1. E-business models

2. Atomic E-Business Model
Direct – to – Customer
Full – Service Provide
Portals, Agents, Auctions, Aggregators, and Other Intermediaries

3. Full – Service Provider
Full – Service Provider E-Business model schematic
B2C & B2B Full – Service Providers
INFRASTRUCTURE
Channel and Segments
Case Study GE Supply Company
Strategic Objective and Value Proposition
Sources of Revenue
Critical Success Factors
Core Competencies

4. Full – Service Provider
Model combines the strength of both the direct-to-customer and the intermediary models.
A firm using the Full – Service Provider model provides total coverage of customer needs in a particular domain consolidated via a single point of contact.
Sourced internally or externally
Domain : financial services, health care, or industrial chemicals

5. Full – Service Provider
Prudential Advisor, established by Prudential Securities, a subsidiary of the Prudential Insurance Company of America.
Prudential Advisor is redefining the full service relationship and bringing together a wealth of resources to support educated investment decisions.
Allows customer to interact in person or by telephone with a live financial adviser.
A flat fee for trade, and an annual fee

6. Prudential Advisor allows Prudential Securities to
own the customer relationship,
the data about what the customers are doing with regards to investment
Some of the transactions
Helps Prudential to cross sell
Third party does not own the customer relationship

8. B2C Full – Service Providers
Barnes & Noble : full service provider for printed information by extending its direct services offerings and partnering with other suppliers.
Extends to
posters and greeting cards
via access to AOL instant messenger
Online book review published in leading journals
Example
Owns the relationship, the data and the transaction
Selling its own products & commission

9. Value to customer - Financial portfolio v/s book portfolio
In more subjective and personal domain, becoming an enduring full-service provider may be substantially more difficult than in the more quantitative domain of investments.

10. B2B Full – Service Providers
Chemnet – major market in building and construction, agriculture, mining, pulp and paper and manufacturing.
The chemical it supplies include mineral acids, acrylic and methacrylic monomers etc.
Many of the chemical suppliers are competitors of other units of Orica.

11. B2B Full – Service Providers : Issues
Chemnet can become the Full – Service chemical Provider for a single factory, an entire company or for the whole industry
As these external opportunities increases so will the internal tensions as
Chemnets sells larger volumes of competing products, and
serves greater number of competing companies
Effectively managing these tensions is one of the critical success factor for the full service provider model

12. INFRASTRUCTURE
In many organizations , layers of systems each built independently to support a specific product line, make it difficult to consolidate information on a customer basis.
Unified view of customer
Databases and data warehouses : most important infrastructure services associated with the model

13. INFRASTRUCTURE
The ability to evaluate proposals for new information systems initiatives to coordinate IT investment across a multi-business-unit-firm with the goal of a single point of contact for the customer.
Centralized management of IT infrastructure capacity to integrate across multiple business units within the firm and third party providers; the full service provider model is not readily workable if each business unit optimizes its own IT needs.
Installation and maintenance of workstations and local area networks to operate the online business linking all the business units and third-party providers.

14. Electronic support for groups to coordinate the cross-functional teams required to implement this model.
The identification and testing of new technologies to find cost-effective ways to deliver this complex business model to the customer across multiple channels.

15. Channels to customers

16. Domain There should be one full service provider in one domain
Domains –
Financial services
Health care
Education
Entertainment
Travel
Government services

17. Case Study – GE Supply Company
Is a business unit of GE
GE Supply offers more than one hundred thousand voice, data and electrical products from more than two hundred suppliers.
The suppliers include GE, as well as some of GE’s competitors – 3M, Lithonia, and Toshiba.
GE Supply delivers products from 150 locations
A website enabling customers to request quotations, order goods, and track their orders via the internet.
GE supply serves electrical contractors, industrial and commercial users, engineer constructors, original equipment manufacturers (OEMs), and utilities.

18. Case Study – GE Supply Company
Value proposition – combines the immediacy of local delivery and support with the scope and resources of a global firm, including low transactions cost.
The company offers a full product line via an online catalog and inventory system keeping track of stocks at 150 locations.
Also offers telephone support from its national sales center, whose staff can assist customers with the product selection and application as well as quoting, expediting and billing.

19. Case Study – GE Supply Company
Full service provider for electrical supplies, including supplies for voice and data communications as well as traditional lighting and power applications.
The company faces ongoing challenge of working successfully with outside suppliers who compete with its sister divisions inside GE.
By providing a ready means for customers to compare GE’s products to those offered by the competition, GE supply may well increase the profits of the company’s manufacturing units. Such comparisons often include factors other than price.
GE Supply’s “Parts Supercenter” offers immediate access to over different GE replacement parts, 24*7. competitors offering narrow product lines are not in a position to offer such services for their own product
“That’s the power of partnering with a market leader”

20. Business model of GE

21. Strategic Objective and Value Proposition
The firm uses a customer database to identify opportunities for cross selling products from its existing range and adding new products to the range.
Offers customer Lower transaction cost for :
Search
Specification
Ordering
Fulfillment
Other suppliers – deal with the full service provider , even at the risk of losing customer contact -
In order to make extra sales
Be part of major market presence

22. Sources of Revenue Selling its own product Annual membership fees
Management fees
Transaction fees
Commission on third party products
Advertising or listing fees from third party providers
Fees for selling aggregated data about customers

23. Critical success factors
Being a leader in your domain
Prudential securities, Barnes & Noble, and GE are all leaders in their field.
They are able to supply a large portion of what customers need in the domain of interest
Other suppliers are added to round out the product line in areas selected by the firm to fit well with its own strength and strategy
Medium and small suppliers may struggle to succeed with the model, as they cannot sell enough of their own products to gain sufficient profit to support the overhead of running the model

24. Critical success factors
The brand, credibility, and the trust for a customer to look to the firm for its complete need in an area.
Banks have a sound basis to become full-service providers in the domain of financial services
Owning the customer relationship in one domain and integrating and consolidating the offering of many third parties into a single channel or multiple channels.
Must prevent losing customer to third parties that may also have potential to attain a full service provider relationships.

