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Pertemuan 7eBusiness Models and Sectors

Matakuliah : F0662/ Web Based AccountingTahun : 2005Versi : 1/0

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Learning Outcomes

Pada akhir pertemuan ini, diharapkan mahasiswa akan mampu :

• Menjelaskan tentang Model e-Business (TIK-8)• Mnjelaskan tentang e-Business Sectors (TIK-8)

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Outline Materi

• Materi 1 Model e-Business • Materi 2 e-Business Sectors

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Session 12

E-business models

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Business Models

• Is a method of doing business by which a company can sustain itself.

• Describes how a company makes money by specifying where it is positioned in the value chain.

• E- business has given rise to several new kinds of business models.

• No simple comprehensive definition/list of business models at present.

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Business Models

Bizmodel Institute, (2000)

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Generic Forms of Business Models• Brokerage• Advertising• Infomediary• Merchant• Manufacturer• Affiliate• Community• Subscription• Utility

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E-business Models

• Transplanted real world business models– Mail order– Advertising– Subscription– Free trial– Direct marketing– Real estate– Incentive scheme– Business to business

• Native Internet Business Models

– Library model– Freeware– Information barter– Digital Products– Access Provision– Web site hosting and

other Internet Services

Banbury P (2000)

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Business Models

• Timmers (1999, 31) defines a business model as “the organisation or architecture of products, services and information flows”.

• According to this author’s research (case studies), there are presently 11 business models.

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Types of Business Models

• Brochure ware: – poster/billboard

• Virtual shops: – pay on delivery

• Auction and reverse auction sites:• Portals:

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Virtual shops• E-Shops:

– Firms initially attempt to obtain a web presence with “brochureware”.

– Increased patronage will lead to the development of two way interaction facilities.

• E-Procurement:– These sites purchase all goods and services via their sites,

eg. www.works.com• E-Malls:

– Are a collection of e-shops with a common payment method/interface.

• www.wishlist.com.au or • www.dstore.com.au

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E-Auctions are increasing at a rapid rate

• E-BayE-Bay– has over 10 million bidders per month (Mollman, 2000).has over 10 million bidders per month (Mollman, 2000).

• TradeoutTradeout– charge sellers a 5% commission, plus a $10 listing fee. charge sellers a 5% commission, plus a $10 listing fee.

They also use email to promote new merchandise.They also use email to promote new merchandise.• ComAuction ComAuction

– has banned anonymous buyers and sellershas banned anonymous buyers and sellers but a but allowllowss buyers & sellers to communicate directly (this is not buyers & sellers to communicate directly (this is not encouraged by competitors).encouraged by competitors).

– Provide software which allows users to convert photos into Provide software which allows users to convert photos into 3d images. 3d images reduce buyer anxiety as they can 3d images. 3d images reduce buyer anxiety as they can see the product from any angle.see the product from any angle.

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Australia’s top auction sites

1. www.ebay.com.2. www.sold.com.au.3. www.ebay.com.au.4. www.gofish.com.au.5. www.ubid.com.au.

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Australia’s top auction sites - 2

6. www.evansclarke.com.au.7. www.fowles.com.au.8. www.stuff.com.au.9. Davinciauctions.com.au.10.www.jobnet.com.au.

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Reverse AuctionsReverse Auctions

• Buyers display a request for goodBuyers display a request for goodss or or a a service.service.

• Ariba and Commerce One are adding Ariba and Commerce One are adding “reverse auction” modules to their software “reverse auction” modules to their software (Mollman, 2000).(Mollman, 2000).

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Reverse Auctions

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How Quaker Oats Uses freemarkets.com

• Quaker chooses contracts that will be put out to bid.• Evaluates suppliers and decides which ones will be

allowed to bid.• Freemarkets also provides list of suppliers.• RFQ is written up and sent out by email to suppliers

together with information as to when bidding will take place.

• Quaker then uses web browser to watch bidding at freemarkets.com

• Auctions generally take place in about 20 – 30 minutes.• Quaker then determines who won the bid and awards the

contract

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Reverse auctions - 2

• Imandi.com and respond.com make buyers list goods or service requests with a price range.– Buyers are anonymous.– No charge presently for buyers (imandi.com).– Respond.com charges merchants $5-50 to

notify merchants of a relevant request.

