e-Commerce and e-Business Models

Electronic commerce, which is abbreviated popularly as e-commerce or eCommerce, is defined as the buying and selling of products or services over electronic media like the Internet or other Information Technology dependent networks. Sometimes e-commerce is also interchangeably used with the terminology e-business.

The amount of transactions and the volume of trade conducted via electronic commerce has grown exponentially with widespread adoption of the Internet and Internet based technologies. The use electronic commerce is done in applications related to electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems and automated data collection systems. Traditional electronic commerce used the World Wide Web or the internet and now is transcending the utilization of mobile platforms to optimize the application of ubiquitous computing. Very recently an emergent trend is foreseen that the Spoken Web will be the future media for electronic commerce.

The transaction wise representation of the various models of e-commerce or e-business is denoted by the following diagram.

The most singular uniform way the various e-business models can be viewed under is as follows:

It is crucial to note that the dynamics of business strategy is vastly affected by the application and adoption of web based technologies in the e-commerce domain.

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Top B-Schools of India

The results for the top 30 B-Schools of India are out for the year 2011.
This time the study was conducted by Economic Times and ratified by a consulting major who collected a total of 253 responses across the 5 functional areas with 31 IT Heads, 38 Finance Head, 97 HR Head, 34 Production/Manufacturing Head was achieved. Finally a study that is ranking the institutes based on what the actual rank is, based on the performances of the students and not on the perceptions of MBA Wannabes, and hence a lot more accurate and relevant for MBA Wannabes.

Top Online Affiliate Marketing Programs

Affiliate marketing is a highly popular emergent marketing practice in which a business model rewards an affiliate marketer for each customer brought about by the affiliate’s own marketing efforts. More popular examples include rewards sites, where users are rewarded with cash or gifts, for the completion of an offer, and the referral of others to the site. The industry has four core players: the merchant (who is sometimes also known as ‘retailer’), the network (Affiliate marketers create this network), the publisher (also known as ‘the affiliate’), and the customer or consumer. The value creation is through a network where all the marketers benefits not only from his direct sales but also the sales of those affiliate marketers who joined the program under him.

Online or Internet based affiliate marketing overlaps with other Internet marketing methods to some degree, because most affiliates use regular advertising business models like CPM, CPC, CPI techniques. The techniques to gain the attention of the customer  include organic search engine optimization, paid search engine marketing, e-mail marketing, and in some sense display advertising. On the other hand, internet affiliate marketers sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.

While everyone is jumping the online marketing Bandwagon, it is crucial to know how to do things the proper way to optimize your success.

Some of the more popular affiliate marketing plans which an online marketer can look towards are as follows:

  1. Amazon.com offers the best kind of referral if you have a great online presence. You can potentially sell thousands of items and also selective items which suit the theme of your website and make 4% to 15% of the sales of books, electronic gadgets and what not.
  2. BBL Marketing media is another promising affiliate marketing platform which market online classified ads and take a percentage of the potential sales.
  3. Share sale is another top affiliate marketing opportunity if you like promoting technology based services.
  4. There are multiple software firms which offer a percentage cut if you can sell their product through affiliate marketing, especially which create social media software, like Twitter/Facbook marketing software like TweetAdder or FriendAdder.
  5. Many online services like website hosting services from GoDaddy are also a good opportunity for affiliate marketers. If you refer anyone to use these services, you will generate a decent cut of the sales.
  6. Last but not the least, there is the huge chain of affiliate marketing banking on Pay-per-Click and Pay-per-View on the posting of advertisements by the affiliate marketer. The most popular amongst them is  MyLikes and SponsoredTweets . In these programs you can make easy money by tweeting to our followers. Similar opportunities are also available if you post advertisements in your Facebook profiles.
  7. There are multiple opportunities to create sponsored posts in blogs and earn through that. One of the most popular website to do that is Pay-per-Post.

Hope these inputs helped you to kick-start your career as an affiliate marketer. Do let us know if you know of any more highly popular affiliate marketing programs.

By the way do you know how to create a successful viral marketing campaign using social media?

Business Cartoons – Impression Management

Impression management is crucial in a job. While it is important that you put across your ideas, talking too much without proper substance is also not recommended. Check out what happens when you talk too much without delivering substance.

The content has been removed by the editor due to copyright violation by Anton.Denzongpa@pastos.com!

Remember: The product of quantity and quality is constant. The constant value depends on the individual.

 

Michael Porter’s 5 forces model

Porter’s 5 forces model is one of the most recognized framework for the analysis of business strategy. Porter, the guru of modern day business strategy, used theoretical frameworks derived from Industrial Organization (IO) economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. This theoretical framework, based on 5 forces, describes the attributes of an attractive industry and thus suggests when opportunities will be greater, and threats less, in these of industries.

