E-Business Economics

INTRODUCING

Application economicing to utilize Internet for the purpose business which becomes
this chapter focus. This chapter began by words how Internet for e business and e
commerce push more market close to perfect emulation model. This discussion then
expanded to range impact of Internet on environmentally which competitive. Followed
by picture of key feature of Internet economy.
 PERFECT EMULATION

Emulation perfecting to point to market whereabouts no individual or grocer buyer gets

to regard market. Its mean, market forces of offer and requisition determines price and
output is goods and service. perfect emulation is theoretical market structure up on a
number main assumption.

That included assumption:

* There are many buyer and grocer;
* There is freedom of turns in at and issue of market;
* There is perfect mobility of production factors;
* There is science which out and out about market;
* There is homogeneous product.
 INTERNET INFLUENCE ON
ENVIRONMENTALLY WHICH COMPETITIVE
Internet have prepare mechanism to crawl nearer market goes to emulation out and out. Specially,
easy access and its reducing regulation means that there is a lot of buyer and grocer at market.
Information profusion at website means buyer and grocer have access goes to science greater
market.

One of key characteristic of environmentally e business is easy input for firm. Entering cost and
outward relative inferior of industrial traditional, since firm not require big sell team, at a price
investment at infrastructure or tall scorch cost for competing effective. Increasing connected among
customer
 ECONOMIC KEY CHARACTERISTIC AT
INTERNET

Economic theory classicing to see information as resource to reduce uncertainty. But,

Internet developing have caused increases it emphasis
on information as element productive and product. Analisys is information economy as
asset has to see it good of nurginal bespoke and nurginal offer.

By the side of requisition, Internet can be utilized as medium access information about
organization and product and service that their sell.

By the side of offer, Internet can be utilized as medium of marketing, promote and sells
product and service. potential to reduce production cost and distribution.
 PRODUCTION AND DISTRIBUTION
COST

Internet can help to reduce production cost and distribution and

makes operating firm on a more efficient. market information on
customer and gathered information logistics of provider, distributor
and producer forms basic to increase efficiency.
DISINTERMEDIATION AND
REINTERMEDIATION
Disintermediation points on intermediate deletion a place
along bounds in chain product and service supply of grocer
go to consumer.
DISINTERMEDIATION AND
REINTERMEDIATION

Reintermediation is changed intermediate a place at along product supply chain and service of grocer goes to
consumer
 INFORMATION ECONOMY

Information economy is clear different of economic

physical product one. Easy information at production
and get betwixt been distributed receiver large
number comprises provider, customer and firm. Easy
and distribution scale doesn't reduce to assess or
qualities of products (Slater, 1998). Easy information
to be manipulated and is changed according to
requirement which variably customer at market that
variably.
 CONNECTIFY AND INTERACTIFY

In e business and e commerce, connectify is among system

information, and communication two aims with real time (quick).
This characteristic enable current price, informations low
distribution cost and digital product, and high-level interactify.
interactify makes relationship among buyer and richer grocer and
more intens (Dutta and segev, 1998).
 ECONOMIC SCALE

While decrease production cost by totals unit that at production therefore firm get gain of
economy scale (Chandler, 1990). Where once economic scale to be viewed as big keep
up industry unit sell volume product outgrows at traditional economic, Internet has
provided mechanism for firms of all measures to exploit this economy gain.
ECONOMY OF SCOPE

Economies of scope is level whereabouts relationship leveraged to

add point to customer. In e corporate business gets to utilize
gathered Information market of customer to give value added at
other market (Rayport and Sviokla, 1995).
 TRANSACTIONS COST

Transactions cost is cost that is issued in utilize market system to buy and sells goods and service.

1. Seeking cost This is cost that gets bearing with buyer and grocer finds each other at market.
2. Information cost This is cost that issued by buyer to get market science on price, amount, quality, availibility
of and goods and service characteristic that is on the market by grocer.
3. Insipid cost This is cost that issued by buyer and grocer while negotiation contracts for transactions happens.
4. Spontaneous cost Buyer evokes cost of price compare at market and ensuring that goods or service
corresponds to requirement.
5. Policy cost This is cost that issued by buyer and grocer ensures that goods or available service and contest
buys requisites that negotiated transactions and is contracted for.
6. Founding cost This is cost that issued by buyer or grocer in term that rule contracts negotiated is not is
accomplished.
 EKSTERNALITY NETWORK

In economics, eksternality sees gain or disadvantages that happening on consequent

others of action that initiated by producer or consumer or both and for one no
compensation is paid. Eksternality can as positive as or negative. E.g., pollution that
created by plant chemical is eksternality negative for society what do strike impact
because one any one have to take on pollution charge without that compensation for that.
 SWITCHING COST

Switching cost comprises that took on by consumer Firm can reach' in's key' on some ways comprises:
for changes over provider and they took on by • Involving consumer in designs and process
provider newing to service new customer (Lee, production; eksternality
2001) • Making network via building sites community;
• Ensuring website's navigation amenity;
• Ensuring transactions amenity;trust
• Customers subjective building;
• Making default to integrate system.
 CLIMACTERIC OF CUSTOMER

Lock in is customer and loyally is customer is two factor be of important prescriptive economic feasibilities of online
efforts. firm shall reach critical mass of customer before gain can be gotten of e business or e commerce. To reach
customer critical mass necessitate success management of three phases:
1. Customer spectacular website shall pull to get customer attention. Herein, design, navigation and transaction
processing all gets role.
2. Customer retention Product and service that gave by e business has quality that adequately for meeting or
overshot customer expectation.
3. New Customer basis To reach critical mass of customer needs to look for a new one customer temporary keeps
existing.
 PRICE

It is of important to recognize that product that is on the market different online ala of standard industry
product.
But such, while determine price, judgment is applied type by traditional' brick and mortar' relevant firm
with businesses online ala also. This always covers:
* Cost price : cost that is issued while produce product or service;
* selling price : price that is put on to customer;
* Profit : totaled lessened selling price production cost;
* Mark up : gain percentage bases cost price (Cost selling price is reduced, divided at the price cheap);
* Margin : percentage gain up on selling price (sales is price cost price is reduced, divided at the price
cheap)
 PRICE

Other factors one that is taken into account while determine price. This
comprises:
• Presumed bespoke zoom;
• Emulation zoom;
• Competitor product price';
• Marketing cost, advertising and promotion;
• Product position on products living cycle;elasticity
• Bespoke price (how is sensitif's customer price change);
• Availibility of and price of substitution product;cost
• Distribution;
• After service cost sell.
 1.PRICE STRATEGY
On second thoughts key factor in determine price, firm shall then determine their price
strategy

• Premium price : price upon averagely industrial one is charged. It happens where abouts product value added
offer to customer in term quality, uniqueness, state or most actually.
• Average cost : price that putting on to reflect bespoke market and dynamic offer. price is
discounted
• Price is discounted down that of market price . Sometimes at conceive of loss boss, this
maybe strategy shorting-range to get market compartment.
• Freely : firm may give product or service in the effort to pull customer.

2.PRICE DISCRIMINATION
Internet empowers consumer by enable they to compare price, product and service that
is on the market by e business.
TERIMA
KASIH