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Table of contents
1.Synopsis…………………………………………………………p.
.Introduction……………………………………………………p.
.Business model definition…………………………………..p.
4.Companies background……………………………………… p.4
4.1 Toyota business profile…………………………………….p.4
4. Volvo business profile………………………………………p.4
5. Online Business Model………………………………………p.5
5.1 E-tailing business model…………………………………. p.5
5. Manufacturer Model (direct marketing/Model)……..p.6
5.a Disintermediation……………………………………………………p.6
5..1 Five Tents of the Manufacturer Model……………..p.7
5..1a-Most efficient path to customer…………………….p.7
5..1b-Single point of accountability………………………p.7
5..1c-"Build to order" customization &personalization.p.7
5..1d-Low Cost Leader………………………………………p.8
5..1e-Standard Based technology…………………………p.8
6. Supply chain improvement……………………………….p.8
7. Advertising Model………………………………………….p.8
8. Benefits that automobiles companies gains from BCp.
. Comparison of online business model…………………..p.
10. E-commerce functionality……………………………….p.10
10.1 "What's New" section……………………………………p.10
10.Web site search engine…………………………………..p.10
10. Site Map…………………………………………………….p.10
11. Toyota's e-commerce functionality…………………….p.11
1. Dealers locator map……………………………………….p.11
1. Customization and personalization……………………..p.1
14. Web site customization (for investor example)………p.14
15. Multilanguage support…………………………………….p.16
1. Business solution suggested………………………………p.17
1. Conclusion……………………………………………………. p.17
14. Bibliography…………………………………………………p.18
Synopsis
Doing business online is not a big issue. However, choosing the right business model to implemented and maintains such a strategy will be the main issue. The good implementation of the business model will give the company great befits in different business areas. Implementing well planed business strategy will maintain and reduce the supply chain processes are the biggest value for online business. Moreover, choosing or developing the right business solution will have a great impact on the flow of the business. The integration of e-commerce functionalities will reflect the efforts that the e-commerce will do to increase the time that customers will spend online and maintain their loyalty to the organization.
Introduction
E-business can be described as the new business logic that operates in a world without boundaries. It refers to a broader definition of Electronic Commerce, not just buying and selling but also servicing customers, providing an integrated business environment and offering added value services [1]. Developing e-business models for conducting e-business is not simply about the adoption of new technologies. It also concerns changes in work practices, in customer/supplier relationships, in the way products are delivered to
Consumers, in marketing practices and changes in staff skills needed to support e-business. Accordingly, e-business models signify new opportunities for re-organizing the way businesses are currently practiced.
Business models definitions
A business model is a plan for offering a value proposition to customers, a source of revenues, an identification of costs, and a detailed set of process for execution. [1]. It is n architecture for the product, service and information flows, including a description of the various business actors and their roles; and a description of the potential benefits for the various business actors; and the descriptions of sources of revenues. []
Companies Backgrounds
Toyota's business profile
Industry Manufacturing
Toyota Motor Corporation is the worlds third largest automaker, offering a full range of models, from mini vehicles to large trucks. Toyota Motor is based in Japan and currently ranked 10th by fortune.com in the global 500 companies list as of 00. Revenues generated in 001 totalled 10,814.4 $ millions.
Live Sites
http//www.toyota.co.jp
(Figure 1)
Volvo's business profile
The Volvo Group is one of the world's largest producers of trucks, buses and construction equipment and holds a leading position in the fields of marine and industrial power systems and aircraft engine components. Based in Sweden and currently ranked 67th by "fortune.com" in the global 500 companies list as of 00. Revenues generated in 001 totalled $18,01. million. The Volvo Group now focuses exclusively on transport equipment for commercial use, through divisions such as Volvo Trucks N.A. (North America), Volvo Construction Equipment, Volvo Parts, Volvo Bus and others.
Live Sites http//www.volvo.com
(Figure )
Online Business Models
There are several types of online business models that a company may implement. Often, we can find many companies implement more than one business model in their online business.Toyota's Motor and Volvo are using four types of business models E-tailing, direct marketing, customization & personalization, and Advertising.
E-tailing business model
The most significant characteristic of BC (E-tailing) model is the ability to create a direct relationship with the customer without the involvement of the intermediaries such as distributors and, wholesalers, or dealer [1]. Toyota's Motor and Volvo both of them are based on the e-tailing model. In bc, business models are often categorized the way that revenues are generated. (1) Direct marketing. () Pure-play e-tailers () Traditional retailers with web site.
Manufacturer model "Direct model or marketing".
Toyota's and Volvo direct model starts and ends with a direct interaction with the power of direct model, they are able to provide customers with superb value, high-quality, relevant technology, customized systems, superior service and support, and products and services that are easy to buy and use. With its singular focus on the customer, the model takes five basic tenets and creates a unique way of buying and selling technology. That not only sets Toyota's apart, it means that the customer experience is revolutionary. This model involves creating additional marketing channels. Direct marketers bypassed the traditional retailer store and took orders directly from consumers. This step called Disintermediation which refers to removal of organizations or business process layers responsible for certain intermediary steps in a given value chain [1]. For example, in the traditional distribution channel, there are intermediating layers between the manufacturer and the consumer, such as wholesalers, distributors, and retailers. These layers can be eliminated and save billions of dollars for the organization.
