E-Business Management Session 1: E-Business Management Models
Slide 2 Session Objectives What is e-business? Highlight the
history of e-business What is a strategy? Determine the types of
e-businesses Market Segmentation e-business Market Segmentation
Matrix B2B Marketplaces e-business models Slide 3 What is
e-business? The use of internet to network and empower business
processes, electronic commerce, organizational communication and
collaboration with in a company and with its customers, suppliers,
and other stakeholders. (Combe, 2006) Slide 4 What is e-business?
The use of electronic means to conduct an organization's business
externally and/or internally Internal linking of employees within
the organization through an intranet to improve information
sharing, facilitate knowledge dissemination and support management
reporting External supporting after-sales service and collaborating
with partners (Jelassi & Enders, 2005) Slide 5 e-business and
e-commerce E-commerce is the buying and selling of goods and
services on the Internet E-business is a subset of e-commerce
http://www.onenortheast.co.uk/page/business/ecommerce.cfm Slide 6
Course Rationale Is it too soon to take the e out especially in the
Caribbean? Bringing technologists and non- technologists together
to make the strategy work To be a technologist and a strategist as
well Slide 7 Before e-business there was Information &
Communication Technology (ICT) Infrastructures before the Internet
Electronic Data Interchange (EDI) Inter-organizational information
systems (IOS) Public IT platforms Disadvantages High Implementation
costs Difficult to inter-connect different islands of technology
Slide 8 Strategy - Definitions The strong focus on profitability
not just growth, an ability to define a unique value proposition,
and a willingness to make tough trade-offs in what not to do
(Porter, 2001) Slide 9 Strategy - Definitions Long term direction
of the firm Overall plan for deploying the firms resources
Willingness to make trade-offs Achieve unique positioning vis--vis
competitors Achieve sustainable competitive advantage over rivals
thus ensuring lasting profitability (Enders & Jelassi, 2005)
Slide 10 Types of strategy Slide 11 Block Strategy A firm erects
barriers around its product market space Components of the business
model are inimitable, offering customers unique value and thus
keeping out competitors If all firms are equally capable, firm can
reduce prices signaling to newcomers that post-entry prices will be
low Slide 12 Run Strategy Blockades to entry can often be
penetrated or eventually will fall Running changing some subsets of
components or linkages of the business model or reinvent the entire
model to offer customers better value Cannibalization introduction
of new products that render existing ones less competive Slide 13
Team-Up Strategy Teaming-up via a strategic alliance, acquisition
or equity position allowing a firm to share in resources of another
company Disadvantage The firm may become too dependent on the other
firms resources Slide 14 It takes more than technology to profit
from technology Imitability The extent to which the technology can
be duplicated/substituted/leapfrogged by competitors Complementary
Assets All other capabilities that underpin the technology brand
name, manufacturing, marketing, distribution, channels, etc.. Slide
15 It takes more than technology to profit from technology Slide 16
e-business Type Pure-Clicks Internet Pure-clicks Companies in
existence because of the internet Examples www.amazon.com,
www.lastminute.com, www.limewire.comwww.amazon.com
www.lastminute.comwww.limewire.com Internet as addition to core
business Examples www.tesco.comwww.tesco.com Slide 17 e-business
Type Clicks and mortar Clicks and mortar/Bricks and clicks
Traditional companies that invest or merge with dot.coms to achieve
synergy with online and offline activities Examples
www.barnesandnoble.com; www.shopatcaveshepherd.com;
http://www.colonyclubhotel.comwww.barnesandnoble.com
www.shopatcaveshepherd.com http://www.colonyclubhotel.com Slide 18
Key Elements of a Business Environment Economies of exchanging
information Cost of sending information via the internet is
practically zero and the reach is global Connectivity and
interactivity More people are communicating via the internet in
real-time Network economies of scale Opportunities for achieving
critical mass of customers by accessing a wider customer base
electronically at a lower cost Speed of change Transactions are
faster thus processes throughout supply chain are re-adjusted to
meet customers demands and expectations Slide 19 Key Elements of a
Business Environment Economies of abundance Too much information
lead to increase of search costs Merchandise exchange Compared to
traditional forms of shopping Internet offers much greater
convenience at lower cost and potentially better service delivery
Prosumption Customers can determine design, development and
production of the products and services that they wish to buy Slide
20 Key Elements of a Business Environment There are three types of
channels through which e-business can take place Communications
Channel Easier access to more information Transactions Channel
Increases efficiency and reduces transaction costs Distribution
Channel Some products and services can be received instantly via
the Internet (Combe, 2006) Slide 21 Market Segmentation Provides
insights into customer preferences Helps to determine the product