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Reverse Auctions – imandi.com

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Reverse auctions - 3

• Imandi.com also charge merchants a small fee to respond to requests.

• Reverse auctions allows buyers to “compare”.

• Ewanted.com is the only site which allows suppliers and visitors see all bids.– Visible bids generate more competition.

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Open market Place -ewanted.com

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Group buying

• Many SMEs lack the purchasing power of their large competitors.

• Group buying sites “pool” the purchasing power of individuals.

www.accompany.com,www.mercate.com,www.pointspeed.com and www.shop2gether.com

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www.accompany.com

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Demand Aggregation

• Enterprise buyer benefits– Reduce product costs by leveraging purchasing– Reduce transaction,shipping and accounting costs– Reduce maintenance costs by standardizing orders

• Suppliers Benefits– Enhance revenues with a high volume sales

channel– Reduce sales costs by reaching fragmented buyers.– Improve manufacturing efficiency by standardising

product requests

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Group Buying - 2

• Shop2gether.com – the merchant dictates how many units the purchaser must buy.– Buyers join a group & hope other people also

join.– Cycle ends when the seller’s criteria is met

(Mollman, 2000).– Buyers charged a fee (most sites don’t charge

buying fees).

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Group buying - 3

• Pointspeed negotiates prices with vendors and collects a fee on transactions (Mollman, 2000).– Provides e-procurement software that allows

you to download order details into your accounting package.

• Mercata.com purchases goods in advanced.– Idea is to anticipate and attract buyers.

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Portals

Offer a variety of information, services and sometimes goods from one central location

– intended to become the potential customer’s start-up page, eg.:• major search engines• http://www.ninemsn.com.au

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Portals

• First portal emerged in 1996.• Also called :

– a horizontal portals, – gateways, – megaportals or – electronic marketplaces.– Revisit http://www.ws.com.au/acs/

• “Are the first point of contact (or gateway) which allows users to click to other links from this site” (Sophocleous, 2000; 45).

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General Purpose Portals

• Such as Yahoo.com or Excite.com.• Generate revenue via advertising.• Yahoo is considered the largest portal site

(Reisman, 1999; 63).• Aim is to attract as much traffic as

possible.

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Types of portals - 1

• Yahoo is considered a consumer portal.• Mysap.com is a business portal. Attempting to

link buyers, sellers, suppliers & catalogue owners (Clark Dickson, 2000).

• Specific market niche or industry portals – called Vortals eg. e-Steel

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Types of portals - 2

• Enterprise Portals – Can be internal or external focused.– Attempting to streamline business processes.– Personalised interface.– Increase productivity.– Need enterprise application integration (EAI).– Intranets, extranets

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Types of Portals - 3• Gartner Group further classifies portals into global &

local categories. Global portals would be – Excite, – Infoseek, – Lycos or – Yahoo.

• Local portals would be – ninemsn.com.au and – telstra.com.au.

• In Asia-pacific region, tendency for portals to align themselves with an ISP/telco.

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How do portals start?

• Yahoo & Excite started as search engines. No bricks & mortar. Others such as ninemsn.com.au started as telcos, isp or media players.

• Ninemsn.com.au attracts 2million visitors/month (Sophocleous, 2000).Most portals have copied the Yahoo style. Eg. they use content categories & text-pages (speed).

• Amazon is neither of the above examples. Also has no bricks & mortar presence. Started in one niche (books), now expanding into other areas.

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Vortals

• Is a web site that provides access to information relating to a particular industry, such as health care, insurance, automobiles, or food manufacturing” (Vortal, 2000).

• Target a specific market niche or industry e.g.– itsource.com.au – IT suppliers. – sydneytribe.com.au – 20/30 years olds with an entertainment

lifestyle. • Seen as B2B communities. e.g. SMEs with home offices

might be attracted to a vortal that provides information about setting up the home office (Vortal, 2000).

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Types of Business Models (Continued)• Virtual Communities:

– Companies use one site to provide or add their information.

