Globalization and business IT: ECommerce models

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Table of Contents

Business-to-Business (B2B) Model
Advantages and disadvantages
Consumer-to-Consumer (C2C) Model
Consumer-to-Business (C2B)
References

Ecommerce models are integral when creating ecommerce solutions for various types of business that rely on online portals. The following models can be used to classify ecommerce

Business – to – Consumer (B2C)

Consumer – to – Business (C2B)

Business – to – Business (B2B)

Consumer – to- Consumer (C2C)

However, this paper will explore three of these models by giving advantages and disadvantages of each using examples.

Business-to-Business (B2B) Model

According to this model, administrative tasks, purchasing as well as ordering are carried out using electronic transactions. These activities take place between two houses (Alpár 2010, p.165). In this model, activities such as wholesale purchases, manufacturing, professional services, and business subscriptions are traded.

There are other instances when virtual companies may participate in business activities under the B2B model (Chun-yan, Kong-lai & Zong-guo 2010, p.116). In the case of virtual organizations, transactions are carried out in the absence of physical establishments. Hence, the internet is used as the main portal for conducting businesses between two organizations.

A typical example can be derived from the operations of www.amazon.com. This is a store that operates through an online portal. It deals with physical products which are mainly books. Hence, it handles the sale of books on behalf of publishers such as Premier Press and O’Reilly. Publishers can either use the online portal at amazon.com or develop their independent sites for selling the books.

They can alternatively use both options at the same time. When they display their books using the site at amazon.com, they have a higher chance of reaching wider audience than using their individual sites. When publishers use the amazon.com site, they have to enter into a business transaction with amazon.com using the B2B model.

Advantages and disadvantages

B2B model has quite a number of merits. For instance, the procurement, manufacturing and supply chain processes in organizations are hastened when the B2B model is used to make transactions between two organizations. This implies that the model tends to boot the efficiency level of procurement, manufacturing and supply chain practices.

Secondly, B2B model is relatively cost effective and fast when making transactions between two organizations. These benefits can be attributed to the fact that the automatic process used when completing electronic transactions.

Therefore, the automated system has been proved to be more efficient than manual transactions. Finally, this model is becoming more popular and readily acceptable by other suppliers and manufacturers. In fact, the fastest growing segment of ecommerce is the B2B model (Rangone & Renga 2006, p.332).

On the other hand, this model harbors a relatively small business community compared to other models. Hence, the model cannot sustain large scale business operations and as such, the profitability arising from this model might be low. In addition, it is rather cumbersome to attract and retain clients within an enterprise.

This implies that the model does not take bring the benefit of returning customers because sustaining the previous ones is not easy. Worse still, stagnated growth may be experienced since attracting new customers is still a difficult task (Burn & Ash 2005, p.1086).

Consumer-to-Consumer (C2C) Model

When this model is used, the key beneficiaries are consumers (Caescu & Dumitru 2011, p.276). Hence, it is a model that takes care of transaction between consumers. In other words, the process of selling is done directly from one consumer to another. For example, some of the common online auction websites include www.amazon.com and eBay.

These websites basically provide an online portal for consumers to sell to other consumers directly. This is achieved in form of advertisements that are placed on these sites by the same consumers. Nonetheless, registering at any of the auction sites is required for both the seller and buyer.

No fee is required for a buyer who takes part in the bidding and buying process. However, sellers are required to pay some fixed amount at either of the sites before they can sell their products.

Perhaps, it is vital to explore how business is conducted at eBay in order to understand the C2C model. To begin with, interaction with the eBay site is necessary before a customer begins the process of selling a product to another buyer. eBay primarily facilitates the process of buying and selling through the internet. The product is first hosted by the seller at www.ebay.com. A small fee is charged for this service.

When a buyer browses through the site, he or she can view the required product and eventually decide to purchase it by placing an order. However, the product is first of all purchased by eBay and consequently sold to the buyer. The buyer is finally capable to obtain the required product. eBay in this case acts as a viable link between the given business entities (Oliva 2009, p.44).

In terms of advantages, the middleman is eliminated and therefore the overall cost of the product is reduced. In addition, business advertising can be done anywhere with a lot of convenience (Barnes, Scornavacca & Innes 2006, p.176). The model has also led to the availability of variety of products in the auction sites due to cheap cost of advertising. However, some fee is levied for accessing the portal in the case of sellers.

In some instances, commissions may be charged after some products have been sold. This may lower the profit margin of the sold product. Cases of fraud have also increased with the use of online auction sites that involve real financial transactions.

