Pertemuan 7 eBusiness Models and Sectors

1. Pertemuan 7eBusiness Models and Sectors Matakuliah : F0662/ Web Based Accounting Tahun : 2005 Versi : 1/0

2. Learning Outcomes Pada akhir pertemuan ini, diharapkan mahasiswa akan mampu : • Menjelaskan tentang Model e-Business (TIK-8) • Mnjelaskan tentang e-Business Sectors (TIK-8)

3. Outline Materi • Materi 1 Model e-Business • Materi 2 e-Business Sectors

4. Session 12E-business models

5. Business Models • Is a method of doing business by which a company can sustain itself. • Describes how a company makes money by specifying where it is positioned in the value chain. • E- business has given rise to several new kinds of business models. • No simple comprehensive definition/list of business models at present.

6. Business Models Bizmodel Institute, (2000)

7. Generic Forms of Business Models • Brokerage • Advertising • Infomediary • Merchant • Manufacturer • Affiliate • Community • Subscription • Utility

8. Transplanted real world business models Mail order Advertising Subscription Free trial Direct marketing Real estate Incentive scheme Business to business Native Internet Business Models Library model Freeware Information barter Digital Products Access Provision Web site hosting and other Internet Services E-business Models Banbury P (2000)

9. Business Models • Timmers (1999, 31) defines a business model as “the organisation or architecture of products, services and information flows”. • According to this author’s research (case studies), there are presently 11 business models.

10. Types of Business Models • Brochure ware: • poster/billboard • Virtual shops: • pay on delivery • Auction and reverse auction sites: • Portals:

11. Virtual shops • E-Shops: • Firms initially attempt to obtain a web presence with “brochureware”. • Increased patronage will lead to the development of two way interaction facilities. • E-Procurement: • These sites purchase all goods and services via their sites, eg. www.works.com • E-Malls: • Are a collection of e-shops with a common payment method/interface. • www.wishlist.com.au or • www.dstore.com.au

12. E-Auctions are increasing at a rapid rate • E-Bay • has over 10 million bidders per month (Mollman, 2000). • Tradeout • charge sellers a 5% commission, plus a $10 listing fee. They also use email to promote new merchandise. • ComAuction • has banned anonymous buyers and sellers but allows buyers & sellers to communicate directly (this is not encouraged by competitors). • Provide software which allows users to convert photos into 3d images. 3d images reduce buyer anxiety as they can see the product from any angle.

13. Australia’s top auction sites • www.ebay.com. • www.sold.com.au. • www.ebay.com.au. • www.gofish.com.au. • www.ubid.com.au.

14. Australia’s top auction sites - 2 • www.evansclarke.com.au. • www.fowles.com.au. • www.stuff.com.au. • Davinciauctions.com.au. • www.jobnet.com.au.

15. Reverse Auctions • Buyers display a request for goods or a service. • Ariba and Commerce One are adding “reverse auction” modules to their software (Mollman, 2000).

16. Reverse Auctions

17. How Quaker Oats Uses freemarkets.com • Quaker chooses contracts that will be put out to bid. • Evaluates suppliers and decides which ones will be allowed to bid. • Freemarkets also provides list of suppliers. • RFQ is written up and sent out by email to suppliers together with information as to when bidding will take place. • Quaker then uses web browser to watch bidding at freemarkets.com • Auctions generally take place in about 20 – 30 minutes. • Quaker then determines who won the bid and awards the contract

18. Reverse auctions - 2 • Imandi.com and respond.com make buyers list goods or service requests with a price range. • Buyers are anonymous. • No charge presently for buyers (imandi.com). • Respond.com charges merchants $5-50 to notify merchants of a relevant request.

19. Reverse Auctions – imandi.com

20. Reverse auctions - 3 • Imandi.com also charge merchants a small fee to respond to requests. • Reverse auctions allows buyers to “compare”. • Ewanted.com is the only site which allows suppliers and visitors see all bids. • Visible bids generate more competition.

21. Open market Place -ewanted.com

22. Group buying • Many SMEs lack the purchasing power of their large competitors. • Group buying sites “pool” the purchasing power of individuals. www.accompany.com,www.mercate.com,www.pointspeed.com and www.shop2gether.com

23. www.accompany.com

24. Demand Aggregation • Enterprise buyer benefits • Reduce product costs by leveraging purchasing • Reduce transaction,shipping and accounting costs • Reduce maintenance costs by standardizing orders • Suppliers Benefits • Enhance revenues with a high volume sales channel • Reduce sales costs by reaching fragmented buyers. • Improve manufacturing efficiency by standardising product requests

25. Group Buying - 2 • Shop2gether.com – the merchant dictates how many units the purchaser must buy. • Buyers join a group & hope other people also join. • Cycle ends when the seller’s criteria is met (Mollman, 2000). • Buyers charged a fee (most sites don’t charge buying fees).

26. Group buying - 3 • Pointspeed negotiates prices with vendors and collects a fee on transactions (Mollman, 2000). • Provides e-procurement software that allows you to download order details into your accounting package. • Mercata.com purchases goods in advanced. • Idea is to anticipate and attract buyers.

27. Portals Offer a variety of information, services and sometimes goods from one central location • intended to become the potential customer’s start-up page, eg.: • major search engines • http://www.ninemsn.com.au

28. Portals • First portal emerged in 1996. • Also called : • a horizontal portals, • gateways, • megaportals or • electronic marketplaces. • Revisit http://www.ws.com.au/acs/ • “Are the first point of contact (or gateway) which allows users to click to other links from this site” (Sophocleous, 2000; 45).

