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By:-By:-

ShynaShyna

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Definition

Business modelBusiness model

2

A business model is the method of doing

business by which a company can sustain itself

that is, generate revenue. The business modelspells out how a company makes money by

specifying its position in the value chain.

A set of planned activities designed to result

in a profit in a marketplace.

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It includes the roles and relationships among a firm's

customers, allies, and suppliers; the major flows of

product, information, and money; and the major benefits

to the participants.

Definition Cont

E-commerce business modelE-commerce business model

A business model that aims to use and leverage the

unique qualities of the Internet and the World WideWeb.

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Eight Key Ingredients of a BusinessModel

Key QuestionsBusiness Model

Components

Value Proposition Why should the customer buy from you?

Revenue model How will you earn money?

Market opportunity What marketspace do you intent to serve, and what is its size?

Competitive environment Who else occupies your intended marketspace?

Competitive advantage What special advantages does your firm bring to the marketspace?

Market strategy How do you plan to promote your products to attract customer?

Organizationaldevelopment

What types of organizational structures within the firm arenecessary to carry out the business plan?

Management teamWhat kinds of experiences and background are important for

the companys leaders to have?

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RELA

TIONBETWEEN B2BANDB2C

Raw material

producer

manufacturer

distributor

retailer

consumer

B2B

B2C

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-commerce

As the name suggests, it is the model involving business and consumers.

In this model, online business sell to individual customers. Business to

customer covers those e-commerce websites and transactions trough which

organization sell goods to customer over the internet. B2C is also known

as internet retailing or E-trailing.

B2C refers to a business communicating with or selling to anindividual rather than a company

Business/organization

Customer

B2C

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This category has expanded greatly in the late 1990s with the

growth of public access to the Internet.

The business-to-consumer category includes electronic

shopping, information searching (e.g. railway timetables) but

also interactive games delivered over the Internet.

Popular items sold using B2C model are airline tickets,

books, computers, videotapes, music CDs,toys ,music, healthand beauty products, jewellery etc..

Introduction to B2C E-commerce(Cont)

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transactions

VISA

Orderform

Order placed

by user Shopping cart

credit card is

charged

Order is

competed

E-mail is sent to customer to merchantSent to warehouse

Shipping carrier picks up

shipment

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Consumer Shopping Procedureon the Internet

1. Basic requirement determination.

2. Search for available items that can meet the

requirement.

3. Compare the candidate items with multipleperspectives

4. Place an Order.

5. Pay the Bill.

6. Receive the delivered items and inspect them.

7. Contact the vendor to get after-service and support,

or to return if disappointed.

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BusinessModel

Variation Example Description

Portal Overview

Portals are gateways to theInternet Offers powerful Websearching tools-effiency and ease

The portal business model is inaddition to serving as a gatewayto the Internet;

It is a destination siteprovide an integrated

package of content andservices all in one place

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PortalAn integrated package of content like

News weather forecasts currency rates stock quotes phone and map information

Services like Entertainment Chat Game Downloads Shopping-auction E-card Sms service search

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BusinessModel

Variation Example Description

Portal

Horizontal/General Yahoo.commsn.com Offers an integrated package ofservices and content such assearch,e-mail,chat etc.Seeks to be a users home base.

Vertical/Specialized

iBoats.com Offers services and products tospecialized marketplace.

A gateway or portal toinformation related to aparticular industry, such ashuman resources, health care,insurance, automobiles, or foodmanufacturing.

Vortals are also seen as likelybusiness-to-businesscommunities

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BusinessModel

Variation Example Description

E-tailer/Storefront

Virtualmerchant Amazon.com,ebooks.com Online version of retail storewhere customers can shop24/7 with comfort.

Click andmortar

Walmart.com,bestbuy.com

Online distributor channel forcompany that also hasphysical stores.

Catalogmerchant

LandsEnd.com,llbean.com

Online version of directcatalog. The catalogmerchant has generally lowerprices than other retailersand lower overhead expensesdue to the smaller size ofstore and lack of largeshowroom space.

Online mall Fashionmall.cominternetmall.c

om

Online version of mall.

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Business

Model Variation Example Description

ContentProvider

Sportsline.com,CNN.com,

deviantart.com

Information andentertainment providers likenewspapers, sports sites orother online sources offeringup-to-date information(news, special interest ,photos, video, artwork etc)to customers.

