Business and Social Webs Goals of this chapter • Understand the importance of „asking WHY“ in the context of web-based systems. • Learn various motivations for ePresence • Overview on options or archetypes for business- and social webs • Understand criteria for decision about web archetypes and marketing strategies in the context of businesses • Get some insight into virtual communities Context of Business Webs • Def.: Business Model (Timmers, 1999) An architecture for product, service, and information flows, including a description of the : – various business actors and their roles – potential benefits for the various business actors – sources of revenue. Context of Business Webs • E-Business Webs are part-of an organization's information system • Business Webs help people to follow their business strategies • Social Webs support people in reaching goals Context: (e-) Presence Planning Questionnaire (1) General business planning: • What is the organization's mission? • What are the resulting goals? • What is the organization's core business? • What are the products and services? • What are the sources of revenue? • What are the benefits to the participating actors? • Who are the customers or addressees? • Who are the competitors? • What is the organizations marketing strategy, or how to compete? • … Context: (e-) Presence Planning Questionnaire (2) Planning of e-presence: • What are the goals of e-presence? • What major difference shall it make? • Where can we start and where are we heading to? • What are the costs and benefits to each participating actor? • What are the major obstacles and risks, what is the effect of compromising e-presence? • … Business Web Archetypes E-shop: simplest solution • Features: – Web that supports “normal“ business, – Least resistance – Customer support – Cost/benefit ratio – Competitors‘ influence – Often in combination with more advanced services Business Web Archetypes (adapted from Tapscott et al. 2000, p. 28) Self-organizing C Agora Alliance o n t r o Aggregation Value Chain l Hierarchical Low Value Integration High Aggregation • The Aggregation business-web enables a flow of goods and services between producers, creating value for both. • Example: Financial service site offering: savings, mortgage, credit card, insurance products (e.g. Egg) • Beginning: often e-shop to which third party products are added. • Aggregator acts as intermediary adding value to end customer as well as third party supplier. Aggregator Customer Producer Customer Producer Aggregator Producer Customer Aggregator • Features: • Assists the customer in finding the best price • May reward loyal customers by giving discounts • Key requirement: convenience for customer • Final stage is fulfillment: transaction is processed; works best for intangible products such as insurance • Application areas: financial services, tourism, theatre industry Agora (Auction) • The Agora is a business-web where buyers and sellers come together to negotiate and assign value to goods. A price discovery mechanism allows buyers and sellers to be matched and to carry out exchanges. • Examples: – eBay: consumer to customer sell-side auction site – FreeMarkets: buy-side auction site Agora (Auction) seller buyer seller Price- buyer Discovery buyer Mechanism seller seller buyer Agora (Auction) • Features: – Particularly appropriate for perishable goods, such as flight seats, theatre tickets, etc. – Allows the creation of markets – Dynamic pricing mechanism to improve performance Value Chain • In the value chain an organization integrates multiple steps of the value chain and exploits the information flows between the stages. • All of the partners act like one enterprise to create value, e.g. shorter delivery, customization, customer support, for the customer through information sharing and cooperation. Value Chain Integrator Producers Customers Value Chain • Examples: – Motor industry: customer demands pull cars through a supply network – Computer industry: Cisco builds the networking infrastructure that powers the web. Cisco designs the core technologies and manages partner relationships. Most of manufacturing, selling, and support are done by partners, but Cisco provides the context for integration. – Theatre Industry: Production companies, artists, playwrights, agents, and theatres can be brought together. Customer participation during the creation of performance schedules can be achieved. Alliance • In an alliance a “product“ is produced through a community of prosumers. • A prosumer is both producer and consumer. • Example: OSS Open Source Software; Industrial strength software, e.g. Linux, is produced by organizations and individuals that contribute code to Linux and use the software to support their businesses. – Contributors are not paid for their contributions – the resulting software can be used free of charge Alliance Prosumers Prosumers Prosumers Prosumers Alliance • Another example: FriendsReunited – Goal: put people in touch with old school friends – No traditional advertising and marketing – June 2001: 191.000; Oct. 2001: 2 Mio users – Subscription fee: 5 £. • Features: – Critical mass required – Virtuous (reinforcing) and vicious circles – Discuss what makes alliances work Virtual Communities • Virtual Communities are social aggregations of people who carry on public discussions with sufficient intellectual incentives and human feeling to form webs of personal relationships in cyberspace. • A virtual community has the capacity to integrate content and communication, gives access to competing publishers and consumers and promotes member-generated content. • Business setting: business networks Virtual community orientation (Rheingold 2000) • Interest-oriented: – shared interest on some topic such as sport, music, hobby – Support via chat rooms, message boards, discussion groups • Relationship-oriented: – Shared life experiences – Focus on sharing information and opinions and community support • Fantasy-oriented: – Role playing and imaginary environments • Transaction-based – Support buying and selling – Provide exchange of information and related products Virtual community – value creation • Organizers of virtual communities create value by: – Taking subscriptions – Placing advertising – Selling products and services – Selling market research data – What else? • Learning • Broadening one‘s perspective Value Map • Visual aid for conceiving a business-web • Parties involved: ellipses • Flows: – Goods and services, revenues – Information and knowledge – Intangible benefits Value Map - Example Goods, services, revenue Knowledge Services Intangible Benefits (e.g. accomodation, restaurants) Commision bookings ECU Production data preferences Theatre Aggregator Theatres Theatre- Seats goers tickets Affiliates (e.g. Tourist Information Office) Marketspace transformation Marketspace model (Dutta and Segev, 2001) • The marketspace model builds on two dimensions: – Technological • Interactivity of Internet • Connectivity of Internet – Strategic • 4 P‘s of marketing: product, price, place, promotion • Customer relationships (personalization, one-to-one marketing possible) • Internet marketing: management of the marketface – the mix of marketplace (real) and marketspace (virtual) Marketspace transformation Marketspace model (Dutta and Segev, 2001) Product Price Customer Interactivity Relationships Connectivity Promotion Place To think about • Examples for business webs and discussion what they achieve and what could be improved. • Draw value maps for prospective business/social webs, e.g. our eLearning solution, the community UniLearn, the InterdisPraktikum application or the web you just dream about to construct. • What motivations might you have to start a virtual community or to participate in one? What could be the added value for you? To contribute • Which components and functions should a virtual community (of a predefined orientation) have? Suggest a class diagram for a virtual community. • Specify the workflow you suggest to start a virtual community (of a predefined orientation) and to keep it alive. For discussion • Humans have a need to communicate – what implications does this have for virtual communities or for the Internet? • The Internet: a promoter or inhibitor of real relationships? • Cooperation via Internet: More or less effective than face-to-face cooperation, or what makes eCooperation a valuable complement to real cooperation?