29. General Purpose Portals • Such as Yahoo.com or Excite.com. • Generate revenue via advertising. • Yahoo is considered the largest portal site (Reisman, 1999; 63). • Aim is to attract as much traffic as possible.

30. Types of portals - 1 • Yahoo is considered a consumer portal. • Mysap.com is a business portal. Attempting to link buyers, sellers, suppliers & catalogue owners (Clark Dickson, 2000). • Specific market niche or industry portals – called Vortals eg. e-Steel

31. Types of portals - 2 • Enterprise Portals • Can be internal or external focused. • Attempting to streamline business processes. • Personalised interface. • Increase productivity. • Need enterprise application integration (EAI). • Intranets, extranets

32. Types of Portals - 3 • Gartner Group further classifies portals into global & local categories. Global portals would be • Excite, • Infoseek, • Lycos or • Yahoo. • Local portals would be • ninemsn.com.au and • telstra.com.au. • In Asia-pacific region, tendency for portals to align themselves with an ISP/telco.

33. How do portals start? • Yahoo & Excite started as search engines. No bricks & mortar. Others such as ninemsn.com.au started as telcos, isp or media players. • Ninemsn.com.au attracts 2million visitors/month (Sophocleous, 2000).Most portals have copied the Yahoo style. Eg. they use content categories & text-pages (speed). • Amazon is neither of the above examples. Also has no bricks & mortar presence. Started in one niche (books), now expanding into other areas.

34. Vortals • Is a web site that provides access to information relating to a particular industry, such as health care, insurance, automobiles, or food manufacturing” (Vortal, 2000). • Target a specific market niche or industry e.g. • itsource.com.au – IT suppliers. • sydneytribe.com.au – 20/30 years olds with an entertainment lifestyle. • Seen as B2B communities. e.g. SMEs with home offices might be attracted to a vortal that provides information about setting up the home office (Vortal, 2000).

35. Types of Business Models (Continued) • Virtual Communities: • Companies use one site to provide or add their information. • eg. www.amazon.com • Collaboration Platforms: • Provide tools (project management, engineering services etc) or an information environment to facilitate collaboration between firms eg. IMCO (Real Estate Integrated Solutions)

36. Types of Business Models (Continued) • Third Party Market Places: • Leave marketing of your product to another party who provides a common interface to a range of products. • eg. http://www.tradezone.com.

37. Tradezone.com

38. Types of Business Models(Continued) • Value Chain Integrators: • Focus on integrating steps of the supply chain. • They are usually on-selling information to firms. • Eg. Telstra. • Can be an example of re-intermediation. • Value Chain Service Providers: • Specialise in a specific functions of the value chain. • eg. online payments, sourcing of goods, insurance. Eg. Payment Service.

39. Types of Business Models (Continued) • Information Brokerage: • Provide a range of information to users. • eg. yahoo.com, excite.com generates 75% of their income from advertising. • Trust Services: • Ensure users are dealing with legitimate sites eg. CareMart. (Timmers, 1999; 38-41)

40. Classification of Business Models Timmers, 1998

41. Business Models Martinez P IBM Corporation (2000)

42. Bibliography • Business models for electronic Commerce – Paul Timmers, European Commission • A taxanomy of Internet Commerce – Paul banbury • http://www.firstmonday.dk/issues/issue3_10/bambury/index.html • Models made “e”: What business are you in?, Pete Martinez IBM corporation (2000) • http://www.ibm.com/services/innovation/gsee510160000f.pdf • Forms and Models of Electronic Commerce, Kaj Hoglund. Dept of computer Science Helsinki University of Technology • http://www.tml.hut.fi/Opinnot/Tik-110.501/1996/seminars/works/forms.html • What the Internet brings to Purchasing. March 2000 • http://www.manufacturing.net/magazine/purchasing/archives/2000/pur0323.00/032isupp.htm

43. Chapter 16Sectors of the e-Business

44. Introduction • The important differences between e-Commerce applications are: • How they fit into the consumer market, • How they are supported by the supply chain • Their potential to alter the role of players in that supply chain.

45. Introduction • The sectors examined in the book are: 1. Bookshops; 2. Grocery Supplies; 3. Software Supplies and Support; 4. Electronic Newspapers; 5. Banking; 6. Auctions; 7. Share Dealing; 8. Gambling.

46. Introduction • These sectors exemplify the range of consumer e‑Commerce services that are available. • Sectors 1, 2, 5 and 7 are discussed in the lecture – the other four areas are for self study.

47. Internet Bookshops General • One of the first applications of e-Commerce • Books have 4 advantages for online retailer: • They can be adequately described online. • They are moderately priced. • Many customers will wait for delivery. • Delivery is manageable/affordable. • Reactions of other players have included: • Large existing players that set up their own e‑Bookstores; • New operators have entered the online market; • Conventional bookshop have been up-rated.

48. Internet Bookshops Supply Chain • e-Commerce has not altered the supply chain. • All bookshops have 2main sources of supply: • Book wholesalers. • Direct supply from the publisher.(some e-fulfilment is direct from the wholesalers)

49. Internet Bookshops Requirements/Facilities • Warehouse (as opposed to retail) premises • Packaging and despatch • IT infrastructure / Web site: • A large database of books. • A search engine for author, title, subject, etc.; • Online access to details of stock • Record of the readers’ interest • Integration into the supply chain

50. Internet Bookshops Examples Amazon www.amazon.com, www.amazon.co.uk • Barnes and Noble www.barnsandnoble.com • Bertelsmann AG www.bol.com • Blackwell www.bookshop.blackwell.co.uk • Chapters www.chapters.ca