Transcript Modeling e-Business with eBML

e-Business
explained through an e-Business Model approach
Course HEG
Neuchâtel, October 2001
Alexander Osterwalder
HEC Lausanne
[email protected]
(+41 21) 692.3420
Université de Lausanne
WEB | AGENDA | FIN
Agenda
•
e-Business
–
•
an e-Business Model Approach to Strategy
Business model components
–
Product innovation
•
–
–
11
22
38
Assets, Activity Configuration and Partner Network
Financial Aspects
•
8
Information, Feel & Serve and Trust & Loyalty
Infrastructure Management
•
> Model
Value proposition, Target Customer and Capabilities
Customer Relationship
•
–
pages
51
Revenue Model, Cost Model and Profit/Loss
© 2001 Osterwalder, HEC Lausanne
e-business 2
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e-Business and the « Hype cycle »
[Gartner Group, 2001]
© 2001 Osterwalder, HEC Lausanne
e-business 3
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«How the Internet influences industry structure»
[Porter, 2001]
© 2001 Osterwalder, HEC Lausanne
e-business 4
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Why an e-Business Model Approach to e-Strategy?
• A buzzword with no precise definition
– […] Executives, reporters and analysts who use the term don't have a clear
idea of what it means. They use it to describe everything from how a company
earns revenue to how it structures its organization [Linder, 2001]
• Dynamic business environment
– Shorter product life cycles
– Increased & global competition
– New Information and Communication Technologies (ICT)
• Evolving dynamic business networks
– Business Webs [Tapscott & al., 2000]
– Co-opetition [Brandenburger & al., 1996]
– Fluid organizations [Selz, 1999]
© 2001 Osterwalder, HEC Lausanne
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e-Business Models: Opportunities
A company that defines it’s business model can...
• …react to rapid change
– Business architects/designers
• …share knowledge
– Business decisions
– buy in
• …simulate & learn
– System dynamics
– Scenarios
© 2001 Osterwalder, HEC Lausanne
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e-Business Model Approach: what is it?
Planning level
Architectural
level
Implementation
level
Strategy
Business
Model
Business
Processes
Information &
Communication
Technology (ICT)
pressure
e-Business
opportunities & change
e-Business
processes
e-Business Technology layer
© 2001 Osterwalder, HEC Lausanne
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e-Business Model Approach: Core Elements of e-Business?
[Ben Lagha, Osterwalder, Pigneur, 2001]
CUSTOMER
RELATIONSHIP
PRODUCT
INNOVATION
value for
resources for
INFRASTRUCTURE
MANAGEMENT
Information
Target Customer
Resources/assets
Feel & serve
Value proposition
Activities/processes
Trust & loyalty
Capabilities
Partner network

Revenue
price
Value added
+
Costs
profit
The e-Business Model Framework (eBMF)
© 2001 Osterwalder, HEC Lausanne
e-business 8
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e-Business Model Approach: Relationships between concepts
value for
PRODUCT
INNOVATION
resource
for
INFRASTRUCTURE
MANAGEMENT
© 2001 Osterwalder, HEC Lausanne
CUSTOMER
RELATIONSHIP
feedback for
resource
for
built
on
cost
resource for
revenue for
FINANCIAL
ASPECTS
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e-Business Model Approach: Relationships between concepts
PRODUCT
INNOVATION
CUSTOMER
RELATIONSHIP
TARGET CUSTOMER
INFORMATION
has needs
value for
sold through
VALUE PROPOSITION
to enable
supposes
resource
for
to collect
FEEL & SERVE
feedback for
CAPABILITIES
builds
on
to improve
to establish
to improve
TRUST & LOYALTY
resource
for
revenue for
builds
on
INFRASTRUCTURE
MANAGEMENT
FINANCIAL
ASPECTS
RESOURCES & ASSETS
REVENUE MODEL
resource for
builds on
cost
ACTIVITY CONFIGURATION
resource for
builds on
PARTNER NETWORK
© 2001 Osterwalder, HEC Lausanne
to increase
PROFIT / LOSS
resource for
diminishes
COST MODEL
e-business 10
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Product Innovation
Product
Innovation
[Ben Lagha, Osterwalder, Pigneur, 2001]
CUSTOMER
RELATIONSHIP
resources for
INFRASTRUCTURE
MANAGEMENT
Information
Target Customer
Resources/assets
Feel & serve
Value proposition
Activities/processes
Trust & loyalty
Capabilities
Partner network

Revenue
price
© 2001 Osterwalder, HEC Lausanne
PRODUCT
INNOVATION
value for
Value added
+
Costs
profit
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Target Customer : Geographical Reach
• With the Internet you are immediately global