Attractiveness in this context refers to the overall industry profitability and also reflects upon the profitability of the firm under analysis. An “unattractive” industry is one where the combination of forces acts to drive down overall profitability. A very unattractive industry would be one approaching “pure competition”, from the perspective of pure industrial economics theory. It is important to note that this framework is not for the analysis of individual firms but for the analysis of the industry.

Despite its limitations in the technology enabled business era, Porter’s 5 forces model is still the leading framework for the analysis of industry attractiveness. The limitations of the Porter’s 5 forces model induced the introduction of the 6th Force, namely the Complementors.

This model comprises of an analysis dependent on 4 entities external to the firm and the fifth force: the Industry structure. These forces are defined as follows:

  1. The threat of the entry of new competitors: This encompasses the challenges surrounding if new competitors were to enter the same industry, how would the profitability be affected? This is measured by the indicators which are detailed subsequently and is a proxy measure for the degree of attractiveness of the industry. Factors couls be issues surrounding economies of scale, proprietory product differences, brand identity, switching costs for the customers, capital intensive nature of the industry, access to distribution channels, absolute cost advantages, government policy surrounding new entrants and potential retaliation or fallouts. Higher is the threats of entry of new competitors, lower is the industry attractiveness.
  2. The intensity of competitive rivalry: This is captured by a number of metrics like the growth rate of the industry, the ratio of cost structure to the value added, cost of over-capacity, degree of output differences among competitors, impact of brand and its conversion to sales, switching costs, concentration among the leading players (Herfindal Index), Information flow and complexity, diversity of competing businesses and exit barriers. Higher is the intensity, lower is the industry attractiveness.
  3. The threat of substitute products or services: This is captured to understand to what extent there is a possibility of the industry’s product or services being substituted by some other category of products or services. Factors which predominantly matter in this force are the relative price advantage of the substitutes, relative functional performance advantage of the substitute, switching costs of the customer for moving to the substitute and the customer’s propensity to substitute.
  4. The bargaining power of customers / buyers: This force tries to estimate the degree of bargaining of post-facto relationships that may be empowered due to the dynamics of the relationship. This could be captured through some metrics like the buyer’s concentration as compared to the Industry’s concentration, customer’s volume vs industry output, customer’s switching cost, price sensitivity, degree of product differences, buyer’s profits and decision maker’s incentives. Higher is the bargaining power of the customer, lower is the industry attractiveness.
  5. The bargaining power of suppliers: This force tries to explore the impact of the bargaining power of the industry’s suppliers and how much they can force the industry to share the benefits of value creation through this bargaining power. Factors are covered in terms of differentiation of inputs, switching cost of the suppliers, relationship specific investments required, presence of substitute inputs, supplier’s industry concentration, importance of volume to the suppliers, cost relative to the total purchases in the industry, impact of supplier’s inputs to overall cost structure or differentiation, threats of forward integration, and potential for backward integration. Higher is the bargaining power of the suppliers, lower is the industry attractiveness.

A detailed explanation of what these forces comprise of is provided in the diagrammatic representation of these 5 forces next.

The 5 forces model has been developed as a response to the SWOT analysis of competitiveness of firms, and has continued to remain the most popular framework in business strategy.

The individual dimensions of the 5 forces has been described in details in the diagrammatic representation of the five forces model. The individual scores on theses dimensions may be mapped to a 7 point Likert Scale. Likert scale basically is an ordered, one-dimensional scale from which respondents choose one option that best aligns with their view.The linguistic values for the same would be Very Strongly agree, Strongly agree, Tend to agree, Neither agree nor disagree, Tend to disagree, Strongly disagree and Very strongly disagree.

These responses on the Likert Scale can then mapped quantitatively to -3 to +3 on the extreme points. The mean of the score can be reconverted in the linguistic variables on the Likert Scale and then expressed as whether the particular force is Very Strong, Strong, Slightly strong, Neither strong nor weak,  Slightly weak, Weak, Very Weak.

Although the Porter’s Five forces model is very popular in terms of usage, one must be aware of the limitations of this framework. No framework can be comprehensively understood unless its limitations are understood as well.

By the way do you know what framework you should consider while deciding on a market entry strategy?

Top Online Strategy Games for Business Students

Strategy can be best understood through simulation games. What better training for a manager than to understand business strategy than to react to simulated market responses as provided by these games? Simulation games ensure that the attempted knowledge imparted in classrooms are driven to the core of the students to a stage where it is assimilated and can be implemented by the student, rather than staying at a superficial text-book knowledge level.

