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Prudential Advisor allows Prudential Securities to own the customer relationship, the data about what the customers are doing with regards to investmentSome of the transactionsHelps Prudential to cross sellThird party does not own the customer relationshipB2C Full Service ProvidersBarnes & Noble : full service provider for printed information by extending its direct services offerings and partnering with other suppliers.Extends to posters and greeting cards Email via access to AOL instant messengerOnline book review published in leading journalsExampleOwns the relationship, the data and the transactionSelling its own products & commission

Full Service ProviderModel combines the strength of both the direct-to-customer and the intermediary models.A firm using the Full Service Provider model provides total coverage of customer needs in a particular domain consolidated via a single point of contact.Sourced internally or externallyDomain : financial services, health care, or industrial chemicalsFull Service ProviderPrudential Advisor, established by Prudential Securities, a subsidiary of the Prudential Insurance Company of America.Prudential Advisor is redefining the full service relationship and bringing together a wealth of resources to support educated investment decisions.Allows customer to interact in person or by telephone with a live financial adviser.A flat fee for trade, and an annual fee

Value to customer - Financial portfolio v/s book portfolioIn more subjective and personal domain, becoming an enduring full-service provider may be substantially more difficult than in the more quantitative domain of investments.B2B Full Service Providers

Chemnet major market in building and construction, agriculture, mining, pulp and paper and manufacturing.The chemical it supplies include mineral acids, acrylic and methacrylic monomers etc.Many of the chemical suppliers are competitors of other units of Orica.B2B Full Service Providers :Issues Chemnet can become the Full Service chemical Provider for a single factory, an entire company or for the whole industryAs these external opportunities increases so will the internal tensions as Chemnets sells larger volumes of competing products, and serves greater number of competing companiesEffectively managing these tensions is one of the critical success factor for the full service provider modelINFRASTRUCTUREIn many organizations , layers of systems each built independently to support a specific product line, make it difficult to consolidate information on a customer basis.Unified view of customerDatabases and data warehouses : most important infrastructure services associated with the modelINFRASTRUCTUREThe ability to evaluate proposals for new information systems initiatives to coordinate IT investment across a multi-business-unit-firm with the goal of a single point of contact for the customer.Centralized management of IT infrastructure capacity to integrate across multiple business units within the firm and third party providers; the full service provider model is not readily workable if each business unit optimizes its own IT needs.Installation and maintenance of workstations and local area networks to operate the online business linking all the business units and third-party providers.Electronic support for groups to coordinate the cross-functional teams required to implement this model.The identification and testing of new technologies to find cost-effective ways to deliver this complex business model to the customer across multiple channels.

Channels to customersDomainThere should be one full service provider in one domainDomains Financial servicesHealth careEducationEntertainmentTravelGovernment services Case Study GE Supply CompanyIs a business unit of GEGE Supply offers more than one hundred thousand voice, data and electrical products from more than two hundred suppliers.The suppliers include GE, as well as some of GEs competitors 3M, Lithonia, and Toshiba.GE Supply delivers products from 150 locations A website enabling customers to request quotations, order goods, and track their orders via the internet.GE supply serves electrical contractors, industrial and commercial users, engineer constructors, original equipment manufacturers (OEMs), and utilities.www.gexprosupply.comCase Study GE Supply CompanyValue proposition combines the immediacy of local delivery and support with the scope and resources of a global firm, including low transactions cost.The company offers a full product line via an online catalog and inventory system keeping track of stocks at 150 locations.Also offers telephone support from its national sales center, whose staff can assist customers with the product selection and application as well as quoting, expediting and billing.Case Study GE Supply CompanyFull service provider for electrical supplies, including supplies for voice and data communications as well as traditional lighting and power applications.The company faces ongoing challenge of working successfully with outside suppliers who compete with its sister divisions inside GE.By providing a ready means for customers to compare GEs products to those offered by the competition, GE supply may well increase the profits of the companys manufacturing units. Such comparisons often include factors other than price.GE Supplys Parts Supercenter offers immediate access to over 12000 different GE replacement parts, 24*7. competitors offering narrow product lines are not in a position to offer such services for their own productThats the power of partnering with a market leaderBusiness model of GE

Strategic Objective and Value PropositionThe firm uses a customer database to identify opportunities for cross selling products from its existing range and adding new products to the range.Offers customer Lower transaction cost for :SearchSpecificationOrderingFulfillmentOther suppliers deal with the full service provider , even at the risk of losing customer contact -In order to make extra salesBe part of major market presence

