1 University of Palestine E-Business ITBS 3202 Ms. Eman Alajrami 2 nd Semester

2 Chapter 2 – part2 E-commerce fundamentals

3 Business model Timmers (1999) defines a ‘business model’ as: An architecture for product, service and information flows, including a description of the various business actors and their roles; and a description of the potential benefits for the various business actors; and a description of the sources of revenue.

4 Business models Figure 2.11 Alternative perspectives on business models

5 Business Models (cont.) Revenue model: description of how the company or an EC project will earn revenue Sales Transaction fees Subscription fees Advertising Affiliate fees Other revenue sources

6 Typical Business Models in EC 1. Online direct marketing 2. Electronic tendering systems tendering (reverse auction): model in which a buyer requests would-be sellers to submit bids, and the lowest bidder wins 3. Name your own price: a model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price 4. Affiliate marketing: an arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to the selling company’s Web site 5. Viral marketing: فيروسي word-of-mouth (WOM) marketing in which customers promote a product or service to friends or other people

7 Typical Business Models in EC (cont.) 6.Group purchasing: quantity purchasing that enables groups of purchasers to obtain a discount price on the products purchased 7. SMEs: small to medium enterprises 8.Online auctions 9. Product and service customization customization: creation of a product or service according to the buyer’s specifications 10. Electronic marketplaces and exchanges 11. Value-chain integrators 12. Value-chain service providers

8 Typical Business Models in EC (cont.) 12. Information brokers سمسار 13. Bartering مقايضة 14. Deep discounting 15. Membership 16. Supply chain improvers Note :Business models can be independent or they can be combined amongst themselves or with traditional business models

9 Classification of EC by Transactions or Interactions business-to-consumer (B2C) : online transactions are made between businesses and individual consumers business-to-business (B2B): businesses make online transactions with other businesses e-tailing: online retailing, usually B2C business-to-business-to-consumer (B2B2C): e-commerce model in which a business provides some product or service to a client business that maintains its own customers consumer-to-business (C2B): e-commerce model in which individuals use the Internet to sell products or services to organizations or individuals seek sellers to bid on products or services they need

10 Classification of EC by Transactions or Interactions (cont.) consumer-to-consumer (C2C): e-commerce model in which consumers sell directly to other consumers peer-to-peer (P2P): technology that enables networked peer computers to share data and processing with each other directly; can be used in C2C, B2B, and B2C e-commerce mobile commerce ((m-commerce): e-commerce transactions and activities conducted in a wireless environment location-based commerce (l-commerce): m-commerce transactions targeted to individuals in specific locations, at specific times

11 Classification of EC by Transactions or Interactions (cont.) intrabusiness EC: e-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization business-to-employees (B2E): e-commerce model in which an organization delivers services, information, or products to its individual employees collaborative commerce (c-commerce): e-commerce model in which individuals or groups communicate or collaborate online e-learning: the online delivery of information for purposes of training or education exchange (electronic): a public electronic market with many buyers and sellers

12 Classification of EC by Transactions or Interactions (cont.) exchange-to-exchange (E2E): e-commerce model in which electronic exchanges formally connect to one another the purpose of exchanging information e-government: e-commerce model in which a government entity buys or provides goods, services, or information to businesses or individual citizens

13 Ecommerce can be divided into five distinct categories: Business business Network-based ordering from suppliers, invoicing, making payments Business consumer Web based electronic retailing Business government Transactions such bidding for government contracts Consumer government Epayment of taxes, receiving govt. services Consumer consumer Peer-to-peer, bartering, auctions From Indiana Slides

14 Electronic Commerce: Definitions and Concepts (cont.) Pure vs. Partial EC depends upon the degree of digitization (the transformation from physical to digital) of: the product (service) sold; the process; and for the delivery agent (or digital intermediary) Brick-and-Mortar organizations are old- economy organizations (corporations) that perform most of their business off-line, selling physical products by means of physical agents

15 Electronic Commerce: Definitions and Concepts (cont.) Virtual (pure-play) organizations conduct their business activities solely online Click-and-mortar organizations conduct some EC activities, but do their primary business in the physical world Electronic market (e-marketplace) online marketplace where buyers and sellers meet to exchange goods, services, money, or information

16 Electronic Commerce: Definitions and Concepts (cont.) Interorganizational information systems (IOSs): allow routine transaction processing and information flow between two or more organizations Intraorganizational information systems enable EC activities to go on within individual organizations