– increasing reach
– languages, cultures and legal systems…
• Location loses importance
– Surgeons in New York can operate in France
(Operation Lindbergh) - (pdf)
• Low distribution costs for digital products
– text, images, sound, software, numbers
• Increased competition
– a tailor in Shanghai can hand-make a suit for
a lawyer in Boston and FedEx it to him
© 2001 Osterwalder, HEC Lausanne
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Target Customer : Irrelevance of Time
Product
Innovation
• Always open (24/7)
Increasing routinization/automation
© 2001 Osterwalder, HEC Lausanne
www.leshop.ch
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Target Customer : Increasing Flow of Information
Product
Innovation
• Decreasing searching costs - the
customer is better informed
www.comparis.ch
© 2001 Osterwalder, HEC Lausanne
• Higher expectations
“the competition is
just one-click-away”
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Value Proposition
Product
Innovation
To characterize product innovation, the value proposition
• defines,
• the actual product or service, and
• the value or benefits perceived by customers of the products and services
offered by the firm.
• In the case of e-business this offer naturally includes a strong information
system component, principally the Internet.
TARGET
Targeted customers
© 2001 Osterwalder, HEC Lausanne
VALUE PROPOSITION
CAPABILITES
Competencies, aptitudes
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Value Proposition
Product
Innovation
PRODUCT INNOVATION
innovation
service
level
CUSTOMER RELATIONSHIP
© 2001 Osterwalder, HEC Lausanne
VALUE
PROPOSITION
cost
advantage
INFRASTRUCTURE MANAGEMENT
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Value Proposition : Case Study
Product
Innovation
Audible.com makes it possible for the customer
to listen to audiobooks, lectures, radio,
newspapers and more, either at their desktop
computer or on-the-go with a portable device.
(complementary product innovation)
The value for the customer consists in :
• A new complementary product for computers &
portable devices (product innovation)
• The low price of the product (because of digital
distribution)
• Speeded up distribution & access (over the Internet)
• Improved shopping experience (through samples &
critics)
© 2001 Osterwalder, HEC Lausanne
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Value Proposition : Case Study
Product
Innovation
LiveManuals helps people find interactive
product manuals on the Web to understand how
their products work (innovation + service)
The value for LiveManuals customers consists in :
•
•
•
•
•
Finding support information for thousands of products (product innovation)
Using live product simulations to see how they work
Getting fast answers with interactive user manuals
Tracking warranties (personalization)
Storing all the customer’s model numbers in one place (personalization)
The value for LiveManual partners consist in :
• Making their products more accessible
• Specializing on their core competencies
© 2001 Osterwalder, HEC Lausanne
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Value Proposition : Case Study
Product
Innovation
The medical nutrition network of
Novartis wants to help people deliver
better nutritional care.
(service)
The value consists in :
• Educational material
• Updates on the latest in the Medical
Nutrition field at Novartis
• Support services for consumers, health
professionals and patients
© 2001 Osterwalder, HEC Lausanne
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Capabilities
[Bagchi, 2000]
Product
Innovation
TARGET
Customers
VALUE PROPOSITION
Capabilities
Competencies
© 2001 Osterwalder, HEC Lausanne
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Capabilities Network
[IBM, 1999]
•
•
Product
Innovation
A capability depends on another
When its performance depends on the another’s
attract
people
Forum
with authors
© 2001 Osterwalder, HEC Lausanne
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Customer Relationship
Customer
relationship
[Ben Lagha, Osterwalder, Pigneur, 2001]
CUSTOMER
RELATIONSHIP
resources for
INFRASTRUCTURE
MANAGEMENT
Information
Target Customer
Resources/assets
Feel & serve
Value proposition
Activities/processes
Trust & loyalty
Capabilities
Partner network

Revenue
price
© 2001 Osterwalder, HEC Lausanne
PRODUCT
INNOVATION
value for
Value added
+
Costs
profit
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Feel & Serve : What is a Channel?
