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E-business models based on the relationship of Entities
B2B
Business
B2C
Cisco, GEIS Mustafa, FabMart
IndiaMart IndiaTimes.com
Consumer
C2B C2C
PriceLine.com BaaZee.com
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Relation Between B2B and B2C Model
B2B B2C
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Business-to-Business (B2B) Entity Model
Definition
Business-to-Business (B2B) is that model of e-commerce where a company
conducts its trading and other commercial activity through the Internet and
customer is another business itself. I.e., B2B facilitates inter-organizational
interaction and transaction.
Examples
MetalSite.com, VerticalNet.com, SHOP2gether.com
Potential
B2B forms a major constituent of the total E-Business volumes. This is
because the value per transaction in a B2B scenario is much higher when
compared with Business to Consumer (B2C) type of transaction.
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Business-to-Business (B2B) Entity model (Contd ....)
Usefulness
The business application of B2B transaction type can be utilized to facilitate
almost all facets of interactions among organizations, such as inventory
management, channel management, distribution management, order
fulfillment and delivery and payment management.
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Three types of B2B Entity Model
The B2B entity model can be classified into three transaction type
Supplier-Centric,
Buyer-Centric,
Intermediary- Centric.
B2B
Buyer-centric B2B
Buyer with high volume purchase capacity create an E-Marketplace for
purchase and acquisition
Used by buyer for
Placing requests for quotations (RFQs)
Carrying out the entire purchase process.
Utilized by high volume and well-recognized buyers, as they may have
adequate capacity and business volumes to attract suppliers
Examples:
United States Government
General Electric Information System
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Three types of B2B Entity Model (Contd.)
Intermediary-centric B2B
A third party sets up the E-Marketplace
Attracts both the buyer and seller businesses to interact with each other.
The role of the intermediary is that of an E-Market maker.
Fulfills the role by electronically connecting many different buyers and
sellers through its database of potential suppliers and buyers,
Acts as a hub for both suppliers and buyer
Buyers place their request for the quotations and sellers respond by bidding
electronically, leading to a match and ultimately to a final transaction
The buyers and sellers, both benefit from the increased options in terms of
pricing, quality, availability and delivery of goods.
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Three types of B2B Entity Model (Contd.)
Intermediary-centric B2B
Benefits achieved by this specific model over two previous models
Intermediary company represent a large number of members in that
specific market segment
Reduces the need for buyers and sellers to contact a large number of
potential partners on their own.
The information available from the intermediary's database allows
Screen out unsuitable partners
Compare the offerings of many different potential partners
Examples of Intermediary-centric B2B :
Honeywell International (Myplant.com)
India Mart,Com
General Electric's Trading Process Network (TPN)
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Tools used B2B Enterprises
Pricing
Pricing is used as a tool to generate sales on the Internet. E-businesses
use it by giving substantial discounts.
Companies also have started giving things free on the Internet in order to
get a critical mass of buyer.
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Tools used B2B Enterprises
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Advantages of B2B Entity Model
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Advantages of B2B Entity Model (Contd..)
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Example Of B2B Supplier Centric E-Business
Cisco Connection Online (1)
Cisco has been exploiting the benefits of the supplier-centric electronic
commerce for several years. Cisco system is the leading supplier of computer
networking equipment. It has close to 70% of the market share & its products
are sold and deployed in around 75 countries.
In the early years customers used Cisco Connection Online (CCO) by dialing
up the public data communication network to access product information and
solutions to common problems. In the following year, Cisco's launch of its web
site with company and product information, discussion forums, and a feedback
mechanism to identify the future needs of customers, in addition to information
sharing and providing solutions to their problems. Customers posted their
questions in this open forum, Cisco engineers and others who may have faced
the same problem earlier provided the answers .Cisco website also added tools
for downloading the software patches and new releases of software.
Today, over 90% of customer orders are completed via the CCO, its electronic
commerce site, resulting in 99% percent order accuracy in the first try, saving
time and money 17
Example Of B2B Supplier Centric E-Business
Cisco Connection Online (2)
Later, Cisco added two agents: the Pricing and the Status agents. The Pricing
agents puts the power of price discovery in the hands of registered partners,
these registered customers can look at the prices of suitable products in local
currencies. The status agent enables customers to check the status of an order.
