Business and Social Webs

Goals of this chapter

• Understand the importance of „asking WHY“ in the context of web-based systems.

• Learn various motivations for ePresence• Overview on options or archetypes for business-

and social webs• Understand criteria for decision about web

archetypes and marketing strategies in the context of businesses

• Get some insight into virtual communities

Context of Business Webs

• Def.: Business Model (Timmers, 1999)An architecture for product, service, and information flows, including a description of the :– various business actors and their roles– potential benefits for the various business

actors– sources of revenue.

Context of Business Webs

• E-Business Webs are part-of an organization's information system

• Business Webs help people to follow their business strategies

• Social Webs support people in reaching goals

Context: (e-) Presence PlanningQuestionnaire (1)

General business planning:• What is the organization's mission?• What are the resulting goals?• What is the organization's core business?• What are the products and services?• What are the sources of revenue?• What are the benefits to the participating actors?• Who are the customers or addressees?• Who are the competitors?• What is the organizations marketing strategy, or how to

compete?• …

Context: (e-) Presence PlanningQuestionnaire (2)

Planning of e-presence:• What are the goals of e-presence?• What major difference shall it make?• Where can we start and where are we heading to?• What are the costs and benefits to each participating

actor?• What are the major obstacles and risks, what is the

effect of compromising e-presence?• …

Business Web Archetypes

E-shop: simplest solution• Features:

– Web that supports “normal“ business,– Least resistance– Customer support – Cost/benefit ratio– Competitors‘ influence– Often in combination with more advanced

services

Business Web Archetypes (adapted from Tapscott et al. 2000, p. 28)

Self-organizing

Control

Hierarchical

Low Value Integration High

Agora Alliance

Aggregation Value Chain

Aggregation

• The Aggregation business-web enables a flow of goods and services between producers, creating value for both.

• Example: Financial service site offering: savings, mortgage, credit card, insurance products (e.g. Egg)

• Beginning: often e-shop to which third party products are added.

• Aggregator acts as intermediary adding value to end customer as well as third party supplier.

Aggregator

Producer

Producer

Producer

Aggregator

Customer

Customer

Customer

Aggregator

• Features:• Assists the customer in finding the best price• May reward loyal customers by giving discounts• Key requirement: convenience for customer• Final stage is fulfillment: transaction is

processed; works best for intangible products such as insurance

• Application areas: financial services, tourism, theatre industry

Agora (Auction)

• The Agora is a business-web where buyers and sellers come together to negotiate and assign value to goods. A price discovery mechanism allows buyers and sellers to be matched and to carry out exchanges.

• Examples: – eBay: consumer to customer sell-side auction site– FreeMarkets: buy-side auction site

Agora (Auction)

buyerbuyer

buyer

buyer

seller

seller seller

seller

Price-

Discovery

Mechanism

Agora (Auction)

• Features:– Particularly appropriate for perishable goods,

such as flight seats, theatre tickets, etc.– Allows the creation of markets– Dynamic pricing mechanism to improve

performance

Value Chain

• In the value chain an organization integrates multiple steps of the value chain and exploits the information flows between the stages.

• All of the partners act like one enterprise to create value, e.g. shorter delivery, customization, customer support, for the customer through information sharing and cooperation.

Value Chain

Integrator

Producers Customers

Value Chain

• Examples:– Motor industry: customer demands pull cars through a

supply network– Computer industry: Cisco builds the networking

infrastructure that powers the web. Cisco designs the core technologies and manages partner relationships. Most of manufacturing, selling, and support are done by partners, but Cisco provides the context for integration.

– Theatre Industry: Production companies, artists, playwrights, agents, and theatres can be brought together. Customer participation during the creation of performance schedules can be achieved.

Alliance

• In an alliance a “product“ is produced through a community of prosumers.

• A prosumer is both producer and consumer.• Example: OSS Open Source Software; Industrial

strength software, e.g. Linux, is produced by organizations and individuals that contribute code to Linux and use the software to support their businesses. – Contributors are not paid for their contributions– the resulting software can be used free of charge

Alliance

Prosumers

Prosumers

Prosumers

Prosumers

Alliance

• Another example: FriendsReunited– Goal: put people in touch with old school friends– No traditional advertising and marketing– June 2001: 191.000; Oct. 2001: 2 Mio users– Subscription fee: 5 £.

• Features:– Critical mass required– Virtuous (reinforcing) and vicious circles– Discuss what makes alliances work

Virtual Communities

• Virtual Communities are social aggregations of people who carry on public discussions with sufficient intellectual incentives and human feeling to form webs of personal relationships in cyberspace.

• A virtual community has the capacity to integrate content and communication, gives access to competing publishers and consumers and promotes member-generated content.

• Business setting: business networks

Virtual community orientation(Rheingold 2000)

• Interest-oriented:– shared interest on some topic such as sport, music, hobby– Support via chat rooms, message boards, discussion groups

• Relationship-oriented:– Shared life experiences– Focus on sharing information and opinions and community

support

• Fantasy-oriented: – Role playing and imaginary environments

• Transaction-based– Support buying and selling– Provide exchange of information and related products

Virtual community – value creation

• Organizers of virtual communities create value by:– Taking subscriptions– Placing advertising– Selling products and services– Selling market research data– What else?

• Learning• Broadening one‘s perspective

Value Map

• Visual aid for conceiving a business-web

• Parties involved: ellipses

• Flows:– Goods and services, revenues– Information and knowledge– Intangible benefits

Value Map - Example

Theatre-

goers

Affiliates(e.g. Tourist Information

Office)

Theatre

Aggregator

Services(e.g. accomodation,

restaurants)

Theatres

Bar

nd lo

yalty

EC

U com

missionperformances Ticketing service

services

EC

U

Co

mm

ision

bo

okin

gs

Theatre-goer insight

Seats

Market accessECU payment

tickets

Production data

preferences

What's on informationordersECU payment

Ref

erra

ls

Goods, services, revenue

Knowledge

Intangible Benefits

Marketspace transformationMarketspace model (Dutta and Segev, 2001)

• The marketspace model builds on two dimensions: – Technological

• Interactivity of Internet• Connectivity of Internet

– Strategic• 4 P‘s of marketing: product, price, place, promotion• Customer relationships (personalization, one-to-one

marketing possible)

• Internet marketing: management of the marketface – the mix of marketplace (real) and marketspace (virtual)

Marketspace transformationMarketspace model (Dutta and Segev, 2001)

Product Price

Promotion

Customer

Relationships

Place

ConnectivityInteractivity

To think about

• Examples for business webs and discussion what they achieve and what could be improved.

• Draw value maps for prospective business/social webs, e.g. our eLearning solution, the community UniLearn, the InterdisPraktikum application or the web you just dream about to construct.

• What motivations might you have to start a virtual community or to participate in one? What could be the added value for you?

To contribute

• Which components and functions should a virtual community (of a predefined orientation) have? Suggest a class diagram for a virtual community.

• Specify the workflow you suggest to start a virtual community (of a predefined orientation) and to keep it alive.

For discussion

• Humans have a need to communicate – what implications does this have for virtual communities or for the Internet?

• The Internet: a promoter or inhibitor of real relationships?

• Cooperation via Internet: More or less effective than face-to-face cooperation, or what makes eCooperation a valuable complement to real cooperation?