Customer
relationship
• A channel can be defined as a set of mechanisms or a network via
which a firm “goes to market” and delivers its value proposition.
– Owned channels - direct (i.e. Web, phone, fax…)
– Owned channels - indirect (i.e. brand shops)
– Partner channels (intermediation i.e. retail, shops, ...)
• More precisely it defines how a firm is “in touch” with its customers for a
variety of tasks
– Customer Buying Cycle (CBC)
– Customer Service Life Cycle (CSLC)
© 2001 Osterwalder, HEC Lausanne
The purpose is to make the
right quantities of the right
products or service available at
the right place, at the right time
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Feel & Serve : Customer Buying Cycle
Customer
relationship
[Muther, 2000; Ives, 2000]
Implementation and Use
Training
Monitoring
Maintenance
Troubleshooting
Reverse Logistics (Returns)
Life Cycle Management
Community
Advertising
Promotions
Public Relations
Partnerships

AFTER
SALES
AWARENESS

Offer (Specification)
Negotiation
Decision
Contract
Order & Order Tracking
Billing & Payment
(Financing)
(Risk taking)
Fulfillment
© 2001 Osterwalder, HEC Lausanne

PURCHASE
EVALUATION

Information
Consulting
(&Requirements)
Specification
Testing
(Community)
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Feel & Serve : Channel Design
Barnes & Noble Inc.
Customer
relationship
CHANNEL
Awareness
Evaluation
Purchase
After sales
Barnes and Noble
Stores
(Retail)
Promotion of
authors and books
Reading corners
Coffee shops
Sales person
Cash registry
(cash/credit card)
Return books
barnesandnoble.co
m
(Website)
Banners to books
etc.
Search function
Customer review
Critics
Excerpt
Shopping cart
checkout
(Credit card)
Order status
Return books
Transaction history
Affiliation Network
(Internet)
Specialized
affiliate Websites
Expert
commentaries
Recommendation
Barnes and Noble
University
(Website)
Free online courses
Courses based on
books etc.
TV, Print, Movies
(Mass media)
Mass advertising
© 2001 Osterwalder, HEC Lausanne
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Feel & Serve : Dis-intermediation (who owns the customer?)
[Benjamin, 1995]
Cost
Customer
relationship
% profit
(shirt)
Producer
Distributor
Retailer
Customer
$52.72
0%
Producer
Distributor
Retailer
Customer
$41.34
28%
Producer
Distributor
Retailer
Customer
$20.45
62%
Producer
Distributor
Retailer
Added value
$20.45
$11.36
$20.91
Price
$20.45
$31.81
$52.72
© 2001 Osterwalder, HEC Lausanne
Customer
$52.72
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Functions of intermediaries
Customer
relationship
Facilitate
• Matching between an offer and a demand
• the research of products (& their sellers)
• the aggregation of products (& of sellers)
• the aggregation of customers (& and their needs)
– buying clubs, customer associations, group buying
•
•
•
•
•
•
•
•
the protection of the private sphere and the management customer profiles
putting sellers under pressure
evaluation of needs and the suggestion of the adequate product
the management of risk (insurance)
the distribution of the articles
the diffusion of information on products
influence on the buying act (Marketing)
the transmission of information about the customer
Intermediaries improve the efficiency of the exchange between producers and
consumers, by aggregating transactions and creating economies of scale or scope
© 2001 Osterwalder, HEC Lausanne
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Feel & Serve : Distribution channels
[Klein, 2001]
Customer
relationship
Otopenia …
Airline
Reservation S.
Travel Agency
80% by Internet!
