Major Business-to-Consumer (B2C) Business Models Portal offers powerful search tools plus an integrated package of content and

services typically utilizes a combines subscription/advertising revenues/transaction fee model may be general or specialize (vortal) 23. Major Business-to-Consumer (B2C) Business Models E-tailer online version of traditional retailer includes virtual merchants (online retail store only) clicks and mortar e-tailers (online distribution channel for a company that also has physical stores) catalog merchants (online version of direct mail catalog) online malls (online version of mall) Manufacturers selling directly over the Web 24. Major Business-to-Consumer (B2C) Business Models Content Provider information and entertainment companies that provide digital content over the Web typically utilizes an advertising, subscription, or affiliate referral fee revenue model Transaction Broker processes online sales transactions typically utilizes a transactions feel revenue model 25. Major Business-to-Consumer (B2C) Business Models Market Creator uses Internet technology to create markets that bring buyers and sellers together typically utilizes a transaction fee revenue model E.g. Auction English auction Dutch auction Sealed-bid auction Double auction 26. English Auctions The bidders announce their bids until no higher bid is forthcoming going . . . going . . . gone! Ascending-price auctions Typically set a closing time in advance Minimum bid plus a reserve price Early buyout price 27. Dutch Auctions Bidding starts at a high price and drops until a bidder accepts the price Descending price auctions 28. Sealed-Bid Auctions Bidders submit their bids independently and are usually prohibited from sharing information with each other First-price sealed-bid auction The winner pays his amount Second-price sealed-bid auction The winner pays one increment over the second-highest bid received 29. Double Auctions Buyers and sellers submit bids to an auctioneer The auctioneer matches the sellers offers to the buyers offer E.g. New York Stock Exchange 30. Major Business-to-Consumer (B2C) Business Models Service Provider offers services online Community Provider provides an online community of like-minded individuals for networking and information sharing revenue is generated by referral fee, advertising, and subscription 31. e-Business Models Dynamic Pricing Models Name-Your-Price Model Comparison-Pricing Model Demand-Sensitive Pricing Model 32. Name-Your-Price Model Allows customers to state the price they are willing to pay Priceline.com Demand collect systems Use shopping bot that takes customers bid to the Priceline partners to see whether they will accept the prices for the requested products/services Intelligent agents 33. Comparison-Pricing Model Allows customers to poll a variety of merchants and find a desired product/service at the lowest price Mysimon.com Uses intelligent-agent technology Offers discussion groups, customer ratings, and comparison shopping 34. Demand-Sensitive Pricing Model Group purchasing Individual buyers to shop in large groups to obtain group discount The more people who buy a product in a single purchase, the lower the cost per person becomes Mercata.com, mobshop.com, demandline.com How it works Buyers create requests for quotes (RFQs) Purchasing manager monitors all aggregated RFQs Manager negotiates through suppliers.

 35. Demand-Sensitive Pricing Model Price Discrimination Output Price D1 R1 Q1 P1 D2 R2 Q2 Q P2 Marginal cost 36. Demand-Sensitive Pricing Model Benefits to Buyers Reduce product costs Reduce transaction costs Benefits to Suppliers Enhance revenue with a high-volume sales Reduce sales costs Improve manufacturing efficiency 37. Major Business-to-Business (B2B) Business Models 38. Major Business-to-Business (B2B) Business Models B2B Hub also known as marketplace/exchange electronic marketplace where suppliers and commercial purchasers can conduct transactions may be a general (horizontal marketplace) or specialized (vertical marketplace) E-distributor supplies products directly to individual businesses 39. Major Business-to-Business (B2B) Business Models B2B Service Provider sells business services to other firms Matchmaker links businesses together charges transaction or usage fees Infomediary gather information and sells it to businesses 40. Seven Unique Feature of E-Commerce Technology 41. Seven Unique Feature of E-Commerce Technology Ubiquity Alters industry structure by creating new marketing channels and expanding size of overall market Creates new efficiencies in industry operations and lowers cost of firms sales operations Enables new differentiation strategies Global Reach Changes industry structure by lowering barriers to entry, but greatly expands market at the same time Lowers cost of industry and firm operations through production and sales efficiencies Enables competition on global scale 42. Seven Unique Features of E-Commerce Technology Universal Standards Changes industry structure by lowering barriers to entry and intensifying competition within an industry Lowers costs of industry and firm operations by lowering computing and communications costs Enables broad-scope strategies Richness Alters industry structure by reducing strength of powerful distribution channels Change industry and firm operations costs by lessening reliance on sales force Enhances post-sale support strategies 43. Seven Unique Features of E-Commerce Technology Interactivity Alters industry structure by reducing threat of substitutes through enhanced customization Reduces industry and firm costs by lessening reliance on sales force Enable differentiation strategies Personalization/Customization Alters industry structure by reducing threats of substitutes, raising barriers to entry Reduces value chain costs in industry and firm by lessening reliance on sales forces 44. Seven Unique Features of E-Commerce Technology Information Density Changes industry structure by weakening powerful sales channels, shifting bargaining power to consumer Reduces industry and firm operations costs by lowering costs of obtaining, processing, and distributing information about suppliers and consumers 45. Case Studies Should we integrate our Internet business with our traditional business or should we keep the two separate? 46. Seamless Model: Office Depot Two reasons Existing catalog-sales support an Internet store Existing information systems made it easy to coordinate online stores and physical stores Customers Benefit Make shopping simple and convenient Companys Benefit Cheaper to reach customers 47. Seamless Model: Office Depot Added Value Each customer has its own specialized view of the OfficeDepot.com site authorization Provide additional discount for larger customers if they place order on online Actually increased the traffic at its physical outlet

 48. Joint Venture Model: KB Toy Reasons Dont have much experience with catalog retailing Tend to focus exclusively on their physical stores KB Toy and Kbkids.com KB Toy joined with BrainPlay.com to create Kbkids.com $80 million