Summary Notes

Topic 2 — Evolution of eMarketplaces

IT6506 · e-Business Technologies · Level III · Semester 6 · UCSC BIT

Q 01

eMarketplace Overview, Classification & Evolution

2.1 Overview
// What is an eMarketplace?

A digital platform connecting buyers and sellers of goods/services. Creates economic value for buyers, sellers, intermediaries, and society by facilitating exchange of InformationGoodsServicesPayments

// Two Main Types

Horizontal

Wide range across many industries.
Examples: Amazon, eBay, Daraz.lk

Vertical

Specialist in one category.
Examples: Airbnb (lodging), Etsy (handmade), Zillow (real estate)

// Evolution Timeline
1990s
Early Days — eBay (1995) and Amazon (1994) launch as first basic online marketplaces
2000s
Expansion — Specialised vertical platforms emerge: Etsy, Airbnb, Daraz.lk
2010s
Mobile Revolution — Uber, PickMe launch mobile-first marketplaces
2010s
B2B Growth — Alibaba, ThomasNet enable digital B2B procurement globally
2015+
Platformisation — Amazon expands into AWS, streaming, AI devices — full ecosystems
Now
Blockchain Era — OpenBazaar, Bitify operate decentralised without central authority
// Key Examples
PlatformTypeUnique Value
AmazonHorizontal (Global)Largest ecommerce; full ecosystem (AWS, streaming, AI)
AlibabaB2B Direct (Global)Connects global buyers directly with Chinese manufacturers
AirbnbVertical (Global)Peer-to-peer lodging; disrupted entire hospitality industry
FiverrVertical (Global)Freelance micro-services marketplace; global digital talent
Daraz.lkHorizontal (LK)Sri Lanka's largest; backed by Alibaba Group
Ikman.lkClassifieds (LK)Free classified ads: vehicles, property, electronics, jobs
KaprukaGifts/Services (LK)Gifting, flowers, food; strong overseas Sri Lankan user base
Healthguard.lkVertical (LK)Healthcare/wellness products exclusively
Q 02

Traditional vs New Business Models & Porter's Five Forces

2.1 / 2.2
// Six-Dimension Comparison
DimensionTraditionalNew eBusiness
ProductionMass — identical goods at scalePersonalised (e.g., Dell build-to-order)
DistributionVia middlemen (wholesaler → retailer)Direct-to-customer, no intermediaries
CommunicationChained/closed, slow hierarchyNetworked/open, real-time multi-directional
FinanceSlow, limited hours, difficult cross-borderFaster, easier, 24/7, instant transfers
MarketsLocal/geographic limitsGlobal, no boundaries
AssetsTangible/physical (factories, stores)Intangible/virtual (data, software, IP)
// Porter's Five Forces — At a Glance
ForceStrongest When…eBusiness Strategy
RivalrySlow market; homogenous products; easy switchingValue-Added Differentiation + CRM + Product Bundling
New EntrantsLow start-up costs; weak brand loyaltyCRM loyalty programs + Strategic Alliances + Cost Leadership
Supplier PowerFew suppliers; unique inputs; supplier can sell directBackward Integration + SCM + ePortal bulk ordering
Buyer PowerBuyers large; product undifferentiated; low switching costForward Integration + CRM + Value-Added Differentiation
SubstitutesEasy switching; low loyalty; product not uniqueProduct Diversification + Market Diversification + Alliances

Old vs Online Model: Old — Physical ops, IT as a function, geographical limits, high switching costs. New — Online ops, IT as strategy, global reach, low switching costs, collaborative competencies.

Q 03

Technologies Enabling New Business Models

2.2
// Disruptive Technology — Old Rule → New Rule
Old RuleTechnologyNew Rule
Info in one place at a timeShared DatabasesInfo appears in multiple places simultaneously
Only experts do complex tasksExpert Systems (AI)A generalist can work like an expert
Centralise OR decentraliseTelecom NetworksBenefit from both simultaneously
Only managers decideDSSDecision-making is everyone's job
Field staff need officesMobile/Wireless/InternetConnected from anywhere, anytime
Best contact = personal contactInternet/WWWBest contact = effective contact
// Six Key Information Systems

MIS

Management Information Systems — collects data to help managers plan, decide, and control operations

TPS

Transaction Processing Systems — processes high-volume routine transactions (sales, purchases, inventory)

DSS

Decision Support Systems — data models helping managers analyse complex scenarios

ESS

Executive Support Systems — KPI dashboards for senior executives' strategic decisions

ICS

Inventory Control Systems — manages stock levels, tracks movement, minimises holding costs

KM

Knowledge Management — captures and shares organisational knowledge across employees

// SCM vs CRM

SCM — Supply Chain Management

  • Flow of goods from supplier to customer
  • Coordinates procurement, production, logistics
  • Reduces cost; improves quality and delivery

