e-commerce business plans
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E-Commerce Business Plans. E-Commerce Prof. Sheizaf Rafaeli. Why New Business Models?. Business models are changing “In five years’ time, all companies will be Internet companies, or they won’t be companies at all.” Andrew Grove (CEO, Intel) Economist , 1999 Old measures don’t apply - PowerPoint PPT PresentationTRANSCRIPT
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E-Commerce Business Plans
E-CommerceProf. Sheizaf Rafaeli
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Why New Business Models?
Business models are changing– “In five years’ time, all companies will be Internet
companies, or they won’t be companies at all.”• Andrew Grove (CEO, Intel) Economist, 1999
Old measures don’t apply– “What’s my ROI on e-commerce? Are you crazy?
This is Columbus in the New World. What was his ROI?”
• Andrew Grove
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What is E-Commerce? Is it electronic mail? Is it electronic data interchange (EDI)? Is it video on demand?, home shopping?, electronic
publishing? Is it home banking? Or online personal financial
information management? Is it a new way of organizing? Is it interactive advertising and marketing? Is it a new methodology that shows how to implement re-
engineering and total quality?
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Buzzwords cheatsheet Speed, Scope, Scale Content, Community,
Commerce Sequential, Pooled,
Reciprocal B2C, B2B, C2C, C2B,
B2G Disintermediation
/ Reintermediation
E-Commerce, E-business?
Internet, Intranet, Extranet, VPN
More, less innovation? Integration?
Automational, Informational, Transformational: Operational, Managerial
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Moving to More Interdependency
Pooled
Sequential
Reciprocal
from Thompson (1967)
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Definitions
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Definition of business model
An architecture for the product, service, and information flows surrounding a value-creating activity
Description of the various business stakeholders and the potential benefits to each
Description of the revenue flows that sustain the model
(Strategy as who we are and what we do)
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business models?
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E-Business on the Internet
Business-to-consumer (B2C)– Amazon, Dell
Business-to-business (B2B)– Freemarkets, CommerceOne
Verticalnet Consumer-to-consumer (C2C)
– Ebay, QXL Consumer-to-Business (C2B)
– Priceline, Accompany, LastMinute
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E-Business on the Internet Business-to-government (B2G)
– E-commerce Resource Center Markets for Information
– infomarco, epinions, abuzz Markets for Bandwidth and Access Interorganizational Systems (Extranets) Enterprise-wide (Intranets)
Look for electronic commerce opportunities within theenterprise, with business partners, and with customers.
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E-Commerce, E-Business
Electronic commerce is the integrated use of computing and communications technologies for business transactions.
First generation e-commerce uses the web as an alternative channel for conducting business (e.g., placing orders).
E-Business, in addition to encompassing e-commerce, includes both front- and back-office applications.
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Second-Generation E-commerce
Allows the business to do something with electronic networks that can’t be done effectively any other way
Ties a business process to the Web as the primary mechanism for conducting daily business
Is based upon full life-cycle business applications Provides adaptive, personalized, value-added
services
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Sharing Information with Partners
Interorganizational systems (IOS) are types of information systems that permit the coupling of transactions between organizations, making them more efficient and responsive.
An Extranet is an application of Internet technology that provides specific external parties with controlled access to internal corporate information.
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Electronic Data Interchange (EDI)
EDI has been used for 20 years, but it has– High cost
• EDI applications are costly to develop and operate
– Limited accessibility• Value-Added Networks (VANs) are often used
– Rigid requirements• highly structured protocols and rigid meaning of data
– Partial solutions• ordering and fulfillment, but not accounting or inventory
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Unbundling the Organization
ProductInnovation
Management
CustomerRelationshipManagement
InfrastructureManagement
Scale
Scope
Speed
Electronic commerce has low interaction cost, it is natural for web-based businesses to focus on a single core process.
(Hagel and Singer, 1999)
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Content
Community
Commerce
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8 Business Model Examples Merchant model: Subscription or Metered usage Infomediary Advertising Brokerage Affiliates Manufacturers Communities and Communication
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Business Model Examples Merchant model:
– Virtual only or Catalog, Travelocity, Expedia
– Bricks & Clicks
– Bits-only.
Subscription or Metered usage– Glassbook, Wall Street Journal, FatBrain, Consumer Reports -- BUT: NYT, Slate, MP3, etc...
Infomediary– Portals, registration requests
– MyMealPlan, When, Evite, Versity, WebMD
– Iowa electronic, Hollywood, Cheathouse, Dr. Koop
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Business Model Examples
Advertising models– freebies: BlueMountain, Freemerchant
– Specialized, personalized portals: Yahoo, Excite, Lycos Brokerage models
– Aggregate buyers (Accompany)
– Fulfill: Kozmo, E-trade, Carsdirect
– B2B bartering: MetalSite, ChemConnect
– Search agent/bot: MySimon, CareerCentralbottomdollar,
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Business Model Examples
Manufacturers– Intel, Apple, Virtual Vineyards
Communities– VerticalNet, iVillage, ICQ, Firefly
– HumanClick, PeopleSupport
– ThirdVoice, Ubique, iMarkup, uToK
– “Viral Marketing”
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Customer Service Life Cycle
Requirements
AcquisitionOwnership
RetirementNeed descriptionProduct offering
Order entryPayment / SettlementDelivery logistics
Service and supportAccount management
Transfer (Disposal)Review / Audit
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Business Models for Electronic Markets:Paul Timmers
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Business Models for Electronic Markets:Paul Timmers (2)
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Evaluation
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Dimensions of IT Business Value
Automational Informational TransformationalBusinessProcesses
Operational
Management
Labor CostInventory Cost
Administrative Expense
UtilizationResponsivenessAccuracy
Decision QualityResource Usage
Efficiency Effectiveness Adaptability
Cycle TimeCustomer Relationships
Competitive FlexibilityOrganizational Form
IT Business Value Metrics
Doing things better Doing better things Doing different things
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ResourcesResources
Business Models for Electronic Marketshttp://www.electronicmarkets.org/netacademy/publications.nsf/all_pk/949/$file/v8n2_timmers.pdf?OpenElement&id=949
What’s your business model?http://www.eloquent.com/cgi/eloweb.dll?id=274-0
Intermediaries and CyberMediarieshttp://www.ascusc.org/jcmc/vol1/issue3/sarkar.html
Internet Business Model Patentshttp://www.jonesaskew.com/articles/99/s99modelpat.html
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Resources (2)Resources (2)
The B2B Boom – Business 2.0 9/99http://www.business2.com/index/0999/
The Truth About Business Modelshttp://www.strategy-business.com/briefs/99301/
The Journal of Computer-Mediated Communication (JCMC) http://www.ascusc.org/jcmc