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Learning Objectives
Importance of Business Models in
Electronic Commerce What is a Business Model? Taxonomy of Electronic Commerce Business Models Transplanted Content based Models Transplanted Transaction based Models Native Content Based Models Native Transaction based Models
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business entities and interrelationships among them. The model describes the sources of revenues and potential benefits accruing to the involved business actors.
Digital Products Internet Access Provision Web Hosting & Internet Services Metered Service Model Metamediary Model Electronic Store Model Brokerage Model Manufacturing Model
Native Transplanted
Content
Transactions Transactions
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d e s a B t n e t n o C e v i t a N
s l e d o M
Freeware Model
Distribution of cooperatively developed free
software prototypes, products, patches and demonstration versions. The contents (software packages) can be downloaded at no incremental cost. For Example Linux http://www.linux.org GNU -- http://www.gnu.org Apache Web server http://www.apache.org
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d e s a B t n e t n o C s d l e e t d n o a l M p s n a r T
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Subscription Model
Economic Databases (CMIE, Prowess) Stock Exchange Trading information (NSE ) Digital Contents Scientific discoveries, Images http://cfa-www.harvard.edu Stock Market - EDGAR Journals -- http://acm.org, http://ieee.org The model provides a subscription based access to Digital contents Flat rates vs. Contents based subscription rates
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Advertising Model
Web sites that establish providing free interactive and repetitive services such as Email, Chat sessions, Discussion forums, News etc. aggregate web traffic or eye-balls These sites can serve Advertisements to these eyeballs by charging the companies to make up for the content provision and other associated cost and profit margins. The model is derived from the free television model. Charging on the basis of number of times a advertisement has been served. Additional charges for the click-through. ISPs - Caltiger.com, Juno.com Emails- HotMail.com, Rediffmail.com Portals/search engines Yahoo.com
ELECTRONIC COMMERCECOMMERCE- Framework, Technologies and Applications Tata McGrawMcGraw-Hill 13
Infomediary Model
Aggregated personal profiles/needs from its
users (consumers and /or suppliers) Subsequently, markets that data to interested set of users Maintains the data privacy The users may get a portion of the brokered deals It operates by lowering the search/location cost It leverages on interaction cost for identifying the right product and price in a fast evolving technologically innovative product groups
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Affiliate Model
1: Affiliated Site redirects the customer to sponsoring merchants site 2: The Sponsoring merchant pays a percentage of transaction to the affiliated site Figure 2.2: The Affiliate Model
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d e s a B n o i t c a s ls n a e r d T o e M v i t a N
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Information Flow
Delivery
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Metamediary Model
intermediary that provides a single point of contact between a community of customers and the community of suppliers it deconstructs space and time it offers products in new ways Metamediaries present the information from users viewpoint rather than the Industry segments.
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Metamediary Model
Travel Magzines Newspaper classifieds Travel Agents Hotel reservation Agents Skiing Equipment dealer
ELECTRONIC COMMERCECOMMERCE- Framework, Technologies and Applications Tata McGrawMcGraw-Hill 22
n o i t c a s n a r s T l e d d e t o n M a l p sed s n a a r B T
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Information Flow
Transaction
Payment Flow
Delivery
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Brokerage Model
Market makers, also known as brokers, play an important role of facilitating the transactions by bringing the buyers and seller together Commission based Services Model Transplant the per transaction/value based commission model by bringing the sellers and buyers on electronic marketplace For Example
Stock brokers- Charles Schwab, ICICIDirect Flowers- Teleflowers Auctions- BaZee.com, AuctionIndia.com
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Manufacturer Model
From Manufacturer to Consumer Product passes through several intermediaries The cost of product increases in the distribution process Each intermediate layer assists in the distribution and logistics If a manufacturer is capable of direct distribution- it can reduce the distribution cost.
In the process, it may need to handle several distribution and logistics issues The customer feedback can be direct, and thus create an opportunity for mass-customization
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