Chapter 13 E-Business
The Internet is a powerful channel that presents new
opportunities for an organization to:
- Touch
customers
- Enrich
products and services with information
- Reduce costs
E-Commerce & E-Business
How do e-commerce and e-business differ?
- E-commerce –
the buying and selling of goods and services over the Internet (online
transactions)
- E-business –
the conducting of business on the Internet including, not only buying and
selling, but also serving customers and collaborating with business partners
(online transactions, serving customers and collaborating with business
partner)
Industries Using E-Business
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
Electronic marketplace (e-marketplace)
Electronic marketplaces, or e-marketplaces, present
structures for conducting commercial exchange, consolidating supply chains, and
creating new sales channels
Their primary goal is to increase market efficiency by
tightening and automating the relationship between buyers and sellers
Existing e-marketplaces allow access to various mechanisms
in which to buy and sell almost anything, from services to direct materials
Electronic Marketplaces
Search Engine Marketing
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
- Example
- e-mall – consists
of a number of e-shops; it serves as a gateway through which a visitor can
access other e-shops
- Example
Business types:
- Brick-and-mortar
business- operates in a physical store without an Internet presence. Eg: Bata.
- Pure-play business-
a business that operates on the Internet only without a physical store.
Examples include fashionvalet.com.
- Click-and-mortar
business– a business that operates in a physical store and on the Internet .Eg:
Hijabs by Hanami
Amazon.com
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
Priceline.com
Agoda.com
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
Consumer-to-Consumer (C2C)
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-Bay
mudah.my
E-Business Benefits
include:
- Highly accessible
Businesses can operate 24 hours a day, 7 days a week, 365
days a year
- Increased customer
loyalty
Additional channels to contact, respond to, and access
customers helps contribute to customer loyalty
- Improved
information content
In the past, customers had to order catalogs or travel to a
physical facility before they could compare price and product attributes.
Electronic catalogs and Web pages present customers with updated information in
real-time about goods, services, and prices
- Increased
convenience
E-business automates and improves many of the activities
that make up a buying experience
- Increased global
reach
Businesses, both small and large, can reach new markets
- Decreased cost
The cost of conducting business on the Internet is
substantially smaller than traditional forms of business communication
E-Business Challenges
include:
- Identifying Limited
Market Segments
The main challenge of e-business is the lack of growth in
some sectors due to product or service limitation.
- Managing Consumer
Trust
Internet marketers must develop a trustworthy relationship
to make that initial sale and generate customer loyalty.
- Ensuring Consumer
Protection
Implement Internet Security, protect from misuse of customer
information.
- Managing Consumer
Trust
Companies that operate online must obey a patchwork of rules
about which customers are subject to sales tax on their purchase and which are
not.
E-Business Benefits and Challenges
There are numerous advantages and limitations in e-business
revenue models including:
- Transaction
fees
- License fees
- Subscription
fees
- Value-added
fees
- 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 mashups
Web Mashups