Business Models in Ecom

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Overview Lecture 2 E-Commerce Business Models
Boriana Koleva bnk@cs.nott.ac.uk C54 Key components of e-commerce business models Major B2C business models Major B2B business models Business models in other emerging areas of e-commerce Benefits and Problems with E-Commerce

E-commerce Business Models
Business model – set of planned activities designed to result in a profit in a marketplace Business plan – document that describes a firm’s business model E-commerce business model – aims to use and leverage the unique qualities of Internet and Web

Key Ingredients of a Business Model

Five Primary Revenue Models

Categorising E-commerce Business models
No one correct way We categorize business models according to e-commerce sector
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isticated set of sourcing and supply chain management tools Application service providers a subset of B2B service providers Revenue through fees (for market making services, supply chain management)

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Exchanges
An electronic digital marketplace where suppliers and commercial purchasers can conduct transactions
Exchange.eSteel.com, GEPolymerland.com

Industry Consortia
Industry-owned vertical marketplaces that serve specific industries Horizontal marketplaces, in contrast, sell specific products and services to a wide range of industries Leading example: Covisint

Usually owned by independent firms whose business is making a market Generate revenue by charging transaction fees Usually serve a single vertical industry Number of exchanges has fallen to around 700 in 2003

Private Industrial Networks
Digital networks (usually, but not always Internet-based) designed to coordinate the flow of communications among firms engaged in business together Single firm network: the most common form (example – Walmart) Industry-wide networks: often evolve out of industry associations (example – WWRE)

B2B Business Models Summary

Emerging business models

Case Study (1)
New ways of pricing products and services Priceline.com (name-your-price)
Customers choose their price for products & services Partnerships with leaders of industry such as travel, lending and retail

Demand-Sensitive Pricing
Sites that allow consumers to lower the price by joining with other

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