3. E-BUSINESS MODELS
Store Front Model
Auction Model
Portal Model
Dynamic Pricing Models
Name -Your-Price Model
Comparison Pricing Model
Demand-Sensitive Pricing Model
Bartering Model
Rebates
Offering Free Products and Services
B2B Exchanges
B2B Service Providers
Online Trading & Lending Models
Getting a Loan Online
4. E-BUSINESS MODELS
CONTINUED…
Recruiting on the web
Online News Services
Online Travel Services
Online Entertainment
Online Automotive Sites
Energy Online
Selling Brain Power
Online Art Dealers
E-Learning
Click & Mortar Businesses
ICDT Business Model
Three Pillars of E-commerce
5. INTRODUCTION
Pure play – an Internet retailer that has no physical
store, such as Expedia.com and Amazon.com
E-business – conducting business on the Internet,
not only buying and selling, but also serving
customers and collaborating with business partners.
E-business model – The combination of a
company’s policy, operations, technology & ideology
defines its business model.
6. 1. STORE-FRONT MODEL
Storefront model enables merchants to sell
products on the Web
transaction processing, security, online
payment, information storage
This is the basic form of e-commerce
where the buyer & seller interact directly.
To conduct store front e-commerce,
merchants need to organize an online
catalog of products, take orders
7. STORE-FRONT MODEL
CONTINUED…
Through their Web sites, accept payments in a
secure environment, send merchandise to
customers and manage customer data(such as
customer profiles).
They must also market their sites to potential
customers.
Leading users of store front model:B2C
companies.
10. STORE-FRONT MODEL
CONTINUED…
Shopping cart technology
An order-processing technology allowing
customers to accumulate lists of items they wish to
buy as they continue to shop
Shopping cart is supported by
Product catalog – hosted on merchant server in
the form of a database
Merchant server – the data storage and
management system employed by the merchant.
Database technology – required to store and
report on large amounts of information
13. STORE-FRONT MODEL
CONTINUED…
Online shopping Malls
Present consumers with a wide selection of products
and services.
Considered to be more convenient than searching and
shopping at independent online storefronts for several
items.
Consumers can search and shop for a variety of
products, and can use mall’s shopping cart technology
to purchase items form many stores in a single
transaction.
Often act as shopping portals (search engines), directing
traffic to different type of companies.
15. 2. AUCTION MODEL
Online auction sites
Act as forums through which Internet users can
log-on and assume the role of either bidder or
seller.
Collect a commission on every successful
auction
As a seller, you are able to post an item you
wish to sell, the minimum price you require to
sell your item and a deadline to close the
auction.
As a bidder, you may search the site for the
availability of the item you are seeking, view the
current bidding activity and place a bid(bids are
usually in designated increments).
Auction sites allow you to add features such as
photo graph or description of the item’s condition.
17. AUCTION MODEL CONTINUED
After the auction has completed the seller and bidder
is notified and the method of delivery is to work out
between the two parties.
In Auction model the site only receive commission
on each successful sale.
18. 3. PORTAL MODEL
Portal comes from the word “Port” point of
entry to the country so Web Portal or E-
Business portal means Point of entering to
the Web.
Portal sites give visitors the chance to find
almost everything they are looking for in one
place
Often offer news, sports and weather as
well as ability to search the Web
19. PORTAL MODEL
Horizontal portals
Portals that aggregate information on a
broad range of topics
Yahoo!, AltaVista, iGoogle
Vertical portals
Portals that offer more specific information
within a single area of interest
WebMD, IMDB, FirstGov
22. PORTAL MODEL
CONTINUED…
Portal Links customers to online merchants, online
shopping malls and auction sites
23. DYNAMIC PRICING
MODELS
Buying in bulk has always driven prices
down and there are now Websites that allow
you to lower the price by joining with other
buyers to purchase products in large
quantities.
