Transcript Document

E-commerce fundamentals
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What are the implications of changes in
marketplace structures for how we trade with
customers and other partners?
Which business models and revenue models
should we consider in order to exploit the
Internet?
What will be the importance of online
intermediaries and marketplace hubs to our
business and what actions should we take to
partner these intermediaries?
Figure 2.1
The environment in which e-business services are provided
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For each of the environment influences shown in
Figure 2.1, give examples of why it is important
to monitor and respond in an e-business context.
For example, the personalization mentioned in
the text is part of why it is important to respond
to technological innovation.
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Customers – which services are they offering via
their web site that your organization could support
them in?
Competitors – need to be benchmarked in order to
review the online services they are offering – do
they have a competitive advantage?
Intermediaries – are new or existing intermediaries
offering products or services from your competitors
while you are not represented?
Suppliers – are suppliers offering different methods
of procurement to competitors that give them a
competitive advantage?
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Macro-environment
Society – what is the ethical and moral consensus on
holding personal information?
Country specific, international legal – what are the
local and global legal constraints for example, on
holding personal information, or taxation rules on
sale of goods?
Country specific, international economic – what are
the economic constraints of operating within a
country or global constraints?
Technology – what new technologies are emerging by
which to deliver online services such as interactive
digital TV and mobile phone-based access?
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Capability to respond to environmental opportunities
and threats to gain competitive advantages
Read the pp. 58-59 Mini Case Study 2.1
The video may be searched form Google video
search.
Discuss the key points of strategic agility
P. 59, Activity 2.1 Give examples of why it’s
important to monitor and respond in an e-business
context
Professor Donald Sull of London Business School talks about
strategic agility
Figure 2.2
Source: www.ft.com
Figure 2.3
An online marketplace map
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Customer Segment
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Search Intermediaries
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Intermediaries and Media Sites
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Mainstream news media sites or portal, e.g., cbc.ca, Google
Niche or vertical media sites, e.g., e-consultancy
Price comparison sites (also called aggregator), e.g.,
http://www.pricecanada.com/
Super-affiliates
Niche affiliate or bloggers—often small or individual sites
Destination Sites
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The sites that the marketer tries to generate traffic to
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It describes the way a manufacture / supplier
delivers products and services to its customers
Fig. 2.5 and Fig 2.6 display variety of options
B2B and B2C interactions between an organization, its suppliers and its
customers
Figure 2.5
Characteristics
B2C
B2B
Proportion of adopters with
access
Low to medium
High to very high
Complexity of buying
decisions
Relatively simple –
individual and influencers
More complex – buying
process involves users,
specifiers, buyers, etc.
Channel
Relatively simple – direct or
from retailer
More complex, direct or via
wholesaler, agent or
distributor
Purchasing characteristics
Low value, high volume or
high value, low volume.
May be high involvement
Similar volume/value. May
be high Involvement.
Repeat orders (rebuys)
more common
Product characteristic
Often standardized items
Standardized items or
bespoke for Sale
Disintermediation of a consumer distribution channel showing (a) the
original situation, (b) disintermediation omitting the wholesaler, and
(c) disintermediation omitting both wholesaler and retailer
Figure 2.6
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The creation of new intermediaries between
customers and suppliers, such as search engine,
price comparator, etc. such as
http://www.esurance.com/,
http://www.pricecanada.com/
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Supplies need to
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Be represented with new intermediaries
Monitor other suppliers via intermediaries
Create own intermediaries
Figure 2.7
From original situation (a) to disintermediation (b) and reintermediation (c)
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Creation of a new intermediary by an established
company
Example:
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B&Q www.diy.com
Opodo www.opodo.com
Boots www.wellbeing.com www.handbag.com
Ford, Daimler (www.covisint.com)
Partnering with existing intermediary –
Mortgage broker Charcol and Freeserve
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Infor-mediaries— intermediaries that capture,
profile, and sell customer information
Metamediaries— intermediaries that assist with
selection and discussion of about different
product and services; they connects customers
with the providers
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Example: http://www.metacritic.com/
Figure 2.11
Metacritic (www.metacritic.com)
Source: CBS Interactive
Timmers (1999) defines a ‘business model’ as:
An architecture for product, service and information
flows, including a description of the various business
actors and their roles; and a description of the
potential benefits for the various business actors; and a
description of the sources of revenue.
Key elements
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Value proposition-products & services to offer
Market or audience
Revenue models and cost base
Competitive environment
Value chain and marketing positioning
Representation in the physical & virtual world
Organizational structure
Management
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It describes how a business generate revenue
What are traditional ways?
The New Ways
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Advertising CPM (cost per thousand/mille)
Advertising CPC (cost per click)
Sponsorship of section, content, or widget
Affiliate Revenue (CPA or CPC)
Transaction Fee
Subscription access to content or services
Per-per-view Access to document
Subscription Data Access for e-mail Marketing
Figure 2.14
Alex Tew’s Million Dollar Home Page (www.milliondollarhomepage.com)
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What factors to consider?
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Number and size of ad units
Ads Capacity to be sold
Fee level negotiated for different ads models
Traffic
Visitor engagement (time to stay)
Example spreadsheet for calculating a site revenue model. Available for
download at www.davechaffey.com/Spreadsheets
Figure 2.15
Example spreadsheet for calculating a site revenue model. Available for
download at www.davechaffey.com/Spreadsheets (Continued)
Figure 2.15