© 2001 Osterwalder, HEC Lausanne
e-business 28
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Feel & Serve : Intermediaries
Customer
relationship
[Sakar, 1995]
Pre-internet
More expensive with intermediary
More expensive
with intermediary
I. Direct market reinforced by
the Internet
ultra-intermediation
Post-internet
Cheaper with
intermediary
III. Cyber-mediary
extra-intermediation
Cheaper with intermediary
II. Threatened intermediary
dis-intermediation
IV. Intermediary reinforce by
the Internet
re-intermediation
Expedia …
© 2001 Osterwalder, HEC Lausanne
e-business 29
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Distribution channel conflict
[Afuah, 2001]
Customer
relationship
For established companies (incumbents, bricks-and-mortars)
• Risk of cannibalization
• Difficulty to reconcile to ways of selling
– on the sales force level
– Compaq and its resellers and the advent of direct sales
• Former competencies, advantage or disadvantage?
versus
– unusable or contra-productive, in case of radical innovation
– Capitalization possible, if innovation incremental
•
QUESTION: start doing e-commerce:
– Integrated entity?
– Separated company?
© 2001 Osterwalder, HEC Lausanne
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Information
Customer
relationship
• Data Warehousing
– gather information
• Data Mining
– find relations between information
• Business Intelligence
– learn from information
– OLAP
• Personalization
– use information for customer relationship
– recommending systems
– personnel customer memory
© 2001 Osterwalder, HEC Lausanne
Online Analytical Processing
(OLAP)
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Information : Recommending system – rule based
•
•
•
•
Conversion
prospect  client
Suggest a personalized content
maintain a privileged relation with the customer
preserve a track of each visit and a customer profile
manage an individualized interaction
–
promotion, action, catalogue, historic, ...
– from business rules (if … then)
– and from the client's profile
–
without interfering (too much) with his private life
© 2001 Osterwalder, HEC Lausanne
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Information : Recommending system - Collaborative filtering
Customer
relationship
• anticipate customers needs
– recommend products
• from his preferences
– as if we knew him for a long time
• and from preferences of other clients with similar tastes
– word of mouth & correlation
– learn by experience
– agents (intelligent)
•
(if you liked this, then you should also like this …)
big mass of information
rating
Isabelle
Thomas
Mathieu
Catherine
Benoît
Fabian
book 1
1
5
5
2
1
book 2
1
2
2
2
3
1
book 3
5
1
book 4
?
4
3
3
5
3
4
Catherine and Fabian seem to have a similar judgement to Isabelle's for the books 1, 2 (& 3);
their rating (explicit) is used for Isabelle's (implicit) for the book 4: between 4 and 5
© 2001 Osterwalder, HEC Lausanne
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CRM – Customer Relationship Management
Customer
relationship
– Sales force (SFA - Sales Force Automation)
• Prevision, contacts, estimate, proposition, follow up …
– Convert a visitor to a customer and keep the customer
SALES
Customer Base
SERVICE
Customer care
– Call center, messaging, web …
– Self-service
– Pro-active, quality of service, …
© 2001 Osterwalder, HEC Lausanne
MARKETING
– initiative, campaign
– from telemarketing to messaging
– one-to-one marketing
personalization
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Trust & Loyalty
Customer
relationship
TRUST
Contribute to the
establishment of
SECURITY
Certification
Verification et authorization
Escrow
Fear: financial losses
QUALITY
Notary, payments
Expertise
Guarantee of quality
PRIVACY
Rating
Fear: loss of intimacy
Reputation of actors
Insurance
Contribute
Risk management
INFO- MEDIARY
COMMUNITY
BRAND
Notoriety …
© 2001 Osterwalder, HEC Lausanne
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Trust & Loyalty : Community
Customer
relationship
[Hagel, 1997]
Group of people or entities
– that share values or interests
– and use the le Net regularly &
at the same place
transaction
interest
fantasy
relation
© 2001 Osterwalder, HEC Lausanne
Business, trading,
occasions, barter …
Idea sharing,
communication …
Role games,
fantasy world…
Assistance (disease),
sharing of experiences …
One-to-One
Put pressure on
sellers
One-to-Tribe
Meeting of
sellers/buyers
Buy
Market
Union
mix
(mass)
(informed)
Barter
Sale
New age
target
(unselfish, elitist)
(spendthrift)
Target customers
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Trust & Loyalty : Infomediary
Customer
relationship
[Hagel, 2000]
•
•
•
•
•
Receives, merges and manages the buyers information
protects the buyer
supplies information to vendors
puts the vendors under pressure
obtains advantages for the buyer on the behalf of the vendors
– for the information given to the vendors
•
•
prefigured by Portals, buying clubs, associations of consumers …
requires skills and rare technologies
•
Who can become info-mediary?
