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Lesson 9Primary Models of eBusiness
ObjectiveDifferentiate between the primary models of eBusiness.

Primary Models of e-business

In many ways, the new rules of eBusiness challenge and reverse the value chain. As we will see in later discussions of eBusiness models, eBusiness success is largely determined by how efficiently the business invents or reinvents itself.
Establishing an eBusiness model helps the enterprise to identify its purpose.The primary models of eBusiness will be discussed in this lesson. The principal actors in eBusiness are businesses and consumers.
There are several possible segments of eBusiness, as illustrated by the eBusiness matrix below.

  Consumer Business Government
Consumer C2C C2B C2G
Business B2C B2B B2G
Government G2C G2B G2G

B2C Charles Schwab
B2B Visteon
C2C Ebay
C2B Search Engine

We will focus mainly on the business-to-business (B2B) and business-to-consumer (B2C) primary models of eBusiness. The primary models for each of these segments have specific characteristics that are influenced by the players, their capabilities, and their general requirements.
This lesson provides a brief introduction to the B2B and B2C models; we will discuss them in more detail later in the course.

Other eBusiness models

  1. Government to Business
  2. (C2C) Consumer to Consumer
Other primary models are the Government to Business[1] (G2B) and the Consumer to Consumer[2] (C2C) models.
G2B models address the links between businesses and government, and tend to be bound by strict standards and controls. C2C models usually take the form of public auctions and "garage sales" where consumers can sell or exchange goods. These models are not as common as the B2B and B2C models and are not discussed further in this course.

B2B and B2C models

There are similarities between the B2B and B2C models on a global level.
In each case, the architect focuses on the following five goals:
  1. Launch a Web site with a list of products
  2. Streamline the entire supply chain
  3. Enhance the buyer-supplier relationship
  4. Automate the purchasing process from requisition to payment
  5. Deliver a robust, easy-to-use online marketplace
The goals are identical, but manifest in different ways. In many ways the B2C market is more volatile. The table below describes the more common examples of each.

Model Goal For example

Business-to-Business (B2B) eCommerce

The B2B model.
The B2B model

Goal: Create Transactions between businesses by means of the Internet.
Purchase ordering of supplies Stock or components/raw materials used in manufacturing Transmission of financial payment data.

Business-to-Consumer (B2C) eCommerce

The B2C model.
The B2C model: business to customers

Goal: Create transactions between a business and an individual by means of the internet.
Examples include
  1. Home shopping for consumer goods
  2. Online banking, insurance purchase
  3. Vacation travel and
  4. hotel reservations
  5. Stock market share purchasing

B2B vs. B2C

Why does the distinction between B2B and B2C matter? Depending on whether you are designing for a B2B or a B2C eBusiness, you may make varying design choices, based on projected hours of business activity and capacity, connectivity and processing speed, and the browser capabilities of your end users.

Applying four key areas to design

There are four key areas of variation to design:
  1. Hours of business/activity
  2. Customer support needs
  3. Connectivity and processing speed
  4. Browser compatibility
The table below examines the differences in approach to B2B and B2C design for each of these key areas.

Approach B2B solution B2C solution
Hours of business activity Sufficient capacity at high traffic periods Is likely to generate traffic during business hours Is likely to make purchases in the evenings or on weekends
Planning for customer support needs Some queries can be automated. Sufficient capacity to process more complex queries during the hours that all customer service areas is required. Must include design capacity and a plan for customer support Capability to browse, select, and purchase Must include design capacity and a plan for customer support Capability to browse, select, and purchase Access to help desk, query support, email and phone support
Connectivity and processing speed Download time is important; customers should not be kept waiting Assume high-speed connection and powerful PC equipment Assume a low speed connection on any given platform
Browser platform and capability Range and variety of browser Assume Company upgrade policies will ensure the latest version of browser Assume a wider variety of browser types and versions Web sites need to be checked for compatibility

While some queries can be automated, the architect must ensure that sufficient capacity exists in all customer service areas to process more complex queries during the hours required.

Applying buyer type to design

It is important to apply what we understand about buyer type to eBusiness design.
Obviously, the nature of the business and its customers will to some degree govern the likely activity of its customers; it is the architect's responsibility to design with this in mind.

Other differences between customer types

Some other issues that may vary between buyer types are described in the table below:

Compare B2B with B2C customers

  For B2B customers For B2C customers
Drawing and seeking customers Customers are more accessible Customers are likely to be known or identified through existing relationships Customers must be pursued through various means Customers are largely anonymous until they perform their first transaction
Sales approach: full catalogue vs. limited focus The requirements of the business customer are more clearly defined It may be viable to present a product subset The needs of the consumer are not defined The product scope should be broad
Payment and billing methods For tax and financial reporting reasons, may require more detailed billing systems Require less sophisticated payment systems

Factors that contribute to eBusiness Success

The items just discussed have been listed as examples of eBusiness success.
Question: Do you agree?
What do you know about B2B and B2C eBusiness models that apply to the kinds of innovations and enhancements you have seen in eBusiness?
Customers take advantage of the availability of online product information by doing research online prior to the actual purchase of high-ticket items.
Online banking with virtual banks is becoming a widely accepted reality.
Many companies are building a social component into their process by using extremely sophisticated service bots[3] to answer customer service and technical support queries. Others are using service bots to redirect users and connect them to the right live human consultant.

Bots were used as early as the first Net newsgroups. There are different kinds of bots. For example, a service bot they might answer specific questions about a product or service. The next lesson wraps up this module.

[1](G2B)Government to Business: A secondary model for eBusiness where the seller is a government entity and the buyer is a business. The Business to Government (B2G) model operates in the reverse.
[2]Consumer to Consumer: A Business model where the buyer and seller are both consumers. An example might be the trade that takes place on an auction site.
[3]Bot:A bot is a software tool for crawling through and mining data, sometimes referred to as an Agent. You give a bot directions and it brings back answers.