1 e Commerce (Introduction) 1st Slide

E-Commerce
Suman Bhattacharya @suman93_2004@yahoo.co.in
Electronic commerce, commonly known as (electronic marketing) e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks.
E-Commerce combines a range of processes, such as e-mail, WWW, & internet applications to provide ways to exchange information between individuals, companies, countries across the globe.
Key business Characteristics

Industrial Age
Mass production Labour performs repetitive task Capital intensive
Information Age
Mass customization Labour applies knowledge Knowledge intensive
Capitalists own production means

Capital is primary driver
Labour owns production means

Knowledge is primary driver
What is a business model?

The method of doing business by which a company can sustain itself how it generates revenue
A company produces a good or service and sells it to customers
Sales Cost of operations = Profits
Broadcasting: The broadcaster is part of a complex network of

distributors, content creators, advertisers (and their agencies), and listeners or viewers. Who makes money and how much is not always clear. The bottom line depends on many competing factors.
Sustenance of the model depends on the companys positioning of itself in the value chain and clear identification of its core competencies
Value Chain
The list of activities that a company engages in to provide its ultimate product or service The primary activities are:
Inbound logistics, including procurement and receiving Operations Outbound logistics, including warehousing and distribution Sales and marketing Service
Core Competencies
Every business must have a certain level of competency in the activities that it performs The core competency is what the company does best. The most successful core competency is not necessarily found in a specific activity but rather in managing the linkages between the activities of the business
dell.com
Chip Manufacturers Marketing Organisations Dell.com Software Design Customer Support Services
Component Manufacturers
Accessories Manufacturers
Business Model
Paul Timmers defined business model as:
A Business Model can be defined as an architecture for product, service and information flow, including a description of various business players and their roles A description of the potential benefit for the various business players and Revenue sources.
Afuah and Tucci

The method by which a firm builds and uses its resources
to offer its customers better value than its competitors and to make money doing so.
Business Models
Michael Porter
The essence of strategy is choosing to perform activities differently than rivals do Competitive strategy is about being different. Deliberately choosing a different set of activities to deliver a unique mix of value
Some definitions do not make a clear distinction between strategy and models
e-Business Technology layer

Positioning Objectives & goals Communication of strategy
Planning level Architectural level Implementation level
Strategy
Conceptual architecture of a business strategy
Business Model
Avoid re-inventing strategy
Business Processes Information systems e-Business Technology layer

Business/IT alignment
STRATEGY
BUSINESS STRATEGY I/T STRATEGY
EXTERNAL
BUSINESS SCOPE
TECHNOLOGY SCOPE
DISTINCTIVE COMPETENCIES
BUSINESS GOVERNANCE
BUSINESS SCOPE
I/T GOVERNANCE
STRATEGIC FIT
AUTOMATION
Business model
LINKAGE
INTERNAL
ADMINISTRATIVE INFRASTRUCTURE
ARCHITECTURES
PROCESSES
SKILLS
PROCESSES
SKILLS
ORGANIZATIONAL INFRASTRUCTURE AND PROCESSES
IT INFRASTRUCTURE AND PROCESSES
ORGANIZATION
FUNCTIONAL INTEGRATION Suman Bhattacharya

@suman93_2004@yahoo.co.in
TECHNOLOGY
An e-Business Model is an Answer to the Question:

Who Pays?
For What? To Whom? And Why?
Customers for the Good / Service Distribution, Consultancy, Training, Installation, Customization, Integration, Audit Data, Information, Expertise Knowledge, Infrastructure After-Sales Service Direct or Intermediated Retailer, Franchisee, Value-Adder, Transaction Cost Advantage Quality Advantage
An e-Business Model framework (questions) WHO?

WHAT?
What do we offer to our customers?
Product innovation Who are our customers? How do we reach them? How we get and keep our customers?
HOW?
Infrastructure operation
Financial Aspects
Customer relationship
What are our key competencies? How we operate and deliver? How we collaborate?
What are our revenues? Our pricing? What are our costs?
HOW MUCH?
An e-Business Model framework (concepts)

WHAT?
Proposition
WHO?
Customer Channel
Product innovation
Relationship
HOW?
Capability Configuration Partnership
Infrastructure operation
Financial Aspects
Customer relationship
Revenue Cost
HOW MUCH?
Properties of e-Business Models: Technology to Business Models

Technology cannot be an afterthought in forming business strategy. The technology language now must be a business language
Properties of e-Business Models:

Shift Focus from Creating to Experiencing
Do not use technology to only create the product. Use technology to enhance the end-to-end customer experience surrounding the product and service, from selection and ordering to receiving and after-sales relationship management.
Properties of e-Business Models

Shift Focus from Customization to Personalization
e-Commerce enables listening to customers Integrated, personalized service keeps customers coming back
Properties of e-Business Models:

Reversal and Unbundling of the Value Chain
Traditional value chain analysis focuses on cost reduction to enhance profit margins Reorient analysis in terms of customer needs
Begin with customer needs and work backward along the fulfillment chain; reversal of the value chain
Advantage of E-commerce
24 * 7 Operation Global Reach Cost of acquiring, serving & retaining customers Customer controls the interaction Knowledge of customer behavior
Disadvantage of E-commerce
All the business process dont never provide themselves to e-commerce (e.g. unpreserved food, high cost item etc.) Cost & benefit hard to predict Rapid technology change Unwillingness of the customers to use the ecommerce facility

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E-Commerce

Suman Bhattacharya @suman93_2004@yahoo.co.in

Suman Bhattacharya @suman93_2004@yahoo.co.in

Suman Bhattacharya @suman93_2004@yahoo.co.in

Key business Characteristics

Capitalists own production means

Labour owns production means

Suman Bhattacharya @suman93_2004@yahoo.co.in

What is a business model?

Sales Cost of operations = Profits

Broadcasting: The broadcaster is part of a complex network of

Suman Bhattacharya @suman93_2004@yahoo.co.in

Suman Bhattacharya @suman93_2004@yahoo.co.in

Afuah and Tucci

e-Business Technology layer

Planning level Architectural level Implementation level

Conceptual architecture of a business strategy

Avoid re-inventing strategy

Business Processes Information systems e-Business Technology layer

ORGANIZATIONAL INFRASTRUCTURE AND PROCESSES

IT INFRASTRUCTURE AND PROCESSES

FUNCTIONAL INTEGRATION Suman Bhattacharya

An e-Business Model is an Answer to the Question:

An e-Business Model framework (questions) WHO?

Suman Bhattacharya @suman93_2004@yahoo.co.in

An e-Business Model framework (concepts)

Properties of e-Business Models: Technology to Business Models

Suman Bhattacharya @suman93_2004@yahoo.co.in

Properties of e-Business Models:

Suman Bhattacharya @suman93_2004@yahoo.co.in

Properties of e-Business Models

Suman Bhattacharya @suman93_2004@yahoo.co.in

Properties of e-Business Models:

Suman Bhattacharya @suman93_2004@yahoo.co.in

Suman Bhattacharya @suman93_2004@yahoo.co.in

Suman Bhattacharya @suman93_2004@yahoo.co.in

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