–
–
–
–
–
Fiduciaries
Merchants
buying clubs & consumer associations
databases
media, portals, …
© 2001 Osterwalder, HEC Lausanne
brand
emotion
traffic
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Infrastructure Management
Infrastructure
management
[Ben Lagha, Osterwalder, Pigneur, 2001]
CUSTOMER
RELATIONSHIP
resources for
INFRASTRUCTURE
MANAGEMENT
Information
Target Customer
Resources/assets
Feel & serve
Value proposition
Activities/processes
Trust & loyalty
Capabilities
Partner network

Revenue
price
© 2001 Osterwalder, HEC Lausanne
PRODUCT
INNOVATION
value for
Value added
+
Costs
profit
e-business 38
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Activity Configuration : Configuration of activities
Infrastructure
management
[Revaz, 1995]
Tôles laminées
Metalu
Alliages reçus
Informations alliages
Alusun
Presser
(13)
Tôles pressées
Laminer
(1)
Tôles laminées
Découper
(14)
Tôles découpées
Eléments soudés
Souder (9)
Tôles pressées
Rechercher
alliages (5)
Nouvel alliage
Presser
(2)
Tôles pressées
Commandes
Capots moteurs
Suivre les contrats (6)
Toits
Stocker (15)
Découper
(3)
Eléments soudés
Livrer (10)
E1
Stocker (4)
Emettre des
propositions
Panneaux alu
Eléments soudés
Capots moteurs
Toits
Aerotech
Cartel
E2
Montants
encaissés
Informations
Concevoir
(16)
Conclure des
contrats
Livrer (7)
Rechercher
composants
(17)
Plans
Propositions
émises
Contrats
Panneaux alu
Capots moteurs
Commandes
Assembler
(8)
Toits
Composants
Informations
Composants
Tableaux de bord
Landcar
Gérer les stocks (11)
Tableaux de bord
Sky Star
© 2001 Osterwalder, HEC Lausanne
Tableaux de bord
Livrer (12)
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Activity Configuration : Value Chain
[Porter, 1985]
© 2001 Osterwalder, HEC Lausanne
Infrastructure
management
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Case study: ColorMailer
[Ben Lagha, Osterwalder, Pigneur, 2001]
Infrastructure
management
ColorMailer...
• ...is a brand of Colorplaza Ltd., an independent
company based in Vevey/Switzerland, active in the
field of digital imaging and in the development of
multimedia Internet applications.
• ...offers products and services in the domain of
digital imaging for private customers.
• …bets on the increasing number of owners of
digital cameras and scanners (~ 30 million
people).
Http://www.colormailer.com
© 2001 Osterwalder, HEC Lausanne
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Case study: Infrastructure management element at ColorMailer
[Ben Lagha, Osterwalder, Pigneur, 2001]
Infrastructure
management
ColorMailer
Website
Printing
infrastructure
RESOURCES/ASSETS
in-house
Resources
for
ACTIVITY CONFIGURATION
Need
for
Packing
staff
Need
for
upload
images
Print of
images
Delivery
of items
Marketing
of product
services
Resources
for
PARTNER NETWORK
out-house
© 2001 Osterwalder, HEC Lausanne
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Partner Network : Alliances and partnerships
Infrastructure
management
Bank
payment
clearance
order
Distributor
inventory
deliver
Credit card
Amazon.com
Shipping
sales
Information systems
coordination
contents
sale
deliver
order
sales
Affiliate
critics
sales
transport
tracking
Customer
buy
content
Author
marketing
© 2001 Osterwalder, HEC Lausanne
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Partner Network : e-SCM, e-procurement and e-market
Infrastructure
management
Power of buyers 
buyers
suppliers
procurement
Electronic
market
Market Vs. relation
Reduced transaction costs
Improved information access
group buying …
Reduced selling costs
bigger market access
Dis-intermediation …
supply chain
Customers’
needs
Integrated
channels
Products/
services
Flexible
processes
Outsources/
In-house
competencies
Power of suppliers 
© 2001 Osterwalder, HEC Lausanne
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Partner Network : Strategic network
Infrastructure
management
[Malone, 1993]
high
Production cost
Co-production
partnership
BUY
Externalization
NETWORK
MARKET
Virtualization
Holding
Coordination cost
low
low
MAKE
HIERARCHY
high
Supply chain
© 2001 Osterwalder, HEC Lausanne
e-business 45
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Logistics: the hidden face of e-commerce
[Kalakota, 1999]
•
Infrastructure
management
Shop
– department and/or stock (eventually separated)
•
Franchise or partnership
– fragmented sector: multitude of small shops
•
Multi-channel distribution center existing
– mail order business with a certain volume
•
Ad hoc distribution centers
– mail order business with a high volume
and also
• Virtual warehouse (partnership with third party)
– outsourcing
– use of distribution centers FedEx, for ex.