The word dynamic means constantly
changing. This is opposite to static pricing
models where everyone pays the same
price.
24. NAME-YOUR-PRICE
MODEL
This model empowers customers by allowing
them to choose their price for products and
services. It is also called reverse auction.
Many of the businesses that offer this service
have formed partnerships with leaders of
industries such as travel, lending, retail etc.
These industry leaders receive the customer’s
desired price from the intermediary and decide
whether or not to sell the product or service.
If the customer’s price is not reasonable then
that customer will be asked to choose another
price.
26. COMPARISON PRICING
MODEL
The comparison pricing Model allows
customers to poll a variety of merchants and
find a desired product or service at the lowest
price.
These sites often get their revenue from
partnerships with particular merchants.
These sites allow individuals to see different
lists of prices for specific products.
28. DEMAND-SENSITIVE PRICING
MODEL
The web has enabled customers to demand
better, faster service at cheaper prices.
It has empowered buyers to shop in large groups
to achieve a group rate.
The concept behind the demand-sensitive-
pricing business model is that the more people
who buy a product in a single purchase, the
lower the cost-per-person becomes.
Selling the products individually can be
expensive because the vendor must price a
product.
29. DEMAND-SENSITIVE PRICING
MODEL CONTINUED…
When customers Buy in bulk this cost is
shared and the profit margin is increased.
Mercata (www.mercata.com)
Mobshop (www.mobshop.com)
30. BARTERING MODEL
A popular method of conducting e-business is
bartering or offering one item in exchange for
another.
Ubarter.com (www.ubarter.com) is a site that
allows individuals and companies wishing to
sell a product to post their listings.
The seller makes an initial offer with the
intention of bartering to reach a final agreement
with the buyer.
A broad range of products & services is
available for barter.
E.g. www.isolve.com
33. REBATES
Rebates can help to attract customers to your
site.
Many companies offer “everyday low prices” and
specials to keep customers coming back.
eBates is a shopping site where customers
receive a rebate on every purchase.
eBates has formed partnerships with wholesalers
and retailers who will offer discounts.
The company passes these discounts to
customers in the form of rebates.
www.ebates.com
35. OFFERING FREE PRODUCTS AND
SERVICES
Many entrepreneurs are forming their business
models around advertising-driven revenue
streams.
Television networks, radio stations, magzines
and print media use advertising to fund their
operations & make profit.
Many of these sites also form partnerships with
companies to exchange products & services for
advertising space & vice versa.
Skype provide free services
36. OFFERING FREE PRODUCTS AND SERVICES
www.hsx is a free gaming site where visitors
become traders of entertainment stocks & star
bonds.
The company is able to offer its services free by
selling advertising to sponsors.
39. B2B EXCHANGES
B2B e-commerce is defined as buying, selling,
partnering, bartering or trading conducted between
two or more businesses.
The B2B marketplace is one of the fastest growing
segments of e-commerce.
Industry leaders have begun using B2B exchanges
to improve their business methods on web.
B2B exchanges allow businesses to buy, sell,
auction, barter and distribute products & services.
www.icgcommerce.com, www.tradeaccess.com &
www.itoi.com
42. B2B SERVICE PROVIDERS
B2B service providers make B2B transactions on
the internet easier.
These e-businesses help other businesses improve
policies, procedures, customer service features and
many others.
E.g. Ariba www.ariba.com & Freemarkets.com is a
B2B market place connecting buyers & sellers.
Companies with surplus inventory can use Free
markets to sell extra assets.
www.liveperson.com & www.pcroomlink.com
44. ONLINE TRADING MODEL
Stock trades used to be handled only through
brokers who are paid commissions for their
services. i.e Stock Exchange.
Due to popularity of online trading, many brokerage
houses have established a presence on web.
Trading sites allow you to research securities, buy,
sell and manage all of your investments from your
desktop.
Online trading often less costs than conventional
brokerage.