CRM — Customer Relationship Management

  • Manages interactions with customers
  • Centralises: contact, purchase history, preferences
  • Drives loyalty, upselling, personalised marketing
// Process — Technology — People Framework

Linkage

Process ↔ Process: output of one step feeds the next (order → deduct stock → reorder)

Interconnection

Technology ↔ Technology: systems share data via APIs in real time

Co-operation

People ↔ Technology: humans and systems work together using each other's strengths

Q 04

Mass Customisation & Direct-to-Customer Interaction

2.3 / 2.4
// Mass Customisation — Definition

Combines mass production efficiency with personalisation — producing tailored goods without sacrificing cost-effectiveness. Enabled by CAD, 3D printing, EDI, automation, and web configurators. Examples: Dell (custom PCs), Nike iD, BMW custom config.

// Mass Customisation vs Mass Personalisation
AspectMass CustomisationMass Personalisation
DefinitionCustomised product via tech + management adaptationPersonalised experience via co-creation + user behaviour analysis
Customer ImpactLimited — chooses from predefined optionsStrong — customer co-creates with the organisation
AimCompetitive advantage through tailored productTailored experience, smart service, customer-need orientation
// Benefits & Problems

4 Benefits

  • Higher satisfaction — products match individual needs
  • Revenue premium — customers pay more for personalisation
  • Reduced inventory — produce on demand, no pre-stocking
  • Differentiation — competitors can't easily replicate unique range

4 Problems

  • No pre-built stock — cannot forecast and manufacture ahead
  • Demand forecasting hard — wide options create uncertainty
  • Supply chain disruption — affects 3rd-party partner workflows
  • Higher machinery costs — varied configurations are expensive
// Apparel Enabling Technologies (Key Examples)
StageTechnology
PatternsBody scanner, digitiser, CAD
DesignCAD + web-based product configurators
Production PlanningEDI + production planning software
AssemblyElectronically-controlled robotics + UPS
DistributionEDI + supply chain management software
// Direct-to-Customer — 5-Stage Cycle
1
Awareness — Educate customers about what the business does and how it solves their problems
2
Consideration — Help prospects evaluate the product's unique value vs competitors
3
Conversion — Turn the prospect into a paying customer (smooth checkout, clear CTA)
4
Retention — Check in, gather feedback, ensure ongoing satisfaction and loyalty
5
Advocacy — Encourage loyal customers to refer new customers via referrals and social sharing

Traditional Retail: Manufacturer → Wholesaler → Distributor → Retailer → Consumer (high cost, slow, no direct data)  |  DTC: Manufacturer → Website → Consumer (higher margin, richer data, faster feedback)

Q 05

Virtual Organisations, Business Goals & Applied Strategy

2.5 / Applied
// Virtual Organisation — Key Points

Definition & Characteristics

  • Geographically dispersed teams working via technology
  • Borderless — no geographic limits
  • Faceless — digital interaction only
  • Paperless — fully digital documents
  • Moves business from place to space

5 Benefits

  • Access to global talent pool
  • Reduced overhead (no rent/utilities)
  • Greater flexibility in work hours/location
  • Reduced environmental impact
  • Enhanced digital collaboration

3 Key Concerns

  • Trust — relying on parties never met in person
  • Security — cyber risk, data breaches, fraud
  • Convenience — always-on pressure, work-life blur

Business Model Shift

Business A + B + C share information through a Virtual Organisation hub to serve the same customer — creating value none could create alone, without co-locating staff.

// Three Business Goals for Reengineering

Survival

Companies in crisis — forced to act. Reactive, urgent transformation. No choice. Example: Traditional retailer losing revenue to Amazon must digitise immediately.

Sustainability

Not yet in trouble, but sees disruption coming. Proactive, preventive change. Example: Bank launches mobile banking before fintech crisis hits.

Growth

Ambitious and already competitive. Uses reengineering to extend their lead. Example: Amazon expanding into AWS, Alexa, healthcare — always ahead.

// Five Forces Quick-Reference for Exams
ForceKey Strategies
Rivalry (High)Product Differentiation · CRM · Product Bundling · Niche Targeting · Horizontal Integration
New Entrants (High)Strengthen entry barriers · CRM Loyalty · Strategic Alliances · Cost Leadership
Supplier Power (High)Backward Integration · SCM · ePortal bulk ordering · Strategic Alliances
Buyer Power (High)Forward Integration · CRM · Value-Added Differentiation · Product Bundling · Loyalty Programs
Substitutes (High)Product Diversification · Market Diversification · Strategic Alliances · Pricing Strategies

The Final Goal of eBusiness: "The ability to connect with, access information, conduct business or deliver services to anyone — from anywhere — anytime — using almost any device — securely — easily — cost effectively — and with a single click."