Electronic Commerce: Business Models, Strategies, and Implementation in the Network Economy. Minder Chen, Ph.D. Professor of Management Information Systems Martin V. Smith School of Business and Economics CSU Channel Islands E-Mail: [email protected]
Electronic Commerce: Business Models, Strategies, and Implementation in the Network Economy
Minder Chen, Ph.D.
Professor of Management Information Systems
Martin V. Smith School of Business and Economics
CSU Channel Islands
E-Mail: [email protected]
Course Web site: http://faculty.csuci.edu/minder.chen/mis310/
Cap: 9.771B Share: $57 7/16
Who Can Afford Not to Play in the Internet EC Space?
Market Cap (4/16/99)
$ 4.3 Billion
$ 2.5 Billion
$ 2.5 Billion
Priceline Tops $1,000 (Sept. 18, 2013) on Growing Demand for Web Bookings [Ref]
Source: The rise and fall and rise of Priceline.com
-- Bill Gates, The Road Ahead
-- Net Ready.
New business models and ideas are driving EC initiatives.
Internet technologies are enablers.
Online: soft goods
Delivery: hard goods
Electronic Customer Support
Operate, Maintain, Repair
Data sheets, catalogs, demos
Web searches, web ads
Credit cards, e-cash
Deliver soft goods electronically
Web site, phone,
fax, e-mail, e-mailing list
Source: Zazzle Marketplace http://www.zazzle.com/sell/more/faq
Source: Information Rules
Adapted from: [PDF]why $o.oois the future of business (free) Chris Anderson
Positive Network Externality
Value to User
Number of Compatible User
Homeplus in Korea (Tesco)
Your competitor is just
Customer Need for Product Information
Compassion about the product (SMM)
Customer Demographics Match
Source: Forrester Research
NetFlix: Atoms to Bits
[ Video Nicholas Negroponte ]
From Hand to Cloud & Back…
Rise of the Sharing Economy
[ See Internet Trends &
eBook, airbnb.com ]
Industries who set up
Raw material producer
Buyer-side EC Model
Click and Mortar
Multi-channel plays will have extraordinary power if companies elegantly blend and synchronize those channels.
Virtual Store/Pure Player
Gap, Safeway, Wallmart
eBay, Amazon, Webvan,
Wingspan Bank, Yahoo
Bricks & Clicks
Wells Fargo, Safeway,
Barnes and Noble
Source: Chris Anderson, “The Long Tail”, Wired, http://www.wired.com/wired/archive/12.10/tail.html
Reference: From Niches to Riches: The Anatomy of the Long Tail (lnk)
Jon Krakauer wrote Into Thin Air
Joe Simpson, Touching the Void
The unlimited “shelf space” of the Internet.
Free:The Future of a Radical Price, Chris Anderson
Case Study: The $250 Neiman Marcus Cookie Recipe Story
What do your customers need?What requests do they make of you?
How do you respond to customer’s requests?
What kind of information can they get from you?
What process do they go through?How do you produce and distribute it to them?
What are the steps that your customers have to take
to complete a purchase transactions?
How do they get shipment status?
How are exceptions handled?
What do you need from customer?What do you know about customer preferences?
What information could you use to better target your
product and service offerings?
What to build relationships?How can you engage customers in an ongoing dialog?
How can you continue to provide information, products,
and services to reinforce your ongoing relationships?
-- Community Web Site
Twitter's estimated advertising revenue:
2012: $288.3 million; 2013: $582.8 m.
2014: $950 million; 2015: $1.33 billion
Google revenue: 2012: $50.2 billion; 2011: $37.9 billion
Facebook revenue: 2012: $5.1 billion; 2011: $3.7 billion
Yahoo revenue: 2012: $5 billion; 2011: $5 billion
Source: eMarketer Inc.
(source: Link, 9/12/2013)
All tangible and intangible items that can be copied adhere to the law of inverted pricing and become cheaper as they improve.
Anticipate this cheapness in your pricing strategy and product/service development strategy
Cost of a 3-minute
Long Distance Call
[PDF]why $o.oois the future of business (free) Chris Anderson
[PDF]FREE: The Future of Radical Price
If you are NOT paying for it,
you’re not the customer.
You are the product being sold.*
** See a counter argument at http://powazek.com/posts/3229
Adapted from Netscape Communications Inc., 1996.
End-to-End Process of An E-Commerce Site
The Elements of User Experience
Source: Jesse James Garrett, The Elements of User Experience,
Source: Web Style Guide at http://webstyleguide.com/wsg3/index.html
See http://webstyleguide.com/wsg3/index.html for Web Style Guide
And http://webstyleguide.com/wsg3/3-information-architecture/index.html for Information Architecture
Choose the right site structure for your audience and content.
Large sites are just too large to depend solely on browsing. Heavily used pages are likely to appear on browsing menus pages, but obscure pages deep within the site will only be found and read through web search technologies.
Source: Steve Krug, Don’t Make Me Think, 2006.
Amazon’s Collaborative Filtering/Recommendation system
eProcurement / SCM
eMarketplace / Auction
Communities of Interests
Product database queries / Search
Registration / Forms
Games / Chat room / eForum
Our business [list name] will deliver [list key deliverables] to [list key beneficiaries] to enable them to [list key benefits]. The business is headed by [list founder and key executives, investors, and advisors] that have [list key background and qualifications]. The business [will launch/was launched] on [date] and we [will begin/began] delivering [first product or service] on [date]. We expect to prove our business model and achieve profitable growth on [date] and anticipate that the terminal value of the business will be [list anticipated value], which represents a [list return] to investors. The total cost to achieve this goal will be [total cost], which includes the following key cost categories [list]. We have currently received [list dollars of funding secured to date] from the following sources [list]. We anticipate receiving the remainder of the funding by [date] from [list sources]. The key risks for the project are [list risks]. These risks will be managed by [list key approached to managing each risk].
Source: Alexander Osterwalder & Yves Pigneur, Business Model Generation (Preview version), 2009.
Key Issues To Solve
Competencies, Activities, Resources
Source: Describe and Improve your Business Model
Source: Ram Charan, What the CEO Wants You to Know