copyright © houghton mifflin company. all rights reserved. 4-1 in the news………. youtube click...

Copyright © Houghton Mifflin Company. All rights reserved. 4-1

In the news……….

• YouTube

• Click Fraud


Week 5

• Analysis of e-business models

• Internet-based software and e-business solutions.

• Characteristics of Internet-based software and e-business solutions.


What do we mean by a model?

• A plan

• In business, a model is a blueprint to emulate

• Using best practice

models


Business Model

• A group of shared or common characteristics, behaviors, and methods of doing business that enables a firm to generate profits through increasing revenues and reducing costs

• A method of doing business by which the company can sustain itself, i.e. make money

• The question to ask: how does the company generate revenue?


Models in E-Business

• A descriptive representation of the fundamental components of a business that operates partially or completely on the Internet.

• So how does the company do business on the Internet? What is their model?

• Companies usually have more than one model.


A History Lesson

Content provider (AOL) Model

Advertising Model

E-Commerce Model of Tangibles

E-Commerce of Non-tangibles


e-Business Models

• Brokerage• Advertising• Subscription, Pay-per-View, or Membership• Distribution Channel Member • Affiliation• Community• Infomediary• Portal • Others…


e-Business Models

• Intellectual property

• Protected by patents?

• America Online

• Ebay

• Netflix

• Yahoo


Brokerage e-Business Model

An e-business model that covers online marketplaces in which buyers and sellers are brought together in an organized environment to facilitate the exchange of goods.


Brokerage e-Business Models

• Marketplace Exchange model - Orbitz• Buy/Sell Fulfillment – carsdirect• Demand Collection System – priceline• Auction Broker – ebay • Transaction Broker – Paypal or Escrow• Distributor • Search Agent - cheapesttextbooks• Virtual Marketplace – Amazon


Close Up of a Brokerage Model

www.cheapesttextbooks.com

•Target Audience?

•Primary purpose of website?

•What can you do on website?

http://www.cheapesttextbooks.com/


Advertising e-Business Model

• An e-business model based on earning revenues in exchange for the display of advertisements on a firm’s web site.

• Banner ads – major source of revenue

• Model works best when traffic is large or highly specialized



• Portal - Yahoo• Classifieds - Craigslist• User Registration - NYTimes• Query-Based Paid Placement - Google• Behavioral Marketing – Claria • Content-Targeted Advertising - Google• Intromercials – Jaguar• Ultramercials – Mercedes Benz

Mercedes Benz

http://www.jaguar.com/global/default.htm

http://www.ultramercial.com/_campaigns/mercedes/index.html


Close Up of a Advertising Model

CraigsList

•Target Audience?



http://www.craigslist.com/



Under which circumstances would advertising online be a failure?


Subscription e-Business Model

• An e-business model in which access to a site is controlled by a subscription fee.


Subscription e-Business Model

• Content Services - Netflix

• Person to Person Networking Services - Classmates

• Trust Services – Truste

Truste

• Internet Service Providers – AOL

http://www.truste.org/about/index.php


Close Up of a Subscription Model

http://www.classmates.com/

•Target Audience?



http://www.classmates.com/


Pay-Per-View or Utility e-Business Model

• An e-business model in which access to a site is controlled by a charge to view single items.

• On-demand model based on pay as you go approach



• Metered Usage Model

• Metered Subscriptions –

• Slashdot

http://slashdot.org/faq/subscriptions.shtml#ss200


Close Up of a Pay Per View

http://slashdot.org/

•Target Audience?



http://slashdot.org/



• For which online content providers would pay-per-view most likely succeed and for which would it likely be a failure?

• What advantages and disadvantages are there for selling one item at a time online?


Membership e-Business Model

• Access to a site is controlled by membership fees.

• Similar to Subscription and Pay-Per-View

• Example: Netflix


Membership vs Pay Per View

• For what kind of situations would the Pay Per View model be more successful than the subscription model?


Distribution Channel Member e-Business Model

• An e-business model that includes activities of retailers, wholesalers, and manufacturers carrying on business through the Internet.

