Week 1
Week 1
Penilaian :
Tugas : 30 %
UTS : 30 %
UAS : 40 %
Business-to-Business (B2B)
E-commerce model in which all of the participants
are businesses or other organizations; Businesses
make online transactions with other businesses.
Business-to-Consumer (B2C)
E-commerce model in which businesses sell to
individual shoppers / consumers). This is also called
e-tailing (online retailing).
• Business-to-Business-to-Consumer (B2B2C)
E-commerce model in which a business provides
some product or service to a client business that
maintains its own customers
• Consumer-to-Business (C2B)
E-commerce model in which individuals use the
Internet to sell products or services to organizations
or individuals who seek sellers to bid on products or
services they need
• Intrabusiness EC
E-commerce category that includes all internal
organizational activities that involve the exchange of
goods, services, or information among various units
and individuals in an organization
• Business-to-Employees (B2E)
E-commerce model in which an organization delivers
services, information, or products to its individual
employees
• Consumer-to-Consumer (C2C)
E-commerce model in which consumers sell directly to
other consumers
• Collaborative Commerce (c-commerce)
E-commerce model in which individuals or groups
communicate or collaborate online
• E-government
E-commerce model in which a government entity buys
or provides goods, services, or information from or to
businesses (G2B) or individual citizens (G2C).
Government can deal also with other government (G2G)
Electronic Commerce Business Models
Definition of Business Model :
• A method of doing business by which a company can
generate revenue to sustain itself (Turban, 2008)
• A business model describes the rationale of how an
organization creates, delivers, and captures value
(Osterwalder in Business Model Generation, 2009)
A comprehensive business model is composed of the
following elements :
Customers, customer relationship, and customer
value proposition
Description of the products & services and the
markets in which they will be sold
Description of the business process (production,
distribution, and marketing strategies)
List of the resources required
Organization’s supply chain (suppliers, business
partners)
List of the major competitors, their market share,
and strengths / weaknesses
The competitive advantage offered by the business
model
The anticipated organizational changes and any
resistance to change
Description of the revenue expected (revenue
model), costs, sources of financing, and estimated
profitability (financial viability)
BUSINESS MODEL CANVAS : 9 Building Blocks
THE STRUCTURE AND PROPERTIES OF BUSINESS MODELS
Revenue Models
Outlines how the organization, or the EC project, will
generate revenue.
The major revenue models are :
1) Sales : revenue from selling products / services on
organization’s / company’s website. Example :
www.airasia.com, www.amazon.com
2) Transaction Fees : receives a commission based on the
volume of transactions made. Example :
www.groupon.co.id, www.agoda.com
3) Subscription Fees : customers pay a fixed amount,
usually monthly, to get some type of service.
Example : www.ayofoto.com
4) Advertising Fees : companies charge others for
allowing them to place banner on their sites.
Example : www.detik.com, www.kaskus.co.id
5) Affiliate Fees : companies receive commissions for
referring customers to others’ website. Example :
Amazon / Mozilla Firefox affiliate program
Amazon’s Affiliate Program
6) Licensing Fees
Can be assessed as an annual fee or a per
usage fee. Example : Microsoft license fee
7) Other Revenue Sources
Some companies allow people to play games
for a fee or to watch a sport competition in
real time for a fee.
Value Proposition
Constitutes value from the customers’ perspective;
the benefits, including the intangible / non-
quantitative ones, that a company can derive from
using the model (product).
Functions / Objectives of a Business Model :
• Describe company’s business processes
• Describe the company positioning within the supply
and value chain
• Formulate the venture’s competitive strategy and its
long-range plans
• Articulate a customer value proposition
• Identify a market (customer) segment
• Estimate the cost structure & amount and profit
potential
Five Common Models of EC Business Models
I. Online Direct Marketing
Selling products / services online. Sales may be from
a manufacturer to a customer (e.g. Dell computer) or
from retailers to consumers (e.g. Walmart online).
II. Electronic Tendering (Bidding) Systems / Reverse
Auction
Model in which a buyer requests would-be sellers to
submit bids; the lowest bidder wins. Example : online
government project tender system (e-tendering)
Five Common Models of EC Business Models
III. Electronic Marketplaces and Exchanges (e-marketplace)
Example : stock & commodities exchanges (the place
where buying & selling occurs)
IV. Viral Marketing
It is basically web-based word-of-mouth advertising and
it is popular in social networks. People & organization
use e-mail & social networks to increase brand
awareness, generate sales, or to recruit friends to join
certain programs.
Five Common Models of EC Business Models
V. Group Purchasing
It is based on the concept of quantity discounts
(“cheaper-by-the-dozen”). Example : Groupon.
THE BENEFITS AND IMPACTS OF EC
I. Benefits to Organizations
Global reach, cost reduction, business always open,
improved customer service & relationship, etc.
II. Benefits to Consumers
Huge selection to choose from, can shop at any time from
any place, can compare & shop for lowest price, etc.
III. Benefits to Society
Facilitate work at home, more public services (available for
more people), allow people in developing countries & rural
areas to accept more services & purchase what they really
like, etc.
THE LIMITATIONS OF EC
I. Technological Limitations
Lack of universal standards for quality, security, and
reliability, the telecommunications bandwidth is
insufficient, internet accessibility is still expensive
and/or inconvenient, etc.
II. Nontechnological Limitations
Some customers like to feel & touch products,
national & international government regulations,
lack of trust in EC & in unknown sellers, etc.
THE BARRIERS OF EC
According to a 2006 study, the major barriers to EC are:
a. Resistance to new technology
b. Implementation difficulties
c. Security concerns
d. Lack of technology skills
e. Lack of potential customers
f. Cost
THE BARRIERS OF EC
Van Toorn et al. (2006) classified the barriers into :
a. Sectoral barriers (government, private sector,
international organizations)
b. Internal barriers (security, lack of technical
knowledge, lack of time & resources)
c. External barriers (lack of government support)
THE BARRIERS OF EC
Van Toorn et al. (2006) also list the top barriers with
regards to global EC :
a. Cultural differences
b. Organizational differences
c. Incompatible B2B interfaces
d. International trade barriers
e. Lack of standards
Beside above, another important barrier is Ethical Issue.