Preface
This study was conducted in accordance to UOL study-guide a la our dear lecturer’s Mr. Jack Koh instructions. In a nutshell, our study would be focusing on an e-Commerce model, the transaction broker namely Hotels.com - its nature and operation.
E-commerce
Electronic commerce is a shorthand term that encompasses a complex of technologies, infrastructure, processes and products. It brings together whole industries and narrow applications, producers business therefore providing a good illustration of how wider changes can influence the way business organizations operate and are managed. In short one can define e-commerce as all electronically mediated information between an organization and its external shareholders be it you, the supplier or even the government.
History of E-commerce
E-commerce has its roots over 30 years ago with technology like Electronic Data Exchange (EDI) to our current HTTPS. Today it has a very wide range of business activities and process, from e-banking to offshore manufacturing to e-logistics. With modern industries heavily leaning upon a electronic dependence business model, the impetus to develop new supporting systems like broadband, fiber-optics systems, inventory control systems and financial accounting/corporate finance modules. Today e-commerce has evolved into a critical component of the company’s long-term corporate strategy in cost containment, but also in maintaining and winning market share in this borderless and global marketplace.
Classification of e-Commerce
The business model that the company embarks upon can be classified into different categories of e-commerce depending on the type of transactions it embraces, namely business-to- business (B2B), business-to-consumers (B2C) and consumer-to-consumer (C2C).
• B2B
First and foremost the B2B group which includes all applications intended to enable or improve relationships within firms and between two or more companies. In the past this has largely been based on the use of private networks and Electronic Data Interchange (EDI). Examples from the business-business category are the use of the Internet for searching product catalogues, ordering from suppliers, receiving invoices and making electronic payments. This category also includes collaborative design and engineering, and managing the logistics of supply and delivery.
Other examples include B2B marketplace like EC21 which connects buyers with suppliers.
• B2C
The business-to-consumer (B2C) group is a much newer area and largely equates to electronic retailing over the Internet. This category has expanded greatly in the late 1990s with the growth of public access to the Internet. The business-to-consumer category includes electronic shopping, information searching (e.g. railway timetables) but also interactive games delivered over the Internet. Popular items purchased via electronic retailing are airline tickets, books, computers, videotapes, and music CDs. Other commendable brokers include Pricerunner.com (compare prices to get the best deals), kelkoo.com (online shopping) and Amazon.com.
Transaction broker also falls under the category of B2C. A transaction broker is an online business model that assists buyers, sellers, or both during the transaction without been a representative or an agent for either party. Furthermore, they sell others products rather than their own product. Transaction brokers receive commissions for every transaction that had been successfully concluded in order to sustain their business. And one legal advantage to sellers is that the seller is usually not legally responsible for the actions of transaction brokers acting within the scope of the transaction.
• C2C
Finally C2C, this category incorporates transactions between and amongst consumers. They are often described as Peer-to-Peer (P2P) etc Skype, blogs and MSN. When eCommerce was first introduced, it redefined the traditional structure of business by giving individuals the same opportunity as multi-national corporations. Consumers are no longer totally reliant on corporations and are increasingly looking to conduct their own business transactions. As a result, many individuals established online organizations that encouraged and assisted commerce between consumers etc e-Bay an online auctioning site that facilitates the trade of privately owned items between individuals. Other examples include monster.com that provides a valuable service to consumers looking for jobs. Employers can advertise on these websites and potential employees can contact their organization for an interview.
Hotels.com
Hotels.com is a leading global player in providing hotel accommodation and reservation through its own network of localized websites and its telephone call centers. With partners like Expedia (a US online winning transaction broker started by Microsoft) & TripAdvisor. This makes Hotels.com an interesting and successful example model of a business-to-consumer (B2C) group that we will examine in greater detail.
AirAsia.com renders a one-stop source for essential information etc. effective price search, amenities and availability of rooms. This will empower any prospective client in his travel; accommodation needs be it leisure or business trips.
Design & Features
The slogan “Wake up happy”, tells one a good deal of what this company’s main policy in regards to customer’s satisfaction. Its homepage constitutes of your country/language of choice to booking of hotels rooms, allowing one to access his or hers desired information with a single click upon entering the website. The homepage has a very user-friendly, good colour scheme and an organized layout.
If one is to book a room, he would be able to sort the hotels based not solely on prices but guest ratings, special deals and promotions to even the the geographical distance to the city. And when one books the room the information provided is concise with detailed descriptions on the facilities and the room, photos, up to date maps reviews. These features allow bookings, payments and planning of ones itinerary in a very orderly manner. with minimum fuss.
Strengths
By embracing such a business model has allowed Hotels.com to enjoy particular benefits such as reduced overheads cost such as having less premises. This has also allowed the company to reach a wider range of consumers and have direct access to potential new clients which connotates increased in sales. However to continue indulge in such benefits would require Hotels.com to be successful in different areas namely: its Mgt team, Sales Services, its business structure, pricing and its website.
• Mgt Team
Hotels.com management team continues to ensure that its strategy in providing a one-stop strategy in booking of hotel rooms continue to attract consumers by offering the widest range of accommodation on the net, including both independent and major chain hotels as well as self-catering in over 100,000 properties worldwide. Furthermore been a specialist in providing travellers with accommodation during sold-out periods wouldn’t dampen any travel broker’s prospects.
The management has also look to expand its bottom-line by also venturing into B2B business modules such as advertising through affiliation with other websites
Other business modules include integrating other travel brokers together by having partners such as Expedia and TripAdvisor to provide better services to tourist. And with new products been introduced such as car rental, flights to insurance this continue to expand its reach as not just a hotel transaction broker.
• Sales Services
Good customer service connotates meeting customer’s expectations allowing one to enjoy intangible benefits such as an enhancement of corporate image and brand.
AirAsia provides the rudimentary needs necessary namely their 24 hours toll free call hotline, e-mails for feedback, FAQs, addresses of their and its partner’s head office furnish with organized and detailed information.
• Wide availability of discounts
Having a wide availability of discounts been advertise allow Hotels.com to carter to the average consumer that seeks discounts and packages.
Note: Bundle pricing also known as packages is a good economic strategy in increasing revenue.
• Website
A well designed webpage that grabs your attention, is secured, fast search and downloads, provides detailed information and good graphics is the crux of a successful e-commerce business model which clearly as illustrated by Hotels.com as follows:
Weakness
• Possible misrepresentation
There will be no way for customers to verify the quality of their purchase beforehand. Many hotels do not provide many details. There is also no way the customer will be able to get his or her money back if the room is found to be unsatisfactory.
• Fraud and security concerns.
Hotels.com accepts mostly online credit card payments. There will be instances when concerns may be raised, eg: use of stolen credit cards, theft of credit card information, wrong or double booking due to connectivity issues. This requires a considerable backroom operation to help customers deal with such issues.
Epilogue
E-commerce transaction brokers have improved the efficiency of transactions made between buyers and sellers. This reduces transaction costs and speeds up the process greatly.
Acknowledgements
Wed 12noon class
Boss: Edwin Chan // rosicky7@gmail.com
Under boss: Koh Eu Jin // koheujin@ymail.com
Consigliere: Edmund Yee // cool_0825_@hotmail.com
Capo: Liu Yan Shan // carribean_dreamz@hotmail.com
