ITEC 410Current Technologies

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Categories of E-Business Models Factors Affecting E-Business Success

Creating a Winning E-Business Second Edition, Chapter 1

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Learning Objectives

Discuss the Five Categories of e-Business Models:

– B2C

– B2B

– B2G

– C2C

– C2B

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Learning Objectives (continued)

Discuss the Factors that affect e-Business

Success

– The Network Effect

– Innovative Marketing Ideas

– Scalability

– Ease of Entry into Electronic Markets

– Ability to quickly adapt to Marketplace Changes

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E-Business Basics

E-commerce – Process of buying or selling goods or services across a telecommunications network

E-business – Widest spectrum of business activities using Internet and Web technologies

Many technologies facilitate e-business– Electronic Funds Transfer (EFT)

– Electronic Data Interchange (EDI)

– Internet / World Wide Web

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Business models– How a company conducts business in order to

generate revenue

– Widespread access to the Internet and Web allows companies to adapt old models and create new ones

E-business models are often categorized by type of customer

E-Business Models

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E-Business Models (continued)

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Business-to-consumer (B2C)– Retail sales (e-retail) including airline tickets,

entertainment venue tickets, hotel rooms, stock purchases, diet and fitness programs

Brick-and-mortar companies are moving to brick-and click companies– Sears, Best Buy, Barnes & Noble, the Gap

Pure-play e-retailers and catalog merchants– Amazon.com, eBags, Harry and David

E-Business Models (continued)

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E-Business Models (continued)

Creating a Winning E-Business Second Edition, Chapter 1

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E-Business Models (continued)

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E-Business Models (continued)

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E-Business Models (continued)

Business-to-business (B2B)– Businesses selling to other businesses

– Online stores, such as Office Depot, Staples

– Internet and Web technologies• Web hosting• Web design• Hardware and software• Consulting

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E-Business Models (continued)

Business-to-business (B2B) – Online trading communities for vertical markets

– Exchanges, aggregators, auctions• Virtual marketspaces for buyers and sellers• Elance, ATLA Exchange, Business.com,

HedgeHog

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E-Business Models (continued)

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E-Business Models (continued)

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E-Business Models (continued)

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E-Business Models (continued)

Business-to-government (B2G)– Businesses provide a marketspace for other

businesses and government agencies

– Bidmain, B2GMarkets

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E-Business Models (continued)

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E-Business Models (continued)

Consumer-to-consumer (C2C)– Consumers sell or exchange products and

services directly with other consumers

– Auctions, online classified ads, expert information exchanges

• eBay, American Boat Listing, TraderOnline.com, AllExperts

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E-Business Models (continued)

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E-Business Models (continued)

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E-Business Models (continued)

Consumer-to-business (C2B)– Reverse auctions in which a single consumer

names his or her own price for products or services

– Consumer’s offer made to multiple businesses, which can accept or decline offer

– Priceline.com

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E-Business Models (continued)

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Factors AffectingE-Business Success

The network effect– Total value of a product, service, or technology

grows as more and more people use it• Telephone system example

– Single telephone has no value; as more people join the telephone system, the value of each telephone increases

• uBid online auction site example– As more people participate, the auction site becomes

more valuable to buyers and sellers

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Factors AffectingE-Business Success (continued)

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Factors AffectingE-Business Success (continued)

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Factors AffectingE-Business Success (continued)

Innovative marketing ideas– Hotmail and viral marketing example

• Hotmail users grew at a rapid rate because of electronic word of mouth coupled with the network effect

• Electronic word of mouth or viral marketing spreads from user to user in the same way a human virus spreads from person to person

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Factors AffectingE-Business Success (continued)

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Factors AffectingE-Business Success (continued)

Scalability– Ability of a business to function well in the face of

rapid growth• Systems and procedures meet customers needs• AllAdvantage e-business failure example

– E-business idea: Paying for users to browse the Web and view advertising

– Millions of customers signed on; advertisers did not– No scalability with rapid growth in customers

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Factors AffectingE-Business Success (continued)

Ease of entry into electronic markets– Low-cost technologies make it easy to create

new e-businesses

– eBay and online auction example• Easy for consumers to interact at auction site• Web auction software is cheap and easy to

install /maintain• E-businesses earn commissions without having to

manage, warehouse, and distribute products

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Factors AffectingE-Business Success (continued)

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Factors AffectingE-Business Success (continued)

Ability to quickly adapt to marketplace changes– Rapid knowledge transfer

– Need to make decisions quickly

– Exploit new ideas and opportunities

– Handle new challenges• Amazon.com is an example of ongoing evolution

from a basic e-business idea

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Factors AffectingE-Business Success (continued)

End of Lecture 02

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