ITEC N410 Lecture 2

1. 1
ITEC 410
Current Technologies
 Categories of E-Business Models
 Factors Affecting E-Business Success

2. Learning Objectives
 Discuss the Five Categories of e-Business Models:
– B2C
– B2B
– B2G
– C2C
– C2B
Creating a Winning E-Business 2
Second Edition, Chapter 1

3. Learning Objectives
(continued)
 Discuss the Factors that affect e-Business
Success
– The Network Effect
– Innovative Marketing Ideas
– Scalability
– Ease of Entry into Electronic Markets
– Ability to quickly adapt to Marketplace Changes
Creating a Winning E-Business 3
Second Edition, Chapter 1

4. E-Business Basics
 E-commerce – Process of buying or selling
goods or services across a telecommunications
network
 E-business – Widest spectrum of business
activities using Internet and Web technologies
 Many technologies facilitate e-business
– Electronic Funds Transfer (EFT)
– Electronic Data Interchange (EDI)
– Internet / World Wide Web
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Second Edition, Chapter 1

5. E-Business Models
 Business models
– How a company conducts business in order to
generate revenue
– Widespread access to the Internet and Web
allows companies to adapt old models and
create new ones
 E-business models are often categorized by
type of customer
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6. E-Business Models
(continued)
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7. E-Business Models
(continued)
 Business-to-consumer (B2C)
– Retail sales (e-retail) including airline tickets,
entertainment venue tickets, hotel rooms, stock
purchases, diet and fitness programs
 Brick-and-mortar companies are moving to
brick-and click companies
– Sears, Best Buy, Barnes & Noble, the Gap
 Pure-play e-retailers and catalog merchants
– Amazon.com, eBags, Harry and David
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8. E-Business Models
(continued)
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9. E-Business Models
(continued)
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10. E-Business Models
(continued)
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11. E-Business Models
(continued)
 Business-to-business (B2B)
– Businesses selling to other businesses
– Online stores, such as Office Depot, Staples
– Internet and Web technologies
• Web hosting
• Web design
• Hardware and software
• Consulting
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Second Edition, Chapter 1

12. E-Business Models
(continued)
 Business-to-business (B2B)
– Online trading communities for vertical markets
– Exchanges, aggregators, auctions
• Virtual marketspaces for buyers and sellers
• Elance, ATLA Exchange, Business.com,
HedgeHog
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13. E-Business Models
(continued)
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14. E-Business Models
(continued)
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15. E-Business Models
(continued)
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16. E-Business Models
(continued)
 Business-to-government (B2G)
– Businesses provide a marketspace for other
businesses and government agencies
– Bidmain, B2GMarkets
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17. E-Business Models
(continued)
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18. E-Business Models
(continued)
 Consumer-to-consumer (C2C)
– Consumers sell or exchange products and
services directly with other consumers
– Auctions, online classified ads, expert information
exchanges
• eBay, American Boat Listing, TraderOnline.com,
AllExperts
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Second Edition, Chapter 1

19. E-Business Models
(continued)
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20. E-Business Models
(continued)
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21. E-Business Models
(continued)
 Consumer-to-business (C2B)
– Reverse auctions in which a single consumer
names his or her own price for products or
services
– Consumer’s offer made to multiple businesses,
which can accept or decline offer
– Priceline.com
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Second Edition, Chapter 1

22. E-Business Models
(continued)
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23. Factors Affecting
E-Business Success
 The network effect
– Total value of a product, service, or technology
grows as more and more people use it
• Telephone system example
– Single telephone has no value; as more people join the
telephone system, the value of each telephone increases
• uBid online auction site example
– As more people participate, the auction site becomes
more valuable to buyers and sellers
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Second Edition, Chapter 2

24. Factors Affecting
E-Business Success (continued)
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25. Factors Affecting
E-Business Success (continued)
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26. Factors Affecting
E-Business Success (continued)
 Innovative marketing ideas
– Hotmail and viral marketing example
• Hotmail users grew at a rapid rate because of
electronic word of mouth coupled with the network
effect
• Electronic word of mouth or viral marketing
spreads from user to user in the same way a
human virus spreads from person to person
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Second Edition, Chapter 2

27. Factors Affecting
E-Business Success (continued)
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28. Factors Affecting
E-Business Success (continued)
 Scalability
– Ability of a business to function well in the face of
rapid growth
• Systems and procedures meet customers needs
• AllAdvantage e-business failure example
– E-business idea: Paying for users to browse the Web
and view advertising
– Millions of customers signed on; advertisers did not
– No scalability with rapid growth in customers
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Second Edition, Chapter 2

29. Factors Affecting
E-Business Success (continued)
 Ease of entry into electronic markets
– Low-cost technologies make it easy to create new
e-businesses
– eBay and online auction example
• Easy for consumers to interact at auction site
• Web auction software is cheap and easy to
install /maintain
• E-businesses earn commissions without having to
manage, warehouse, and distribute products
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Second Edition, Chapter 2

30. Factors Affecting
E-Business Success (continued)
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Second Edition, Chapter 2

31. Factors Affecting
E-Business Success (continued)
 Ability to quickly adapt to marketplace changes
– Rapid knowledge transfer
– Need to make decisions quickly
– Exploit new ideas and opportunities
– Handle new challenges
• Amazon.com is an example of ongoing evolution
from a basic e-business idea
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Second Edition, Chapter 2

32. Factors Affecting
E-Business Success (continued)
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33. End of Lecture
02
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