E-Business in the Czech Republic Petr Prochazka, PhD.

1) E-Business Basics 2) E-Business Models 4) E-Business in the CR E-business in the CR PRESENTATION OUTLINE

1)E-business Use of digital technology and Internet to drive major business processes Widest spectrum of business activities using Internet and Web technologies 2) E-commerce Subset of e-business Buying and selling goods and services through Internet 3) E-government Using internet technology to deliver information and services to citizens, employees, and businesses E-business in the CR PRESENTATION OUTLINE

E-business and E-commerce Based on information and communication technology Most prominently WWW but also Electronic Funds Transfer or Electronic Data Interchange World Wide Web (Web) A subset of the Internet Built on the concept of hypertext System of linked pages called Web pages Related Web pages are called a Web site Viewed in a Web browser Stored on Web servers Millions of people around the world access the Internet and Web daily E-business in the CR E-Business and E-Commerce

In 2011 estimated global E-Commerce market sales more than $1 trillion US In 2005 E-Business market reaching value of $2 trillion US Widespread linking of individuals and businesses has changed global economy Time and space are no longer limiting factors Business value of information is greater Information is more accessible Traditional intermediaries have been replaced by new types of intermediaries Buyers are growing more powerful Internet and Web access has changed buyers expectations Information on competing products Transaction speed and convenience E-business in the CR E-Business and the Global Economy

E-business in the CR Pros and Cons

Business models How a company conducts business in order to generate revenue Widespread access to the Internet and Web allows companies to adapt old models and create new ones E-business models are often categorized by type of customer E-business in the CR BUSINESS MODELS

E-business in the CR BUSINESS MODELS

Business-to-consumer (B2C) Retail sales (e-retail) including airline tickets, entertainment venue tickets, hotel rooms, stock purchases, diet and fitness programs Most frequent Brick-and-mortar companies are moving to brick- and click companies Sears, Best Buy, Barnes & Noble, the Gap Pure-play e-retailers and catalog merchants Amazon.com, eBags E-business in the CR BUSINESS MODELS

Business-to-business (B2B) Businesses selling to other businesses Online stores, such as Office Depot, Staples Internet and Web technologies Web hosting Web design Hardware and software Consulting E-business in the CR BUSINESS MODELS

Business-to-business (B2B) Online trading communities for vertical markets Exchanges, aggregators, auctions Virtual marketspaces for buyers and sellers Business.com, HedgeHog E-business in the CR BUSINESS MODELS

Business-to-government (B2G) Businesses provide a marketspace for other businesses and government agencies Bidmain, B2GMarkets E-business in the CR BUSINESS MODELS

Consumer-to-consumer (C2C) Consumers sell or exchange products and services directly with other consumers Auctions, online classified ads, expert information exchanges eBay E-business in the CR BUSINESS MODELS

Consumer-to-business (C2B) Reverse auctions in which a single consumer names his or her own price for products or services Consumer’s offer made to multiple businesses, which can accept or decline offer Priceline.com E-business in the CR BUSINESS MODELS

Another view of E-Business model may be: 1) Virtual storefront model 2) Virtual community 3) Portal model 4) Auction model 5) Dynamic pricing model E-business in the CR BUSINESS MODELS

Usually what people believe to be a meaning for the word “e-business” A basic form of e-commerce in which the buyer and the seller interact directly Storefront model enables merchants to sell products on the Web An e-commerce storefront should include: Online catalog of products Order processing Secure payment Timely order fulfillment E-business in the CR VIRTUAL STOREFRONT MODEL

Evolution of online shopping malls Wide selection of products and services Offers greater convenience than shopping at multiple online shops Consumers can make multiple purchases in one transaction E.g., mall.com, amazon.com and bestbuy.com E-business in the CR VIRTUAL STOREFRONT MODEL

Community models Act as places where people meet, chat and share their ideas MSN, Yahoo, Facebook Auction models Act as forums through which Internet users can log-on and assume the role of either bidder or seller Collect a commission on every successful auction Sellers post items they wish to sell and wait for buyers to bid Ebay.com Portal models Give visitors the chance to find almost everything they are looking for in one place E-business in the CR OTHER MODELS

Portal models Horizontal portals Portals that aggregate information on a broad range of topics Yahoo, Google Vertical portals Portals that offer more specific information within a single area of interest IMDB.com E-business in the CR OTHER MODELS

Dynamic pricing models The Web has changed the way products are priced and purchased Name your price model Priceline.com Comparison pricing model Web sites using shopping technology to find the lowest price for a given item Dealtime.com E-business in the CR OTHER MODELS