Examples: www.magnigi.com & www.schwab.com
48. GETTING A LOAN ONLINE
Online lending is a growing segment of e-
commerce.
You might find a loan with a lower rate online
than through traditional lending channels.
www.mortgagebot.com & www.ecredit.com
51. RECRUITING ON THE WEB
Recruiting on the web can be done effectively on the
web.
Whether you are an employer or a job seeker,the
internet can improve your ability to recruit or find a
job.
Job seekers can learn how to write a resume and
cover letter, post it online and search through job
listings to find the jobs that best suits their needs.
Employers can post jobs that can be searched by an
enormous pool of applicants.
52. RECRUITING ON THE WEB
www.dice.com is a recruiting website and
focuses on the computer industry.
Fees are based on the number of jobs a
company wishes to post and the frequency with
which posts are updated.
Job seekers can post their resumes and search
the jobs database for free.
www.rozee.pk, www.guru.com
54. ONLINE NEWS SERVICES
The web is playing a major role to the publishing
and news industry.
Well known news organizations such as CNN
,The wall street general and Newsweek have all
found the web to be a dynamic environment on
which to feature their content.
The Wall Street Journal(www.wsj.com) is one of
the most widely read newspapers in the world is
offered in an online edition which includes full-
text and 24-hour updates.
56. ONLINE TRAVEL SERVICES
Web surfers can search for and arrange all of
their travel & accommodations online and can
often save money doing so.
The web gives people access to much of the
same information previously accessible only by
travel agents.
You will find the lowest prices, best times and
the best accommodations available to You.
Microsoft offers travel services through
www.expedia.com.
57. ONLINE TRAVEL SERVICES
Microsoft allows you to book all of your travel
arrangements including transportation and
lodging.
Membership is free and members are given
access to a database of information offering
them the best available options.
59. ONLINE ENTERTAINMENT
The web is based on the communication of high
quality information developed with high-quality
multimedia.
The entertainment industry has recognized this
and has leveraged its power to sell movie
tickets, albums and any other entertainment-
related content they can fit on a Webpage.
Internet copyright cases are becoming the norm
as individuals begin to use the internet to trade
their media such as music and videos.
www.imdb.com www.apniisp.com
61. ONLINE AUTOMOTIVE SITES
Various sites allow users to research and purchase
new and used cars.
Whether or not you actually make your final
arrangements for the purchase of a new vehicle
online, many of the preliminary steps can be
completed.
Online auto sites provide users with the ability to
explore options more efficiently than traveling
among dealerships.
Autobytel (www.autobytel.com) is a one-stop shop
where users buy, sell, maintain and learn more about
automobiles.
63. ENERGY ONLINE
A number of companies have set up energy
exchanges where buyers and sellers come to
communicate, buy, sell and distribute energy.
These companies sell crude oil, electricity and the
products and systems for distributing them.
Houston Street (www.houstonstreeet.com) is an
online market for traders looking to buy energy
commodities.
Traders can buy and sell crude oil, refined products
and electricity from the HoustonStreet website.
65. SELLING BRAIN POWER
Companies can buy patents and other intellectual
property online.
It is often difficult for small businesses to invest time
and money in research and development.
Other companies have trouble finding the talent to
create such property.
Companies who don’t have the human resources to
complete complex projects can find help at
HelloBrain.com.
When merchants post the projects they need
completed and the compensation they are willing to
pay, proposed answers will be sent from companies
and contractors that can help.
67. ONLINE ART DEALERS
The web offers a new outlet for your favorite
supplies and artwork which you can find at a
discount on the web.
Shopping cart technology and express shipping
allow you to have your art and supplies within a
few days of your order.
Art.com allows you to choose between fine art,
photography, posters and prints, animations and
many other media.
70. E-LEARNING
E-learning industry is growing rapidly as the
number of individuals with access to computers
and hand-held devices increases.
Universities and corporate-training companies
offer high quality distance education directly
over the web.