•
transportatio
n
Direct sending by manufacturer
– outsourcing
– integration of information systems
© 2001 Osterwalder, HEC Lausanne
warehousing
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Order fulfillment (warehousing)
Infrastructure
management
[Kalakota, 1999]
outsourced
Third-Party
Fulfillment
Center
Manufacturer
Direct
Shipment
Partner
Fulfillment
Opération
Operation
Build-to-order
self-operated
Dedicated
Fulfillment
Center
centralized
In-store
Distributed
Delivery
Centers
distributed
Structure
© 2001 Osterwalder, HEC Lausanne
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outsourced
Third-Party
Fulfillment
Center
Partner
Fulfillment
Opération
Dedicated
Fulfillment
Center
Distributed
Delivery
Centers
centralized
Volumes
Investment
Flexibility
© 2001 Osterwalder, HEC Lausanne
Infrastructure
management
in house
Operation
Changing the warehousing approach
distributed
Structure
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Standards - XML
Infrastructure
management
[Haifei Li, 2000]
• Collection of business components (product, supplier, order, …)
• and standard processes (fulfillment, invoicing, delieving …)
• XML tags for inter-application exchanges
– EAI, B2B, …
– EDI legacy (ISO codes, X12 components)
• bizTalk
– By Microsoft
– Simple Object Access Protocol (SOAP)
• Common Business Library (CBL)
Scénario ABC
– By CommerceOne
• Commerce XML (cXML)
– By Ariba
•
and also Bolero, IOTP, OAGIS, OCF …
© 2001 Osterwalder, HEC Lausanne
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Standards - ebXML
Infrastructure
management
Initiative OASIS & UN-CEFAC (Edifact)
UML
Trading
TPA Partner
Arrangement
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Financial Aspects
Financial
Aspects
[Ben Lagha, Osterwalder, Pigneur, 2001]
CUSTOMER
RELATIONSHIP
resources for
INFRASTRUCTURE
MANAGEMENT
Information
Target Customer
Resources/assets
Feel & serve
Value proposition
Activities/processes
Trust & loyalty
Capabilities
Partner network

Revenue
price
© 2001 Osterwalder, HEC Lausanne
PRODUCT
INNOVATION
value for
Value added
+
Costs
profit
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Value creation and revenues - a simple equation
Financial
Aspects
«The creation of an economic value stays the measure of success»
• PROFIT
 = (P – VC).Q – FC
FINANCIAL
ASPECTS
REVENUE MODEL
to increase
P
the unit price of a product
VC the variable cost of a unit
Q
the number of products sold
PROFIT / LOSS
diminishes
COST MODEL
FC fixed costs
© 2001 Osterwalder, HEC Lausanne
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Revenue Models
• Selling
– selling a good : flowers
(i.e. www.fleurop.ch)
– selling a service : brokerage
(i.e. www.consors.ch)
© 2001 Osterwalder, HEC Lausanne
Financial
Aspects
• Revenue Sharing
– affiliation programs
(i.e.Amazon.com)
– commission
(i.e.ColorMailer.com & partners)
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Revenue Models (…continued…)
Financial
Aspects
• Providing/Leasing
– Application Service Providers (ASP)
(i.e. JD Edward Enterprise Resource Planning (ERP))
• Advertising/Sponsoring
– www.romandie.com / www.yahoo.com
www.jdedwards.com
© 2001 Osterwalder, HEC Lausanne
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Revenue Models (...continued)
Financial
Aspects
• Transaction Cut
– auctions (i.e. eBay.com)
– brokerage
(i.e. SWX Swiss Exchange www.swx.ch)
• Licensing
– intellectual capital (Rambus)
– Software (i.e. Oracle, Microsoft, …)
• Franchising
– Benetton, McDonalds
© 2001 Osterwalder, HEC Lausanne
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Pricing Models
Financial
Aspects
• Free
– subsidized through other
revenues (i.e. advertising)
• Fixed Pricing
–
–
–
–
menu pricing (ev. with discount)
subscription
pay per use
below cost (...subsidized)
Free: le Monde
• One-to-one bargaining
Subscription: WS Journal
– negotiation
• Auction
– reverse auction
– dutch auction
– ...