Dynamic pricing models Rebate Model Sites offer rebates on product at leading online retailers in return for commission or advertising revenues eBates.com Free offering model Free products and services generate high traffic Freemerchant.com E-business in the CR OTHER MODELS

Dynamic pricing models Group Discount Model (one deal a day model) Sites offer discounts for certain items for limited amount of time and number of customers Free offering model Free products and services generate high traffic Freemerchant.com E-business in the CR OTHER MODELS

E-business success depends largely upon the penetration of Internet in the given region Type of internet connection (broadband, dsl, dial-up) E-business in the CR CZECH REPUBLIC OVERVIEW YEARUSERS (mil) POPULATION (mil) % POPULATION

Internet Activity By 2010, new internet activities, replacement of traditional media – WebTV! E-business in the CR CZECH REPUBLIC OVERVIEW YEARSending s Searching for information on goods and services Internet Banking

E-Government E-business in the CR CZECH REPUBLIC OVERVIEW YEAR% population using E- Govt

E-commerce and E-business E-business in the CR CZECH REPUBLIC OVERVIEW YEARE-commerce % of total turnover E-business integration of business processes (int and ext) Security (digital signatures)

Czech Republic Most Successful E-Businesses Horizontal Portals Seznam.cz Established in 1996 as a start-up business by a university student That time Internet was merely an academic network E-business in the CR SEZNAM.CZ

Czech Republic Most Successful E-Businesses First Investments were made by both informal and angel investors Problems with the business model (advertising targeted only at the Internet users, who was using the Internet in 1996?) Advertising on the main page was for $200 US per month E-business in the CR SEZNAM.CZ

Czech Republic Most Successful E-Businesses Seznam.cz was working on a principle similar to yahoo.com The owner ceases to continue his studies In 1998, he adds new functionalities – mail services, news, fulltext search engine In 2000, 30% of the company is sold to a venture investor E-business in the CR SEZNAM.CZ

Czech Republic Most Successful E-Businesses Luckily, the investor firm never takes seznam.cz to the public stock market due to burst of dot.com bubble in 2000s Original owner remains in control of the company In 2005, new services are launched – real estate portal, etc. In 2006, new business model for advertisments is introduced similar to adwords E-business in the CR SEZNAM.CZ

Czech Republic Most Successful E-Businesses In 2007, the original owner steps down and names a new CEO Remains in control of the company In 2007, stream.cz is purchased (WebTV project) In 2009, market share is about 50%, google.cz 30% In 2010, google.cz slowly catches up with seznam.cz Currently, however, seznam.cz is still one of the few portals that faces global google.com competition (together with Chinese Baidu and others E-business in the CR SEZNAM.CZ

Czech Republic Most Successful E-Businesses 2010 Seznam.cz Value: 12 billion CZK Employees: 800 No ambition for international markets but for Slovak republic – aimed at Czechs, looking for competitive advantage in the local market E-business in the CR SEZNAM.CZ

2010 Google.com Equity: 46 billion US Employees: 24,400 Presence in more than 130 markets around the world E-business in the CR GOOGLE.COM

Czech Republic Most Successful E-Businesses Aukro.cz Biggest auction server in the Czech Republic Started in 2003 In 2004, only 7000 registrations In 2008, turnover 2.5 billion CZK In 2010, 1800 new users every day more than 2 million users in total use aukro.cz Number of auctions – per day, items get sold valued at 16 million CZK per day E-business in the CR AUKRO.CZ

Czech Republic Most Successful E-Businesses Alza.cz Biggest e-retailer in the CR Started in 1994 In 2009, more than 2 million orders done In 2010, turnover more than 5.5 billion CZK E-business in the CR ALZA.CZ

Trends on the Czech Internet Price Comparison Servers In % of users In 2010 more than 29% of users use it for shopping Deal of the Day Servers Massive start in 2010 Today more than 40 servers In terms of sold items, highest ranking #10 on the Czech Internet E-business in the CR TRENDS IN THE CR

Trends on the Czech Internet Community Servers #1 Facebook.com #2 lide.seznam.cz Portals #1-2 seznam.cz and google.cz Publication servers #1 youtube.cz #2 local Czech rajce.net News Servers (language) Only Czech media E-business in the CR TRENDS IN THE CR

Florida State College Slideshare Presentation. Florida State College E-business Statistics CR Berkley E-business Presentations Newspapers Annual reports of.cz and.com e-businesses Thomas Bush Starting a Successful E-Business E-business in the CR Sources