If you as an instructor or a student are still not sure how these strategy simulation games will help you, this article may interest you “From e-learning to games-based e-learning: using interactive technologies in teaching an IS course”, by Thomas M. Connolly, Mark Stansfield, published in journal, International Journal of Information Technology and Management, Volume 6 Issue 2-4, June 2007

  • Mike Bikes advanced strategic simulation game ensures learning whereby students form the management team of a Bicycle Manufacturing company making all the key functional decisions involving Price, Marketing, Distribution, Finance, Operations, HR, and R&D
  • In Industry Player (.) comby Tycoon Systems, students create and manage their own company. In real-time, they experience a multiplayer competition for market leadership and shareholder value within a simulation of real world economy.
  • Marketplace-live is an advanced simulation game students start a firm in the microcomputer industry. Students experience real time challenges in Marketing, Product Development, Accounting, Finance and Manufacturing Fundamentals, Financial Analysis, Business Partner Negotiations, Human Resource Management and e-Commerce.
  • The Price Strategy Simulator by Michael Bean ensures students get a feel of pricing strategies at war through a simulation of Price Wars amongst Hewlett-Packard / Compaq and Dell. IBM enters the competition and an excellent pricing strategy simulation learning is ensured.

Faculties and students who would be interested for more details on the use of Simulation games would be encourage to buy this book from Amazon “The Global Business Game: A Simulation in Strategic Management and International Business” by Joseph Wolfe. Now, using the Amazon banner in this website, Business-Fundas readers can avail of a special discount.

While most of the previously mentioned games were for Business School students, there are quite a few games which will develop the intellect of younger students. A few descriptions of the same are provided below.

  • In a world of online simulation games, where dexterity of the thumb and index finger is infinitely more important than the flexing of the cerebrum, there is a deep need to interact and actually learn something from that overpriced multimedia computer/gaming system. One such game is the ROMper Room, where focus is more on intellectual stimulation.
  • Some basic Strategy and Time Management online games are also available at freeworldgroup website. These games are meant for those who are attempting to enhance their personal development skills and time management skills although they may seem redundant to graduate management students.

Information Technology and Information Systems

People often use the terms Information Technology and Information Systems interchangeably, although both the terminologies have established identities of their own. However it is crucial for every professional and individual to understand the subtle differences that defines the individuality of these disciplines.

Information Systems (IS) is a discipline bridging the business field and the well-defined computer science field (popularly called information technology) that has been evolving since it was coined in the early 1970s.An information systems discipline therefore is supported by the theoretical foundations of management social science, information theories and information technology such that students of the discipline have unique opportunity to explore the academics of various business models as well as related algorithmic processes within a computer science discipline. Typically, information systems include people, business procedures or processes, data, software, and hardware that are used to gather and analyze digital information. Specifically Information Systems are the intersection that people and organizations use to collect, filter, process, create, & distribute data (computing) through its business processes, and implemented by its human capital.

While Information Technology (IT) typically is the acquisition, processing, storage and dissemination of digitized information, often represented technically as “Data” through electronics-based media built upon the disciplines of computing and telecommunications. The terminology was first coined in a 1958 by Leavitt and Whisler who defined it as “the new technology that does not yet have a single established name. We shall call it information technology.” Essentially, in its raw form, it comprises of Hardware, Software, the platforms to support both, communication networks and protocols.

It is crucial to understand that while “Information Technology” is a huge discipline with an identity of its own, it essentially is a subset of the discipline “Information Systems”, although the latter evolved much later. The discipline of Information Systems specifically studies the intersection of Business Processes (which may or may not be technology enabled), People (who will be part of the business processes and will use information technology) and Information Technology.

Hope this clarifies your thoughts. Do let me know what you think or would like to discuss further,

Marketing Plan – Blueprint for Marketing Strategy

Today when so much investments are dependent on the outcome of a marketing plan, the same needs to be scrutinized very deeply so as to minimize the risks of non-performance. One such way is to ensure the proper implementation using a marketing strategy plan or a blue-print of implementation for your strategy. So what is a marketing strategy plan?

Basically, it encompasses all the activities in details that needs to be done to ensure that a campaign is successful.

  • For a marketing plan to be successful, the primary importance is understanding whether its adherence to the main marketing mix (4 Ps) is done in a well planned manner. If your objective is to deliver a service, then the 7Ps of Services Marketing needs to be checked out for planned adherence.
  • If you are focusing on extensive usage of technology, are you having ample focus on how you are leveraging the usage of technology vis-a-vis the competencies within your team? Did you take care of the Basics of Digital Marketing Strategy?
  • Have you given the implementation a thought? Is there a structured sequential blueprint to your Marketing Plan which you are planning to operationalize?
  • What is the targeted returns you are expecting from your campaign? Do a cost vis-a-vis outcome-benefit break up for the entire blue-print stage wise. Does each stage commensurate the Expected Returns on Investments (ROI) figures?
  • Last, not the least, does it go hand in hand with the internal competencies of the team that will be implementing your strategy? A great strategy may fall flat without due importance given to the implementation and the competencies of the team.

Do let us know if you need any clarification. Hope you enjoyed reading our articles. By the way, do check out PrintmeIt.com, they create wonderful flyers and brochures which you can you for your advertising campaigns.

Did you read these related articles? They have drawn a lot of attention from readers of similar articles as this one and had been shared extensively in professional networks like LinkedIn.