ims 6485: ecommerce business models 1 dr. lawrence west, mis dept., university of central florida...
TRANSCRIPT
IMS 6485: eCommerce Business Models
1Dr. Lawrence West, MIS Dept., University of Central [email protected]
Topics
• Overview
• Key Business Model Elements
• B2C Models
• B2B Models
• Emerging Models
• Industry Structures & Strategies
IMS 6485: eCommerce Business Models
2Dr. Lawrence West, MIS Dept., University of Central [email protected]
Chapter Overview
• Chapter 2 slices and dices the world of commerce and eCommerce into categories
• What is the value of having and studying categories like this?
• What are the dimensions into which the world of commerce is sliced?
– Business Models
– B2C Business Models
– B2B Business Models
– Emerging Models
– Enablers
– Changes to Industry Strategy and Structure
– Costs
IMS 6485: eCommerce Business Models
3Dr. Lawrence West, MIS Dept., University of Central [email protected]
Reviewing our Industry Participants
Animal
Vegetable
Mineral
INVENTORY
INVENTORY
INVENTORY
FACTORYWHOLE-SALER
INTERMEDIATE
GOODS
WHOLE-SALER
RETAILER
P
Q
p0
AC
MC
qi
(a)
IMS 6485: eCommerce Business Models
4Dr. Lawrence West, MIS Dept., University of Central [email protected]
West's Comments
• I feel that this chapter under-emphasizes four aspects of eCommerce
– Using eCommerce technologies to supplement the conduct of business when the business model largely makes sense without eCommerce
– eCommerce as a driver of costs
– Roles and participation of governments
– eCommerce implementation costs
• Some of these concerns are included in the discussion of changing business (Sect. 2.5)
• We will have to include the concepts on our own
IMS 6485: eCommerce Business Models
5Dr. Lawrence West, MIS Dept., University of Central [email protected]
Key Business Model Elements
• Table 2.1 & discussion on pp. 67-75
• Are these model elements restricted to eCommerce?
• Consider a 2-step analysis
– Analyze business without eCommerce implementation
– Analyze with eCommerce
• Value Proposition
• Revenue Model
• Market Opportunity
• Competitive Environment
• Competitive Advantage
• Market Strategy
• Organizational Development
• Management Team
IMS 6485: eCommerce Business Models
6Dr. Lawrence West, MIS Dept., University of Central [email protected]
Business Model Notes—Value Proposition
• Value Proposition
– Can you differentiate your product or service to enhance the value of your product to customers?
– If so, this is also a competitive advantage
– Can you protect your differentiated product?
• What are examples of eCommerce affecting the value of a product or service to consumers?
IMS 6485: eCommerce Business Models
7Dr. Lawrence West, MIS Dept., University of Central [email protected]
Business Model Notes—Revenue Models
• Differentiate between eCommerce-only models discussed in book and traditional commerce revenue
– Advertising model
– Subscription model
– Transaction fee model
– Sales revenue model
– Affiliate revenue model
• Traditional commerce examples of each
• eCommerce examples
• Blended examples
IMS 6485: eCommerce Business Models
8Dr. Lawrence West, MIS Dept., University of Central [email protected]
Business Model Notes—Market Opportunity
• How does the Internet change market opportunities?– Entirely new markets– Changes to traditional markets– New market channels– Enhancements to traditional channels
• How can market opportunities change?– Changes in disposable income (China and Russia)– New products or services– Changes in connectivity/network access– Changes in complimentary goods or network
externalities
IMS 6485: eCommerce Business Models
9Dr. Lawrence West, MIS Dept., University of Central [email protected]
Business Model Notes—Competitive Environment
• Two dimensions of competition
– Competitors
• Existing competitors
• Potential competitors
– Channels
• Traditional competitors
• Electronic competitors
IMS 6485: eCommerce Business Models
10Dr. Lawrence West, MIS Dept., University of Central [email protected]
Business Model Notes—Competitive Advantage
• A huge factor in business strategy
• A competitive advantage is some aspect of the business model that cannot be duplicated by competitors
• Is the advantage sustainable or vulnerable?
