Chapter 14 E-Business

Learning Outcomes 14.1 Compare e-commerce and e-business 14.2 Compare the four types of e-business models 14.3 Describe the benefits and challenges associated with e-business 14.4 Explain the differences among e-shops, e- malls, and online auctions

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-Business 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

E-Business Models

E-Business Models

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

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-Business Benefits and Challenges E-Business benefits include: Highly accessible Increased customer loyalty Improved information content Increased convenience Increased global reach Decreased cost

E-Business Benefits and Challenges E-business challenges include: Protecting consumers Leveraging existing systems Increasing liability Providing security Adhering to taxation rules

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

CHAPTER FOURTEEN Opening Case Study Questions Identify the type of e-business model eBay is using and explain why it has been so successful Other major Web sites, like Amazon.com and Yahoo!, have entered the e-marketplace with far less success than eBay. How has eBay maintained its dominant position? What are the three different types of online auctions and which one is eBay using?

CHAPTER FOURTEEN CASE 7-Eleven’s Dream Team 7-Eleven Japan has integrated its online site 7dream.com with its physical stores Through the 7dream.com Web site, 7-Eleven Japan enables consumers to choose from an online assortment of 100,000 products which are picked up from one of 8,400 store locations

Chapter Fourteen Case Questions What 7dream.com sells is “convenience.” Explain how integrating the Internet into its existing business is the key to its success Identify new electronic relationships 7-Eleven Japan can create to increase customer acquisitions Explain how 7-Eleven Japan can leverage the advantages of an e-marketplace to increase customer retention

Chapter Fourteen Case Questions Why is 7-Eleven Japan’s e-business venture successful? Would 7-Eleven Japan’s e-business venture be successful in the United States? Discuss the challenges facing 7-Eleven’s e-business model in the United States How can companies leverage knowledge gained abroad to improve stateside business process?