With the introduction of these two agents thousands of queries that were either
handled through phone or fax have migrated to the web, with customers
getting near instantaneous response. Cisco runs mirror sites to speed up
responses and reduce the traffic congestion problem from European and other
communities outside the United States.
Today Cisco, through its web site, offers a full-fledged online market place,
complete with partner and re-seller registration, information center for
products, online pricing and ordering, software delivery over the internet,
status checking, online service and support and training in multiple languages.
Today more than 70% of Cisco's customer support is delivered over the
network, resulting in tremendous cost savings, improved customer
relationship, and service leadership.. 18
Example Of B2B Supplier Centric E-Business
Cisco Connection Online (3)
By implementing a virtual supply chain the company has been able to reduce
inventory levels by 45%, and reduce the time to market its products by
approximately 12 weeks. The operating cost savings resulting from its shift to
virtual manufacturing have been estimated at over US $ 175 million. The
company has already deployed an e-learning solution and can train up to 3000,
people, dispersed worldwide, in a single online session. The move to adopt an e-
learning solution for sales and technical staff will save around 60% of the
training costs incurred by the company.
Online technical assistance to users, through the Technical Assistance Center
(TAC) web site of the Cisco, provides real-time assistance. The site handles over
80% of the support questions, with a majority of them resulting in a satisfactory
close out in a single interaction.
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Example Of B2B Buyer Centric E-Business
General Electric Information System (1)
The General Electric Information Systems (GEIS) is one the most diversified
companies with leading status in manufacturing home appliances, power
generation, aircraft engines, industrial materials, TV broadcasting, and capital
services, and is one of top ten corporations in the United States. The process of
managing the tendering process, suppliers' database and providing timely
information to suppliers was a cumbersome task due to the shear volume of
procurement.
The General Electric Information Systems (GEIS) initiated a web site for posting
invitations for tenders and other accompanying documents to streamline its
procurement process.
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Example Of B2B Buyer Centric E-Business
General Electric Information System (2)
In the new process, the company posted a single copy of the online downloadable
Documents, and notified GE's suppliers through e-mail. The company's suppliers
were expected to download the Request For Quotations (RFQs) through the
Internet and submit their bids electronically. A single online posting of the tender
document and e-mail notifications to selected suppliers along with their subsequent
online bidding not only saves time but has also offered tremendous savings in
processing costs. Also, it has increased competition as any supplier from any part
of the world can access the site and bid. In order to be able to bid all they require is
an Internet connection and the Trading Process Network (TPN) software download,
which is free of charge.
The company experimented with a pilot implementation to automate procurement
at GE's Lighting Unit in Cleveland. It resulted in an immediate payoff of 10 to 15
percent reduction in prices, due to the openness of the web. Also, the purchasing
cycle was cut to half from fourteen days to seven days. The deployment of e-
commerce based procurement solutions has reduced transaction costs for both
General Electric and also its suppliers. Thus it creates a level playing field for21
small businesses and offers them an opportunity to compete.
Example Of B2B Intermediary Centric E-Business
IndiaMart.com (1)
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Example Of B2B Intermediary Centric E-Business
IndiaMart.com (2)
IndiaMart further added the feature of free query forwarding in addition to free
listing, as the free listing service was available at many sites. The queries
received by IndiaMart were forwarded through e-mail, fax, phone or regular
postal service to exporters, depending upon the nature of facilities available
with them. The forwarding of queries through e-mail did not entail much
expense, but phone, fax, and postal services did. However, it was essential to
demonstrate the power and reach of the Internet to exporters and suppliers who
were not even familiar with computers.
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Example Of B2B Intermediary Centric E-Business
IndiaMart.com (3)
The strategy paid off in long run. As suppliers started receiving queries,
they were interested in making a bigger presence on the IndiaMart.com
e-marketplace. The development of web based catalogues and contents
for these suppliers, exporters, and tour operators formed an important
revenue stream in the early years.
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Business-to-Consumer (B2C) Entity Model
Definition
Business-to-Consumer (B2C) is a model where a business organization
undertakes commercial transaction directly with individual consumers. It is
also called E-Retail or E-Tail because it is actually retail sales over the
Internet. The selling businesses offer a set of merchandise at given prices,
discounts, and shipping and delivery options.
