E-Commerce Business Models and Web 2.0, Slides of Fundamentals of E-Commerce

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INTRODUCTION TO

E-COMMERCE

(Part II)

Prepared by Nick Gachui, BSc. Computer Science (JKUAT), MSc. Software

Engineering (JKUAT).

BUSINESS NET TYPES

• (^) A more abstract categorization of digital businesses has been given 2001 by Tapscott (Meier &

Stormer 2008, pp. 34–46). He discussed the following business net types:

• (^) Business Web Agora
  • Objective: To run a marketplace for goods and values.
  • (^) Attributes: Market information available, negotiation processes established, dynamic pricing through negotiations between market participants.
  • Role of the customer: Market participant.
  • Benefits: Negotiable products and services.
  • (^) Examples: eBay, auctions.yahoo.
• (^) Business Web Aggregator
  • (^) Objective: To run a digital super market.
  • Attributes: Presentation of a great variety of products, fixed prices and no negotiation between supplier and customer, simple fulfilment from the customer’s point of view.
  • (^) Role of the customer: Customer.
  • Benefits: Convenient selection and fulfilment from the customer’s point of view.
  • (^) Examples: etrade, amazon.

WEB 2.

• (^) Web 2.0 (Chen & Vargo 2014) describes World Wide Web sites that emphasize user- generated content, usability, and interoperability. Although Web 2.0 suggests a new version of the World Wide Web, it does not refer to an update of any technical specification, but rather to cumulative changes in the way Web pages are made and used.

Characteristic application types of Web 2.0 are:

• (^) Blogs : A blog (a truncation of the expression weblog) is a discussion or informational site published on the World Wide Web and consisting of discrete entries (“posts”) typically displayed in reverse chronological order (the most recent post appears first). We normally see “multi-author blogs” (MABs) with posts written by large numbers of authors and professionally edited. MABs from newspapers, other media outlets, universities, think tanks, advocacy groups and similar institutions account for an increasing quantity of blog traffic. The rise of Twitter and other “micro-blogging” systems helps integrate MABs and single-author blogs into societal news streams.
• (^) Social networking services : A social networking service (also social networking site or SNS) is a platform to build social networks or social relations among people who share similar interests, activities, backgrounds or real-life connections. A SNS consists of a representation of each user (often a profile), his or her social links, and a variety of additional services such as career services. SNS’s are Web-based services that allow individuals to create a public profile, create a list of users with whom to share connections, and view and cross the connections within the system. Most SNS’s provide means for users to interact over the Internet, such as E-Mail and instant messaging. SNS’s incorporate new information and communication tools such as mobile connectivity, photo/video/sharing and blogging.

Contd…

• (^) If an enterprise wants to be successful in the Web-2.0-world it has to move from a goods focus to a service focus. How can this be managed? The following rules may help: - Do not produce goods but assist customers in their own value-creation processes. - Value is not created and sold but value is co-created with customers and other value-creation partners. - (^) Do not consider customers as isolated entities, but in the context of their own networks. - (^) Resources are not primarily tangible such as natural resources but usually intangible such as knowledge and skills. - (^) Shift from thinking of customers as targets to thinking of customers as resources. - Shift from making efficiency primary to increasing efficiency through effectiveness.
• Obviously there is a strong focus on the customer and customer satisfaction as it should be in every business. But what is really new? Is there finally a significant difference between traditional business, Web 1.0 business and Web 2.0 business? We are not sure.

TECHNICAL AND ECONOMIC CHALLENGES

• (^) TECHNICAL CHALLENGES
• (^) ICT systems have to work properly not only within the boundaries of the own organization but also in

combination with ICT systems of other organizations. Interfaces between the involved systems have to

be defined and documented properly. But: How heterogeneous are the involved ICT systems allowed

to be? Is our IT infrastructure fit for E-Commerce? How do we have to change or extend our

application systems for E-Commerce?

• (^) In the digital business ICT systems are mission critical assets. How do we have to protect an ICT

system so that it is not possible to destroy it, damage it or manipulate it? Are our ICT systems secure?

Are unauthorized persons able to get access to our systems? Are payment procedures secure enough?

Can we protect the personal data of involved people, especially customer data?

• (^) Finally we have to realize, that E-Commerce depends on people. Are the people of our IT organization

qualified enough? Can we provide the necessary and significantly high technical support?

QUESTIONS FOR YOUR SELF-STUDY

• Q1: Where do you use the opportunities of E-Commerce actually in your daily life?
• (^) Q2: Which companies do you know which are doing E-Commerce?
• (^) Q3: Consider the Internet-based businesses, which we have listed above. Are they really new business categories?
• (^) Q4: Find additional advantages and disadvantages of digital businesses.
• Q5: Consider the above-mentioned technical and economic challenges of E- Commerce.
• (^) Q6: What is E-Commerce? How does it differentiate from traditional business models?
• (^) Q7: What are different business models available for E-Commerce?
• (^) Q8: How can customers benefit from E-Commerce?

END

Any Comments and Questions are Welcome