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Internet Service. Learning Objectives. Describe different Internet business models. Contrast an electronic and traditional service. Understand the importance of scalability to E-commerce success. Distinguish among the E-business models. Technology Convergence Enabling E-Business. Internet

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Presentation Transcript
learning objectives
Learning Objectives
  • Describe different Internet business models.
  • Contrast an electronic and traditional service.
  • Understand the importance of scalability to E-commerce success.
  • Distinguish among the E-business models.
technology convergence enabling e business
Technology Convergence Enabling E-Business
  • Internet
  • Global telephone system
  • Communications standard TCP/IP (Transfer Control Protocol/Internet Protocol)
  • Addressing system of URLs
  • Personal computers and cable TV
  • Customer databases
  • Sound and graphics
  • User-friendly free browser
purpose of web site
Purpose of Web-site
  • A retail channel (Amazon.com)
  • Supplemental channel (Barnes & Nobel)
  • Technical support (Dell Computer)
  • Embellish existing service (HBS Press)
  • Order processing (Delta Airline)
  • Convey information (Dr. Koop)
  • Organization membership (POMS.org)
  • Games (Treeloot.com)
e business models weill vitale place to space hbs press 2001
E-Business Models(Weill & Vitale, Place to Space, HBS Press, 2001)
  • Content Provider: Reuters
  • Direct to Customer: Dell
  • Full-Service Provider: GE Supply Co.
  • Intermediary: eBay
  • Shared Infrastructure: SABRE
  • Value Net Integrator: Seven-Eleven Japan
  • Virtual Community: Monster.com
  • Whole-of-Enterprise: Government
service package and e service
Selling (providing) information

Selling value-added service

Selling services with goods

Selling goods

Used car prices

Online travel agent

Computer support

Online retailer

Kelly Blue Book

Biztravel.com

Everdream

Amazon.com

Information dominates

service package

Goods dominates service package

Service Package and E-Service
e business supply chain network elements
E-Business Supply Chain (Network) Elements
  • Major entities including firm of interest and its customers, suppliers, and allies
  • Major flows of product, information, and money
  • Revenues and other benefits each participant receives
  • Critical aspects: participants, relationships, and flows

Example: 7-Eleven Japan

economics of e business
Economics of E-Business
  • Sources of Revenue:- Transaction fees- Information and advice- Fees for services and commissions- Advertising and listing fees
  • Ownership- Customer relationship- Customer data- Customer transaction
economics of scalability
Economics of Scalability
  • Information vs goods content of service package
  • Degree of customer contact
  • Standardization vs customization
  • Shipping and handling costs
  • Cost of after sales service
  • Why did living.com fail?
economics of scalability1
Dimensions

High Scalability Low

E-commerce continuum

Selling

information

(E-service)

Selling value-

added service

Selling

services with

goods

Selling goods

(E-commerce)

Information vs. Goods Content

Information dominates

Goods dominate

Degree of Customer Content

None

Need for call center

Standardization vs. Customization

Mass distribution

Fill individual orders

Shipping and Handling Costs

None

Yes - costs depend on item ordered

Cost of After- sales service

None

Returns possible

Example Service

Used car prices

Online travel agent

Computer support

Online retailer

Example Firm

Kelly Blue Book

Biztravel.com

Everdream

Amazon.com

Economics of Scalability
topics for discussion
Topics for Discussion
  • Can an Internet service encounter be a memorable experience?
  • What is the “front-office” of an Internet service?
  • What is the contribution to gross national product (GNP) of “self-service” activities?
  • Position the following websites on the electronic services product-process matrix: cookingpost.com, chocoholic.com, peapod.com, raisinrack.com, and win.com.
amazon com
Amazon.com
  • How would you contrast Amazon’s business design with that of Barnes & Noble before Barnes & Noble went online?
  • From a customer’s perspective, what are the advantages and disadvantages of each design?
amazon com cont
Amazon.com (cont.)
  • Why has Amazon.com not turned a profit yet and what needs to be done to achieve profitability?
  • Will amazon continue to be successful against “click and mortar” competitors, such as Barnes & Nobel, which go online?
  • Is Amazon.com a model for the future of retailing?
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