b2b Model Ravi

PROJECT REPORT ON B2B MODELSUBMITTED BY:-RAVI PRASADPG2K13090SECTION A2013-15SUBMITTED TO:-PROF. C.K.SABARWAL

Copyright 2014 Pearson Education, Inc. Publishing as Prentice Hall

B2B model Analysisof E-Commerce


E-commerce Business ModelsBusiness modelSet of planned activities designed to result in a profit in a marketplaceExamples http://articles.bplans.co.uk/starting-a-business/examples-of-well-known-business-models/1040Business planDescribes a firms business modelExamples; http://articles.bplans.com/a-standard-business-plan-outline/E-commerce business modelUses/leverages unique qualities of Internet and Web http://www.tutorialspoint.com/e_commerce/e_commerce_business_models.htm

Eight Key Elements of a Business ModelValue propositionRevenue modelMarket opportunityCompetitive environmentCompetitive advantageMarket strategyOrganizational developmentManagement teamCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


1. Value PropositionHow does the product or service fulfill customer needsE-commerce value propositions:Personalization/customizationConveniencePrice/No shipping costQuick deliveryUnparalleled SelectionProduct/service qualityCopyright 2014 PearsonEducation, Inc. Publishing as Prentice HallSlide 2-*

Copyright 2014 PearsonEducation, Inc. Publishing as Prentice Hall

2. Revenue ModelHow will the company earn moneyMajor types of revenue models:Advertising revenue model- Facebook Subscription revenue model Consumer ReportsTransaction fee revenue model- ebay Sales revenue model AmazonMP3Affiliate revenue model airlines/car rentals/hotelsCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


3. Market OpportunityThe intended Marketspace of the companyMarketspace: Area of actual or potential commercial value in which company intends to operateRealistic market opportunity: Defined by revenue potential in each market niche in which company hopes to competeMarket opportunity typically divided into smaller nichesCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


4. Competitive EnvironmentWho else occupies your intended marketspace?Other companies selling similar products in the same marketspaceIncludes both direct and indirect competitorsInfluenced by:Number and size of active competitorsEach competitors market shareCompetitors profitabilityCompetitors pricingCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


5. Competitive AdvantageThe special advantages of a firmSuperior product or cheaper product than competitorsWhat makes a product superior?Important concepts:Asymmetries exist when one competitor has more resources than the othersFirst-mover advantage, complementary resourcesUnfair competitive advantage results from factors that are hard to duplicate or acquire (brands, natural resources, capital investments)Leverage using your vast resources to move in other markets leveraging a large customer basePerfect marketsCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


6. Market StrategyHow do you plan to promote your products or services to attract the target audienceDetails how a company intends to enter market and attract customersBest business concepts will fail if not properly marketed to potential customers -IBM OS 2Copyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


7. Organizational DevelopmentThe types of organizational structures within the firm necessary to carry out the business planDescribes how firm will organize workTypically, divided into functional departmentsAs company grows, hiring moves from generalists to specialistsCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


8. Management TeamWhat kind of backgrounds should the companys leaders have?A strong management team:Can make the business model work Can give credibility to outside investorsHas market-specific knowledgeHas experience in implementing business plans

Copyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


Raising CapitalSeed capital personal funds used to start businessTraditional sourcesIncubators provide small amount of funding and provide services to start-upsCommercial banksAngel investors wealthy investors who invest money in exchange for equity share of the businessVenture capital firms invest funds they manage for other investorsStrategic partnersCrowdfundingUsing internet to allow individuals to contribute to new ventures



Categorizing E-commerceBusiness ModelsNo one correct way (explained on upcoming slides)Text categorizes according to:E-commerce sector (e.g., B2B)E-commerce technology (e.g., m-commerce)Similar business models appear in more than one sectorSome companies use multiple business models (e.g., eBay)Copyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


B2C Business ModelsE-tailerCommunity provider (social network)Content providerPortalTransaction brokerMarket creatorService providerCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


B2C Models: E-tailerOnline version of traditional retailerRevenue model: SalesVariations:Virtual merchantBricks-and-clicksCatalog merchantManufacturer-direct Low barriers to entryCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


B2C Models: Community ProviderProvide online environment (social network) where people with similar interests can transact, share content, and communicate Examples: Facebook, LinkedIn, Twitter, PinterestRevenue models:Typically hybrid, combining advertising, subscriptions, sales, transaction fees, and so on Copyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


