e-Business Models

e-Business Models

1Outline2.1Introduction2.2Storefront Model2.2.1Shopping-Cart Technology2.2.2Online Shopping Malls2.3Auction Model2.4Portal Model2.5Dynamic-Pricing Model2.5.1Name-Your-Price Model2.5.2Comparison-Pricing Model2.5.3Demand-Sensitive Pricing Model2.5.4Bartering Model2.5.5Rebates2.5.6Offering Free Products and Services2.6B2B e-Commerce and EDI2.7Click-and-Mortar Businesses2.1 IntroductionIn this chapter we explore the many business models currently being implemented on the Web Models include:The Storefront ModelThe Auction ModelThe Portal ModelThe Name-Your-Price ModelThe Comparison Pricing ModelThe Demand Sensitive Pricing modelThe B2B Exchange Model

22.1 Introductione-Business A company that has an online presence E-commerce businesses allow customers to sell, trade and barter over the WebA companys policy, operations, technology and ideology define its business model

32.2 Storefront ModelStorefront model enables merchants to sell products on the WebTransaction processing, security, online payment, information storageE-commerce allows companies to conduct business 24-by-7, all day everyday, worldwide An e-commerce storefront should include: Online catalog of productsOrder processingSecure paymentTimely order fulfillment42.2.1 Shopping Cart TechnologyShopping CartAn order-processing technology allowing customers to accumulate lists of items they wish to buy as they continue to shop Shopping cart is supported by Product catalogMerchant serverDatabase technologyCombine a number of purchasing methods to give customers a wide array of options52.2.2 Online Shopping MallsWide selection of products and servicesOffers greater convenience than shopping at multiple online shopsConsumers can make multiple purchases in one transaction

62.3 Auction ModelOnline auction sites Act as forums through which Internet users can log-on and assume the role of either bidder or sellerCollect a commission on every successful auctionSellers post items they wish to sell and wait for buyers to bidReserve priceThe minimum price a seller will accept in a given auctionReverse auctionsAllow the buyer to set a price as sellers compete to match or even beat it 72.3 Auction Model8

eBay home page. (These materials have been reproduced by Prentice Hall withthe permission of eBay, Inc. COPYRIGHT EBAY, INC. All Rights Reserved.)2.3 Auction Model9

Placing a bid on eBay. (These materials have been reproduced by Prentice Hall withthe permission of eBay, Inc. COPYRIGHT EBAY, INC. All Rights Reserved.)2.4 Portal ModelPortal sites Give visitors the chance to find almost everything they are looking for in one place Horizontal portalsPortals that aggregate information on a broad range of topicsYahoo!, AltaVista, GoogleVertical portals Portals that offer more specific information within a single area of interestWebMD, IMDB, FirstGov

102.5 Dynamic Pricing ModelsThe Web has changed the way products are priced and purchasedComparison pricing modelWeb sites using shopping bot technology to find the lowest price for a given itemDemand-sensitive pricing modelGroup buying reduces price as volume of sales increaseName-your-price model Name-your-price for products and services

112.5 Dynamic Pricing ModelsBartering ModelIndividuals and business trade unneeded items for items they desireUbarter.com, isolve.comRebate ModelSites offer rebates on product at leading online retailers in return for commission or advertising revenueseBatesFree offering modelFree products and services generate high trafficFreemerchant, Start Sampling, FreeSamples.com12B2B E-commerce and EDIB2B e-business The electronic business relationship between two or more companies Traditional EDI uses a value-added network or VANA closed network that includes all members of a production process XML (eXtensible Markup Language) A development technology similar to HTML (Hypertext Markup Language) Improves the compatibility between disparate systems, creating new market opportunities 13B2B E-commerce and EDIB2B e-commerce and the use of exchange sites allow businesses to reach their markets faster and more efficiently Lead timeThe time it takes to receive a product from a supplier after an order has been placedLong lead times increase inventory costs, increase worker stress levels and strain relationships between the manufacturer and the supplier142.6 B2B E-commerce and EDIJIT (just-in-time) inventory managementSupplies arrive at the exact time they are needed, thereby limiting any unnecessary inventory expenseEnterprise Application Integration (EAI)The process of integrating traditional EDI systems with the WebBusiness-to-business integrators (B2Bi) Companies that use XML and similar technologies to help other companies integrate their current systems with the Webwww.excara.com, Webmethods.com, commerceone.com, tibco.com, Freemarkets.com, mercator.com152.7 Click-and-Mortar BusinessesBrick-and-mortarCompanies that operate solely offline with traditional business practicesClick-and-mortarCompanies operating with both an online and offline presenceClick and mortar companies have brand recognition, and an established customer baseBarnesandnoble.comBestbuy.com

162.7 Click-and-Mortar BusinessesKey benefits to automotive industryCombined supplier baseConnects automobile manufacturers, dealers and consumers in a single marketplaceDecreases lead time and production costsKey benefits to electronics industryProvides access to thousands of components from hundreds of electronic suppliersProvides ability to search by part number, product type or manufacturerIncreases competitive pricing172.7 Click-and-Mortar BusinessesKey benefits to energy industryProvides real time pricing data on energy commoditiesProvides access to hundreds of energy commoditiesAllows regional energy providers to gain access to a worldwide marketKey benefits to food industryReduced lead time preserves perishablesProvides access to real time pricing dataOnline auction technology allows for alternative pricing

182.7 Click-and-Mortar BusinessesBenefits to chemical industryAccess to millions of chemical products from thousands of suppliersIntegrated supply chains provide faster, more reliable transactionsBenefits to construction industryContracting and subcontracting are made simpler by online biddingConstruction companies can find raw materials from suppliers worldwide19