25. Critical success factors
Owning more of customer data in the relevant domain than any other player
May not necessarily complete all the transactions, but it must own all of the data about customers, their preferences and their transaction histories
To ethically exploit the ownership of customer data to provide full set of services to the consumer is essential for success in this model
Enforcement of the policies to protect the interests of internal and external suppliers as well as customers.
Ex: the incentive and reward systems of the business units or the channel managers must be based not only on the success of their area but the strength of the total relationship with the customer

26. Core Competencies
Relationship Management : ability to form and manage relationship with customers and with the other players in the value chain.
Strength of the relationship with the customer - Strength of the value proposition to the customer and the ability to deliver - the brand, the breadth of offerings, the price-value equation, and the completeness of the consolidation into a single point contact
Customer and product information management
Collecting, synthesizing, and analysing information about customer segments and their desires, and matching these with the currently available service offerings while identifying opportunities for new product creation

27. Core Competencies IT Infrastructure Brand management and development
Must develop and integrate firmwide transaction processing, customer databases, electronic links to suppliers, and security.
The IT Infrastructure capabilities necessary will be among the largest and most complex for any of the models.
Has to provide seamless integration with a multi-business-unit and perhaps global firm as well as myriad third-party providers
Brand management and development
Requires a trusted brand to thrive
The brand sets the expectation for high quality and the ability to credibly deliver all the consumers’ needs in their domain

28. Portals, Agents, Auctions, Aggregators, and Other Intermediaries
Compare Intermediaries
Electronic Auctions
Model schematic
Electronic Markets and Market Makers
Aggregators
Electronic Malls
Portals
Intelligent Agents

29. Portals, Agents, Auctions, Aggregators, and Other Intermediaries
Case Study – Jango online shopping agent
Customer segments & Channels
INFRASTRUCTURE
Strategic Objective and Value Proposition
Sources of Revenue
Critical Success Factors
Core Competencies

30. Compare Intermediaries
Completeness of service offered
Numbers of buyers and sellers participating

31. Intermediary business models for e-business

32. Completeness of service
Search – to locate providers of products and services
Specification – to identify important product attributes. Specifications reduce communication costs for both buyers and sellers.
Price – to establish the price
Sale – to complete sales transaction, including payment and settlement
Fulfillment – to fulfill the purchase by delivering the product or service.
Surveillance – to conduct surveillance of the activities of buyers and sellers in order to report aggregate activity and prices and to inform and regulate the market.
Enforcement – to enforce proper conduct of buyers and sellers

33. E-Bay Case Study How e-Bay works How pay-pal works

34. eBay e-business model schematic

36. Case Study – Shopster.com

37. Infrastructure Knowledge Management
Enforcing internet and policies
Workstation networks
Centralized management of e-business applications, ensuring consistency and integration across product offerings
IS planning
IS project management

39. Strategic Objectives and Value Proposition
Bringing together buyers and sellers
Getting paid on whatever business they transact
Buyers and sellers are motivated to use intermediaries:
Lower search cost
Lower transaction cost
Intermediary is motivated to attract more users and to increase its range of services to expand the total value its adds to the transaction process

40. Sources of revenue Sellers may pay : a listing fees A transaction fee
A sales commission
Or some combination
Buyers can pay:
Subscription fees
Sales commission

41. Critical Success Factors
Attracting and retaining a critical mass of customers is the primary critical success factor
Building up infrastructure just quickly enough to meet demand as it increases
Owning the customer relationship and producing intermediary site with high degree of “stickiness”
Part of achieving a sticky site is utilizing the ownership of customer data
Using the data to analyse their customers into clear segments.

42. Core Competency The ability to : Information about –
Collect
Synthesize
Utilize
Information about –
product
Prices
Other market factors
Ability to balance completeness of service with customer volume

43. Virtual Community

46. Case Study – istockPhoto.com

47. Infrastructure
Virtual community depends on IT to exist. The most important infrastructure services for the virtual-community based on research :
Training in the use for IT for members of the community
Application Service Provision (ASP) : bulletin boards, s, ISP access
IT research and development :
IS planning
Installation and maintenance of workstations, LAN
Measure for information privacy

48. Channel & Customer Segments?

49. Sustainability ?

50. Strategic Objectives and Value Proposition
Opportunity to interact electronically with like minded individuals
Create and consume content relevant to a topic of personal or professional interest
Created “an attention aggregator”
Lower consumer acquisition costs

51. Sources of Revenue Membership fees (well.com)
Direct sales of goods and services (The Motley Fool)
Advertising
Clickthroughs
Sales commissions

52. Core Competency Building a lasting sense of community
Sourcing or creating attractive content at the economically attractive price
Discovering member needs and understanding the value members attach to meeting those needs

53. Critical Success Factor
Finding and retaining a critical mass of members
Building and maintaining loyalty with an appropriate mix of content and features
Maintaining privacy and security for member information
Leveraging member profile information with advertisers and merchants
Engendering a feeling of trust in the community by its members