and the features Helps to determine the distribution channels
Provides information on potential size Helps to determine ROI Helps
to determine scale effects Slide 22 Market Segment Measurable
Should be able to measure the size of a segment to determine
purchasing power Substantial Should be large enough to be served
profitably Differentiable Should be exclusive and react differently
to a variety of marketing approaches Actionable Should be possible
to develop and serve specific segments Slide 23 Types of Market
Segmentation Geographic segmentation Demographic segmentation
Psychographic segmentation Behavioral segmentation Slide 24
e-business Market Segmentation Matrix Jelassi & Enders, 2005
Slide 25 B2B Marketplaces - Openess Public Exchange www.onecer.net;
www.leadpoint.com www.onecer.netwww.leadpoint.com Consortiums
www.orbitz.com Private exchanges www.entrex.net Slide 26 B2B
Marketplaces -based on Purchasing Characteristics What businesses
are buying: MRO goods Manufacturing inputs Sourcing of goods (how):
Systematic sourcing Negotiated contracts with qualified suppliers
Spot sourcing To fulfill an immediate need at the lowest possible
price Slide 27 B2B Marketplaces -based on Purchasing
Characteristics Jelassi & Enders, 2005 Slide 28 Discussion
Provide a real-world example of your choice for each one of the
nine quadrants that make up the e-business market segmentation
matrix. Choose as many Caribbean examples as possible Discuss the
advantages and disadvantages of the varying degrees of openness in
B2B marketplaces Slide 29 e-business model A business model the
organization of product, service and information flows and the
sources of revenue and benefits for suppliers and customers An
e-business model is the adaptation of an organization's business
model to the internet economy Slide 30 Types of e-business models
Brokerages Intermediaries who bring together buyers and sellers for
transactional purposes E-shops Shopping carts offered allowing you
to make transactions via the company website E-Malls A collection
of e-shops with some commonality between them Slide 31 Types of
e-business models E-auctions Provide a channel of communication
through which the bidding process for products and services can
take place between competing buyers Trading communities Also known
as Vertical Web Community it provides a source of information and
communication that is necessary for e-business activity to take
place in a particular industry Slide 32 Types of e-business models
Virtual communities Communities that share a common interest and
use the internet to communicate with each other Buyer aggregator
model Organizes large numbers of individual buyers so that they can
gain the types of savings that are usually the privilege of large
volume buyers Slide 33 Types of e-business models Classifieds
Online classified advertisement which run on the same principles as
newspaper classifieds Infomediaries Specialise in gathering
valuable information about customers and selling it to third
parties Slide 34 Types of e-business models E-procurement
Management of all procurement activities via electronic means
Distribution model Helps distributors to achieve efficiency savings
by managing large volumes of customers, automating orders,
communicating with partners and facilitating value-adding services
Slide 35 Types of e-business models Portal A Channel through which
websites are offered as content Collaboration platforms Provide the
technological tools for information to pass quickly and efficiently
between organsiations Third-party marketplaces A channel through
which firms can extend their sales pitch to customers by making
available their product catalogue on the website Slide 36 Types of
e-business models Manufacturer model Creates a direct line of
communication between manufacturers and consumers Affiliate model
Offers buying opportunities for internet users across many websites
Subscription model Generates revenue through subscription to access
particular websites Slide 37 Characteristics of a Viable e-
business Model Design programs that take advantage of the internet
network effects and other disruptive attributes to achieve a
critical mass of installed customer base Leverage on a single set
of digital assets to provide across many different and disparate
markets Build trust relationships with customers through e-business
communities to increase their cost of switching to other vendors
Slide 38 Characteristics of a Viable e- business Model Transform
value propositions and organisational structures for enhanced value
creation Generate synergy effect on e-commerce products and service
offerings Slide 39 Success Factors Understand and exploit the e-
marketspace characteristics Add value to the customers Achieve
economic viability Slide 40 Discussion Explain how e-marketplaces
work and discuss the advantages that they provide for participants
Using examples, identify the main value- adding characteristics of
the internet for e- business Find an example of a firm that
operates in the B2C market and identify the characteristics of a
firms e-business model Slide 41 References Colin Combe,
Introduction to E-Business: Management and Strategy, 2006 Tawfik
Jelassi & Albretch Enders, Strategies for e-Business: Creating
Value through Electronic Commerce and Mobile Commerce, 2005 Allan
Afuah & Christopher Tucci, Internet Business Models and
Strategies: Text and Cases, 2001 www.onenortheast.co.uk
