CHAPTER 14: E-BUSINESS

E-Business

• The Internet is a powerful channel that presents new opportunities for an organization to:

v  Touch customers. (can see what the customer want)

v  Enrich products and services with information.

v  Reduce costs

• How do e-commerce and e-business differ?

v  E-commerce – the buying and selling of goods and services over the Internet

v  E-business – the conducting of business on the Internet including, not only buying and selling, but also serving customers and collaborating with business partners

• Industries Using E-Business

E-Business Models

• E-Business model – an approach to conducting electronic business on the Internet

Business-to-Business (B2B)

• Electronic marketplace (e-marketplace) – interactive business communities providing a central market where multiple buyers and sellers can engage in e-business activities

Business-to-Consumer (B2C)

• Common B2C e-business models include:
• E-shop – aversion of a retail store where customers can shop at any hour of the day without leaving their home or office.
•  E-mall – consists of a number of e-shops; it serves as a gateway through which a visitor can access other e-shops

• Business types:

v  Brick-and-mortar business. (offline)

v  Pure-play business. (online)

v  Click-and-mortar business. (have a own business and also business in online)

Consumer-to-Business (C2B)

• Priceline.com is an example of a C2B e-business model
• The demand for C2B e-business will increase over the next few years due to customer’s desire for greater convenience and lower prices

Consumer-to-Consumer (C2C)

• Online auctions

v  Electronic auction (e-auction) – sellers and buyers solicit consecutive bids from each other and prices are determined dynamically

v  Forward auction – sellers use as a selling channel to many buyers and the highest bid wins (the product increase, increase and increase)

v  Reverse auction – buyers use to purchase a product or service, selecting the seller with the lowest bid (buy the product with the high price but when want to sellers, the price will be decrease)

• C2C communities include:

v  Communities of interest – people interact with each other on specific topics, such as golfing and stamp collecting

v  Communities of relations – people come together to share certain life experiences, such as cancer patients, senior citizens and car enthusiasts

v  Communities of fantasy – people participate in imaginary environments, such as fantasy football teams and playing one-on-one with Michael Jordan

E-Business Benefits and Challenges

• E-Business benefits include:

v  Highly accessible

v  Increased customer loyalty

v  Improved information content

v  Increased convenience

v  Increased global reach

v  Decreased cost

• E-Business challenges include:

v  Protecting consumers

v  Leveraging existing systems

v  Increasing liability

v  Providing security

v  Adhering to taxation rules

• There are numerous advantages and limitations in e-business revenue models including:

v  Transaction fees

v  License fees

v  Subscription fees

v  Value-added fees

v  Advertising fees

Mashups

• Web mashup – a web site or web application that uses content from more than one sources to create a completely new service

v  Application programming interface (API) – a set of routines, protocols, and tools for building software applications

v  Mashup editor – WSYIWYGs (What You See Is What You Get) for mashups