chapter 5 part2 - wordpress.com · 02-02-2018 · firm value webs while firms produce value...

Chapter 5 – Part2E-commerce Business Strategies

Copyright © 2015 Pearson Education, Inc.Copyright © 2016 Pearson Education, Ltd.

Learning Objectives

Identify the key components of e-commerce business models.

Describe the major B2C business models.

Describe the major B2B business models.

Understand key business concepts and strategies applicable to e-commerce.

Copyright © 2016 Pearson Education, Ltd. Slide 1-2

B2C Business Models

E-tailer

Community provider (social network)

Content provider

Portal

Transaction broker

Market creator

Service provider


B2C Models: E-tailer

Online version of traditional retailer

Revenue model: Sales

The e-tail revenue model is product-based

Variations: Virtual merchant

Bricks-and-clicks

Catalog merchant

Manufacturer-direct

Internet Mall



Every Internet and smartphone user is a potentialcustomer (time-starved customers)

This sector, is extremely competitive.

Because barriers to entry (the total cost of entering a new marketplace) into the e-tail market are low


B2C Models: Community Provider

Provide online environment (social network) wherepeople with similar interests can transact (buy andsell), share content, and communicate

Sites offer users community-building tools andservices.

Examples: Facebook, LinkedIn, Twitter, Pinterest

Revenue models:

Typically hybrid, combining advertising, subscriptions,sales, transaction fees, and so on


B2C Models: Community Provider


B2C Models: Content Provider

Digital content on the Web: Distribute information content, such as digital video, music, photos,

text, and artwork.

Revenue models: Use variety of models, including advertising, subscription; sales of

digital goods

Variations: Syndication

Web aggregators


B2C Models: Content Provider


B2C Business Models: Portal

such as Yahoo, MSN, and AOL offer users powerful search tools as well as an integrated package of content and services, such as news, e-mail, instant messaging, calendars, shopping, music downloads, video streaming, and more, all in one place.

Revenue models: Advertising, referral fees, transaction fees, subscriptions for premium

services

Variations: Horizontal/general

Vertical/specialized (vortal)

Search


B2C Business Models: Portal


B2C Models: Transaction Broker

Process online transactions for consumers

Companies that process transactions for consumers normally handled in person, by phone, or by mail Primary value proposition—saving time and money

Revenue model: Transaction fees

Industries using this model: Financial services

Travel services

Job placement services


B2C Models: Transaction Broker


B2C Models: Market Creator

Create digital environment where buyers and sellers canmeet and transact

Examples: Priceline, eBay

Revenue model: Transaction fees, fees to merchants for access themarket.

Sharing economy (mesh economy): platforms that allowpeople to sell services (they could also be categorized asservice providers)

Examples: Uber, Airbnb


B2C Models: Market Creator


B2C Models: Service Provider

Offers Online services Example: Google—Google Maps, Gmail, and so on

Value proposition Valuable, convenient, time-saving, low-cost alternatives

to traditional service providers

Revenue models: Sales of services, subscription fees, advertising, sales of

marketing data


B2C Models: Service Provider


B2B Business Models

Net marketplacesE-distributor

E-procurement,?n

Exchange

Industry consortium

Private industrial network


B2B Business Models


B2B Models: E-distributor

a company that supplies products and servicesdirectly to individual businesses

E-distributor owned by one company seeking toserve many customers

Revenue model: Sales of goods

Example: Grainger

Grainger, for example, is the largest distributor ofmaintenance, repair, and operations (MRO) supplies


B2B Models: E-procurement

creates and sells access to digital markets

Creates digital markets where participants transactfor indirect goods B2B service providers, SaaS and PaaS providers

Revenue model: Service fees, supply-chain management, fulfillment services

Example: Ariba


B2B Models: Exchanges

is an independent digital marketplace where hundreds ofsuppliers meet commercial purchasers to conducttransactions.

Independently owned vertical digital marketplace for directinputs

Revenue model: Transaction, commission fees

Create powerful competition between suppliers


B2B Models: Industry Consortia

are industry-owned vertical marketplaces that serve specificindustries, such as the automobile, aerospace, chemical,floral, or logging industries.

More successful than exchanges Sponsored by powerful industry players

Strengthen traditional purchasing behavior

Revenue model: Transaction, commission fees

Example: SupplyOn

horizontal marketplaces supply companies in different industries witha particular type of product and service, such as marketing-related,financial, or computing services.


Private Industrial Networks

sometimes referred to as a “private trading exchange orPTX” is a digital network designed to coordinate the flow ofcommunications among firms engaged in business together.

Typically evolve out of company’s internal enterprise system

Example: Walmart’s network for suppliers

Cost absorbed by network owner and recovered throughproduction and distribution efficiencies


Industry Value Chains

Value Chain: Set of activities performed by suppliers,manufacturers, transporters, distributors, and retailers thattransform raw inputs into final products and services

Internet reduces cost of information and other transactionalcosts

Leads to greater operational efficiencies, lowering cost,prices, adding value for customers


E-commerce and Industry Value Chains

Figure 5.4, Page 354


Firm Value Chains

Firm Value chain: Activities that a firm engages in to create final products from raw inputs

Each step adds value to the final product

Effect of E-Commerce: Increases operational efficiency

Enables product differentiation

Enables precise coordination of steps in chain

Provide users with more differentiated and high-value products


E-commerce and Firm Value Chains



Firm Value Webs

While firms produce value through their value chains, theyalso rely on the value chains of their partners—theirsuppliers, distributors, and delivery firms.

A value web is a networked business ecosystem that uses e-commerce technology to coordinate the value chains ofbusiness partners within an industry, or at the first level, tocoordinate the value chains of a group of firms.

Coordinates a firm’s suppliers with its own production needsusing an Internet-based supply chain management system


Internet-enabled Value Web




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chapter 5 part2 - wordpress.com · 02-02-2018 · firm value webs while firms produce value...

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