Chapter 14: E-Business

E-Business

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

1)Touch customers

2)Enrich products and services with information

3)Reduce costs

How do e-commerce and e-business differ?

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

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 – a version 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:

Brick-and-mortar business

Pure-play business

Click-and-mortar business

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

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

Forward auction - Sellers use as a selling channel to many buyers and the highest bid wins

Reverse auction - Buyers use to purchase a product or service, selecting the seller with the lowest bid

C2C communities include:

Communities of interest - People interact with each other on specific topics, such as golfing and stamp collecting

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

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:

1)Highly accessible

2)Increased customer loyalty

3)Improved information content

4)Increased convenience

5)Increased global reach

6)Decreased cost

E-business challenges include:

1)Protecting consumers

2)Leveraging existing systems

3)Increasing liability

4)Providing security

5)Adhering to taxation rules

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

1)Transaction fees

2)License fees

3)Subscription fees

4)Value-added fees

5)Advertising fees

Mashups

Web mashup - a Web site or Web application that uses content from more than one source to create a completely new service

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

Mashup editor - WSYIWYGs (What You See Is What You Get) for mashup