Week 2 - Introduction to Internet for Business

1. Glossary
ID 1 2 Terminology Bricks and Mortar Business Models Ans 6 Definition A business combining an online and offline presence. A summary of how a company will generate revenue, identifying its product offering, value-added services, revenue sources and target customers. A traditional organization with limited online presence. All electronically mediated information exchanges between an organization and its external stakeholders. All electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business processes. An organization with principally an online presence. Commercial transactions between an organization and consumers. Commercial transactions between an organization and other organizations (interorganizational marketing). Creation of a new intermediary by en established company Describe methods of generating income for an organization. e-Commerce transactions between a purchasing organization and its suppliers. e-Commerce transactions between a supplier organization and its customers. The creation of new intermediaries between customers and suppliers providing services such as supplier search and product evaluation The physical network that links computers across the globe. It consists of the infrastructure of network servers and communication links between them that are used to hold and transport information between the client PCs and web servers. The removal of intermediaries such as distributors or brokers that formerly linked a company to its customers

3 4 5

Business-to-Business (B2B) Business-toConsumer (B2C) Buy-side e-commerce

6 7 8 9 10 11 12 13 14

Clicks and Mortar Clicks only or Internet Pureplay Electronic Business Electronic Commerce Internet Revenue models Sell-side e-commerce Disintermediation Reintermediation

15

Counterintermediation

2. Relationship between e-commerce and e-business Based on the definitions and the reading (pp. 10-13) choose the most relevant below.

3. Differentiate between buy-side and sell-side e-commerce. Read about the different types of sell-side e-commerce (pp. 15). Visit each of the websites below and match the website with the type of sell-side e-commerce. Websites Facebook (www.facebook.com) Guinness (www.guinness.com) Consumer site Yahoo! (www.yahoo.com) Online retailer: Amazon (www.amazon.com) Price Waterhouse Coopers (www.pwcglobal.com) 4. Business or consumer models Read the text (pp. 26-29) and then visit some of your favourite websites. Try to categorise these websites into one of the squares in the following figure: Types of sell-side e-commerce Transactional e-commerce Service-orientated relationship-building Brand-building Portal or media Social network or community site

The next step will be to compare the B2C and B2B business models:

Comparing B2C and B2B

Characteristic Number of participants in market Number of people involved in purchasing process Level of customers product expertise Number of transactions B2C B2B (direct purchasing) There are huge number of B2C consumers and many B2C sellers B2B does not have as many buyers (companies buying using B2B) in the market. or sellers (companies selling via B2B).

$ Value of transactions

Important buying decision criteria Sales process

Methods of understanding customers Integration of systems with customer Fulfilment

Payment

Read pp. 30-31 and describe and categorise the advantages of using ecommerce for your groups chosen company: Cost The costs to the business will be reduced, e.g. employing staff,

Capability

Communication

Control

Customer Service

Competitive advantage

Revenue Models
Browse the web to find examples of each of these revenue models. Model Examples Brokerage: bringing buyers and sellers together Kelkoo, eBay Advertising Yahoo Infomediary (information intermediaries selling information) AC Nielsen NetRatings internet marketing research Merchant Virtual retailer like Amazon Catalogue Merchant like LandsEnd Manufacturer (Direct) Dell Community Access to the community is free but there is a charge for premium services. Many dating sites use this and also business / software communities like RedHat. Affiliate Divert traffic to partner sites, eg Barnes & Noble Subscription Can be similar to the community model, eg FriendsReunited allows users to join free but an annual subscription must be paid in order to contact other members Utility This model is based on the electricity or water model, ie pay according to your consumption. Slashdot offers subscriptions based on consumption of (access to) IT related articles. 5. Marketplace channel structures Read Online Marketplace Analysis on pp. 69-67. Restructure Disintermediation Go to www.dell.com and compare the prices with what you can get locally (e.g. vatgia). Also compare the range and configuration of products available. Reintermediation Go to www.vatgia.com and try to find a laptop suitable for you. Discuss how this model satisfies customers

Applying E-commerce Fundamentals

Read (pp. 77-93) and then ccomplete the following for your teams chosen business. Include viable alternatives. What Transaction model (B2C, B2B, C2C) Marketplace position Why

Revenue model

Commercial model

Bricks and/or Clicks Marketplace restructuring (intermediation / disintermediation)