Loyalty

During the class held the 6th November 2007 we spoke about loyalty and how e-businesses can built it. This is not an easy task: it is more simple to be loyal to a real store than to an online one. Moreover the intrduction of E-commerce decreases loyalty due to the fact that the customers' ability to shop, compare and switch to different vendors have became easier, faster and less expensive.

However, some websites have been able to successfully built loyalty and satisfaction among their customers. This is the case of eBay which, according to the video shown during the class, is now the 59th economy of the world.
eBay reached its position thanks to the feedbacks that are written after any transaction performed. Then these comments are converted into score.
The website fully respects all the requirements needed to make customers loyal and satisfied:

• information quality
• system quality
• service quality

Furthermore, its success comes from the users' trust, which is an important global e-commerce issue due to the difficulty in taking legal action in cases of dispute or fraud and due to the potential conflicts caused by differences in culture and business environment.

eBay now is so well established in the Internet landscape that lots of people have decided to start making a living based on the online auction.

E-business models and revenue models

Usually, in order to be well-informed on what is happening in Italy, I read the Corriere della Sera website. As almost all online magazines and newspapers, it gains its revenue from advertising: as you are surfing that website, pop-ups advertising various companies (mainly Italian companies) appear on your screen, while other are fixed.

Moreover, there is the section "corriere store" where a reader can buy historical front pages (for example, the front page written the 21st July 1969 which announces the first man on the moon) or articles in which he/she is interested. This section is not free of charge and an additional shipping fee is required, it changes depending on the destination.

The Corriere della Sera website offers to the reader also the possibility to search for a job, to consult the yellow pages and dictionaries and to find a house among other things. All these sections can be considered added values: an extention of what the business is offering.

Porter's Five Forces

Due to the introduction of the online booking, the travel agencies are going through negative period. Nowadays more and more people book tickets on the Internet, the number of websites which offer this option is huge, from the airlines websites (BA, Alitalia, Ryanair) to travelling search engines (eDreams, Expedia, VolaGratis).
Porter’s five forces give a clear explanation on what happened to those agencies after online booking had been employed by airlines companies.

• Power of suppliers: the power shifted from the middleman (travel agencies) to the suppliers (airlines companies) which now can reach the final users.
• Power of buyers: as the consumers are not interested from whom they are going to buy and as they tend to compare costs in order to find the best option, their power increased thanks to the online booking. Moreover, the switching costs are lower and, consequently, the buyers became even more powerful.
• Rivalry/competition: is high in this sector, at the present, almost all companies offer the possibility to book tickets online.
• Barriers to entry: are low, a characteristic of the Internet is that it breaks down regional barriers.
• Availability of substitutes: the threats generate by the availability of substitutes are high due to the large number of airlines companies which are doing the online booking.

E-business revenue models

In order to buy some books for my MBA course, I started to search them on the Internet. In particular I was looking for the International Marketing book, "International Marketing Strategy" published by Pearson.

As usual, I googled the name and, among the websites found by Google, I clicked on the Pearson's website. This website gives to the customer the possibility to buy online. It has two e-business models: B2C, business to consumer, due to the fact that the customer is the final user of the product and B2B, business to business, because it deals with universities.

The Pearson website gains its revenues by selling the books online, moreover, it can be seen as a way to reinforce the brand awareness throughout advertising the published books.

Concerning the security system, the website endeavour to prevent unauthorised access to the information through strict security procedures regarding its storage and disclosure, as required by the Data Protection Acts of 1984 and 1998. When you place orders through this site or access your account information, they automatically send you to a secure server, provided your browser accepts Secure Sockets Layer encryption.