B2C Models: Content ProviderDigital content on the Web:News, music, video, text, artworkRevenue models: Subscription; pay per download (micropayment); advertising; affiliate referral Variations:SyndicationWeb aggregatorsCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


B2C Business Models: PortalSearch plus an integrated package of content and servicesRevenue models: Advertising, referral fees, transaction fees, subscriptionsVariations: Horizontal/general includes all internet usersVertical/specialized (vortal) focus around a market segment niche of subject matterSearchCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


B2C Models: Transaction BrokerProcess online transactions for consumersPrimary value propositionsaving time and moneyRevenue model: Transaction feesIndustries using this model:Financial servicesTravel servicesJob placement services



B2C Models: Market CreatorCreate digital environments where buyers and sellers can meet and transact businessExamples:PricelineeBayetradeRevenue model: Transaction fees, fees to merchants for accessCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


B2C Models: Service ProviderOnline servicesExample: GoogleGoogle Maps, Gmail, and so onValue proposition Valuable, convenient, time-saving, low-cost alternatives to traditional service providersRevenue models:Sales of services, subscription fees, advertising, sales of marketing data



B2B Models: E-distributorVersion of retail and wholesale store, MRO (explain next slide) goods, and indirect goodsOwned by one company seeking to serve many customersRevenue model: Sales of goodsExample: Grainger.com



MRO MRO - Maintenance, repair and operationsSupplies consumed in the production process but which do not either become part of the end product or are not central to the firm's output. MRO items include consumables (such as cleaning, laboratory, or office supplies), industrial equipment (such as compressors, pumps, valves) and plant upkeep supplies (such as gaskets, lubricants, repair tools), and computers, fixtures, furniture, etc.



B2B Models: E-procurementCreates and sells access to digital markets where participants transact for indirect goodsB2B service providers, application service providers (ASPs)Revenue model:Service fees, supply-chain management, fulfillment servicesExample: Ariba- http://www.ariba.com/about/our-storyCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


B2B Models: ExchangesIndependently owned vertical digital marketplace where hundreds of suppliers meet small number of large commercial purchasersRevenue model: Transaction, commission feesCreate powerful competition between suppliersTend to force suppliers into powerful price competition; number of exchanges has dropped dramaticallyCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


B2B Models: Industry ConsortiaIndustry-owned vertical digital marketplace open to select suppliersMore successful than exchangesSponsored by powerful industry playersStrengthen traditional purchasing behaviorRevenue model: Transaction, commission feesExample: Exostar - http://www.exostar.com/Mission/Copyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


Private Industrial NetworksDigital network used to coordinate among firms engaged in business togetherTypically evolve out of companys internal enterprise systemExample: Walmarts network for suppliersCost absorbed by network owner and recovered through production and distribution efficiencies



E-commerce Enablers:The Gold Rush Model E-commerce infrastructure companies have profited the most:Hardware, software, networking, securityE-commerce software systems, payment systemsMedia solutions, performance enhancementCRM softwareDatabasesHosting services, and so on



How E-commerce Changes BusinessE-commerce changes industry structure by changing:Rivalry among existing competitorsBarriers to entryThreat of new substitute productsStrength of suppliersBargaining power of buyers



Industry Value ChainsSet of activities performed by suppliers, manufacturers, transporters, distributors, and retailers that transform raw inputs into final products and services Internet reduces cost of information and other transactional costsLeads to greater operational efficiencies, lowering cost, prices, adding value for customers



Firm Value ChainsActivities that a firm engages in to create final products from raw inputsEach step adds valueEffect of Internet:Increases operational efficiencyEnables product differentiationEnables precise coordination of steps in chainCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


Firm Value WebsNetworked business ecosystem Uses Internet technology to coordinate the value chains of business partnersCoordinates a firms suppliers with its own production needs using an Internet-based supply chain management systemCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


Business StrategyPlan for achieving superior long-term returns on capital invested: that is, profit Five generic strategiesProduct/service differentiation Cost competitionScopeFocusCustomer intimacyCopyright 2014 Pearson Education, Inc. Publishing as Prentice HallSlide 2-*


Fact and figures


Growth Strategy, Innovation


Suggestion for future


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b2b Model Ravi

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