Business and Social Webs

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Business and Social Webs
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Goals of this chapter

• Understand the importance of asking WHY in the
  context of web-based systems.
• Learn various motivations for ePresence
• Overview on options or archetypes for business-
  and social webs
• Understand criteria for decision about web
  archetypes and marketing strategies in the
  context of businesses
• Get some insight into virtual communities

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Context of Business Webs

• Def. Business Model (Timmers, 1999)An
  architecture for product, service, and
  information flows, including a description of the
  
• various business actors and their roles
• potential benefits for the various business
  actors
• sources of revenue.

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Context of Business Webs

• E-Business Webs are part-of an organization's
  information system
• Business Webs help people to follow their
  business strategies
• Social Webs support people in reaching goals

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Context (e-) Presence PlanningQuestionnaire (1)

• General business planning
• What is the organization's mission?
• What are the resulting goals?
• What is the organization's core business?
• What are the products and services?
• What are the sources of revenue?
• What are the benefits to the participating
  actors?
• Who are the customers or addressees?
• Who are the competitors?
• What is the organizations marketing strategy, or
  how to compete?

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Context (e-) Presence PlanningQuestionnaire (2)

• Planning of e-presence
• What are the goals of e-presence?
• What major difference shall it make?
• Where can we start and where are we heading to?
• What are the costs and benefits to each
  participating actor?
• What are the major obstacles and risks, what is
  the effect of compromising e-presence?

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Business Web Archetypes

• E-shop simplest solution
• Features
• Web that supports normal business,
• Least resistance
• Customer support
• Cost/benefit ratio
• Competitors influence
• Often in combination with more advanced services

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Business Web Archetypes (adapted from Tapscott
et al. 2000, p. 28)
Self-organizing C o n t r o l Hierarchica
l
Agora
Alliance
Value Chain
Aggregation
Low Value Integration High
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Aggregation

• The Aggregation business-web enables a flow of
  goods and services between producers, creating
  value for both.
• Example Financial service site offering
  savings, mortgage, credit card, insurance
  products (e.g. Egg)
• Beginning often e-shop to which third party
  products are added.
• Aggregator acts as intermediary adding value to
  end customer as well as third party supplier.

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Aggregator
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Aggregator

• Features
• Assists the customer in finding the best price
• May reward loyal customers by giving discounts
• Key requirement convenience for customer
• Final stage is fulfillment transaction is
  processed works best for intangible products
  such as insurance
• Application areas financial services, tourism,
  theatre industry

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Agora (Auction)

• The Agora is a business-web where buyers and
  sellers come together to negotiate and assign
  value to goods. A price discovery mechanism
  allows buyers and sellers to be matched and to
  carry out exchanges.
• Examples
• eBay consumer to customer sell-side auction site
• FreeMarkets buy-side auction site

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Agora (Auction)
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Agora (Auction)

• Features
• Particularly appropriate for perishable goods,
  such as flight seats, theatre tickets, etc.
• Allows the creation of markets
• Dynamic pricing mechanism to improve performance

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Value Chain

• In the value chain an organization integrates
  multiple steps of the value chain and exploits
  the information flows between the stages.
• All of the partners act like one enterprise to
  create value, e.g. shorter delivery,
  customization, customer support, for the customer
  through information sharing and cooperation.

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Value Chain
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Value Chain

• Examples
• Motor industry customer demands pull cars
  through a supply network
• Computer industry Cisco builds the networking
  infrastructure that powers the web. Cisco designs
  the core technologies and manages partner
  relationships. Most of manufacturing, selling,
  and support are done by partners, but Cisco
  provides the context for integration.
• Theatre Industry Production companies, artists,
  playwrights, agents, and theatres can be brought
  together. Customer participation during the
  creation of performance schedules can be
  achieved.

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Alliance

• In an alliance a product is produced through a
  community of prosumers.
• A prosumer is both producer and consumer.
• Example OSS Open Source Software Industrial
  strength software, e.g. Linux, is produced by
  organizations and individuals that contribute
  code to Linux and use the software to support
  their businesses.
• Contributors are not paid for their contributions
• the resulting software can be used free of charge

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Alliance
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Alliance

• Another example FriendsReunited
• Goal put people in touch with old school friends
• No traditional advertising and marketing
• June 2001 191.000 Oct. 2001 2 Mio users
• Subscription fee 5 .
• Features
• Critical mass required
• Virtuous (reinforcing) and vicious circles
• Discuss what makes alliances work

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Virtual Communities

• Virtual Communities are social aggregations of
  people who carry on public discussions with
  sufficient intellectual incentives and human
  feeling to form webs of personal relationships in
  cyberspace.
• A virtual community has the capacity to integrate
  content and communication, gives access to
  competing publishers and consumers and promotes
  member-generated content.
• Business setting business networks

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Virtual community orientation(Rheingold 2000)

• Interest-oriented
• shared interest on some topic such as sport,
  music, hobby
• Support via chat rooms, message boards,
  discussion groups
• Relationship-oriented
• Shared life experiences
• Focus on sharing information and opinions and
  community support
• Fantasy-oriented
• Role playing and imaginary environments
• Transaction-based
• Support buying and selling
• Provide exchange of information and related
  products

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Virtual community value creation

• Organizers of virtual communities create value
  by
• Taking subscriptions
• Placing advertising
• Selling products and services
• Selling market research data
• What else?
• Learning
• Broadening ones perspective

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Value Map

• Visual aid for conceiving a business-web
• Parties involved ellipses
• Flows
• Goods and services, revenues
• Information and knowledge
• Intangible benefits

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Value Map - Example
Services (e.g. accomodation, restaurants)
Goods, services, revenue
Knowledge Intangible Benefits
services
ECU Commision
bookings
Production data preferences
Theatre Aggregator
Theatre-goer insight
What's on information
ECU payment
Theatres
Market access
orders
ECU payment
Theatre- goers
Barnd loyalty
ECU commission
Referrals
Seats
tickets
performances
Affiliates (e.g. Tourist Information Office)
Ticketing service
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Marketspace transformationMarketspace model
(Dutta and Segev, 2001)

• The marketspace model builds on two dimensions
• Technological
• Interactivity of Internet
• Connectivity of Internet
• Strategic
• 4 Ps of marketing product, price, place,
  promotion
• Customer relationships (personalization,
  one-to-one marketing possible)
• Internet marketing management of the marketface
  the mix of marketplace (real) and marketspace
  (virtual)

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Marketspace transformationMarketspace model
(Dutta and Segev, 2001)
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To think about

• Examples for business webs and discussion what
  they achieve and what could be improved.
• Draw value maps for prospective business/social
  webs, e.g. our eLearning solution, the community
  UniLearn, the InterdisPraktikum application or
  the web you just dream about to construct.
• What motivations might you have to start a
  virtual community or to participate in one? What
  could be the added value for you?

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To contribute

• Which components and functions should a virtual
  community (of a predefined orientation) have?
  Suggest a class diagram for a virtual community.
• Specify the workflow you suggest to start a
  virtual community (of a predefined orientation)
  and to keep it alive.

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For discussion

• Humans have a need to communicate what
  implications does this have for virtual
  communities or for the Internet?
• The Internet a promoter or inhibitor of real
  relationships?
• Cooperation via Internet More or less effective
  than face-to-face cooperation, or what makes
  eCooperation a valuable complement to real
  cooperation?