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E-Commerce Business Plans

E-Commerce Business Plans. E-Commerce Prof. Sheizaf Rafaeli. Why New Business Models?. Business models are changing “In five years’ time, all companies will be Internet companies, or they won’t be companies at all.” Andrew Grove (CEO, Intel) Economist , 1999 Old measures don’t apply

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E-Commerce Business Plans

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  1. E-Commerce Business Plans E-Commerce Prof. Sheizaf Rafaeli

  2. Why New Business Models? • Business models are changing • “In five years’ time, all companies will be Internet companies, or they won’t be companies at all.” • Andrew Grove (CEO, Intel) Economist, 1999 • Old measures don’t apply • “What’s my ROI on e-commerce? Are you crazy? This is Columbus in the New World. What was his ROI?” • Andrew Grove

  3. What is E-Commerce? • Is it electronic mail? • Is it electronic data interchange (EDI)? • Is it video on demand?, home shopping?, electronic publishing? • Is it home banking? Or online personal financial information management? • Is it a new way of organizing? • Is it interactive advertising and marketing? • Is it a new methodology that shows how to implement re-engineering and total quality?

  4. Speed, Scope, Scale Content, Community, Commerce Sequential, Pooled, Reciprocal B2C, B2B, C2C, C2B, B2G Disintermediation/ Reintermediation E-Commerce, E-business? Internet, Intranet, Extranet, VPN More, less innovation? Integration? Automational, Informational, Transformational: Operational, Managerial Buzzwords cheatsheet

  5. Moving to More Interdependency Sequential Reciprocal Pooled from Thompson (1967)

  6. Definitions

  7. Definition of business model • An architecture for the product, service, and information flows surrounding a value-creating activity • Description of the various business stakeholders and the potential benefits to each • Description of the revenue flows that sustain the model (Strategy as who we are and what we do)

  8. business models?

  9. E-Business on the Internet • Business-to-consumer (B2C) • Amazon, Dell • Business-to-business (B2B) • Freemarkets, CommerceOneVerticalnet • Consumer-to-consumer (C2C) • Ebay, QXL • Consumer-to-Business (C2B) • Priceline, Accompany, LastMinute

  10. E-Business on the Internet • Business-to-government (B2G) • E-commerce Resource Center • Markets for Information • infomarco, epinions, abuzz • Markets for Bandwidth and Access • Interorganizational Systems (Extranets) • Enterprise-wide (Intranets) Look for electronic commerce opportunities within the enterprise, with business partners, and with customers.

  11. E-Commerce, E-Business • Electronic commerce is the integrated use of computing and communications technologies for business transactions. • First generation e-commerce uses the web as an alternative channel for conducting business (e.g., placing orders). • E-Business, in addition to encompassing e-commerce, includes both front- and back-office applications.

  12. Second-Generation E-commerce • Allows the business to do something with electronic networks that can’t be done effectively any other way • Ties a business process to the Web as the primary mechanism for conducting daily business • Is based upon full life-cycle business applications • Provides adaptive, personalized, value-added services

  13. Sharing Information with Partners • Interorganizational systems (IOS) are types of information systems that permit the coupling of transactions between organizations, making them more efficient and responsive. • An Extranet is an application of Internet technology that provides specific external parties with controlled access to internal corporate information.

  14. Electronic Data Interchange (EDI) • EDI has been used for 20 years, but it has • High cost • EDI applications are costly to develop and operate • Limited accessibility • Value-Added Networks (VANs) are often used • Rigid requirements • highly structured protocols and rigid meaning of data • Partial solutions • ordering and fulfillment, but not accounting or inventory

  15. Customer Relationship Management Product Innovation Management Infrastructure Management Unbundling the Organization Scope Speed Scale Electronic commerce has low interaction cost, it is natural for web-based businesses to focus on a single core process. (Hagel and Singer, 1999)

  16. Content Community Commerce

  17. 8 Business Model Examples • Merchant model: • Subscription or Metered usage • Infomediary • Advertising • Brokerage • Affiliates • Manufacturers • Communities and Communication

  18. Business Model Examples • Merchant model: • Virtual only or Catalog, Travelocity, Expedia • Bricks & Clicks • Bits-only. • Subscription or Metered usage • Glassbook, Wall Street Journal, FatBrain, Consumer Reports -- BUT: NYT, Slate, MP3, etc... • Infomediary • Portals, registration requests • MyMealPlan, When, Evite, Versity, WebMD • Iowa electronic, Hollywood, Cheathouse, Dr. Koop

  19. Business Model Examples • Advertising models • freebies: BlueMountain, Freemerchant • Specialized, personalized portals: Yahoo, Excite, Lycos • Brokerage models • Aggregate buyers (Accompany) • Fulfill: Kozmo, E-trade, Carsdirect • B2B bartering: MetalSite, ChemConnect • Search agent/bot: MySimon, CareerCentralbottomdollar,

  20. Business Model Examples • Manufacturers • Intel, Apple, Virtual Vineyards • Communities • VerticalNet, iVillage, ICQ, Firefly • HumanClick, PeopleSupport • ThirdVoice, Ubique, iMarkup, uToK • “Viral Marketing”

  21. Customer Service Life Cycle Retirement Requirements Transfer (Disposal) Review / Audit Need description Product offering Ownership Acquisition Service and support Account management Order entry Payment / Settlement Delivery logistics

  22. Business Models for Electronic Markets:Paul Timmers

  23. Business Models for Electronic Markets:Paul Timmers (2)

  24. Evaluation

  25. IT Business Value Metrics Dimensions of IT Business Value Business Processes Automational Informational Transformational Utilization Responsiveness Accuracy Cycle Time Customer Relationships Labor Cost Inventory Cost Operational Administrative Expense Decision Quality Resource Usage Competitive Flexibility Organizational Form Management Efficiency Effectiveness Adaptability Doing things better Doing better things Doing different things

  26. Resources • Business Models for Electronic Marketshttp://www.electronicmarkets.org/netacademy/publications.nsf/all_pk/949/$file/v8n2_timmers.pdf?OpenElement&id=949 • What’s your business model?http://www.eloquent.com/cgi/eloweb.dll?id=274-0 • Intermediaries and CyberMediarieshttp://www.ascusc.org/jcmc/vol1/issue3/sarkar.html • Internet Business Model Patentshttp://www.jonesaskew.com/articles/99/s99modelpat.html

  27. Resources (2) • The B2B Boom – Business 2.0 9/99http://www.business2.com/index/0999/ • The Truth About Business Modelshttp://www.strategy-business.com/briefs/99301/ • The Journal of Computer-Mediated Communication (JCMC) http://www.ascusc.org/jcmc

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