CHAPTER 13 : E-BUSINESS

➤ E - BUSINESS

The internet is a powerful channel that presents new opportunities for organization to;

• Touch customers
• Enrich products and services with information
• Reduce costs

 How do ecommerce 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

➤ E - BUSINESS MODELS

 E business model – An approach to conducting electronic business on the Internet .

Business-to-Business (B2B)

Electronic marketplace (E-market place) – 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 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-operates in a physical store without an internet presence.Eg : Bata
• Pure-play business-a business that operates on the internet only without a physical store.Eg ; fashionvalet.com
• Click-and-mortar business-a business that operates in a physical store and on the internet.Eg: Hijabs by Hanami

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 stamps 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-to-one with Michael Jordan

➤ E-BUSINESS BENEFITS AND CHALLENGES

E-business benefits include:

• Highly accessible - Businesses can operate 24 hours a day, 7 days a week, 365 days a year
• Increased customer loyalty - Additional channels to contact, respond to, and access customers helps contribute to customer loyalty
• Improved information content - In the past, customers had to order catalogs or travel to a physical facility before they could compare price and product attributes. Electronic catalogs and Web pages present customers with updated information in real-time about goods, services, and prices
• Increased convenience - E-business automates and improves many of the activities that make up a buying experience
• Increased global reach - Businesses, both small and large, can reach new markets
• Decreased cost - The cost of conducting business on the Internet is substantially smaller than traditional forms of business communication

E-business challenges include : 

• Identifying Limited Market Segments - The main challenge of e-business is the lack of growth in some sectors due to product or service limitation.
• Managing Consumer Trust - Internet marketers must develop a trustworthy relationship to make that initial sale and generate customer loyalty.
• Ensuring Consumer Protection - Implement Internet Security, protect from misuse of customer information.
• Adhering to taxation rules - Companies that operate online must obey a patchwork of rules about which customers are subject to sales tax on their purchase and which are not.

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

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

➤ MASHUPS

Web mashup - 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
• Mashup editor - WSYIWYGs (What You See Is What You Get) for mashups
• Web Mashups