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Chapter 14Chapter 14

E-BusinessE-Business

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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

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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

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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

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E-Business

Industries Using E-Business

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E-Business Models

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

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E-Business Models

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E-Business Models

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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

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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

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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

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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

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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

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E-Business Benefits and Challenges

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

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E-Business Benefits and Challenges

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

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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

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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?

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CHAPTER FOURTEEN CASE7-Eleven’s Dream Team

• 7-Eleven Japan has integrated its online site 7dream.com with its physical stores

• Through the 7dream.com Web site, 7-Eleven Japan enables consumers to choose from an online assortment of 100,000 products which are picked up from one of 8,400 store locations

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Chapter Fourteen Case Questions

1. What 7dream.com sells is “convenience.” Explain how integrating the Internet into its existing business is the key to its success

2. Identify new electronic relationships 7-Eleven Japan can create to increase customer acquisitions

3. Explain how 7-Eleven Japan can leverage the advantages of an e-marketplace to increase customer retention

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Chapter Fourteen Case Questions

4. Why is 7-Eleven Japan’s e-business venture successful?

5. Would 7-Eleven Japan’s e-business venture be successful in the United States? Discuss the challenges facing 7-Eleven’s e-business model in the United States

6. How can companies leverage knowledge gained abroad to improve stateside business process?