Examples www.vulectures.com
73. BRICK AND MORTAR
BUSINESSES
A company that can offer its services both online
and offline can add value to the customer
experiences.
Location is very important for a brick and mortar
business.
There is a sense of trust and reliability that comes
with having your own brick and mortar store. Many
customers still feel safer buying from a store.
Barners & Noble (www.bn.com) has established
itself as a leader in the booksellers market both
online and offline.
Also called brick and click.
77. INFORMATION, COMMUNICATION,,
DISTRIBUTION, TRANSACTION
MODEL (ICDT)
Virtual Information Space
Information that is displayed is accurate and
current.
Only viewed by authorized users
Customers can easily find the site and navigate
through it once they have reached the site.
The site is accessible without long wait times.
Virtual Distribution Space
Delivery of products and services only to legitimate,
approved customers
Reliable delivery of products and services
78. ICDT MODEL CONTINUED….
Virtual Transaction Space
Security over data
Accuracy and integrity of processing methods
Reputability (honesty and trust worthy) of trading
partners
Privacy (Secrecy or confidentiality) concerns by
customers
Virtual Communication Space
Enabling relationship building, negotiation (co-
operation) and exchanging of ideas.
79. THREE PILLARS OF E-
COMMERCE MODEL
Builds on the existing market space and utilizes
electronic mechanisms as an enabler of supporting
open market processes.
• Electronic Information
• Electronic Relationships
• Electronic Transactions
Lecture 04
79
80. THREE PILLARS OF E-
COMMERCE MODEL
This is another electronic business model that builds
on traditional market spaces is the three pillars of
electronic commerce model by Peter Fingar, which is
illustrated in Figure.
Three electronic pillars support electronic
information, electronic relationships, and electronic
transactions..
The first pillar, electronic information, is similar to
Angehrn’s (ICDT model) virtual information space.
construct a good, solid pillar that will not crumble
(fail) , or in WWW terms, the Web page will not links
lead the visitor to a dead-end.
Lecture 04
80
81. THREE PILLARS E-BUSINESS MODEL
CONTINUED…
Search engines and other intelligent agents are
increasing in popularity to assist users to more
efficiently and effectively navigate the WWW.
81
Lecture 04
82. THREE PILLARS E-BUSINESS
MODEL CONTINUED…
The second pillar, electronic relationships, is the
central pillar, and it is similar to Angehrn’s (ICDT
model) of virtual communication space.
Having entrants (or simply participants) pass through
this port of entry on a somewhat regular basis is the
key to successfully engaging in electronic commerce.
To attract users over and over again to a site (which
also means away from other sites), the site needs to
have certain features. it must:
• Be innovative (modern , original, pioneering and evolutionary)
• Add value (to give potential customers the feeling of community and interaction they
are increasingly expecting).
• Provide information and interaction, not otherwise available (means that only
for the authenticated users)
• Create forums for opinion-building activities.
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Lecture 04
83. THREE PILLARS E-BUSINESS
MODEL CONTINUED…
Electronic Commerce is interactive, and users expect
to experience interaction when they visit a site.
To build good customer relationships,
• electronic commerce websites need to be designed to
give
• potential customers the feeling of community
• and interaction they are increasingly expecting.
The use of intelligent agents is one way of
accomplishing this goal.
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Lecture 04
84. THREE PILLARS E-BUSINESS
MODEL CONTINUED…
The third pillar is the electronic transactions pillar. This
pillar is similar to Angehrn’s virtual transaction space,
and it also encompasses Angehrn’s virtual distribution
space.
Many businesses have built an electronic information
pillar and some have built or are building an electronic
community pillar, but substantially (considerably)
fewer have constructed the electronic transaction
pillar.
Two impediments (difficulties) to constructing the
pillar exist:
• the ability to engage in meaningful and sufficient
negotiation processes
• and security of transaction data.
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Lecture 04