Examples
Dell Computers (//www. dell.com), Mustafa (www.Mustafa.com), Amazon
(www.amazon.com), Fabmart (www.fabmart.com)
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Business-to-Consumer (B2C) Entity Model (Contd.)
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Business-to-Consumer (B2C) Entity Model (Contd.)
Catalogue Merchants
Successful traditional mail-order business who supplement with an online
shopping site, or move completely to Web-based ordering. Examples
include avon.com (cosmetics and fragrances)
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Business-to-Consumer (B2C) Entity Model (Contd.)
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Business-to-Consumer (B2C) Entity Model (Contd.)
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Business-to-Consumer (B2C) Entity Model (Contd.)
Disadvantages of B2C
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Example Of B2C E-Business
Mustafa.com (1)
Mustafa, a popular departmental store in Singapore with Indians, stocks over
100,000 items, spread over 2 buildings with 4 floors each. The store has been a
popular stop-over for buying items like appliances, electronics, jewelry, apparels
and gifts for people who transiting through Singapore because the goods sold in
the store cater to Indian requirements and also because the store takes care of
shipping the goods to India.
The store had a fair bit of computerization going on even prior to 1995, in
terms of bar-coded items, cash registers, and inventory and purchase order
management system. In 1995, it put up a static information only web site for
potential visitors. In September 1997, Mustafa decided to move on to a
transactional site where international visitors can browse through store catalogs
and place orders in advance. Thus, offering a convenience to harried visitors who
have to rush through the shopping during transit.
In the new model customers can place the order in advance and specify the
transit date. On the day of transit, the goods are delivered to the airport; sent
directly as an air package that is part of the transiting passenger's additional 33
Consumer -to- Business (C2B) Entity Model
Definition
Transaction, originated by the customer with a set of requirement
specifications and specific price for a commodity, service, or item.
Responsibility of the business entity to match the requirements of the
consumers to the best possible extent.
Consumer-to-Business (C2B) enables a consumer to determine the price
of a product and/or service offered by a company.
Examples
www.Priceline.com,
www. ReverseAuction.com
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Consumer -to- Business (C2B) Entity Model
Consumers also get the opportunity to specify the range of prices they
can afford or are willing to pay for a particular item, service, or
commodity.
Creates ease at the point of sale for both the merchant and the consumer.
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Example Of C2B Entity Model
Priceline.com (1)
Priceline.com is one of the earliest examples of C2B electronic commerce
exchange. Priceline.com implements a mechanism that offers to sell products
below retail prices without eroding it. By implementing a mechanism to sell
products below retail prices it facilitates and makes it possible to move the excess
inventory without diminishing the brands' retail price.
In the case of Priceline.com, a consumer bargain hunting for an airline ticket
indicates his choice of source and destination cities, along with the number of hops
and the fare, which he or she wishes to pay for the ticket and the service. Then
sellers decide weather to fulfill the request or not . Priceline.com uses software that
acts as a "fare search engine and tries to match the buyer's request with an airline
that is willing to fulfill it.
As soon as the buyer enters his travel plan, flexibility and the price, the backend
Oracle database stores the requests and initiates a search on the fare search engine.
The search engine connects to the Computer Reservation Systems (CRSs) of all
participating airlines and submits the query. If any airline is willing to offer a seat
at the named price on the given dates a match is found and reservations are made. 36
Consumer -to- Consumer (C2C) Entity Model
Definition
Provides the opportunity for trading of products and/or
services amongst consumers who are connected through the
Internet
Examples
ebay.com,
InfoRocket.com,
TraderOnline.com
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Consumer -to- Consumer (C2C) Entity Model (Contd.)
Advantages of C2C:
Broader market
Eliminates intermediary
Constantly changing and updating
Disadvantages of C2C
No quality control
No payment guarantee
Hard to pay for using checks, ATM, cards, etc but future this is
likely to change.
