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E-Business Models

E-Business Models. The emphasis is on business in e-business Part 1 – B2C Adomas Svirskas Vilnius University October 2005. Agenda. E-business is about business firstly Variety of options for the same single goal Business to Consumer (B2C) Business to Business (B2B) Supply Chain

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E-Business Models

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  1. E-Business Models The emphasis is on business in e-business Part 1 – B2C Adomas Svirskas Vilnius University October 2005

  2. Agenda • E-business is about business firstly • Variety of options for the same single goal • Business to Consumer (B2C) • Business to Business (B2B) • Supply Chain • Hub and spoke • Many to many • E-Procurement • Business to Government (B2G) Adomas Svirskas, Vilnius University

  3. The Vision • "In a few years' time, there will be no Internet companies - there will just be companies - and all companies that will operate in the future, will be Internet companies."Dr. Andrew Grove, Chairman, INTEL Corporation, September 20, 1999: http://www.intel.com/pressroom/archive/speeches/cn092099.htm Adomas Svirskas, Vilnius University

  4. Putting the Business First • Any business considering engaging into e-business must ask themselves: • How does the use of the Internet technologies fit into the overall business strategy? (Do we have a strategy anyway…?) • What business channels will benefit most from the technology? • How does the use of technology impact the bottom-line? • What are the new opportunities? Adomas Svirskas, Vilnius University

  5. E-Business Strategy • It is the key to e-business success • It is not primarily about technology (although is informed by the latter) • It outlines how the business will take advantage of the new environment • It defines clear measurable goals (more customers/better service/new markets..) • It maps out the ROI plan • It is a journey, not a destination Adomas Svirskas, Vilnius University

  6. Variety of the Options • The goal is one: supporting business growth • The options depend on: • Business size, industry sector, locale, partnerships, customer base and their demands • Readiness for e-business • Awareness • Executive support • IT readiness • Investment potential and strategy • Availability of outside infrastructure, standards, tools Adomas Svirskas, Vilnius University

  7. An Example • Many customers would hardly make a purchase decision on an expensive complex product purely online • However, they would definitely appreciate a possibility to track the progress of fulfillment of their order online • Therefore, investment into clear and accurate online tracking is needed rather than into sophisticated online product configurator. Adomas Svirskas, Vilnius University

  8. Business Website and e-mail • Increases business visibility • Improves product information accuracy and timeliness (sometimes this matters most) • Allows to collect feedback and shape user communities (via forums) • Improves support and cuts its costs • Relatively simple and cheap from the technical standpoint Adomas Svirskas, Vilnius University

  9. Using e-mail • Dominant majority of businesses use it • It is a very powerful marketing tool (when used with care) • Choice of the audience and style matters most • The trick is to make the customer to value the newsletters and product/service info • Spam is walking fine line with the law Adomas Svirskas, Vilnius University

  10. Tracking the Success and Impact • Number of visitors • E-visit profile: pages visited, time spent • Visitor’s profile: origin, personal data (if possible) • Reshaping and restructuring the website according to the findings • Preparing the next step: from brochure-style website to orders online Adomas Svirskas, Vilnius University

  11. Business to Consumer (B2C) • An important category of e-business solutions allowing business transactions with consumers through the Internet • Requires feasibility analysis: • B2C solutions of the competitors • Risk of ignoring B2C solution • New marketing opportunities • Investment needed to support business model Adomas Svirskas, Vilnius University

  12. Business to Consumer (B2C) • Involves: • Web Marketing, pre-sales support • E-Catalogue management • Campaigns, promotions, volume and loyalty discounts, gift vouchers… • Payment (reaches into B2B) • Order fulfillment, customer support (reaches into B2B) • Delivery logistics (reaches into B2B) • Inventory management (reaches into B2B) • Suppliers integration (reaches into B2B) Adomas Svirskas, Vilnius University

  13. Business to Consumer (B2C) • Success factors: • Quality of the solution • User experience (Customer Relationship Management (CRM) domain) • Overall satisfaction • Trust • Reliability • Scalability • Availability • Cost of the solution Adomas Svirskas, Vilnius University

  14. Integrated B2C e-business [1] Adomas Svirskas, Vilnius University

  15. E-Catalogue • The face of any B2C solution • Must be: • Efficient and accurate • Easy to navigate • Easy to manage and maintain • Scalable • Internationalized Adomas Svirskas, Vilnius University

  16. CRM in B2C e-business • E-CRM is quite different from conventional one • E-Users are much more mobile, dynamic, demanding and loyalty is fragile – the competition is just few clicks away… • Personalization matters • Data mining helps to analyze the patterns and predict future trends Adomas Svirskas, Vilnius University

  17. Order Placement • This is one of the crucial steps of B2C • The process should be as smooth for the consumer as possible, here is where the trust is being strengthened (provided that e-catalogue developed initial trust) • Sales taxes, shipping fees should be clearly indicated • Wish lists, persistent shopping carts do matter Adomas Svirskas, Vilnius University

  18. Payment in B2C • Very important and challenging step • Security considerations: • Ensuring the payment mechanism is secure • Presenting it as trustworthy to the customer • Links with financial institutions • Payment mechanisms • Money transfer • Credit cards • Escrow services • Intermediaries (e.g. PayPal) • Fraud prevention, Identity protection Adomas Svirskas, Vilnius University

  19. Inventory Management • The key is to keep inventories (hence costs) down yet ensure prompt fulfillment • On-demand approach • Inventory costs: • Costs to place purchase order/start production • Production/acquisition costs • Stocking costs • Costs of unfulfilled demant Adomas Svirskas, Vilnius University

  20. Fulfillment and Delivery • It is about arriving of the good intact and on time agreed during order placement • An important trust building factor • Involves: • Warehouse operation and pulling the goods • Packing of the goods • Operating/outsourcing delivery service • Tracking deliveries • Dealing with returns • Dealing with seasonal peaks Adomas Svirskas, Vilnius University

  21. Customer service in B2C • An important customer base and loyalty building tool • Thorough and accurate product information • Overall level of information – FAQ, forums, background material • Professional handling of occurring problems Adomas Svirskas, Vilnius University

  22. Conclusions on B2C • B2C lifts retail business to a new level • B2C is integrated mechanism of quite complex processes and should be viewed as such • B2C must be aligned with overall business strategy • B2C implementation prepares business to reach into B2B domain Adomas Svirskas, Vilnius University

  23. References • [1] USHER project http://www.usherproject.org.uk/ • [2] Kotok, A., Weber R.R. ebXML – The new global standard for doing business on the Internet Adomas Svirskas, Vilnius University

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