Sources of RevenueSelling its own productAnnual membership feesManagement feesTransaction feesCommission on third party productsAdvertising or listing fees from third party providersFees for selling aggregated data about customersCritical success factorsBeing a leader in your domainPrudential securities, Barnes & Noble, and GE are all leaders in their field.They are able to supply a large portion of what customers need in the domain of interestOther suppliers are added to round out the product line in areas selected by the firm to fit well with its own strength and strategyMedium and small suppliers may struggle to succeed with the model, as they cannot sell enough of their own products to gain sufficient profit to support the overhead of running the modelCritical success factorsThe brand, credibility, and the trust for a customer to look to the firm for its complete need in an area.Banks have a sound basis to become full-service providers in the domain of financial servicesOwning the customer relationship in one domain and integrating and consolidating the offering of many third parties into a single channel or multiple channels.Must prevent losing customer to third parties that may also have potential to attain a full service provider relationships.Critical success factorsOwning more of customer data in the relevant domain than any other playerMay not necessarily complete all the transactions, but it must own all of the data about customers, their preferences and their transaction historiesTo ethically exploit the ownership of customer data to provide full set of services to the consumer is essential for success in this modelEnforcement of the policies to protect the interests of internal and external suppliers as well as customers.Ex: the incentive and reward systems of the business units or the channel managers must be based not only on the success of their area but the strength of the total relationship with the customerCore CompetenciesRelationship Management : ability to form and manage relationship with customers and with the other players in the value chain.Strength of the relationship with the customer - Strength of the value proposition to the customer and the ability to deliver - the brand, the breadth of offerings, the price-value equation, and the completeness of the consolidation into a single point contactCustomer and product information management Collecting, synthesizing, and analysing information about customer segments and their desires, and matching these with the currently available service offerings while identifying opportunities for new product creationCore CompetenciesIT InfrastructureMust develop and integrate firmwide transaction processing, customer databases, electronic links to suppliers, and security.The IT Infrastructure capabilities necessary will be among the largest and most complex for any of the models.Has to provide seamless integration with a multi-business-unit and perhaps global firm as well as myriad third-party providersBrand management and developmentRequires a trusted brand to thriveThe brand sets the expectation for high quality and the ability to credibly deliver all the consumers needs in their domain

Portals, Agents, Auctions, Aggregators, and Other Intermediaries

Compare IntermediariesElectronic AuctionsModel schematicElectronic Markets and Market MakersAggregatorsElectronic MallsPortalsIntelligent Agents

Portals, Agents, Auctions, Aggregators, and Other Intermediaries

Case Study Jango online shopping agentCustomer segments & ChannelsINFRASTRUCTUREStrategic Objective and Value PropositionSources of RevenueCritical Success Factors Core Competencies

Compare Intermediaries

Completeness of service offered

Numbers of buyers and sellers participating

Intermediary business models for e-businessCompleteness of serviceSearch to locate providers of products and servicesSpecification to identify important product attributes. Specifications reduce communication costs for both buyers and sellers. Price to establish the priceSale to complete sales transaction, including payment and settlementFulfillment to fulfill the purchase by delivering the product or service.Surveillance to conduct surveillance of the activities of buyers and sellers in order to report aggregate activity and prices and to inform and regulate the market.Enforcement to enforce proper conduct of buyers and sellers

E-Bay Case StudyHow e-Bay worksHow pay-pal workshttps://www.paypal.com/cgi-bin/webscr?cmd=xpt/Marketing/general/NewConsumerWorks-outside

eBay e-business model schematic

Case Study Shopster.comInfrastructureKnowledge ManagementEnforcing internet and e-mail policiesWorkstation networksCentralized management of e-business applications, ensuring consistency and integration across product offeringsIS planningIS project management

Strategic Objectives and Value PropositionBringing together buyers and sellersGetting paid on whatever business they transactBuyers and sellers are motivated to use intermediaries:Lower search costLower transaction costIntermediary is motivated to attract more users and to increase its range of services to expand the total value its adds to the transaction processSources of revenueSellers may pay : a listing feesA transaction fee A sales commissionOr some combinationBuyers can pay:Subscription feesSales commission

Critical Success Factors

Attracting and retaining a critical mass of customers is the primary critical success factorBuilding up infrastructure just quickly enough to meet demand as it increasesOwning the customer relationship and producing intermediary site with high degree of stickinessPart of achieving a sticky site is utilizing the ownership of customer dataUsing the data to analyse their customers into clear segments.Core CompetencyThe ability to :CollectSynthesizeUtilizeInformation about product PricesOther market factorsAbility to balance completeness of service with customer volumeVirtual Community

Case Study istockPhoto.comVirtual community depends on IT to exist. The most important infrastructure services for the virtual-community based on research :Training in the use for IT for members of the communityApplication Service Provision (ASP) : bulletin boards, e-mails, ISP accessIT research and development :IS planningInstallation and maintenance of workstations, LANMeasure for information privacy

InfrastructureChannel & Customer Segments?Sustainability?Strategic Objectives and Value PropositionOpportunity to interact electronically with like minded individualsCreate and consume content relevant to a topic of personal or professional interestCreated an attention aggregatorLower consumer acquisition costsSources of RevenueMembership fees (well.com)Direct sales of goods and services (The Motley Fool)AdvertisingClickthroughsSales commissionsCore CompetencyBuilding a lasting sense of communitySourcing or creating attractive content at the economically attractive priceDiscovering member needs and understanding the value members attach to meeting those needsCritical Success FactorFinding and retaining a critical mass of membersBuilding and maintaining loyalty with an appropriate mix of content and featuresMaintaining privacy and security for member informationLeveraging member profile information with advertisers and merchantsEngendering a feeling of trust in the community by its members