McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, All Rights Reserved

Chapter 13Chapter 13

E-BusinessE-Business

14-2

Learning Outcomes

14.1 Compare e-commerce and e-business

14.2 Compare the four types of e-business

models

14.3 Describe the benefits and challenges

associated with e-business

14.4 Explain the differences among e-shops, e-

malls, and online auctions

14-3

E-Business

• The Internet is a powerful channel that presents new opportunities for an organization to:– Touch customers– Enrich products and services with

information– Reduce costs

14-4

E-Business

• How do e-commerce and e-business differ?– E-commerce – the buying and selling of

goods and services over the Internet – E-business – the conducting of business on

the Internet including, not only buying and selling, but also serving customers and collaborating with business partners

14-5

E-Business

Industries Using E-Business

14-6

E-Business Models

• E-business model – an approach to conducting electronic business on the Internet

14-7

E-Business Models

14-8

E-Business Models

14-9

Business-to-Business (B2B)

• Electronic marketplace (e-marketplace) – interactive business communities providing a central market where multiple buyers and sellers can engage in e-business activities

14-10

Business-to-Consumer (B2C)

• Common B2C e-business models include:– e-shop – a version of a retail store where customers

can shop at any hour of the day without leaving their home or office

– e-mall – consists of a number of e-shops; it serves as a gateway through which a visitor can access other e-shops

• Business types:– Brick-and-mortar business– Pure-play business– Click-and-mortar business

14-11

Consumer-to-Business (C2B)

• Priceline.com is an example of a C2B e-business model

• The demand for C2B e-business will increase over the next few years due to customer’s desire for greater convenience and lower prices

14-12

Consumer-to-Consumer (C2C)

• Online auctions– Electronic auction (e-auction) - Sellers and

buyers solicit consecutive bids from each other and prices are determined dynamically

– Forward auction - Sellers use as a selling channel to many buyers and the highest bid wins

– Reverse auction - Buyers use to purchase a product or service, selecting the seller with the lowest bid

14-13

Consumer-to-Consumer (C2C)

• C2C communities include:– Communities of interest - People interact with each

other on specific topics, such as golfing and stamp collecting

– Communities of relations - People come together to share certain life experiences, such as cancer patients, senior citizens, and car enthusiasts

– Communities of fantasy - People participate in imaginary environments, such as fantasy football teams and playing one-on-one with Michael Jordan

14-14

E-Business Benefits and Challenges

• E-Business benefits include:– Highly accessible – Increased customer loyalty– Improved information content – Increased convenience– Increased global reach – Decreased cost

14-15

E-Business Benefits and Challenges

• E-business challenges include:– Protecting consumers– Leveraging existing systems– Increasing liability– Providing security– Adhering to taxation rules

14-16

E-Business Benefits and Challenges

• There are numerous advantages and limitations in e-business revenue models including: – Transaction fees– License fees– Subscription fees– Value-added fees– Advertising fees

14-17

Mashups

• Web mashup - a Web site or Web application that uses content from more than one source to create a completely new service– Application programming interface

(API) - a set of routines, protocols, and tools for building software applications

– Mashup editor - WSYIWYGs (What You See Is What You Get) for mashups

14-18

CHAPTER FOURTEEN Opening Case Study Questions

1. Identify the type of e-business model eBay is using and explain why it has been so successful

2. Other major Web sites, like Amazon.com and Yahoo!, have entered the e-marketplace with far less success than eBay. How has eBay maintained its dominant position?

3. What are the three different types of online auctions and which one is eBay using?

14-19

CHAPTER FOURTEEN CASEeBiz

• There are numerous ways to make money on the Internet

– Million dollar home page

– One red paperclip

14-20

Chapter Fourteen Case Questions

1. How else can you use the Internet to raise money?

2. What types of businesses could benefit from trading on the Internet?

3. Can you think of any other disruptive or non-traditional ways that you could use the Internet?