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E-business Models Based on
the Relationship of
Transaction Types
1
 On the basis of value addition: addition of value to a product or service
 On the basis of control:
 At the high end of control there is hierarchical control.
 At the low end there is no control.
2
3
Brokerage Model
 brokers, who bring sellers and buyers of products and services together to engage
in transactions
 The characteristics of the brokerage model
 ✓ The price-discovery mechanism is its key-principle.
 ✓ It is a meeting point for sellers and buyers.
 ✓ Auctions and exchanges are the modes of transactions.
 ✓ It is a 'Free Market'.
 ✓ It consists of Global Network of Buyers and Sellers.
 ✓ it is a Virtual Marketspace enabled by the Internet.
 ✓ it encompasses all types of organizations now.
4
Advantages of the Brokerage Model
 C2C trading
 Global reach
 Direct buyer and seller communication
 Efficient access to information
5
Auction broker
 different auction formats are aggregated on certain common
attributes.
 There are divided into several classification
 English auction (open-outcry auction) - selling art, and other
physical goods
 Dutch auction - developed in the Netherlands
the opening price is set extremely high.
6
First – price sealed – bid auction
Two different Phases
Bidding Phase (All the bids are
collected )
Resolution Phase (bids are opened)
Vickrey auction -bids are sealed
7
Info-mediary Model
 An organizer of virtual community is called an information intermediary or info-
mediary.
 An info-mediary may offer users free Internet access
8
 Four types of Info-mediary
 ✓ Specialized agents - having closed relationships with both buyers and suppliers
 ✓ Generic agents - open relationships with both buyers and suppliers and involve no
relationship - Specific investment
 ✓ Supplier agents. - interest in selling their products
 ✓ Buyer agents - establish relationship with a core set of buyer
9
Community Model
 groups of people meet online to fulfill certain needs
 Community Structures
 The Internet communities can be found structured in several
predictable ways as follows:
 ➢ Newsletters - one-way communication
 ➢ Discussion lists - allows a member to send a message to the list
address
10
 There are three types of discussion lists:
E-mail discussion list - forwarded to other members
E-mail discussion list digest - collects all the messages sent to
the list
Moderated discussion list digest - limit the quantity and screen
the quality of messages
11
Manufacture Model
 The manufacture model can be based on
 • Efficiency
 • Improved customer service
 • Better understanding of customer preference
12
Advertising Model
 The banner ads may be the major or sole source of revenue for the broadcaster
 Types of Advertising on the Internet
 ▪ Portals - include varied content or services
 ▪ Classifieds - Lists items for sale
 ▪ User-based registration - user to submit demographic details by registration
 ▪ Query-based paid placement - Sells favourable link positioning
 ▪ Contextual advertising - developers who bundle ads
13
Different Web Advertising Formats
 Banners. An ad appearing at the top of a Web page.
 Vertical columns. On a frame Web page positions alongside requested content (often as
form of sponsorship).
 Pop-up windows. Java script opens a browser window with an ad.
 Interstitials. Full screen ads that appear on a Web browser while a page is loading.
 Intromercials. Animated full-screen ads placed at entry of a site before a user reaches the
intended content (CBS Market watch)
 Ultramercials. Interactive online ads that require the user to respond intermittently in
order to wade through the message before reaching the intended content.
14
Subscription Model
 Users are charged a periodic—daily, monthly, or annual—fee to subscribe to a
service
15
Affiliate Model
 provides purchase opportunities wherever people may be surfing
 Banner exchange. It trades banner placement among a network of
affiliated sites.
 Pay-per-click. It is the site that pays affiliates for a user click-
through.
 Revenue sharing. It offers a per cent-of-sale commission based on a
user click through in which the user subsequently purchases a
product.
16

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E-business Models Based on the Relationship of Transaction

  • 1. E-business Models Based on the Relationship of Transaction Types 1
  • 2.  On the basis of value addition: addition of value to a product or service  On the basis of control:  At the high end of control there is hierarchical control.  At the low end there is no control. 2
  • 3. 3
  • 4. Brokerage Model  brokers, who bring sellers and buyers of products and services together to engage in transactions  The characteristics of the brokerage model  ✓ The price-discovery mechanism is its key-principle.  ✓ It is a meeting point for sellers and buyers.  ✓ Auctions and exchanges are the modes of transactions.  ✓ It is a 'Free Market'.  ✓ It consists of Global Network of Buyers and Sellers.  ✓ it is a Virtual Marketspace enabled by the Internet.  ✓ it encompasses all types of organizations now. 4
  • 5. Advantages of the Brokerage Model  C2C trading  Global reach  Direct buyer and seller communication  Efficient access to information 5
  • 6. Auction broker  different auction formats are aggregated on certain common attributes.  There are divided into several classification  English auction (open-outcry auction) - selling art, and other physical goods  Dutch auction - developed in the Netherlands the opening price is set extremely high. 6
  • 7. First – price sealed – bid auction Two different Phases Bidding Phase (All the bids are collected ) Resolution Phase (bids are opened) Vickrey auction -bids are sealed 7
  • 8. Info-mediary Model  An organizer of virtual community is called an information intermediary or info- mediary.  An info-mediary may offer users free Internet access 8
  • 9.  Four types of Info-mediary  ✓ Specialized agents - having closed relationships with both buyers and suppliers  ✓ Generic agents - open relationships with both buyers and suppliers and involve no relationship - Specific investment  ✓ Supplier agents. - interest in selling their products  ✓ Buyer agents - establish relationship with a core set of buyer 9
  • 10. Community Model  groups of people meet online to fulfill certain needs  Community Structures  The Internet communities can be found structured in several predictable ways as follows:  ➢ Newsletters - one-way communication  ➢ Discussion lists - allows a member to send a message to the list address 10
  • 11.  There are three types of discussion lists: E-mail discussion list - forwarded to other members E-mail discussion list digest - collects all the messages sent to the list Moderated discussion list digest - limit the quantity and screen the quality of messages 11
  • 12. Manufacture Model  The manufacture model can be based on  • Efficiency  • Improved customer service  • Better understanding of customer preference 12
  • 13. Advertising Model  The banner ads may be the major or sole source of revenue for the broadcaster  Types of Advertising on the Internet  ▪ Portals - include varied content or services  ▪ Classifieds - Lists items for sale  ▪ User-based registration - user to submit demographic details by registration  ▪ Query-based paid placement - Sells favourable link positioning  ▪ Contextual advertising - developers who bundle ads 13
  • 14. Different Web Advertising Formats  Banners. An ad appearing at the top of a Web page.  Vertical columns. On a frame Web page positions alongside requested content (often as form of sponsorship).  Pop-up windows. Java script opens a browser window with an ad.  Interstitials. Full screen ads that appear on a Web browser while a page is loading.  Intromercials. Animated full-screen ads placed at entry of a site before a user reaches the intended content (CBS Market watch)  Ultramercials. Interactive online ads that require the user to respond intermittently in order to wade through the message before reaching the intended content. 14
  • 15. Subscription Model  Users are charged a periodic—daily, monthly, or annual—fee to subscribe to a service 15
  • 16. Affiliate Model  provides purchase opportunities wherever people may be surfing  Banner exchange. It trades banner placement among a network of affiliated sites.  Pay-per-click. It is the site that pays affiliates for a user click- through.  Revenue sharing. It offers a per cent-of-sale commission based on a user click through in which the user subsequently purchases a product. 16