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E-Commerce Models
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E-Commerce Models Functionally, e-commerce involves, businesses and consumers. The four segments of e-commerce are: Business-to-Business (B2B)As the name suggests, it is a business platform involving two independent or even dependent business entities. It acts a business facilitator, negotiator and dealmaker between or among mutually contributing business units. Business-to-Consumer (B2C)It refers to a business platform, involving a business entity and consumers. It is a retail version of e-commerce. Selling goods or services through web based shops. It is based on the concept of ‘shopping at convenience’. Consumer-to-Business (C2B)It is a kind of retail marketing platform, where a business entity seeks or rather ‘chases’ customers actively. It is a pro-active version of e-commerce in the sense that it is a ‘customer chaser’, offering customers’ deals, packages or bundle of products at competitive prices. Moreover, it negotiates or bids by offering ‘best possible deals’ to the customers. It is often referred to as ‘reverse auction’. These days it is a common business model adopted by airlines and tour operators. Consumer-to-Consumer (C2C)It represents a consumer business platform, where one consumer acts a resource person selling goods in an online medium to other consumers at a price. One may call such processes as ‘consumer2consumer’ auctions. Another important economic activity that is being generated by such ‘consumer2consumer’ auctions is in the realm of resale and rentals. That is, it has helped in creating a market for second hand goods. B2B GM /Ford B2C Amazon/Dell C2B Priceline C2C Ebay Internet Business Models E-business Model Functions Examples E-shop > To mark a web presence > Seeking additional demand > Often combined with traditional marketing channels An electronic version of a traditional shop offering specific or multiple products BazaarE.com, Indiabookshop.com E-procure-ment Electronic tendering and procurement of goods and services Represents a business platform where manufacturers and suppliers collaborate (a kind of extranet) Seekandsource.com Matexnet.com E-Malls e-supermarket (collection of e-shops) A collaborative platform of e-shops Indiamart.com, CPmall.com, Bababazaar.com E-Auctions > An electronic implementation of bidding mechanism >May also offer integration of the bidding process with contracting, payments and delivery An electronic bidding process Baazee.com, Bidsorbuy.com, Trade2gain.com Auction-india.com Virtual Communities Customers (or members) adding information to a basic environment Represent specific market sectors India-apparel.com Rubbercommerce. com, Indiaconstruction. com, electricmela.com Collaboration Platforms Seek collaboration between enterprises on specific functions Team of consultants Salahkarindia. com, Docmednet. com Third-party Market Places> Additional online channel to other existing channels. > Several or all of the additional features, such as branding, payment, logistics, ordering, and secure transactions > collaboration with value-chain service providers Internet Megastore (an online version of large number of shops/ catalogs) Globalsources. com Value Chain Integrators Integrating multiple steps of the value chain Extranet Solutions provided to the suppliers, Delphi.com Value Chain Service Providers Specialization in a specific function for the value chain Complete logistics support, gati.com Information brokers / trust providers > Adding value to the huge amount of data already available >Investment advice > Trusted third party services (certification authorities, electronic notaries) Trust service providers, Verisign.com Information brokers, Bloomberg. com, Emecklai.com Case Study: Dell the Conqueror 1984: In a University Hostel room, Michael Dell hits on a revolutionary idea: Sell PCs over the phone, rather than build a costly sales team or pay a middleman a distribution fee. 1988: With great prices and quick delivery- Dell sales hit $159 million. The efficient model enables 30% gross margins, making it easy for Dell to undercut rivals who enjoy 40% -plus margin. Dell goes public, raising $ 30 million. 1995:The company revamps to reach new efficiency highs. By combining its build-to-order system and tightening its supply chain, Dell cuts inventory level from 40 days to 17. 1997: Dell starts its assault on the server business with models costing one-third as much as rivals. And Dell jumps on the Net. By April it’s doing $1million in sales daily online- with 30 people, vs the 700 it would have needed to man the phones. 1999: Dell sales zoom to$ 18 billion, inventory to record low levels. 2001: Dell becomes the No.1 PC seller, with a 13% worldwide share. Though margins squeezed to $ 361 million in profits, whereas its rivals lose $1.1 billion. 2002: Dell further consolidated its position over its nearest competitor HP by becoming the world’s most widely distributed PC seller. 2003: As No.1 PC seller in the world, it currently holds 15% of the market share.
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