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  • 1. E-Commerce Jason C.H. Chen, Ph.D. School of Business Administration Gonzaga University, Washington, U.S.A. Senior Consultant, Taskco.com [email_address] Nov. 20, 2000
  • 2. Topics
    • E-Commerce: From B2C to B2B and Beyond
    • e-Bid Process
    • Features of a B2B application.
    • Business plan for an e-Marketplace (next year)
    • e-CRM and 1-1 Marketing (next year)
  • 3. E-Commerce: From B2C to B2B and Beyond Jason C.H. Chen, Ph.D. School of Business Administration Gonzaga University, Washington, U.S.A. Senior Consultant, Taskco.com [email_address] Nov. 22, 2000
  • 4. Outline of Topics
    • EC, B2C and B2B and their models.
    • How big is B2B?
    • Where is the Evidence?
    • What are the revenue models in B2B?
    • What is driving adoption of B2B?
    • Why now?
    • TASKCo.com
  • 5. eBusiness Key Concepts
    • eBusiness
      • The strategy of how to automate old business models with the aid of technology to maximize customer value
    • eCommerce
      • The process of buying and selling over digital media
    • eCRM (eCustomer Relationship Management)
      • The process of building, sustaining, and improving eBusiness relationships with existing and potential customers through digital media
  • 6. What is E-Commerce ?
    • Electronic commerce (EC) is an emerging concept that describes the buying and selling of products, services and information via computer networks, including the Internet.
  • 7. Figure: E-commerce on the rise. Source: 1999 SG Cowen/Datamation Networked Computing Survey Figure: E-commerce apps are a big driver for storage. Average installed online storage in gigabytes. Source: 1999 SG Cowen/Datamation Networked Computing Survey No plans Start in 99/00 Expand in 99/00 Largely done
  • 8. Table: E-commerce’s most promising potential benefits Benefit New channel for existing business Improved customer service Enabled entire new line of business Reduced operating costs Improved cycle time % of Respondents 25% 23% 18% 7% 5% Benefit Keep pace with technology Reduced cost of sales Other Not available None % of Respondents 5% 4% 6% 4% 3%
  • 9. eBusiness Processes WHY Customer Relationship Redesign Business Processes (Outside-In) Applying Technology WHAT HOW
  • 10. eBusiness Processes WHY Customer Relationship Redesign Business Processes (Outside-In) Applying Technology WHAT HOW
  • 11. Traditional versus E-Business Models? C B C B C: Individual Consumer B: Business
  • 12. What is B2C?
    • B2C (or Extranets) is just web-enabled relationships between existing partners; they tend to be run by a single company seeking to lower the cost of doing business with its current suppliers or individual customers.
    • Examples?
      • Amazon.com
      • Egghead.com
  • 13. Enterprise User Profiles Workflow Business rules Payment Analytics Internet Firewall Figure: A B2C e-business Model Intranet
  • 14. B2C Applications
    • Electronic storefront
    • Electronic malls
    • Advertising online
    • Service online
      • selling books, toys, computers
      • e-banking (cyberbanking)
      • online stock trading
      • online job market, travel, real estate
  • 15. Figure : B2C and B2B Internet Commerce in the U.S. (Source: Forrester Research) Billion
  • 16. What is B2B?
    • “ B2B” is business-to- business commerce conducted over the Internet (called B2B e-commerce space, or e-marketplaces )
  • 17. B2B e-Markepplaces: A CEO’s Perspective
    • “ The next chapter in the e-business revolution involves the transformation of entire markets and the redefinition of industries. We will see the rise of a new class of entities -- e-Marketplaces -- that will help online buyers and sellers find each other, attack the inefficiencies of traditional markets, and carve out for themselves important roles in the e-business economy.”
    • Louis V. Gerstner Jr.
