The E-Commerce Business Model Implementation

The E-Commerce Business Model Implementation

Alessia D'Andrea (National Research Council, Italy), Fernando Ferri (Institute of Research on Population and Social Policies - National Research Council, Italy) and Patrizia Grifoni (National Research Council, Italy)
Copyright: © 2014 |Pages: 12
DOI: 10.4018/978-1-4666-5202-6.ch224

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The rapid development of Information and Communication Technology (ICT) has generated evolutionary e-commerce business solutions. E-commerce can be defined as “any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact (Euro Info Correspondence Centre, 2002). The evolution of e-commerce involves different phases: innovation, consolidation, and reinvention. The Innovation phase (1995–2000) is characterized by an idealistic vision of markets in which quality information was equally available to both buyers and sellers. After 2000, e-commerce entered in the consolidation phase during which traditional firms began to use the Web to enhance their existing business activities. Finally starting from 2006 started the currently reinvention phase, in which e-commerce is audience, customer, and community-driven. This phase is characterized by the development of Web 2.0 applications that encouraged the development of e-commerce business models.

A definition of e-commerce business model is given by Feng Li (2007) that defines it as “an architecture for product, service and information flows, including a description of the various business actors and their roles, a description of the potential benefits for the various business actors, and a description of the sources of revenue.” Studies on e-commerce business models addresses questions related to their scope and their main components (Bartelt & Meyer, 2001; Rappa, 2009). Basic concepts and definitions to analyse the challenges given by of e-commerce business models described in (Meier & Stormer, 2009). Other studies focus on the characteristics of successful e-commerce business models (Malone et al., 2006) their economic/financial impacts (Merrifield, 2000; Tapscott & Williams, 2006; Lewis, 2000) and their identification and evaluation (Shin & Park, 2009).

On considering the classification of e-commerce business models, there is more than one way according to their type. Kalakota and Whinston (1997) classify them into two categories: Business-to-Business (B2B) and Business-to-Consumer (B2C). Turban et al. (2002) categorize business model into three different categories: business-to-business (B2B); business-to-consumer (B2C) and consumer-to-consumer (C2C). In Focazio (2001) and Madu and Madu (2002) authors distinguish: Business to Business (B2B), Business to Consumer (B2C), Consumer to Business (C2B), and Consumer to Consumer (C2C). The choice of the e-commerce business model represents the first step for a company that wants make its e-commerce strategies on the Web. So the company has to choice the most appropriate e-commerce business models to use according to its own interests, goals, products/services it wants to offer. For instance a company can decides to use a C2B model if it wants to fill a job (through referral hiring sites) or if it needs to advertise online (for example through Google Adwords program); on the contrary it can use a B2B model for commerce transactions between manufacturers and wholesalers or between retailers and wholesalers. After the choice of the most appropriate e-commerce business models to use (according to its own interests), the second step consists in the design of the e-commerce business model. During this phase different elements such as: product management, consumer management, infrastructure management and financial management have to be considered. Also the choice of social media to use to promote their products/services represents an important step (Kumar et al., 2013).

Key Terms in this Chapter

Consumer-To-Business Model: Involves a transaction that is conducted between a consumer and a business company.

Consumer-To-Consumer Model: Electronic Internet-facilitated medium that involves transactions between consumers.

E-Commerce: Any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.

Business Models: set of activities which a firm performs, how it performs them and when it performs them so as to offer its customers benefits they want and to earn a profit.

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