(Figure ,Taurban 00)
The five tenets of this model are[6]
Most Efficient Path to the Customer
Toyota and Volvo believe that the most efficient path to the customer is through a direct relationship, with no intermediaries to add confusion and cost. They are organized around groups of customers with similar needs. This allows their teams to understand the specific needs of specific customers without the customer needs being translated by inefficient resellers and middlemen.
Single Point of Accountability
They work to keep things easy for their customers. They make the single point of accountability so that resources necessary to meet customer needs can be easily marshaled in support of complex challenges. Their customers want streamlined and fast access to the right resources; approaching them directly.
"Build to order" customisation & personalization
Toyota Motors and Volvo, along with other carmakers around the world, announced plans to implement a "build to order" program much like Dell's approach in building computers.Giving customers the ability to build a car to suit their needs by using the web site, they are able to custom configure their car's features and components, see it online, price it, and have it delivered to nearby dealers, thereby cutting inventory requirements in half, while at the same time giving customers exactly what they want. Using a virtual car on the web site, customers can view more than 1,50 possible exterior combinations in real time, rotate the image 60 degrees, and see the price updated automatically with each selection of trim or accessories. After storing the car in a virtual garage, the customer can decide on purchase and select the dealer at which to pick up the completed car.
Low-Cost Leader
Resources are focused according to what matters to our customers. With a highly efficient supply chain and manufacturing organization, a concentration on standards-based technology developed collaboratively with our industry partners, and a dedication to reducing costs through business process improvements, we consistently provide our customers with superior value.
Standards-Based Technology
The standard technology is key to providing their customers with relevant, high-value products and services. Focusing on standards gives customers the benefit of extensive research and development from Toyota Motors and Volvo and an entire industry not from just these two companies. Unlike proprietary technologies, standards give customers flexibility and choice.
Supply chain improvements
Building autos to order instead of dealers' showrooms; the automotive industry is expected to save tens of billions just for inventory reduction. This approach depends on the concept of pull type production, which begins when an order is placed online. Pull type processing allows for inexpensive customization of products and services and provides a competitive advantage for Toyota.
Advertising model
With direct model and customization for Toyota's Motor and Volvo comes one-to-one or direct advertising which is more effective than mass advertising. Volvos implement different types of advertisements online with other online stores by adding links to the main web site and by using pop ups in other web selling online cars.
Benefits that automobiles companies gaining from the BC model (Turban, 00)
First, promoting products. EC enhances promotion abilities by implementing rich web based information and direct interaction with their customers from the online web sites. [1]. Second, Establishing new sales channels. Both Toyota and Volvo, when they decided to implement such a strategy, they were looking to expand their market by building a new market channel over the Internet. Third, direct saving. BC maintains the cost of delivering information to customers over the Internet. This includes a physical or a digital form. Fourth, Reduced cycle time. The administrative work in relation to physical delivery, especially across international borders, can be reduced significantly. Fifth, consumers' service. Customer's service can be enhanced by enabling customers to find more information online [4].
Comparison of online business models
Although, both Toyota and Volvo are implementing the different business models The E-tailing model, the advertising model and the customer support model, both of the two companies are implementing their online strategies to improve their relationships with their customers. However, Toyota Motors are getting more revenue and better position in the global top500 global companies than Volvo. Although at the same time they were using the same model. The point here is that Toyota has a more efficient way in customizing their online business more interactively and more user friendly interface. The factors that affect the success or failure of the models it goes back to the type of strategies they are implementing to improve their business. Toyota has invested millions of dollars to improve its online systems are implementing the right CRM system they for their consumers. Volvo's revenue is lower as their web sites have most of the e-commerce functionality that is required for the success of the web site.There are a number of factors that affect the success of Volvo online. The lack of updated contents time after time as users likes to see updated news and offers. They have to Improve faster interaction with their customers.Another main issue is the right choice of the CRM in their web site as Toyota has more choices and keeps updating its contents and offers the customer relationship programs. The wide spread of Toyota factories in most of the world keep it more recommended for customers as it saves time and costs for delivering products with a cheaper price than Volvo. As Volvo is producing their cars only in Sweden and delivering it to their reseller or distributor in the other countries, this keeps their price higher than Toyota. The right implementation of the supply chain process and reducing it to save millions of dollars was the main strategy of Toyota in its conducted business.
Types of e-commerce functionality available on each site
'What's New' section?
