Electronic business model characteristics and applications

ecommerce business models

With the advent of Internet, we have seen a lot of changes in the communications arena and business practices are no exception. E-commerce has taken business from closed doors of offices and retail shops to the information superhighway, where literally millions of people trade daily. The online business model can be viewed in terms of B2B, B2C and C2C models (business to business, business to consumer and consumer to consumer respectively).

To get an insight into the working of these models, the ways they are similar and different from each other, we take a look at one site representing each of the above-discussed models. For B2B, we have Intel's site - the leading microprocessor manufacturing company. Eddie Bauer, an online shopping store having everyday-use items stands for B2C and lastly, eBay for C2C model as on this site, an ordinary surfer can assume role of both - a seller or buyer.

The major difference in the three business models is the market they target. A B2B site offers its services and products to other business owners who in turn, would market the product to the end-of-chain consumer. Intel's site specifically aims at resellers, retailers and vendors who would like to deal in Intel-based products like desktop systems, networking, servers, wireless and other solutions. Intel has divided its range of products region-wise so that dealers from around the world can access information that is relevant to their geographical location.

Eddie Bauer's target audience is general public from around the world - the ordinary consumers who surf the web. Having a B2C presence, the site is an online shopping store that offers its wide range of products to customers who are willing to pay the price - regardless of their physical presence.

A eBay, being a C2C site, plays part of a 'linker' - allowing one surfer of the site to place an ad (for whatever he wishes to sell) for all other surfers to see. 'To see and to be seen' is what describes this site best. eBay is just a service provider - consumers of this site don't pay anything directly to the site as payment, but to each other (buyer to seller) through a mutually agreed payment method (PayPal) and eBay. Accepting both the buyer and sellers from around the world, eBay has an international clientele - which can include individual consumers as well as small business.

Thus, we see that B2C and C2C generally target web surfers from around the world as potential customers but B2B offers its services to business. The commonality remains - the global reach.

Intel offers products like its branded components of workstations, servers, communications and also catering to the needs of notebook and desktop-based systems. Apart from hardware, 'Intel's Premier Provider' lists preferred vendors whom Intel recognizes as 'experts' to deliver optimized solutions.

Eddie Bauer is exclusively product-based service - offering wardrobe items and house hold furniture. Garments include categories for men and women (business and casual) categories covering shirts, shorts, sweat shirts, pants, skirts and nightwear. Accessories include gifts, sunglasses, watches, sandals, shoes and also travel luggage products. The home store section provides furnishings for bed, bath and family room.

A eBay, calling itself 'World's Online Marketplace' has nearly all imaginable items under the sun as the products offered on the site are from world wide sellers. Categories include everything from automobiles to arts, antiques, garments and toys.

B2B and C2C models more often than not require users to become registered members; whereas, B2C model is typically interested in selling its items in a time-efficient manner, such sites keep registration optional.

Intel has a search by location mechanism to locate local authorized dealers. For buying directly from the site, registration is required after which, the consumers can add items to their 'Shopping Bag' - something very much similar to a shopping cart.

Eddie Bauer doesn't require registration to proceed with a purchase but it helps consumers if they opt for it (it's optional) to save time the next time they are filling their form and telling the site about delivery location. A shopping cart is in place to add items until its time to check out. Selecting a product, color customization option is there to suit an individual's taste. Eddie Bauer lets users order its free catalog; product item number from it can be directly entered on the site's main page. Order history and tracking status of an order are also possible. Wish-list option lets customers add something, which they 'wish' to buy, and would like to be reminded about some time later. Wish-list can be shared through email. This facility requires registration first.

To do business on eBay, users first become fill out a registration form and get an ID with which they are identified on the site and get access to various features. Due to wide range of options, registration becomes indispensable in a C2C site like eBay.

Intel, being a microprocessor giant has market dominance already in place and its web presence has enabled it to keep the reign in place. Without an online B2B presence, Intel couldn't have expanded its reach to virtually all parts of the world. Keeping in touch with its business associates 24/7 helps the business grow. The model makes the latest technology known to the world and helps Intel finding new businesses in a competitive market. The target market comes to know about Intel through magazines and ads in electronic media including ads placed over websites and its products getting reviewed by industries leading reviewers like ZDNet and various hardware magazines. Over all profits that this business model brings to Intel is to make its brand available globally. The site, sure will keep Intel in the forefront.

Harnessing the power of e-commerce, the B2C model works excellently for Eddie Bauer. The site catalogs its entire range to the global audience, regardless of their physical presence and that adds to its profits. Cost reduction is one aspect of a B2C model where a store can be put to work with minimum of effort - reaching far larger number of audience than an ordinary store in town. As the technology leaped, the store kept up the pace with it to make its presence felt in online world - increasing profits by building upon the already strong brand name image is what seems to be purpose for Eddie Bauer to go online.