• eg. www.amazon.com• Collaboration Platforms:

– Provide tools (project management, engineering services etc) or an information environment to facilitate collaboration between firms eg. IMCO (Real Estate Integrated Solutions)

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Types of Business Models (Continued)

• Third Party Market Places: – Leave marketing of your product to another

party who provides a common interface to a range of products.

• eg. http://www.tradezone.com.

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Tradezone.com

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Types of Business Models (Continued)

• Value Chain Integrators: • Focus on integrating steps of the supply chain.

–They are usually on-selling information to firms.• Eg. Telstra.

–Can be an example of re-intermediation.• Value Chain Service Providers: • Specialise in a specific functions of the value

chain.–eg. online payments, sourcing of goods, insurance. Eg. Payment Service.

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Types of Business Models (Continued)

• Information Brokerage: – Provide a range of information to users.– eg. yahoo.com, excite.com generates

75% of their income from advertising.• Trust Services:

– Ensure users are dealing with legitimate sites eg. CareMart.

(Timmers, 1999; 38-41)

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Classification of Business Models

Timmers, 1998

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Business Models

Martinez P IBM Corporation (2000)

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Bibliography

• Business models for electronic Commerce – Paul Timmers, European Commission

• A taxanomy of Internet Commerce – Paul banbury• http://www.firstmonday.dk/issues/issue3_10/bambury/index.html• Models made “e”: What business are you in?, Pete Martinez IBM

corporation (2000)• http://www.ibm.com/services/innovation/gsee510160000f.pdf• Forms and Models of Electronic Commerce, Kaj Hoglund. Dept of

computer Science Helsinki University of Technology• http://www.tml.hut.fi/Opinnot/Tik-110.501/1996/seminars/works/form

s.html• What the Internet brings to Purchasing. March 2000• http://www.manufacturing.net/magazine/purchasing/archives/2000/

pur0323.00/032isupp.htm

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Chapter 16Sectors of the e-Business

bu sin ess e

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Introduction

• The important differences between e-Commerce applications are:– How they fit into the consumer market,– How they are supported by the supply chain– Their potential to alter the role of players in

that supply chain.

e-Vendor

Supply Chain Infrastructure

Consumer

Market

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Introduction

• The sectors examined in the book are:1. Bookshops;2. Grocery Supplies;3. Software Supplies and Support;4. Electronic Newspapers;5. Banking;6. Auctions;7. Share Dealing;8. Gambling.

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Introduction

• These sectors exemplify the range of consumer e‑Commerce services that are available.

• Sectors 1, 2, 5 and 7 are discussed in the lecture – the other four areas are for self study.

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Internet BookshopsGeneral• One of the first applications of e-Commerce• Books have 4 advantages for online retailer:

– They can be adequately described online. – They are moderately priced.– Many customers will wait for delivery.– Delivery is manageable/affordable.– Reactions of other players have included:– Large existing players that set up their own

e‑Bookstores;– New operators have entered the online market;– Conventional bookshop have been up-rated.

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Internet BookshopsSupply Chain• e-Commerce has not altered the supply chain.• All bookshops have 2main sources of supply:

– Book wholesalers.– Direct supply from the publisher.

(some e-fulfilment is direct from the wholesalers)

Bookshop Publisher Wholesaler Customer

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Internet Bookshops

Requirements/Facilities• Warehouse (as opposed to retail) premises• Packaging and despatch• IT infrastructure / Web site:

– A large database of books.– A search engine for author, title, subject, etc.;– Online access to details of stock– Record of the readers’ interest– Integration into the supply chain

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Internet BookshopsExamplesAmazon www.amazon.com,

www.amazon.co.uk• Barnes and Noble www.barnsandnoble.com• Bertelsmann AG www.bol.com• Blackwell www.bookshop.blackwell.co.uk• Chapters www.chapters.ca

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Internet Bookshopsamazon.com• Amazon opened for business in July ’95• By 1999 Amazon had:

– Four despatch bases in the US– Operations in Germany and the UK

• As of 1998, turnover was US$610 million(a growth of 313% over the previous year).

• Amazon has never made a profit:– The loss for the third quarter of 1999 was US$79 million on sales of

US$356 million.

• Amazon has diversified into selling:– Recorded music– Videos– Electronic equipment– and several other product areas

TM

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Grocery Supplies

General

• Going to the supermarket can be just a chore - how much easier if, with just a few clicks of the mouse, the weekly shop could done.