When people visit web site they expect new contents, often, even if they visit multiple sites in a day. According to Mathew Benson, the senior director of Bivings Woodell, an effective e-commerce site always has a lot happening, just like a regular business[4]. Both Toyota and Volvo has used such a function in their web site. A good home page is like a newspaper that's updated at least weekly, daily, or even more often. [See figure 1]
Web site search engines
No matter how effectively each business promotes their new contents in their homepage, there will be more contents on the site users can refer to and access directly [4]. That's where a search engine comes in. If users know they can find out what they are looking for in the site, they will come back. A good search engine will return a well-formatted output to the users in an easily accessible way [4]. Toyota used to locate partners, news, reports and others businesses related information in a fast and reliable method.[See figure 1]
Web site Maps
Visitors should be able to navigate the web site easily and not get lost. A site map is a graphical or text based tool that portrays the information for the visitors and allow visitors to click and be connected to their required page in the web site [4]. A site map outlines in a single page all the contents of the Web site. [See figure 4]
Toyota's e-commerce functionality
Toyota's following the three-deep rule Visitors should not be more than three clicks away from what they want. Indices on the left side of the page acts as a table of contents that can be broken down into various levels of detail so users can read the web site like a book. (See figure 5). The web site has the following functionalities 'What's New' section which gets updated dynamically with the latest news and events, Site search engine helping online customers locating their required information faster, Site map, appealing colour scheme, compelling graphics, up-to-date content, and clear navigation elements keeps
(Figure 4)
Toyota is enjoying their transactions over the web. Moreover, Toyota's home page allows visitors to see pages customized for business users and Investors. This mass customisation feature is useful for preventing visitors from having to wade through contents they don't need.
(Figure 5)
Dealer's locators Maps
Toyota Motor
Volvo Motor
Customisation and personalization option
Toyota and Volvo are offering online customisation tools for their cars and after the users are satisfied with their requirements they can confirm directly with the manufacturer and the product will be delivered to the local dealer with their specifications.
Customers and other business partners can log directly to their personalized web sites without going tho the web site with a lots of information, which is not related to their needs.
Customer service and maintenance guides online are another important issues in the e-commerce functionality that can be available for the all manufacturer models online. Here in this case Toyota's customer's service has more functionality and professional views than Volvo and you can observe that from the first look at the web site.
Volvo's service page online provides different services to their users including cars manual, warranty information, service centres available in their region, a services schedule and finance management.
Multi Language supports
Both Toyota and Volvo offer their web sites in different languages by allowing their customers to customize their web site language.
Site map
Toyota's site map
Volvo's site Map
E-commerce business solutions suggested for Toyota Motor and Volvo
Improving the Visitors Relationship Management Profiling and Personalization. Visitor's relationship management (VRM) appears to be the next big thing for web based and electronic commerce in general[4]. Car dealers try to use the web to better manage relationship with their customers.
Conclusion
Electronic commerce affects almost every aspect of how business is conducted. It fundamentally changes organizational and industrial infrastructure. While there are many challenges ahead, companies are creating entirely new business and tapping markets not reachable to them before. Uncertainties in consumers' acceptance, the lack of adequate business models, and bandwidth limitations have great affects on running business online. Maintaining others issues such as privacy, costs, security, and friendly consumer interface will improve user's interactions with the business online.The competitive advantage of any organization is derived from the long term relationship that it has built with its consumers. As consumers increasingly take control of their needs fulfillment process, marketers should evaluate the value that they can add to this fulfillment process to benefit both consumers and the organization.
Bibliography
[1] Turban, E., Lee, J., King D. and Chung, M. (00), Electronic Commerce A Managerial Perspective. nd edition, Prentice Hall
[] Timmers, P. Business,(18). Models for Electronic Markets, Journal on Electronic Markets.
[] Michael, R. "Business Models on the Web" managing the digital enterprise (http//digitalenterprise.org/models/models.html) (00)
[4] Charles, T.(000) E-Commerce strategies, Microsoft press
[6] Jeffrey, F. and Bernard, J. (001) e-Commerce, McGraw-Hill
[7] Clifford, T. "Toyota Customer Design Concepts" (http//giray.uzmen.com/clients-14-toyota.html#) (00)
[8] Andrew, P. "Toyota online case study", Vignette Corporation white papers, (http//www.vignette.com/contentmanagement/0,07,1-1-1-1665-1756-616,00.html?vgn_rms_id=148_7) (00)
[] Jay, P. "Volvo Group Anchors Global Internet strategy", Vignette Corporation white papers, (http//www.vignette.com)
[10] Roffey, P. "Driving the global fast-track at Volvo", (http//www.roffeypark.com/in_company/volvo.html)
[11] IBM, "Customer Relationship Management", (http//www-.ibm.com/e-business/doc/content/overview/816.html) (00)
[1] FORTUNE, "FORTUNEs Global 500",
(http//www.fortune.com/fortune/global500)
[1] Toyota, (www.toyota.com.au)
[14] Toyota, (http//www.prius.toyota.com.au/Prius/HomePage/0,,,00.html)
[15] Volvo, (http//www.volvocars.com/) (00)
[16] Volvo, (http//www.volvocars.com.au)
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