Dutch Flower Auction
© 2001 Osterwalder, HEC Lausanne
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Pricing Models (…continued)
Financial
Aspects
• Real-time Market Driven
– offer/demand (i.e. stock markets)
• Lowest price
– (i.e. through agents,
through proof)
• Barter
– no money flow
• Product Mix dependant
colruyt.be
– bundling (i.e. computers,
mobile phones, hotels)
barterdirectory.com.au
© 2001 Osterwalder, HEC Lausanne
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Transforming the pricing
[Klein, 2000]
• Based on
–
–
–
–
•
catalog
negotiation between the seller and the buyer
auction
request for proposal (RFP)
« good bye to fixed pricing »?
– Suppliers enjoy price differenciation in order to avoid comparison
– Customers enjoy low price and gaming using comparison
Yield Management
• Allows to calculate in real time (online if on the Internet)
• the best prices
• for maximazing the profit generated by the sales
• based on a forecasting model of sale behavior
(for micro-segments)
© 2001 Osterwalder, HEC Lausanne
Yield Management
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Trends towards dynamic and online pricing
[Klein, 2000]
Financial
Aspects
• Based on
–
–
–
–
•
catalog
negotiation between the seller and the buyer
auction
request for proposal (RFP)
« good bye to fixed pricing »?
– Suppliers enjoy price differenciation in order to avoid comparison
– Customers enjoy low price and gaming using comparison
Yield Management
• Allows to calculate in real time (online if on the Internet)
• the best prices
• for maximazing the profit generated by the sales
• based on a forecasting model of sale behavior
(for micro-segments)
© 2001 Osterwalder, HEC Lausanne
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Yield Management - conditions
• Perishable product
– No value after a given date (seat onboard, room, …)
• Variable demand and rigid production capacity
– Demand changes (high, low, …)
– Offer is fixed
• Reservation
– Before the use of the service
• Price differenciation
– Elasticity (demand/price) is variable according to the segment
– Attract customer with high sensity to price with low prices (apex)
– Keep demanding people with price barriers (1st class)
• High fixed cost & low variable cost
• Price leverage
– Small increase of revenu causes significative increase of profit
© 2001 Osterwalder, HEC Lausanne
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e-Business Models: HEC Lausanne Research Objectives
[Ben Lagha, Osterwalder, Pigneur, 2001]
E-Business Model
Language (eBML)
E-Business Model Handbook
- navigate in concepts (www)
- graphical representation
- illustrative examples
- ontology representation (xml)
- graphical representation
- knowledge sharing
E-Business Model Ontology
or Framework (eBMF)
- concepts/models (components)
- links between concepts/models
E-Business Model
Simulation
E-Business Model
Design Tool
- scenarios (system dynamics)
- learn about Business Models
- be prepared
- computer assisted design
- evaluation
- change management
E-Business Model
Games
- play, learn & understand
© 2001 Osterwalder, HEC Lausanne
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END
© 2001 Osterwalder, HEC Lausanne
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