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Grocery Supplies

General• The logistics of an online supermarket are

a bit different from other online stores:– The supermarket stocks several thousand lines– The customer may well select (say) 60 of them.– Groceries are both bulky and perishable– Common practice is to arrange a delivery slot

with the customer.

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Grocery SuppliesSupply Chain• The home delivery grocery business

requires local depots and it needs the same supply chain infrastructure, co-ordinated by EDI, that the supermarkets have in place.

• A home delivery operation can use a depot rather than a retail facility. However many existing players are using their local retail facilities for e-fulfilment.

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Grocery Supplies

Supermarket /Local Depot Supplier Regional

Depot Customer

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Grocery Supplies

ExamplesPeapod www.peapod.com• Homestore www.homestore.com• Sainsbury www.sainsbury.co.uk• Tesco www.tesco.net

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Grocery Supplies

peapod.com• Peapod started selling groceries in 1989.

• Peapod depots stock a full range of groceries.

• Items can be found through the classification / menu system or using a search.

• Shopping lists can be stored.

TM

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Grocery Supplies

peapod.com• Orders have to be put in at least a day in

advance of delivery time.

• Peapod currently operate in six metropolitan areas in the US.

• Peapod is a software company – the depots are operated as franchises.

TM

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Internet Banking

General• Customer services typically include:

– Online balances and statements.– Credit transfers so that bills can be paid online.– Maintenance of standing orders and direct

debits

… but exclude any transactions involving cash

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Internet Banking

General

• For the bank, online transactions are cheaper than telephone banking and much cheaper than branch transactions.

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Internet Banking

Supply Chain• Using e-banking reduces usage of the branch network

(although a branch or ATM machine will still be required).

• For online banking, security is obviously an issue.

Supplier Customer Branch /

ATM

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Internet Banking

Examples

• Bank of Scotland www.rbs.co.uk• The Co-operative Bankwww.smile.co.uk• First National Bank of the Internet

www.fnbinternet.com

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Internet Banking

smile.co.uk• The Co-operative Bank:

– Grew out of the Co-operative movement– Has about a 5% UK market share.– Has a very small branch network.

• The bank’s online offering is called ‘smile’ ☺.(one of the UK’s first operational online banks)

TM

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Internet Banking

smile.co.uk

• Smile’s banking service include:– A full range of accounts;– Online money transfer;– Flexible paying in arrangements;– Online payment of bills;– Standing orders and direct debits;– Use of ATM machines;– Conventional cheques;– A guarantee of reimbursement

TM

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Online Share Dealing

General• The Internet can make available to the

private investor:– Up-to-the-minute information.– Immediate access to the market.– Reduced trading costs.

(Allgood, 1999) 

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Online Share Dealing

General– ‘The investor is able to deal at a price

viewed immediately, whereas using more traditional dealing services an investor will often have to wait in a telephone queuing system to get through to the dealing desk and when trading may have to wait for the price of the trade to be confirmed.’

(Allgood, 1999) 

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Online Share Dealing

Supply ChainThe supply chain for share dealing is

unchanged, the use of the net just speeds up the whole process (and that can be vital in some share dealing).

Broker Investor

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Online Share Dealing

Examples

• E*Trade www.etrade.com,www.etrade.co.uk

• Market Eye www.market-eye.co.uk• Charles Schwabwww.schwab.co.uk

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Online Share Dealingetrade.com• E*Trade started online trading in 1983.• Available on CompuServe and AOL in 1992.• Net version online in 1996.• The services they list are:

– Free real-time quotes;– Market news and research;– Choice of order types;– Low commission rates;– Portfolio tracking;– Customer accounts;– Discussion groups.

TM

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e-Diversity

• The technology for online operation and the issue of payment security is much the same whatever the trade sector.

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e-Diversity

• Differences between products and services:– How adequately the product can be described

online,– The ease with which the product can be delivered

to the customer,– The extent to which the price to the consumer can

be cut by operating online,– The possibility of offering an enhanced service by

operating electronically.– The ability of virtual operators to avoid tax and

other regulations.

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Summary

• Mahasiswa diwajibkan membuat summary