1 / 21

E Commerce Business Models and Concepts

E Commerce Business Models and Concepts. Tweet Tweet!. New Trends and Technologies. 2010 – 174 Million people would use search engines to conduct 15-17 billion searches online 150 million people would watch 30 billion videos online 104 million people would read blogs

Download Presentation

E Commerce Business Models and Concepts

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. E Commerce Business Models and Concepts Tweet Tweet!

  2. New Trends and Technologies • 2010 – 174 Million people would use search engines to conduct 15-17 billion searches online • 150 million people would watch 30 billion videos online • 104 million people would read blogs • Are we this starved for communication options? • Twitter was the phenomena of the moment in which “tweeple” express themselves in 140 characters or less … “friends’ here are “followers” • Twitter has produced little revenue and zero profits although $160 million has been invested … how can this be exploited for commercial purposes?

  3. Twitter • Is the buzz social network that is the web-based version of cell phone based texting • Podcasting company Odeo got the idea in a search to increase revenues and eventually spun it into Twitter.com • The idea of Twitter is to marry the short text message with the Web to create social networks • No fees, no charges or installation – you just tweet a short update on your cell phone and your friends can keep up with your activities, locations, etc. • Over 145 M registered users … great for updates during the World Cup, Iranian /Egyptian rebellions, death of Steve Jobs … 200 M tweets sometimes dispatched almost simultaneously • 80% Tweets generated by 10% users and their churn rate is 60% … 40% users remain a month or more

  4. Terms for Determining Business and Commercial uses • Churn rates – high .. People feeling too connected to acquaintances? • Unique users • Number of tweets • Investors include • Amazon founder • Benchmark Capital • Spark Capital • Company Valuation $1B … why??

  5. Company Valuation • Valuation based on the commercial uses just as is Facebook … but what does Twitter produce of commercial value? • Primary Asset – user attention and audience size • 1. “get it now” access • 2. database of information from Tweets! • Additionally … powerful tool for news

  6. News Reports Via Twitter The World Reports one individual at a time ….

  7. How do I Monetize these Assets? • Advertising!! • Promotional Tweets – Red Bull and Starbucks

  8. Monetization • Promotional Trends • what’s hot, what are people talking about? • Twitter promotes this as reflective of what people are tweeting • @early bird accounts • Users follow for special offers … twofers for films, fashion, beauty products • “flash marketing” to influentials

  9. Temporal Real Time Searches • Twitter offers something none of the other sites really can .. Real time information .. Agreements with Google, Yahoo, Microsoft enable them to index tweets and enable Internet searches • Who is this service a benefit to and how does it morph into a commercial use? • Dell has opened an @DellOutlet to sell discontinued models and open box computers

  10. E-Commerce Business Models • Set of planned activities (business processes) designed to result in a profit in a marketplace • A business plan is the document that describes the firm’s business model • An E-Commerce Model aims to use and leverage the unique qualities of the Internet and WWW to generate profits

  11. Key Elements of the Business Model • Value Proposition – why should the customer by from you? • Revenue Model – How will you earn money? • Competitive environment – who else occupies your intended marketplace • Market Strategy – How do you plan to promote your products or services to attract your TA • Organizational development – what types of organizational structures within the firm are necessary to carry out the business plan? • Management team – what kinds of experience and background are important for the company’s leaders to have?

  12. Value Proposition • How does your product or service fulfill a need for the consumer? • What are your competitive advantages? • Why should the customer patronize your firm versus another? • personalization, customization, reduced information search, facilitation of transactions

  13. Revenue Model • Describes how the firm will earn money .. • Generate profits and produce an adequate ROI vs. alternative investments

  14. Revenue Model • Advertising Revenue Model – website offers a forum for advertisements and receives fees from advertisers. Site attracts high viewership, retain viewers (stickiness) therefore able to charge higher prices • Transaction Fee Revenue Model – fee for enabling or executing transactions (E*Trade)

  15. Revenue Model • Sales Revenue Model – derive revenue by selling goods and information or services to customers. LL Bean, Amazon, Gap.com • Subscription Revenue Model – offers users content or services but charges a subscription fee for access to all or some of the offerings. Requirements to be successful involve offering information with high value added (Match.com, consumerreports.com) • Affiliate Revenue Model – receive a referral fee or % of revenue from business resulting from referral. (MyPoints)

  16. Market Opportunity • The company’s intended MARKETSPACE (i.e., an area of actual or potential commercial value). • Market Opportunity is defined as opportunities available to the firm in that market space and is usually divided into smaller market niches. • Realistic market opportunity – revenue potential in each of the market niches where you hope to compete

  17. Market Opportunity • EX: Your company creates software learning systems for sale over the Internet. • Software Training market is $70B – 2 major segments – Instructor led (70%) and Computer Based (30%). Within this 2 niches – small business and Fortune 500 . • Your company is a startup – can’t compete for Fortune 500 … • Your realistic market opportunity is then $6B (smaller business looking for computer based software training that is cost effect • MarketSpaceand Market Opportunity in the Software Training Market

  18. Market Opportunity

  19. Competitive Environment • Composed of • Other companies selling similar products and operating in the same marketspace • Companies offering substitute products and services • New Entrants in the marketplace • Influenced by • # of active competitors • how large competitors operations are • market share of the competition • profitability • pricing strategy

  20. Competitive Environment • Direct Competitors – similar products in the same market segment (brand competitors) • Indirect Competitors – different industries but still compete because products can substitute for one another

  21. Competitive Advantage • Produce a superior product and/or bring the product to the market at a lower price than competitors • Does the firm have access to better production capabilities? • Does the firm have more experienced, knowledgeable and/or loyal employees? • Does the firm have a patent? • Superior shipping, supplier or distribution relationships? • First Mover advantage – first entry into the marketplace, can lack complementary resources to maintain advantage • Unfair competitive advantage – advantage based on something others cannot purchase (i.e., brand name). • Perfect markets have no competitive advantages

More Related