[C] E-Business Strategy/ Models

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C E-Business Strategy/ Models

• ????
• Judy Strauss, Adel I. El-Ansary, and Raymond
  Frost, E-Marketing, Prentice Hall, 2006.
• Chap 2 Strategic E-Marketing.
• Chap 12 Distribution.
• Ward Hanson, Principles of Internet Marketing.

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Environment, Strategy, and Performance (ESP Model)
Legal
-
Ethical

Technology

Internet

E

Competition


Other factors

Markets


SWOT

E
-
Business
S

Strategy/

E
-
Marketing
Implementation Marketing Mix
Model

Strategy


P

Performance Metrics

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Overview

• The Amazon Story
• E-Business Strategy
• E-Business Model
• Strategic E-Business Models
• Activity Level E-Business Models
• Business Process Level E-Business Models
• Enterprise Level E-Business Models
• Pure Play
• Web Business Models

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1. The Amazon Story

• Amazon (http//www.amazon.com)
• Jeff Bezos?1995?7???
• A pure-play dot-com (?????) survivor.
• Adapt its competencies into many different
  e-business models.
• ??????IT,????????????????????
• ??????????,???????
• ???????????,????????

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E-Business Model of Amazon

• (1) Online Retailing
• Amazons core business Sales of books, music,
  and videos.
• After 7 years of effort, Amazon.com finally
  proved this model can be profitable.
• Learn a good, but tough (??) , formula for
  operating profitability.
• 2002-2003, Amazon has cut inventory by 25,
  tightened (??) operations, and doubled sales.

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E-Business Model of Amazon

• (2) Co-branding (????) Partnership
• Include Borders, Circuit City, Target,
  and Toys RUs (?????).
• These partnerships involve Amazons licensing of
  online storefront technology or earning fees for
  customer service and product delivery.
• This model is more profitable than retailing
  model.
• Because its less costly automated services,
  e-commerce experience, or huge customer base.
• Amazons objective add 2 new partners /1 year.

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?????http//www.toysrus.com
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E-Business Model of Amazon

• (3) Affiliate Program (????)
• Amazon create firstly. (called Amazon Associates)
• Giving 600,000 Web site owners a 15 commission
  (????) for referring (??) customers who purchase
  at Amazon.
• (4) Auction (??)
• Customers can auction items on the site.

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Join Associates
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2. E-Business Strategy

• Corporate Strategy
• It is concerned with how the firm will achieve
  its objectives.
• Strategic planning the managerial process of
  developing and maintaining a viable (???) fit
  between the organizations objectives, skills,
  resources and its changing market opportunities.
• E-Business Strategy
• Corporate Strategy Information Technology

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Strategic Objectives

• The firm sets objectives such as
• Growth. How much can the firm reasonably expect
  to grow in terms of revenues, and how fast?
• Competitive position. How should the firm
  position itself against other firms in the
  industry? Viable positions are
• Industry leader (Microsoft),
• Price leader (Priceline.com),
• Quality leader (Mercedes),
• Niche firm (Google.com),
• Best customer service (Dell.com).

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Strategic Objectives (Cont.)

• Geographic scope. Where should the firm serve its
  customers on the continuum (????) of local to
  multinational?
• Other objectives. Companies often set objectives
  for the number of industries they will enter, the
  range of products they will offer, the core
  competencies they will foster (??), and so on.

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3. E-Business Model

• Business Model
• A method by which the organization sustains (??)
  itself in the long term, and includes its value
  proposition (????) for partners and customers as
  well as its revenue streams (????).
• A firm will select one or more business models
  as strategies to accomplish enterprise goals.
• E-Business Model
• Business Model Information Technology

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4. Strategic E-Business Models

• Level of Commitment to E-business

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E-Business Model Classification
Activity Level Activity Level
Product/ service Content publisher
Price Pricing strategies
Place (Distribution) E-mail
Place (Distribution) Online purchasing
Place (Distribution) Order processing
Promotion Online advertising
Promotion Online sales promotions
Information gathering Business Intelligence

• The lowest level of the pyramid
• Affects individual business activities that can
  save the firm money if automated using IT or
  Internet.

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E-Business Model Classification
Business Process Level Business Process Level
E-Business ?????? ERP
E-Business ?????? CRM
E-Business ?????? SCM
????? ???? KM
????? ???? Database Marketing
????? ???? Mass Customization
????? ?? Community Building
????? ?? Affiliate Programs

• The second level of the pyramid
• Changes business processes to increase the firms
  effectiveness.

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E-Business Model Classification
Enterprise Level Enterprise Level
EC (Online Transactions ) Direct Selling (ex Dell)
EC (Online Transactions ) Content Sponsorship Online (sell advertising)
Portal Portal
Broker Models (?????) Online Exchange (B2B)
Broker Models (?????) Online Auction (B2C)
Agent Models (?????) Representing Sellers
Agent Models (?????) Representing Sellers
????? Virtual Mall
????? Infomediary

• The enterprise level of the pyramid
• The firm automates many business processes in a
  unified system- demonstrating a significant
  commitment to e-business.

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• Agent Models Representing Sellers (?????)
• Selling Agents. Represent a firm to help sell
  products.
• Manufacturers Agents. Represent manufacturing
  firms.
• Catalog Aggregator. Brings together many catalog
  companies to create a new searchable database of
  products for buyers.
• Metamediary. Represents a cluster of
  manufacturers, online retailers, and content
  providers organized around a life event (???) or
  major asset purchase (???).

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• Agent Models Representing Buyers (?????)
• Shopping Agents. Help individual consumers find
  specific products and the best prices online.
• Reverse Auction. Allows individual buyers to
  enter the price they will pay for particular
  items at the purchasing agents Web site, and
  sellers can agree or not.
• Buyer Cooperative (????, or Buyer Aggregator).
  Pools many buyers together to drive down the
  price on selected items. (????????????)

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• Virtual Mall
• is similar to a shopping mall in which multiple
  online merchants are hosted at a Web site.
• Infomediary (?????)
• is an online organization that aggregates and
  distributes information.
• E.g. market research firms.

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E-Business Model Classification

• Businesses that began on the Internet, even if
  they subsequently added a brick-and-mortar (??)
  presence.
• Pure plays face significant challenges.
• They must compete as new brands and take
  customers away from established brick-and-mortar
  businesses.
• One way to change the rules is to invent a new
  e-business model, as Yahoo! and eBay did.

Pure Play
Pure Play
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5. Web Business Models

• ???????????????
• Business models can be based on improvements in
  product or service
• ????????????????
• Business models can be based directly on
  generating revenue
• ?????????????

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5.1 Improvement-Based Business Models
(1) Enhancement
(2) Efficiency

• Reduce costs
• Free trial

• Build brand
• Build category
• Enhance quality

(3) Effectiveness

• Support dealers
• Support suppliers

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5.2 Revenue-Based Business Models
(1) Provider Pays
(2) Customer Pays
???????????? ??????????
??B2B?B2C?????

• Product sales
• Pay-per-use
• Subscriptions(???????)
• Bundle sales (????)
• ??????????????????????

• Sponsorship (????)
• Alliances (????)
• Banner advertising
• Prospect fees (?????????)
• Sales commissions