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Example Of C2C Entity Mode
BaaZee.com (1)
BaaZee.com, founded in March 2000, is a popular Indian auction site. In the initial
stages, the company offered merchandise, from a number of offline merchants, for
public bidding to its members. Later, it expanded the business by widening the
range of products and enabling its member consumers to buy and sell goods
amongst each other.
Thus the company supports both B2C as well as C2C auction models. Currently,
the low value items such as books and music contribute 32% of the revenue; travel
contributes 12-13%, 20% of revenue comes from mobile phones, 15% form
electronic gadgets, and 20% of the revenue is contributed by information
technology products. The auction process involves three entities, the seller, the
buyer and the auction house. BaaZee.com consists of nearly ten thousand sellers,
one million buyers, and an electronic auction house implemented by
BaaZee.com. It charges the seller 3% of the sales value for every transaction
completed.
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Example Of C2C Entity Mode
BaaZee.com (2)
As soon as the auction process is over, as per the pre-fixed stage or time and the
seller has procured the highest bid above the reserved price, the buyer and seller
receive e-mail announcing the buyer and giving them details of payment and
delivery term.
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What is E-Government?
Classification-
E-Government Entities can be grouped as
Government-to-Citizen (G2C)
Government -to-Business(G2B)
Government-to-Government (G2G)
Government-to-Employees (G2E)
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What is E-Government?
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E-Government
Benefits-
It is convenient and cost-effective for public and businesses
Get easy access to the most current information available without having
to spend time, energy and money to get it.
Improved accounting and record keeping can be achieved through
computerization
Information and forms can be easily accessed, resulting quicker
processing time.
Linked information can now be stored in databases versus hardcopies
stored in various locations.
Individuals with disabilities or conditions no longer have to be mobile to
interact with government and can be in the comfort of their own homes46
E-Government
Problems
Effects of Internet-based governments are often difficult to
gauge or unsatisfactory although a prodigious amount of money
has been spent on the development and implementation of E-
government
Once e-government begins to develop and become more
sophisticated, citizens will be forced to interact electronically
with the government on a larger scale. This could potentially
lead to a lack of privacy for civilians as their government
obtains more and more information on them.
An e-government site that provides web access and support often
does not offer the potential to reach many users including
those who live in remote areas or have low education proficiency
or exist on poverty line incomes.
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E-Government Entity Models
Government-to-Citizen (G2C)
Government-to-Citizen is the online non-commercial interaction
between local and central Government and private individuals.
This also called Individuals-to-Administration Model (I2A model)
Individuals filing tax returns at the government web site is an
example of the Entity Model
It can help reduce hassles and avoid queues in government offices
and enhance productivity.
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E-Government Entity Models
Government-to-Government(G2G)
Government-to-Government is the online interaction between
Government organizations, departments, and authorities and with other
Government organizations, departments, and authorities.
Government-to-Employees (G2E)
Government-to- Employees is the online interaction between Government
organizations and its employees. 50
E-Government & E-Governance
Definition of E-Government
Definition of e-Governance
Communication Protocol One way communication protocol Two way communication protocol
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Difference between E-Government & E-Governance
Business-to-Business-to-Consumer
Describes transactions in which a business sells a service or product to a
consumer using another business as an intermediary.
Example
Maytag.com allows consumers to choose the features they want in
durable goods. These are then shipped to the retailers, which also
function as services centers and return centers( if the durable goods prove
to be not so durable).
Consumer-to-Business-to-Consumer
Describes transactions in which a consumer sells a service or product to
another consumer using a business as an intermediary.
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Education-to-Students (E2S) Entity Model
Description
E2S model envisages an educational institute providing learning
experience to students through the web site. A student have to register
for online education program at these sites.
Benefits
Potential for mass education programs
Overcoming problems related to geographical boundaries and of
students in commuting to their learning places.
Students from far off places can attend on-line" class and can
access online tutorials and even appear for online examinations.
Experts in respective fields, spread across a wide geographical
region can come together at the E2S site to share their knowledge
and experience with the students. 56
Education-to-Students (E2S) Entity Model (Contd.)
Example
Barnes and Noble the well known bookstores in USA with
acknowledged web presence in planning to join hands with others in
creating an online University "Barnes and Noble University" that
would offer online learning experience through their site bn.com.
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Business-to-Employee (B2E) Entity Model
Question
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