    • Chairman of the Board and CEO
    • IBM Corporation
  • 18. E-Market is … Web-based marketplace
    • e-market is Web sites where buyers and sellers come together to communicate, exchange ideas, advertise, bid in auctions, conduct transactions, and coordinate inventory and fulfillment
    MarketSite Buyers Sellers
  • 19. Figure : A B2B Model (Source: Goldman Sachs Investment Research Report) Banks, Financial Institutions eCredit.com Suppliers
    • Production materials
    • Operating goods, services
    Invoices, Payment , Clearing Enterprise Customers Logistics Celarix, NTE Transportation, Warehousing
  • 20. E-Channel Management Procurement Network Trading Network E-Customer Relationship E-Commerce E-Portal Management E-Services SCM/ERP/Legacy Appls Businesses Businesses & Consumers 1:N M:1 M:N Knowledge Management/Business Intelligence Focus on e-Business Applications
  • 21. B2B Applications
    • Advertising
    • Auctioning
    • Procurement
    • Channel management
    • E-commerce
  • 22. How Big is B2B? Figure: The Goldman Sachs B2B Sizing in USA
  • 23. Where is the Evidence
    • Three highlights from the Goldman Sachs B2B survey 1.0:
      • E-Commerce spending on proprietary Web site, e-market, and procurement (75% say, in 2000)
      • Business are increasingly likely to develop B2B e-markets and to favor online auctions (74% say, in 2000)
      • Outsourcing e-commerce spending is commonplace among businesses (25% say, up to 75% of e-C spending)
  • 24. B2B Revenue Model
    • B2B companies exhibit varying business models, depending on the key products and services they offer. The models include:
      • transaction fees,
      • auction-driving commissions,
      • advertising,
      • content subscriptions,
      • software licensing
  • 25. B2C vs. B2B Source: Goldman Sachs Investmenet Research
  • 26. The Magnificent Seven B2B Drivers
    • Increasing competition and globalization
    • Growing interactivity
    • Financial opportunity
    • Efficiencies and cost savings
    • Enhanced market and customer reach
    • Real-time needs
    • Regulatory and taxation issues
  • 27. Small Business Likely to Fuel B2B
    • Small businesses will fuel the B2B market
      • the use of and dependence on the Internet by small businesses as a medium for marketing, distribution, and commerce will likely fuel the B2B market.
      • as more small business access the Internet and set up corporate Web pages, the more they will employ the Internet to execute their business strategy.
  • 28. Benefits of B2B
    • B2B solutions create competitive dynamics through:
      • cost savings
        • the composition of cost (product versus process costs)
        • the number of intermediaries in the supply chain.
      • new financial (revenue) opportunities
        • the rate of industry-wide B2B adoption
        • business model
  • 29. Why Now?
    • B2B catalysts are now arising to stimulate adoption (mentioned earlier).
    • Interactive networks have recently become ubiquitous and inexpensive, accelerating the use of B2B applications.
    • A viral effect will spur copycat behavior throughout the market as more companies continue to implement B2B applications.
  • 30. Which Industries are Likely to Embrace B2B Solutions
    • Industries that are B2B inclined exhibit certain key characteristics:
      • the supply chain is highly diffuse,
      • techno-innovators dominate the culture,
      • process represents more than 20% of total costs,
      • products exhibit complex configurations,
      • expense pressure is intense.
  • 31.
    • Research show that leading industries migrating online and adopting B2B solutions include the following:
      • Aerospace/Defense: 35%
      • Electronics: 25%
      • Chemicals: 20%
      • Motor vehicles and parts: 18%
      • Medical equipment and transport: 17%
  • 32. What Makes a B2B e-market Company Succeed?
    • Five Critical Success Factors for e-markets:
      • Business model,
      • market size,
      • industry expertise,
      • branding and distribution,
      • management execution hustle (not just the formulation of strategy)
  • 33. Solutions for e-Enterprise Organizations
    • Streamlines buying and selling between trading partners
    • Maximizes trade efficiency across the entire supply chain
    • Strategic e-commerce capabilities in Internet time
    • Delivers compelling ROI
    Buyers Sellers MarketSite
  • 34. Solutions for Internet Market Makers
    • Turn your supply chain into a revenue generation opportunity
    • Leverage your industry domain expertise into strategic e-commerce solutions
    • Brings e-commerce to businesses of any size, across all industries
    Your Portal
  • 35. Global Solution for Businesses: The Global Trading Web Global Trading Web Connect once to trade with anyone,anytime, anywhere in the world.
  • 36. European e-markets
    • B2C e-commerce in Europe is likely to remain approximately two to three years behind the U.S. .
    • B2B in Europe currently lags the U.S. by two years.
    • How about in Asia?
  • 37. TASKCo Mission Expand Markets Improve Efficiencies Retain Customers Fundamental Business Drivers Have Not Changed Leveraging Internet to Help Customers to: