MGT 546 E-COMMERCE BUSINESS MODEL PREPARED FOR : SIR SHAMSUL BAHARIN SAIHANI PREPARED BY : AMIRUL ASYAFI BIN ABDULLAH MUHAMMAD SYAFIQ BIN TAJUDIN

BUSINESS MODELS Business Model - A set of planned activities (business processes) designed to result in a profit in a marketplace Business Plan - A document that describe a firm's business model E - Commerce Business Model - Use and leverage the unique qualities of that internet and world wide web (WWW) into a firms business model

8 SUCCESSFUL BUSINESS MODEL VALUE PROPOSITION How a firm product or service fulfill the needs of customers Offer- personalization and customization - reduction of product search cost - reduction of price discovery cost - facilititation transaction by managing product delivery REVENUE MODEL How the firm earn revenue, profit and return on investment (ROI) Advertising Model : fees from advertisers in exchange for advertisment (yahoo.com) Subscription : fees from subscriberin exchange for access to content a services (Malaysiakini.com) Transaction : fees (commission) for enabling or executing a transaction (eBay.com) Sales : sales of goods, information and services (Amazon.com) Affliate : fees for business referrals, customer reduced loyalty points (MyPoints.com)

MARKET OPPORTUNITY Firms marketplace and potential financial opportunities available to the firm. Example: divided into smaller market segment (commercial and consumer vehicle) MARKET STRATEGY The plan or strategy on how firms intends to enter the market and attract new customer. Example: joint venture and free gifts ORGANIZATION DEVELOPMENT How company organize the work to that needs to be accomplished. Organization needs new changes in structure to support ecommerce (work rules, procedures) MANAGEMENT TEAM Employee is responsible for making business model work New skills and knowledge can break the old business model Example: finding the right management team (technical skills and experience)

COMPETITIVE ENVIRONMENT Refer to other firms operating in the same marketspace selling same products Direct Competition : sell products and services very similar and same market segment Indirect Competition : Firms in different industry but still same product and services Large number of competitors in one segment : difficult to be profitable, sign the market is saturated COMPETITIVE ADVANTAGE Achieve when firm produce a superior product and bring the price lower than its competitor in the market Unique forms : First mover advantage - being first in the market Unfair competitive advantage - develop advantage that others cannot purchase (brand name, patents) Firms can use their competitive advantage to perform better than their rivals.

BUSINESS TO CONSUMER BUSINESS MODELSDESCRIPTIONREVENUE MODELSEXAMPLES PORTALOffers integrated package of service and content such as news and . Advertising, Subscription and Transaction. Yahoo.com and MSN.com E- TAILEROnline version of retail store, where customer can shop at any hour. Sales of Goods and Transaction Fees. Amazon.com and Wallmart.com Content ProviderInformation and entertainment providers such as newspapers and sports sites. Advertising, Subscription and Affiliate. Sportline.com and CNN.com

BUSINESS MODELSDESCRIPTIONREVENUE MODELSEXAMPLES Transaction BrokerProcessors of online sales transaction help customers get things done faster. Transaction FeesExpedia.com and Monster.com Market CreatorWeb based business that are used internet technology to create market. Transaction FeeseBay.com and Priceline.com Service ProviderCompanies that make money by selling users a service rather than a product. Sales of ServicexDrive.com and myCFO.com Community Provider Sites where individuals with particular interests, hobbies and experience. Advertising, Subscription and Affiliate. About.com and iVillage.com.