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E-Commerce

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    1. E-Commerce Jason C.H. Chen, Ph.D. School of Business Administration Gonzaga University, Washington, U.S.A. Senior Consultant, Taskco.com chen@gonzaga.edu Nov. 20, 2000

    3. E-Commerce: From B2C to B2B and Beyond Jason C.H. Chen, Ph.D. School of Business Administration Gonzaga University, Washington, U.S.A. Senior Consultant, Taskco.com chen@gonzaga.edu Nov. 22, 2000

    4. Outline of Topics EC, B2C and B2B and their models. How big is B2B? Where is the Evidence? What are the revenue models in B2B? What is driving adoption of B2B? Why now? TASKCo.com

    5. eBusiness Key Concepts eBusiness The strategy of how to automate old business models with the aid of technology to maximize customer value eCommerce The process of buying and selling over digital media eCRM (eCustomer Relationship Management) The process of building, sustaining, and improving eBusiness relationships with existing and potential customers through digital media

    6. What is E-Commerce ? Electronic commerce (EC) is an emerging concept that describes the buying and selling of products, services and information via computer networks, including the Internet.

    11. Traditional versus E-Business Models?

    12. What is B2C? B2C (or Extranets) is just web-enabled relationships between existing partners; they tend to be run by a single company seeking to lower the cost of doing business with its current suppliers or individual customers. Examples? Amazon.com Egghead.com

    14. B2C Applications Electronic storefront Electronic malls Advertising online Service online selling books, toys, computers e-banking (cyberbanking) online stock trading online job market, travel, real estate

    15. Figure : B2C and B2B Internet Commerce in the U.S. (Source: Forrester Research)

    16. What is B2B? B2B is business-to- business commerce conducted over the Internet (called B2B e-commerce space, or e-marketplaces) Why B2B is superior? B2B e-frastructure and e-markets are the continuous extension of previously installed technologies and current marketplace activities. In (our) views, continuous innovations represent superior investments because they build upon technology platform and economics that have already proven successful.Why B2B is superior? B2B e-frastructure and e-markets are the continuous extension of previously installed technologies and current marketplace activities. In (our) views, continuous innovations represent superior investments because they build upon technology platform and economics that have already proven successful.

    17. B2B e-Markepplaces: A CEOs Perspective The next chapter in the e-business revolution involves the transformation of entire markets and the redefinition of industries. We will see the rise of a new class of entities -- e-Marketplaces -- that will help online buyers and sellers find each other, attack the inefficiencies of traditional markets, and carve out for themselves important roles in the e-business economy. Louis V. Gerstner Jr. Chairman of the Board and CEO IBM Corporation

    18. E-Market is Web-based marketplace e-market is Web sites where buyers and sellers come together to communicate, exchange ideas, advertise, bid in auctions, conduct transactions, and coordinate inventory and fulfillment

    19. Figure : A B2B Model (Source: Goldman Sachs Investment Research Report)

    21. B2B Applications Advertising Auctioning Procurement Channel management E-commerce

    22. How Big is B2B?

    23. Where is the Evidence Three highlights from the Goldman Sachs B2B survey 1.0: E-Commerce spending on proprietary Web site, e-market, and procurement (75% say, in 2000) Business are increasingly likely to develop B2B e-markets and to favor online auctions (74% say, in 2000) Outsourcing e-commerce spending is commonplace among businesses (25% say, up to 75% of e-C spending)

    24. B2B Revenue Model B2B companies exhibit varying business models, depending on the key products and services they offer. The models include: transaction fees, auction-driving commissions, advertising, content subscriptions, software licensing

    25. B2C vs. B2B

    26. The Magnificent Seven B2B Drivers Increasing competition and globalization Growing interactivity Financial opportunity Efficiencies and cost savings Enhanced market and customer reach Real-time needs Regulatory and taxation issues Growing interactivity -- such as bidding, RFQ Enhanced market and customer reach -- Global reach Regulatory and taxation issues -- Limited government regulation and taxation on E-com.is a key driver of B2B Growing interactivity -- such as bidding, RFQ Enhanced market and customer reach -- Global reach Regulatory and taxation issues -- Limited government regulation and taxation on E-com.is a key driver of B2B

    27. Small Business Likely to Fuel B2B Small businesses will fuel the B2B market the use of and dependence on the Internet by small businesses as a medium for marketing, distribution, and commerce will likely fuel the B2B market. as more small business access the Internet and set up corporate Web pages, the more they will employ the Internet to execute their business strategy.

    28. Benefits of B2B B2B solutions create competitive dynamics through: cost savings the composition of cost (product versus process costs) the number of intermediaries in the supply chain. new financial (revenue) opportunities the rate of industry-wide B2B adoption business model

    29. Why Now? B2B catalysts are now arising to stimulate adoption (mentioned earlier). Interactive networks have recently become ubiquitous and inexpensive, accelerating the use of B2B applications. A viral effect will spur copycat behavior throughout the market as more companies continue to implement B2B applications.

    30. Which Industries are Likely to Embrace B2B Solutions Industries that are B2B inclined exhibit certain key characteristics: the supply chain is highly diffuse, techno-innovators dominate the culture, process represents more than 20% of total costs, products exhibit complex configurations, expense pressure is intense.

    31. Research show that leading industries migrating online and adopting B2B solutions include the following: Aerospace/Defense: 35% Electronics: 25% Chemicals: 20% Motor vehicles and parts: 18% Medical equipment and transport: 17%

    32. What Makes a B2B e-market Company Succeed? Five Critical Success Factors for e-markets: Business model, market size, industry expertise, branding and distribution, management execution hustle (not just the formulation of strategy) branding and distribution, management execution hustle -- efficiency branding and distribution, management execution hustle -- efficiency

    33. Solutions for e-Enterprise Organizations Streamlines buying and selling between trading partners Maximizes trade efficiency across the entire supply chain Strategic e-commerce capabilities in Internet time Delivers compelling ROI Example: Today, with ERP applications, enterprises work internally. With Commerce Ones solutions you work between enterprises Commerce provides strategic ecommerce solutions that allows your enterprise to optimize commerce between all your customers, partners and service providers Example: Today, with ERP applications, enterprises work internally. With Commerce Ones solutions you work between enterprises Commerce provides strategic ecommerce solutions that allows your enterprise to optimize commerce between all your customers, partners and service providers

    34. Solutions for Internet Market Makers Turn your supply chain into a revenue generation opportunity Leverage your industry domain expertise into strategic e-commerce solutions Brings e-commerce to businesses of any size, across all industries Solutions for e-Marketplaces Value Proposition: Strategic e-commerce capability to automate their buying wehter ad hoc, catalog based or RFQ - collaborative interactions with your trading partmers..infrastructure/system capabilities Truly leverages the power of the InternetSolutions for e-Marketplaces Value Proposition: Strategic e-commerce capability to automate their buying wehter ad hoc, catalog based or RFQ - collaborative interactions with your trading partmers..infrastructure/system capabilities Truly leverages the power of the Internet

    36. European e-markets B2C e-commerce in Europe is likely to remain approximately two to three years behind the U.S. . B2B in Europe currently lags the U.S. by two years. How about in Asia?

    37. TASKCo Mission