Even though security measures have been put in place, cyber crime is evolving rapidly on a daily basis. Tricksters are inventing new online tricks from time to time (Raffaello, Riccardo & Giovanni 2009, p.252).

Consumer-to-Business (C2B)

When a business organization conducts a transaction with a consumer, it demonstrates an ecommerce model known as the buyer in this case is the organization while the seller is the consumer (Groff & Wingender 2010, p.103). This is a direct opposite of B2C model. This implies that the final selling price of a product is fully determined by the consumer. The supplier does not influence the selling price of the products being offered.

A typical example of this category entails individual persons who engage in selling products to business enterprises. For instance, individuals can post their personal data or CV on a website such as www.monster.com so that they can highlight specific services that they can give.

In the event that any other business entity is interested in the skills and competences displayed in a bio data, then the individual can be contacted and employed if found suitable (Huang, Jin & Yang 2004, p. 204).

One of the advantages of C2B ecommerce model is that it allows consumers to advertise their bio data and reach potential employers at a cheap rate.

Moreover, business organizations are able to explore a wide data base of consumers with their respective data bases and eventually make their final decisions on the best and most qualified candidate to hire (Balocco, Mogre & Toletti 2009, p.247). moreover, it is a relatively cheap method of advertising the skills and competences of an individual.

In the event that a personal website is made for the sole purpose of adverting the ideals of a prospective employee, it can indeed be a very costly and complicated undertaking. This explains why this site has a large database of individuals who have displayed their credentials so that prospective employers can browse through and meet the desired candidates.

It is also imperative to mention that business organizations are most advantaged in the sense that that they do not have to spend additional resources in adverting for desired skills and competences in their organizations. If they want a particular employee with specific characteristics, they merely browse through the database and pick the right candidate in readiness for interview.

In terms of disadvantages, Consumer-to-Business (C2B) ecommerce model may fail to reveal all the required skills and competences that a particular organization is seeking. For instance, not all individuals with the required job descriptions may post their bio data in this online site. As a result, some employers may still fail the most suitable candidates for certain positions.

Secondly, the model may not be fully relied upon due to several cases of fraud in the internet. Some bio data posted in this site may not be authentic as they appear to be and therefore, recruiting firms are required to take additional step for authenticating the details displayed in this site.

References

Alpár, F 2010, ‘Matchmaking framework for B2B E Marketplaces.’ Informatica Economica vol. 14 no. 4, pp. 164-170.

Balocco, R, Mogre,R & Toletti, G, 2009, ‘Mobile internet and SMEs: a focus on the adoption.” Industrial Management + Data Systems vol. 109 no. 2, pp. 245-249.

Barnes, S.J., Scornavacca, E. & Innes, D 2006, ‘Understanding wireless field force automation in trade services’. Industrial Management & Data Systems, Vol. 106 no. 2, pp.172 – 181.

Burn, J & Ash, C 2005, ‘A dynamic model of e-business strategies for ERP enabled organizations, Industrial Management & Data Systems, Vol. 105 no. 8, pp.1084 – 1095.

Caescu, S & Dumitru, I 2011, ‘Particularities of the competitive environment in the business to business field.’ Management & Marketing vol. 6 no. 2 (2011, pp. 273-284.

Chun-yan, G, Kong-lai, Z. & Zong-guo, M, 2010, ‘The design of B2B E-commerce system based on MVC Model and J2EE.’ Management Science and Engineering vol. 4 no. 4, pp. 113-119.

Groff, J, & Wingender, J 2010, ‘The impact on firm value from joining a B2B sourcing market.” The Business Review, Cambridge vol. 16 no. 1, pp. 99-104.

Huang, J, Jin, B & Yang, C 2004, ‘Satisfaction with business-to-employee benefit systems and organizational citizenship behavior: An examination of gender differences.’ International Journal of Manpower, Vol. 25 no. 2, pp.195 – 210.

Oliva, R.A 2009, ‘The B2E connection.’ Marketing Management vol. 11 no. 4, pp. 43-44.

Raffaello, B., Riccardo, M & Giovanni, T 2009, ‘Mobile internet and SMEs: a focus on the adoption.’ Industrial Management & Data Systems, Vol. 109 no. 2, pp.245 – 261.

Rangone, A. & Renga,F.M 2006, ‘B2e mobile internet: an exploratory study of Italian applications.’Business Process Management Journal, Vol. 12 no. 3, pp.330-343.

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