaining power of buyers
 Industry structural analysis-> value chain
2.6 Key business concepts and strategies applicable to e-commerce 2.6 Key business concepts and strategies applicable to e-commerce
 Industry Value Chains E-commerce and Industry Value Chains

 Set 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 costs
 Leads to greater operational efficiencies, lowering cost,
prices, adding value for customers
 Firm Value Chains E-commerce and Firm Value Chains

 Activities that a firm engages in to create final products
from raw inputs
 Each step adds value
 Effect of Internet:
• Increases operational efficiency
• Enables product differentiation
• Enables precise coordination of steps in chain
 Firm Value Webs Internet-Enabled Value Web

 Networked business ecosystem
 Uses Internet technology to coordinate the value chains of
business partners
 Coordinates a firm’s suppliers with its own production
needs using an Internet-based supply chain management
system
 Business Strategy  E-commerce Technology and Business Model Disruption

 Plan for achieving superior long-term returns on capital  Disruptive technologies
invested: that is, profit  Digital disruption
 Five generic strategies  Sustaining technology
• Product/service differentiation
 Stages
• Cost competition
• Disruptors introduce new products of lower quality
• Scope
• Disruptors improve products
• Focus/market niche
• New products become superior to existing products
• Customer intimacy
• Incumbent companies lose market share
2.6 Key business concepts and strategies applicable to e-commerce Next week: Lecture 2
© Prentice Hall 2004 51 © Prentice Hall 2004 52

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Chapter 1 Learning Objectives

2.1 Introduction of e-business and e-commerce

Giới thiệu thương mại điện tử Introduction of e‐commerce

MIS Mô hình TMĐT

Xây dựng sự hiện diện

Source: Radovilsky, Z. and V. Hegde. Factors Influencing e‐commerce Implementation: Analysis of

Introduction of e‐commerce Introduction of e‐commerce and e‐business

Thảo luận: Phân biệt sự khác nhau giữa E-commerce và E-business

Source: Radovilsky, Z. and V. Hegde. Factors Influencing e‐commerce Implementation: Analysis of

2.1 Introduction of e-business and e-commerce Thảo luận

11 © Prentice Hall 2004 12

2.2 Identify the key components of e-commerce business models.

 Eight Key Elements of a Business Model

1. Value Proposition 2. Revenue Model

• Facilitation of transactions by managing product • Freemium strategy

delivery  Transaction fee revenue model

3. Market Opportunity 4. Competitive Environment

5. Competitive Advantage 6. Market Strategy

7. Organizational Development 8. Management Team

 Categorizing E-commerce Business Models

 E-tailer B2C Models: E-Tailer

 Community provider (social network)  Online version of traditional retailer

B2C Models: Community Provider B2C Models: Content Provider

B2C Business Models: Portal B2C Models: Transaction Broker

B2C Models: Market Creator B2C Models: Service Provider

B2C Models: Service Provider  B2B Business Models

Input Model Output

Decision support system

 B2B Models: E-Distributor  B2B Models: E-Procurement

 B2B Models: Exchanges  B2B Models: Industry Consortia

 Private Industrial Networks  How E-commerce Changes Business

 Industry Value Chains E-commerce and Industry Value Chains

 Firm Value Chains E-commerce and Firm Value Chains

 Firm Value Webs Internet-Enabled Value Web

 Business Strategy  E-commerce Technology and Business Model Disruption

© Prentice Hall 2004 51 © Prentice Hall 2004 52

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