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Business Models. Characteristics. A networked architecture that defines ownership, sources of revenues, value-chain, and flows of information, goods, and payments The Internet-technology can be used to reconfigure business models and automate the flow of information

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Characteristics l.jpg
Characteristics

  • A networked architecture that defines ownership, sources of revenues, value-chain, and flows of information, goods, and payments

  • The Internet-technology can be used to reconfigure business models and automate the flow of information

  • Interfaces can be one-to-many or many-to-many

  • Business model and business strategy ?


Taxonomy l.jpg
Taxonomy

  • Ownership structure

    • Public (independent)

    • Private

    • Consortium

  • Value-chain

    • Different ways to generate value propositions

  • Industry specific

    • Vertical

    • Horizontal

  • Transactional and non-transactional


Public e marketplace l.jpg
Public E-marketplace

  • Owned by an independent third party

  • Automated access (many-to-many)

  • Niches

    • Low prices, commodity-type products, and indirect material

  • Value creation from aggregation

  • Contextual services

    • Logistics, financial, insurance, research reports

  • Critical mass and liquidity

    http://www.alibaba.comhttp://www.expedia.com


Private e marketplace l.jpg
Private E-marketplace

  • Owner is also a trader

  • Requires approximately $100 million to build one

  • Owner creates business rules and rules of participation

  • Owner profits more than the trading partners

  • One-to-many interactions

  • Buy-side and sell-side



Integration benefits l.jpg
Integration Benefits

  • Single business platform

  • Use of standardized interfaces

  • Transaction process efficiency

  • Consolidated purchasing

  • Improved sourcing decisions

  • Faster production ramp-up


Unique capabilities l.jpg
Unique Capabilities

  • Owner interacts with partners directly and controls what information partners see.

  • Promotes communication protocols consistent with the owner’s trading practices

  • Supports different access rights of participants

  • Supports selling/buying with multiple attributes

  • Permits customer collaboration and customization

  • AMR predicts private e-marketplace market will reach $35 billion by 2005

    http://www.walmart.com

    http://www.cisco.com


Consortium e marketplace l.jpg
Consortium E-marketplace

  • A private e-marketplace where the ownership is shared by more than one

  • Liquidity of e-marketplace is assured by the equity holders

  • Equity-sharing and profit-sharing

  • Integration benefits: consolidated purchases, collaborative product design, and supply-chain improvements


Consortium e marketplace cont l.jpg
Consortium E-marketplace (cont)

  • Aggregation benefits: sharing infrastructure cost, product, and service standardization

  • Challenges:

    • Trading partners may perceive visibility of their relationships (with their partners) as a threat

    • May pose anti-trust problems with the FTC

  • Examples: Kraft, General Mills, Nabisco, Aerospan, Covisint

    http://www.transora.com, and http://www.e2open.com


Slide11 l.jpg

Roles in the Value-chain

  • Creator

    • Develop new products/service ideas

    • Refine existing products/services

  • Producer

    • Package creator’s ideas into products, services, and business solutions

  • Distributor

    • Enable buyers and sellers to connect, communicate, and transact (supply chain or demand chain)

  • Customer

    • Individual customers

    • Business customers


  • Slide12 l.jpg

    Model Differentiators

    • Disintermediation/Reintermediation

    • Inventory ownership

    • Online/Offline sale

    • Information sharing

    • Revenue sources

    • Cost drivers



    Aggregation l.jpg
    Aggregation

    Forward Aggregation

    1

    1

    Sell

    2

    2

    Purchase

    3

    3

    Resellers

    Buyers

    E-Marketplace


    Features l.jpg
    Features

    • Aggregates the selling power of small sellers, and the sellers exploit economics of scale in purchasing from major suppliers

    • Sellers are helped by the marketplace in fulfillment, order configuration, logistics, and call centers (Ingram Micro)

    • A catalog hub that consolidates sellers’ catalogs is also an aggregator

    • Plasticsnet.com requires only a single purchase order to purchase from a diverse set of suppliers


    Slide17 l.jpg

    Reverse Aggregation

    Suppliers

    Buyers

    E-Marketplace


    Features18 l.jpg
    Features

    • Aggregates the buyers

      • Price reduction, reduced transaction cost

        http://www.fob.com

    • Can outsource procurement

    • Would work best with a few large and many small buyers

    • Product diversity would make reverse aggregation difficult

    • Other aggregators

      • Shopbots aggregate information on books, music, and electronics

      • Relationship aggregators to management the diverse bank accounts of a company

        http://www.maxmiles.com


    Originators l.jpg
    Originators

    Provide online expertise to match product features with customer needs

    Knowledge of buyers and sellers’ businesses

    Initial qualification, specification, packaging (identify and qualify buyers)

    Works well with a fragmented supplier base, and/or complex products

    Freemarkets provide structure, standards, and liquidity for complex transactions

    MySimon matches multiple attributes for tailored purchasing advice


    Collaboration platform l.jpg
    Collaboration Platform

    Provides a set of tools for collaboration – collaborative product design and supply chain

    Online collaboration through web services (.net of Microsoft)

    Plug-in business processes in a service grid, accessible to all companies


    Transaction facilitators l.jpg
    Transaction Facilitators

    Provide efficient transaction services between buyers and sellers

    Use of advanced databases to automate a diverse set of transactions

    Payment processing, and order processing

    Economics of scale in transactions

    Require large business volumes for survival (low margins)

    Must collaborate with originators and other e-marketplaces for referrals

    Competitive advantage through customizing transactions for users

    Integrate the company’s business rules in web-based purchasing


    Resource consolidators l.jpg
    Resource Consolidators

    Create spot markets for resources

    Capacity, inventory, and human resources

    Enable companies to quickly adjust their capacities

    Price volatility and demand uncertainty

    High-fixed asset industries: energy, electricity, and utility

    CapacityWeb, Employease, Tradeout.com, and Enron online


    Service providers l.jpg
    Service Providers

    Specialize on a specific narrow segment of the value-chain

    Payment services, logistics services

    Search agents

    Application service providers

    Customer profiling and business opportunities brokerage

    Electronic notaries and certification authorities


    B2b auction hub l.jpg
    B2B Auction Hub

    Forward auction

    Seller posts goods and buyers bid

    Sell surplus or used equipment http://www.machinefinder.com

    Reverse auction

    Buyer posts description of needed goods

    Suppliers bid

    E-marketplace qualifies sellers and buyers

    Dynamic pricing based on supply and demand


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