– Vulnerable through duplication
– Vulnerable through erosion
• Is the advantage natural or contrived?
• Is the advantage static or dynamic?
– Microsoft seeks dynamic competitive advantage through a stream of innovations
IMS 6485: eCommerce Business Models
11Dr. Lawrence West, MIS Dept., University of Central [email protected]
Business Model Notes—Competitive Advantage (cont.)
• Asymetry (location, patent, trade secret, special asset)
• First Mover Advantage (What is source of advantage?)
• Complimentary Resources
• "Unfair" Advantage (possession of unique resource)
• Leverage
– Examples of leveraging existing information technologies into eCommerce activities
– Examples of leveraging existing infrastructure into eCommerce activities
– Examples of leveraging reputation into eCommerce activities
IMS 6485: eCommerce Business Models
12Dr. Lawrence West, MIS Dept., University of Central [email protected]
B2C Business Models
• "Business Model" is used slightly differently in this section than in previous section
• I think that "B2C Business Activity" is a better use in this section
• See how the B2C Models in Table 2.3 are linked to the Business Model discussion in Table 2.1 through the Revenue Model column
• Can anyone think of a B2C eCommerce business model that does not use web sites?
IMS 6485: eCommerce Business Models
13Dr. Lawrence West, MIS Dept., University of Central [email protected]
B2C Business Models (cont.)
• Types
– Portals
– E-tailer (retail sales)
– Content providers
– Transaction brokers
– Market creators
– Service providers
– Community providers
• What is the impact of the Web on each?
• What resources are needed to implement each?
IMS 6485: eCommerce Business Models
14Dr. Lawrence West, MIS Dept., University of Central [email protected]
B2B Business Models
• Also see the Revenue Model connection to Table 2.1
• Open models
– E-distributor
– E-procurement
– Exchange
– Industry Consortium
• Private models
– Single firm owned supply chain management
– Industry-wide supply chain management network
IMS 6485: eCommerce Business Models
15Dr. Lawrence West, MIS Dept., University of Central [email protected]
B2B Business Models—Notes
• Private networks enable the largest volume by value of eCommerce
• Private industrial networks coordinate activities among firms doing business together
– Wal Mart's networks to its suppliers
• Industry-wide Networks grow out of advantages accruing to competitors in an industry from cooperation
– Airline reservation system
IMS 6485: eCommerce Business Models
16Dr. Lawrence West, MIS Dept., University of Central [email protected]
Emerging Models
• C2C
• P2P
– I don't see a lot of legal value in this model
• Mobile commerce (M-Commerce)--How does this differ from web-based eCommerce?
– Nature of customers, products, technologies?
– Customer usage patterns
– Leveraging existing infrastructure
IMS 6485: eCommerce Business Models
17Dr. Lawrence West, MIS Dept., University of Central [email protected]
Industry Structure
• Five Six Forces
– Rivalry among existing competitors
– Threat of substitute products
– Barriers to entry into the industry
– Bargaining power of suppliers
– Bargaining power of buyers
– Regulatory environment
• How have eCommerce technologies changed these factors in some industries?
• What were the impacts on the industries?
IMS 6485: eCommerce Business Models
18Dr. Lawrence West, MIS Dept., University of Central [email protected]
Industry Structure (cont.)
• Impacts of eCommerce
– Changing distribution channels
– Increasing some and decreasing other couplings between
• Trading partners
• All participants in a transaction
– Redefining products
IMS 6485: eCommerce Business Models
19Dr. Lawrence West, MIS Dept., University of Central [email protected]
Industry Structure (cont.)
• Cost competition—what is the impact of eCommerce on costs for one or more firms in an industry?
– What is the importance of cost reduction on the adoption of eCommerce technologies in the not-for-profit sector?
– Can cost asymmetries among firms be sustained by the low cost firm?
– How to economies of scale increase the importance of the first mover advantage when competing on cost?
– Are there limits to the scale a firm can achieve?
IMS 6485: eCommerce Business Models
20Dr. Lawrence West, MIS Dept., University of Central [email protected]
Industry Structure
• Two other strategic issues
– Economies of scope
– Advantages of focus