E-Commerce CSC330 4 (3,1) : Part 1: Introduction To E-Commerce Chapter 2: E-Commerce Business Strategies

E-Commerce
CSC330 4(3,1)
Lecture 4
Part 1: Introduction to E-Commerce

Chapter 2: E-Commerce Business Strategies
Recap
 Types of E-Commerce
 Business-to-Consumer (B2C) E-Commerce, Business-to-
Business (B2B) E-Commerce, Consumer-to-Consumer (C2C) E-
Commerce, Mobile E-Commerce (M-Commerce), Social E-
Commerce, and Local E-Commerce
 Understanding E-Commerce: Organizing Themes
 Business, Technology, and Society
 Academic Disciplines Concerned with E-Commerce
 Technical Approach (Computer Science, Management Science,
and Information Systems
 Behavioral Approach (Information Systems Research,
Economics, Marketing, Management, Finance / Accounting, and
Sociology)
 Case Study: Puma Goes Omni
2
Topics
 E-Commerce Business Model
 Business Model
 E-Commerce Business Model
 Eight Key Elements of a Business Model
 Value Proposition, Revenue Model, Market Opportunity,
Competitive Environment, Competitive Advantage, Market
Strategy, Organizational Development, and Management Team
3
E-Commerce Business Model
 Business Model
 “a set of planned activities designed to result in a profit”.
 In general, it is a core company’s profit-making plan which
defines the products or services it will sell, its target market

and audience, and expected costs.

 A business model that aims to use and control unique qualities
of Internet, Web, and mobile platform.
4
Eight Key Elements of a Business Model
1. Value Proposition
2. Revenue Model
3. Market Opportunity
4. Competitive Environment
5. Competitive Advantage
6. Market Strategy
7. Organizational Development
8. Management Team
5
Eight Key Elements of a Business Model – 1
Value Proposition
 “Why should customer buy from you?”
 It defines how a company’s product or service fulfills the needs of
customers.
 What value do we deliver to the customer?
 Which customer needs are we satisfying?
 What are we offering to each customer segment?
6
Value Proposition…
Zara Wal-Mart
7
Amazon Apple
8
Dell Direct
9
Revenue Model
 “How will you earn money?”
 Major types of revenue models:
 Advertising Revenue Model
 Subscription Revenue Model
 Freemium Strategy
 Transaction Fee Revenue Model

 Sales Revenue Model
 Affiliate Revenue Model
10
Revenue Model…
Advertising Revenue Model
A company provides a forum for advertisements and receives fees
from advertisers.
Example: Yahoo (Yahoo News), and Facebook.
11
Revenue Model…
Subscription Revenue Model
A company offers its users content or services and charges a
subscription fee for access to some or all its offering.
Example: Scribd, Spotify, and Netflix.
12
Revenue Model…
Freemium Strategy
Freemium = Free + Premium.
A company provides a certain level of product or services for free,
then charge a subscription fee for premium levels of the product or
service.
Example: Pandora.
13
Revenue Model…
Transaction Fee Revenue Model
A company receives a fee (commission) for executing a transaction.
Example: eBay.
14
Revenue Model…
Sales Revenue Model
A company drives revenue by selling goods, information, or services.
Example: Amazon, ASOS, and iTunes.
15
Revenue Model…
Affiliate Revenue Model
A company drives business to an affiliate and receives a referral fee
or percentage of the revenue from any resulting sale.
Example: Skyscanner, and Amazon (in case of specific product).
16
Market Opportunity
 “What marketspace do you intend to serve, and what is its size?”
 Identify customer
 Market need
 Size of market
 Competitors
 Potential growth
17
Market Opportunity…
Customer Segments
Process of dividing customers into groups based on characteristics,
so that companies can market to each group effectively.
Customer Segments Types
Geographic - country, city, language, population, and climate.
Demographic - age, gender, income, occupation, and education.
Psychographic – lifestyle (social class), and personality.
Behavioral – product usage rate, purchase occasion, and attitude
toward product.
Social Media – social platform, and active usage time of social
platform.
18
Customer Relationships
Describes the types of relationships a company establishes with
specific customer segments.
Driven by motivations to include:
 Customer Acquisition - a process used to bring consumers
down the marketing, from brand awareness to purchase
decision.
 Customer Retention - the ability of a company or product to
retain its customers.
 Upselling - a process/technique that involves encouraging
customers to buy a higher-end version of a product than what
they originally intended to purchase.
19
Customer Relationships…
20
Summary
 Business Model
 E-Commerce Business Model
 Eight Key Elements of a Business Model
 Value Proposition, Revenue Model, Market Opportunity,
Competitive Environment, Competitive Advantage, Market
Strategy, Organizational Development, and Management Team
21

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E-Commerce

Part 1: Introduction to E-Commerce

defines the products or services it will sell, its target market

 E-Commerce Business Model

 Transaction Fee Revenue Model

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