Business Models Business Models Foothill College Electronic Commerce Agenda • Business models

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Business Models Business Models Foothill College Electronic Commerce Agenda • Business models Powered By Docstoc
					Business Models

   Foothill College
Electronic Commerce
                 Agenda
•   Business models
•   Example companies
•   Business process (PTP)
•   Analyzing process models
•   Introduction to Value Webs
      What is a Business Model?
•   A value chain that connects participants
•   The path of goods in a supply chain
•   The path of transactions in an exchange
•   The path of information in a value chain
•   Interdependencies / paths in a “value web”
    – Ultimately, how you expect to make money
              Acronyms First
•   B = business
•   C = consumer
•   M = marketplace
•   A = application
    – Each “participant” is a node along a “for
      value” transaction exchange (value chain)
    – Models must include two or more participants
    Networked Business Models
•   Connect more participants
•   Integrate “business process”
•   Transfer information much faster
•   Support hybrid transaction models
•   Lend themselves to workflow / BPR
           Business Models
•   B2C, B2B
•   C2C, C2B
•   B2B2C, M2B2C
•   Market models and M2M
•   Internet exchange
•   e-Hubs / e-Market places
•   Direct commerce
    B2B - Business to Business
•   The big mover
•   e-Business driven
•   EDI and Internet based
•   80% of “e-Commerce” $s
•   Estimated at $1 trillion spend
    – growing to 2.5 trillion by 2005
    – will be all of digital commerce by 2010
            B2B Examples
•   IBM
•   HP
•   Cisco
•   Dell
•   Intel
    B2C - Business to Consumer
•   Consumer driven
•   Earliest e-Commerce
•   Initially was retail - computers
•   Books, CDs, travel, and entertainment
•   500,000 commerce sites in all verticals
    – many “click-and-mortar” strategies
    – driven by large “Web only” players
            B2C Examples
•   Amazon.com
•   Drugstore.com
•   Wal-Mart.com
•   Safeway.com
•   1-800-flowers.com
B2B2C - Business to Business
        to Consumer
• Suppliers of products / services to B2C
• Large back end players:
  – financial services
  – distribution, replenishment
  – payments, EDI, supply chain
  – New portal B2C model
• Can include direct commerce
          B2B2C Examples
•   Yahoo!
•   Fed-ex, UPS
•   Safeway (hybrid)
•   Direct commerce vendors:
    – Vitessa, CrossCommerce, EnText
    – iConomy, Escalate, iVendor
C2C - Consumer to Consumer
• Auctions
  – facilitated at a portal
• Peer-to-peer
  – Napster model
  – file exchange
  – transaction optional
• Classified ads at portal sites
             C2C Examples
•   E-Bay
•   E-wanted
•   Match.com
•   Napster (model)
    – C2M2C really reflects the actual model
• Excite Classifieds
• Direct “C2C” really doesn’t exist today
    C2B - Consumer to Business
•   Reverse auction
•   Post a “wanted” message
•   Businesses will bid on message
•   Can be automated at an exchange
•   Creates very large consumer markets
    – a way to liquidate distressed inventory
    – or participate in a “C2M2B2C” exchange
             C2B Examples
•   Priceline
•   Autobytel.com*
•   GreatShop.com
•   Reverse auction C2B is the driver
    – In these examples, C2M2B is the model
    – A marketplace “intermediary” is needed
    – *autobytel.com is technically a C2M2B, or
      C2M2B2C, as a B2B marketplace is central
             Market Models
• Market = intermediary
• Vertical exchange model
  – markets trade or share commodities
  – DynegyDirect, VerticalNet
• Napster / eBay are market intermediaries
• Dynamic pricing / collaborative commerce
  – Large buy-side / sell-side portals / exchanges
         B2M2X Examples
• eBay
• VerticalNet
• VertMarkets*
  – Part of Vertical Net
• DynegyDirect**
  – Part of Enron Online – still operational
• Commerce One, Ariba, and Covisint
        Internet Exchange
• Large B2B component
  – estimated at 33% of all B2B in 2003
• Dynamic pricing
  – prices are set by buyers and sellers
• Multiple buyers and sellers
  – it is a “market place” where many buyers
    and many sellers are present. Usually it is
    organized around a specific vertical market
         Exchange Players
• ANXeBusiness Corp
  – EDI network / markets
• General Electric (GSX)
  – Sold to Francisco Partners 6/02
• Covisint auto exchange
• DynegyDirect
  – Enron online (energy) closed 7/02
  – Still operational in energy, logistics, retail
        E-Markets and E-hubs
•   Exchange
•   Market place
•   Channel partners
•   eXtended enterprise
•   Add process to portals
    – Community, content, and commerce
    – Creating process share from member value
    E-Hub Vendors and Players
•   Covisint
•   Vertical Net
•   I2, Manugistics
•   ANX - auto exchange
•   See Net Market Makers for info / terms:
    – http://www.netmarketmakers.com/
    – http://www.netmarketmakers.com/glossary/
           Direct Commerce
•   New retail model
•   Deliver products from suppliers
•   Commerce “appears” on portal sites
•   Portals are the “merchant of record”
•   eCommerce vendor delivers back end
•   Portal and commerce vendor split margins
    Direct Commerce “Founders”
•   Vitessa (purchased)
•   Cross Commerce (gone)
•   iConomy (gone)
•   iVendor (gone)
•   Escalate (SCM software)
•   EnText (gone)
     – All launched in Spring 2000, as the bubble
       burst for 90% of their target customers.
          Analyzing Process
•   The PTP model
•   Process
•   Transactions
•   Participants
•   Creating “value webs”
           The Model - PTP
• Process
• Transactions
• Participants
• Can be used to describe and explain all
  business models, especially the Internet
• Analytically – defines “process share”
    – Market share of a given business process
Business Process Cycle

 Discover      Negotiate




 Settle         Perform
                Process (P)
•   Discover
•   Negotiate
•   Performance
•   Settle / payment
•   Actions of participants
    – Process can stall, fail, or require more than
      one turn to fully complete (close) a cycle
            Transactions (T)
•   Spot
•   Recurring
•   Replenishment
•   Dynamic
•   Modalities of transactions
            Participants (P)
•   Consumer
•   Business
•   Market
•   Application
•   Types of actors
     Analyzing Value Webs
• Look at PTP
• Analyze each component of the model
  – Process
  – Transactions
  – Participants
• Look at the number of process turns
• Look at the efficiency of process turns
                 Summary
• Internetworking allows many models
  – e-Commerce was people driven
  – e-Business is process driven
• eMarketplaces support process
  – E-Hubs connect addition of partners
• Business models are business process
  – Use the PTP model to analyze process models
                  Review
•   What is a business model?
•   What are C, B, M, and A?
•   What are “extended value chains”?
•   What are P, T, and P in process?
•   What is a definition of “value web”?
              Exercises
• How many business models do you
  participate in each week? Draw some.
• Are these networked process models?
• If so, how do goods, transactions, and
  information flow among participants?
• Name five B2C successes / failures
• Is a grocery store a “portal”? Explain.

				
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