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3rd lecture of E-commerce E-business

Types of E-commerce
E-commerce Business Models
Case Studies

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Types of E-commerce
• Business-to-Consumer (B2C)
• Business-to-Business (B2B)
• Consumer-to-Consumer (C2C)
• Mobile e-commerce (M-commerce)
• Social e-commerce
• Local e-commerce

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Business-to-Consumer (B2C)
Seven different B2C business models:
• Online retailers, (Wallmart…)
• service providers, (Preply, Cambly…)
• transaction brokers, (Trivago…)
• content providers, (Netflix…)
• community providers, (Facebook, Linkedin…)
• social networks,
• market creators, (e-bay, amazon, trendyol…)
• portals (https://www.mynet.com/)
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The Growth of B2C E-commerce in the U.S.

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 Business-to-Business (B2B)

Two primary business models used within the B2B

arena:
• Net marketplaces which include e-distributors, e-
procurement exchanges and
companies, industry
consortia,
• Private industrial networks.

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The Growth of B2B E-commerce in the U.S.

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Business-to-business (B2B) traditional advertising spending in
the United States from 2016 to 2023(in billion U.S. dollars)

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Consumer-to-Consumer (C2C)

Consumers selling to other consumers… Examples: E-bay, ETSY

https://www.etsy.com/

https://www.youtube.com/watch?v=xQTGjLXWP8M&t=4s

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What are the factors that drive the growth
of m-commerce?

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The Growth of M-commerce in the United
States

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Social E-commerce

Facebook, Instagram, Pinterest, Youtube buy buttons…

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Local e-commerce

E-commerce that is focused on engaging the

consumer based on his or her current geographic
location
Example: Foursquare…

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Insight on Society: Facebook and the Age of
Privacy
• Class discussion:
– Why are social network sites interested in collecting
user information?
– What types of privacy invasion are described in the
case? Which is the most privacy-invading, and why?
– Is e-commerce any different than traditional markets with
respect to privacy? Don’t merchants always want to know
their customer?
– How do you protect your privacy on the Web? https://
www.youtube.com/watch?v=6zRgbHvkZVY Google
it «meta fined for data breach»
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E-commerce Business Models
• Business model
– Set of planned activities designed to result in a profit in a
marketplace

• Business plan
– Describes a firm’s business model

• E-commerce business model

– Uses/leverages unique qualities of Internet and Web

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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

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THE EIGHT KEY ELEMENTS OF
A BUSINESS MODEL

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1. Value Proposition
• “Why should the customer buy from you?”
• Successful e-commerce value propositions:
– Personalization/customization
– Reduction of product search, price discovery costs
– Facilitation of transactions by managing product delivery

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2. Revenue Model
• “How will you earn money?”
• Major types of revenue models:
– Advertising revenue model
– Subscription revenue model
 Freemium strategy
– Transaction fee revenue model
– Sales revenue model
– Affiliate revenue model

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3. Market Opportunity
• “What marketspace do you intend to serve and
what is its size?”
– Marketspace: Area of actual or potential commercial value in
which company intends to operate
– Realistic market opportunity: Defined by revenue potential in each
market niche in which company hopes to compete

• Market opportunity typically divided into smaller

niches

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4. Competitive Environment
• “Who else occupies your intended marketspace?”
– Other companies selling similar products in the same marketspace
– Includes both direct and indirect competitors

• Influenced by:
– Number and size of active competitors
– Each competitor’s market share
– Competitors’ profitability
– Competitors’ pricing

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5. Competitive Advantage
• “What special advantages does your firm bring to the
marketspace?”
– Is your product superior to or cheaper to produce than your
competitors’?

• Important concepts:
– Asymmetries
– First-mover advantage, complementary resources
– Unfair competitive advantage
– Leverage
– Perfect markets

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6. Market Strategy
• “How do you plan to promote your products or
services to attract your target audience?”
– Details how a company intends to enter market and attract
customers
– Best business concepts will fail if not properly marketed to
potential customers

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7. Organizational Development
• “What types of organizational structures within the
firm are necessary to carry out the business plan?”
• Describes how firm will organize work
– Typically, divided into functional departments
– As company grows, hiring moves from generalists to specialists

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8. Management Team
• “What kind of backgrounds should the company’s
leaders have?”
• A strong management team:
– Can make the business model work
– Can give credibility to outside investors
– Has market-specific knowledge
– Has experience in implementing business plans

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Insight on Society: Twitter
• Class discussion:
– What revenue models does Twitter use?

– What are the characteristics of these models?

– Which companies have been acquired by Twitter?

https://www.youtube.com/watch?v=no7jLwpexdw

https://www.ntv.com.tr/teknoloji/twitterda-mavi-tik-satisi-
yeniden-
basladi-iste-turkiye-fiyati,P5dQN5iKN0K7cQ0lm0d-Zw
#
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