CHAPTER 14
Ebusiness
McGraw-Hill/Irwin
© The McGraw-Hill Companies, All Rights Reserved
LEARNING OUTCOMES
14.1 Compare ecommerce and ebusiness
14.2 Compare the four types of ebusiness
models
14.3 Describe the benefits and challenges
associated with ebusiness
14.4 Explain the differences among eshops,
emalls, and online auctions
14-2
EBUSINESS
• The Internet is a powerful channel
that presents new opportunities for
an organization to:
– Touch customers
– Enrich products and services with
information
– Reduce costs
14-3
EBUSINESS
• How do ecommerce and ebusiness differ?
– Ecommerce – the buying and selling of
goods and services over the Internet
– Ebusiness – the conducting of business on
the Internet including, not only buying and
selling, but also serving customers and
collaborating with business partners
14-4
EBUSINESS
Industries Using Ebusiness
14-5
EBUSINESS MODELS
• Ebusiness model – an approach to
conducting electronic business on the
Internet
14-6
EBUSINESS MODELS
14-7
Business-to-Business (B2B)
• Electronic
marketplace
(emarketplace) –
interactive business
communities
providing a central
market where
multiple buyers and
sellers can engage
in ebusiness
activities
14-8
Business-to-Consumer (B2C)
• Common B2C ebusiness models include:
– eshop – a version of a retail store where customers
can shop at any hour of the day without leaving their
home or office
– emall – consists of a number of eshops; it serves as
a gateway through which a visitor can access other
eshops
• Business types:
– Brick-and-mortar business
– Pure-play business
– Click-and-mortar business
14-9
Consumer-to-Business (C2B)
• Priceline.com is an example of a C2B
ebusiness model
• The demand for C2B ebusiness will
increase over the next few years due to
customer’s desire for greater convenience
and lower prices
14-10
Consumer-to-Consumer (C2C)
• Online auctions
– Electronic auction (eauction) - Sellers and
buyers solicit consecutive bids from each
other and prices are determined dynamically
– Forward auction - Sellers use as a selling
channel to many buyers and the highest bid
wins
– Reverse auction - Buyers use to purchase a
product or service, selecting the seller with
the lowest bid
14-11
Consumer-to-Consumer (C2C)
• C2C communities include:
– Communities of interest - People interact with each
other on specific topics, such as golfing and stamp
collecting
– Communities of relations - People come together
to share certain life experiences, such as cancer
patients, senior citizens, and car enthusiasts
– Communities of fantasy - People participate in
imaginary environments, such as fantasy football
teams and playing one-on-one with Michael Jordan
14-12
EBUSINESS BENEFITS AND
CHALLENGES
• Ebusiness benefits include:
– Highly accessible
– Increased customer loyalty
– Improved information content
– Increased convenience
– Increased global reach
– Decreased cost
14-13
EBUSINESS BENEFITS AND
CHALLENGES
• Ebusiness challenges include:
– Protecting consumers
– Leveraging existing systems
– Increasing liability
– Providing security
– Adhering to taxation rules
14-14
EBUSINESS BENEFITS AND
CHALLENGES
• There are numerous advantages and
limitations in ebusiness revenue models
including:
– Transaction fees
– License fees
– Subscription fees
– Value-added fees
– Advertising fees
14-15
MASHUPS
• Web mashup - a Web site or Web
application that uses content from more
than one source to create a completely
new service
– Application programming interface (API) a set of routines, protocols, and tools for
building software applications
– Mashup editor - WSYIWYGs (What You See
Is What You Get) for mashups
14-16
CHAPTER FOURTEEN
Opening Case Study Questions
1. Identify the type of ebusiness model WTC is
using for the Ironman and explain why it has
been so successful
2. What advantages would WTC have in opening
up an Ironman emarketplace?
3. What would be an example of WTC using a
mashup for the Ironman?
14-17
CHAPTER FOURTEEN CASE
eBiz
• There are numerous ways to
make money on the Internet
– Million dollar home page
– One red paperclip
14-18
CHAPTER FOURTEEN CASE
QUESTIONS
1. How else can you use the Internet to raise
money?
2. What types of businesses could benefit from
trading on the Internet?
3. Can you think of any other disruptive or nontraditional ways that you could use the
Internet?
14-19