Chapter 14 : E-Business

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

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.

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.

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 & Challenges

E-business benefits include :

• Highly accessible
• Increased customer loyalty
• Improved information content
• Increased convenience
• Increased global reach
• Decreased cost

E-business challenges include :

• Protecting consumers
• Leveraging existing systems
• Increasing liability
• Providing security
• Adhering to taxation rules

There are numerous advantages and limitations in e-business revenue models including :

• Transaction fees
• License fees
• Subscription fees
• Value-added fees
• Advertising fees

Mash-ups

Web mash-up : a Web site or Web application that uses content from more than one source to create a completely new service.

Application programming interface (API) : a set of routines, protocols, and tools for building software applications.

Mash-up editor : WSYIWYGs (What You See Is What You Get) for mash-ups.