• Merchant models• Direct (manufacturer) models

• Example: Dell


Distribution Channel Member e-Business Model

• Merchant models:• Virtual Merchant – Amazon• Catalog Merchant – LandsEnd• Click and Mortar – Barnes and Noble• Bit Vendor – Apple iTunes Music Store

• Direct models: • Purchase• Lease (terms of use sale)• License – software licensing • Brand Integrated Content - BMWfilms

http://www.bmwworld.com/media/films/bmwfilms.htm


Close Up of Two Distribution Channel Models

Amazon.com versus Barnes & Noble

• How are these two the same?

• Different?


Distribution Channel e-Business Models

• What advantages does an existing bricks-and-mortar retailer have over a new start-up if it should set up an online shopping site?

• What reasons might explain why an existing bricks-and-mortar retailer would choose not to create an online shopping site?


Affiliation e-Business Models

• An e-business model that involves payments to website operators for customers who find their way to a company’s site and either buy merchandise or services or perform some other action, such as registering and providing certain information.

• Contrast with the portal model• Examples are Barnes & Noble and Amazon.com


Affiliation e-Business Models

• Banner Exchange

• Pay Per Click

• Revenue Sharing

• What risks and benefits are associated with an affiliation arrangement for both parties as well as any customers?


Close Up of an Affiliate

www.amazon.com

•Target Audience?



http://www.amazon.com/


Community e-Business Model

• An e-business model built around the idea that a group of online users can be regularly brought together at a commonly used website for commercial purposes.


Community e-Business Model

• Open Source – Red Hat

• Open Content - Wikipedia

• Public Broadcasting – WCPE.org

• Social Networking Services – Flickr, Friendster, Orkut


Close Up of a Community Model

Wikipedia

•Target Audience?



http://en.wikipedia.org/wiki/Main_Page


Infomediary e-Business Model

• An e-business model based on the collection and sale of online information.

• Infomediaries include research firms that post their reports on their websites (Forrester.com) as well as firms that produce lists and directories with links to articles and websites (Clickz.com).


Infomediary e-Business Model

• Advertising Networks - DoubleClick

• Audience Measurement Services – Nielsens/Netratings

• Incentive Marketing - Coolsavings

• Metamediary - Edmunds


Close Up of an Infomediary

Coolsavings.com

•Target Audience?




Portal e-Business Model

• A type of infomediary that earns revenues by drawing users to its site and serving as a gateway or portal to information located elsewhere on the Internet.

• MSN, Yahoo!, and Google


Close Up of an Portal Model

Yahoo.com

•Target Audience?




Horizontal Portals

• Portals that have a wide general reach into different informational topics.

• Examples include MSN and Yahoo!

• What are some other examples?


Vertical Portals

• Portals that have a narrow focus into a particular informational topic.

• Examples include every college and university website as well as any corporate website where users are might be expected to begin their online activities


Internet-Based Software Solutions: how do they fit?

• E-mail

• Website

• e-Commerce

• Customer Relationship Management

• Supply-Chain Management


Customer Relationship Management (CRM)

• Software used to manage the tasks of communicating with customers and sharing this information with employees

• CRM requires a standardized approach to handling customers and information.

• Oracle, IBM, SAS

• http://www.salesforce.com/• What are the benefits of following a standardized

approach to handling customers and information?


Supply-Chain Management (SCM)

• Software used to improve communication between the suppliers and users

• Requires a standardized approach to handling suppliers

• SAP, IBM

• What are the benefits of following a standardized approach to dealing with suppliers?


Fundamental Characteristics of Internet-Based Software and e-Business Solutions

• Efficiency and Productivity

• Quality, Standardization, and Customization of Products and Services

• Adding Value and Creating Competitive Advantage Online

copyright © houghton mifflin company. all rights reserved. 4-1 in the news………. youtube click...

Documents

ebusiness solutions

brokerage model

model of tangibles

specialized slide

fraud slide

analysis of e

best practice models

characteristics of internet