Infomediaries:electronic

intermediariesthatcontrolinformationflowincyberspace, oftenaggregatinginformationandsellingittoothers

They do not own butaggregate and distribute the

content produced by others

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BusinessModel

Variation Example Description

SERVICEPROVIDER

xDrive.com,Whatsitworthtoyou.com

Companies that makemoney by selling users aservice, rather than a

product. Offers services online, likeconsultancy, tradeknowledge, expertise etc.Eg. Window updatesoffered by microsoft

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BusinessModel

Variation Example Description

Transaction broker

E-Trade.com,Monster.co

m

Processors of online salestransactions, such as stock brokersand travel agents that increasecustomer `s productivity by helpingthem do things faster.It assists buyers, sellers, or bothduring transaction and acts as anagent for larger markets.Furthermore, they sell othersproducts rather than their ownproduct.Transaction brokers receive

commissions for every transactionthat had been successfully concludedin order to sustain their business.One legal advantage to sellers is thatthe seller is usually not legallyresponsible for the actions of

transaction brokers acting within thesco e of the transaction.

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BusinessModel

Variation Example Description

Communit

y Provider

About.com,

iVillage.com

Sites where individuals with

particular interests, hobbies andcommon experience can cometogether and compare.Communities utilize electronictools such as forums, chatrooms, e-mail lists, message

boards, and other interactiveInternet mechanisms, which areusually tailored to the particularcommunity.

Broadly, the community model comes in two basic varieties :-

Centered on relationships. It revolve around shared interests, ideas, topics, and goals. In

these communities, the development of relationships is the

primary goal.

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To maximize member involvement, community sites must

offer maximum degrees of interactivity and personalization.For example, GeoCities offers space and tools for members to

set up their own Web sites and establish virtual communities

within the broader GeoCities community.

Centered on tasks

Task-centered communities generally are more structured and

impersonal.

The relationships established or augmented online are a means

to a mutual end, such as enhanced profits.

More specifically, Web communities are established between

business partners, between businesses and their customers,

between different groups of customers, within companies, and

between individuals and groups devoted to particular topics.

Community provider Model (cont..)

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BusinessModel

Variation Example Description

MARKETCREATOR

Auctions andother forms ofDynamic Pricing

eBay.com,Priceline.com,upperbid.com

Web-based businessesthat use internettechnology to createmarkets that bringbuyers and sellerstogether.The successfactoris:->Attracting sufficientcritical number ofsellers and buyers tothe marketplace.->Speed, ability tobecome operationalquickly

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English AuctionsThe bidders announce their bids until nohigher bid is forthcominggoing . . . going . . . gone!

Ascending-price auctions

Typically set a closing time in advanceMinimum bid plus a reserve price

Dutch Auctions

Bidding starts at a high price and drops until abidder accepts the priceDescending price auctions

pricing models

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,Price

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Sealed-Bid AuctionsBidders submit their bids independently and are

usually prohibited from sharing information witheach other

First-price sealed-bid auctionThe winner pays his amount

Second-price sealed-bid auctionThe winner pays one increment over the second-

highest bid received.Double Auctions

Buyers and sellers submit bids to anauctioneer

The auctioneer matches the sellers offers tothe buyers offer

E.g. New York Stock Exchange

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Capabilities and functionalities of

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Capabilities and functionalities ofB2C Model

With the conduction of business on the internet ,the role and

importance of electronic markets has been increasing. It lets

increase the efficiency of business performance .

Some of the capabilities which an electronic marketplace has,

which speak of their potential are-

1. Instantaneous communication

It helps in quick communication between the various

participants of business systems. It also helps to reduce

Time to Market.2. Global Access

the products and services offered through the electronic

markets have global reach and give access to larger and

new markets.

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3. Customization

Electronic markets allows to customize or configure goodsaccording to users need .

4. Increased Availability

Since e-commerce provide access to companys site 24/7 so

there is much greater availability of products.

5. De-intermediation

It helps in elimination the middleman, offering simplified

electronic distribution and product differentiation based on

customer choice.

6. CollaborationThey facilitate automation of transactions between

electronic enterprises and support real time exchange of

information and thus enable collaborative processing.

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Thanks