Mobile Commerce Chapter 2

Identify the key components of e-commerce business models
Value Proposition
- how a company's product or service fulfills the needs of consumers
Revenue Model
- how the company plans to make money from operations
Market Opportunity
- the revenue potential in a market place
Competitive Advantage
- how a company differentiates itself from other players in the market
Market Strategy
- how the company plans to enter a market and attract customers
Competitive Environment
- direct/indirect competitors in the same marketplace
Organizational Development
- defining all the functions in a business and the skills involved to perform each job
Management Team
- set of individuals who will oversee and make decisions about the company and its growth
What is a business model? How does it differ from a business plan?
Business model: is a set of planned activities designed to create product in a market place

Business plan: describes a firm's business model
What are the 8 key components of an effective business model?
(V R M C M C O M)
Value Proposition
Revenue Model
Market Opportunity
Competitive Advantage
Market Strategy
Competitive Environment
Organizational Development
Management team
What are amazon's primary customer value propositions?
Describe the 5 primary revenue models used by e-commerce firms
1) Sales
- company creates sales by selling goods or services
- ie. Amazon
2) Subscription
- company offers its users content or services charges a subscription free to have access to some or all of its offerings
3) Transaction
- companies receives a fee for enabling a transaction
- ie. ebay receives a small fee from the seller when their product is sold
4) Affiliate
- company steers business to an affiliate and receives a referral fee or percentage of revenue from any sales
5) Advertising
- a company provides a forum for advertisements and receives fees from the advertisers
Why is targeting a market niche generally smarter for a community provider than targeting a large market segment?
Community environments create websites where people can meet, and share different experiences.

Market opportunity is divided into smaller market niches and allows it to be easier to compete in a smaller scale, and capture more people

- Meet consumer's needs
- Lower costs
Would you say amazon and eBay are direct or indirect competitors? ***
They are direct competitors - because they are selling similar products or services
- They serve the same group of consumers
- They sell similar products and services
- They both offer new and used products
- They are both solely based online
- Both offer free shipping and other discounts
What are some of the specific ways that a company can obtain a competitive advantage?
A company can obtain competitive advantage by differentiating their product/service from other competitors in the same market
they can also have:
- good distribution channel
- high operating efficiency
- lower prices while still offering a valuable product
- having superior CRM
Besides advertising and product sampling, what are some other market strategies a company might pursue?
- Trade Shows
- Loyalty Programs
- Premiums
- Conferences
- News Letters
- Sponsorships at different events (ie. sports)
- Seminars
- Entertainment (ie. gala)
How do venture capitalists differ from angel investors
Angel investors:
- Are normally wealthy individuals who invest in a venture and want to have a stake in the company
- Their investments are often smaller than venture capitalists
- They will assume more risk
Venture Capitalists:
- Normally a group of people investing
- They assume lesser risk
- Normally invest after there aren't angel investors
Why is it difficult to categorize e-commerce business models?
- Many companies often have mulitple business models
- No way to classify them as a certain model
- E-commerce models are normally categorized into sectors (B2B, C2C etc)
Besides the examples given in the chapter, what are some other examples of vertical and horizontal portals in existence today?
Portal - offers powerful search tools as well as a package of content such as emails, instant messaging, video streaming etc all in one place

Vertical Portal - are focussed on content to attract more users and get to the point
Horizontal Portal - serves as an entry point to several firms in the same industry or to the same type of suppliers.

examples of portals
- iGoogle
- Reddif
What are the major differences between virtual storefronts, such as bluefly and bricks and clicks operations such as walmart? What are the advantages/disadvantages of each?
Virtual Storefronts
- Have an online website, and does not have a physical storefront
- Consumers can browse products, read reviews, and purchase goods/services with a click of a button

- Cost effective (no physical cost for store)
- Ability to have scope, and reach a larger audience
- Provides better prices for consumers
- some consumers don't trust online companies
- customers aren't able to physically see the products as well as they would in a store
- hard to create CRM or loyalty

Bricks & Clicks
- Have both a physical storefront and an online website to purchase goods/services
- Can purchase online or in store

- Gives consumers the both of both worlds; they can view the product online and they have the choice to order it or go see it first then purchase it
- Payments can be directly made to the merchant

- Sometimes products are available on the website, but are no longer available in store
- Difficult to open a store in every geographic area
Besides news and articles, what other forms of information or content do content providers offer?
They offer:
- Website content
- SEO content
- Social media marketing
- Provide media such as pictures and videos
What is a reverse auction? What company is an example of this type of business?
- sellers and buyers are reversed
- the buyer puts a request for a product and the sellers bid the prices they are willing to be paid
What are the key success factors for exchanges? How are they different from portals?
exchanges - corporate suppliers and buyers meet and close deals in a digital market place

Portals bring information from diverse sources, and provides access to different websites, industries, or sectors, whereas an exchange is specific for a particular industry
How have e-commerce models changed industry structure in the travel business?
e-commerce has opened a whole new door for the travel industry. It has allowed people to select travel types of their choice, accommodations, allows you to review and see different comments/experiences that other people had while travelling. Tourism is looking to tap the new market developed by e-com - use of internet and mobile devices is rapidly growing travel. People have the ability to book an air flight from their smartphone with a click of a button.
Who are the major players in an industry value chain and how are they impacted by e-commerce technology?
- Suppliers
- Manufacturers
- Transporters
- Distributers
- Retailers
- Customers

E-commerce has impacted these players by reducing the cost of information

- Allows suppliers and manufacturers to sell their products/services at fair rates, transporters can chare the fair amount for their service, and will to have overall higher profit margins for reatailers, and the best price for customers.
5 generic business strategies for achieving a profitable business
1) Differentiation
2) Cost competition
3) Scope
- companies compete in all markets world wide to create higher profits
4) Focus or market niche
5) CRM & intimacy
Market Opportunity vs Market Place
Market Opportunity is a business possibility they can take to capitalize on increasing demand of that product

Market Place is a virtual place where buyers and sellers meet
Crowd Funding
- Is a group of people who come together to pitch a little bit of money into an idea or company
- People do this through various platforms
Describe the major B2C models
- offers powerful search tools plus an integrated package of content and services
- Online retailer
Content Provider
- information and entertainment companies that provide digital content
Transaction Broker
- processes online sales transactions
Market Creator
- uses internet technologies to bring buyers and sellers together; typically uses transaction fee revenue model
Service Provider
- offers services online
Community Provider
- provides an online community for people who have similar traits or characteristics
Describe the major B2B models
- supplies products directly to individual businesses
- single firms create digital markets for thousands of sellers and buyers
Industry Consortium
- industry owned vertical digital market
Private Industrial Network
- industry owned private industrial network that coordinates supply chains with a limited set of partners
What are key business concepts and strategies applicable to e-commerce?
Industry Structure
- nature of players in an industry (P5)
- rivarly, threat of new entrants, threat of subs, buyer power, supplier power
Industry Value Chains
- activities performed within an industry by suppliers, manufacturers, transporters, distributers, and reatailers
Firm Value Chains
- activities peformed within an individual firm to create products from raw inputs
Business Strategy