Business Webs

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					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
  – 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
  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
• …
  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
• 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
      Business Web Archetypes
                    (adapted from Tapscott et al. 2000, p. 28)


         C                 Agora                        Alliance
         o                 Aggregation                   Value Chain


                  Low               Value Integration                  High
• 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.
• 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.



Producer      Aggregator

  Producer                  Customer
• 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)

                   Discovery             buyer

        seller                  seller
              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
              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
            Value Chain


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
  – Theatre Industry: Production companies, artists,
    playwrights, agents, and theatres can be brought
    together. Customer participation during the creation of
    performance schedules can be achieved.
• 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

Prosumers          Prosumers


• 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
• 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
• 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,


                                                                      Production data


                  Seats                                                                  goers

                               (e.g. Tourist Information
     Marketspace transformation
                 Marketspace model (Dutta and Segev, 2001)

• The marketspace model builds on two
  – 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

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
• 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
• Cooperation via Internet: More or less
  effective than face-to-face cooperation, or
  what makes eCooperation a valuable
  complement to real cooperation?