BUSINESS MODELS
A. E-Commerce Business Models
A business model is a set of planned activities designed to result in a marketplace. The business model is at the center of the business plan. Business plan is a document that describes a firm’s business model
EIGHT KEY INGREDIENTS OF A BUSINESS MODEL
To develop a successful business model in any arena, we must make sure that the model effectively addresses the eight elements. These elements are :
1. Value Proposition
Is defines how a company’s product or service fulfills the needs of customers.
2. Revenue Model
Is describes how the firm will earn revenue, produce profits, and produce a superior return on invested capital.
3. Market Opportunity
Is the area of actual or potential commercial value in which a company intends to operate.
4. Competitive Environment
Refers to the other companies operating in the same marketspace selling similar products.
5. Competitive Advantage
Achieved by a firm when it can produce a superior product and/or bring the product to market at a lower price than most, or all, of its competitors.
6. Market Strategy
The plan you put together that details exactly how you intend to enter a new market and attract new customers.
7. Organizational Development
Development plan that describes how the company will organize the work that needs to be accomplished.
8. Management Team
Employees of the company responsible for making the business model work.
B. MAJOR BUSINESS TO CONSUMER (B2C) BUSINESS MODEL
Business to consumer (B2C) e-commerce, in which online business seek to reach individual consumers, is the most well known and familiar type of e-commerce. The major business models utilized in the B2C arena :
1. Portal
Offers users powerful web search tools as well as an integrated package of content and services all in one place
2. E-Tailer
Is online retail store, come in all sizes and shape, from giant Amazon.com to tiny local stores that have Web sites.
3. Content Provider
Distributes information content, such as digital news, music, photos, video, and artwork over the web.
4. Transaction Broker
Site that processes transactions for consumers that are normally handled in person, by phone, or mail.
5. Market Creator
Builds a digital environment where buyers and sellers can meet, display product, search for products, and establish a price for product.
6. Service Provider
Service provider offers services online. Some charge a fee, while others generate revenue from other sources, such as through advertising and by collecting personal information that is useful in direct marketing.
7. Community Provider
Sites that create a digital online environment where people with similar interest can transact, communicate with like minded people, and receive interest related information.
C. MAJOR BUSINESS TO BUSINESS (B2B) BUSINESS MODEL
Major business models that utilized in the B2B arena :
1. E-Distributor
A company that supplies products and services directly to individual business.
2. E-Procurement
B2B e-procurement firms create and sell access to digital electronic market. Sells business services to other firms.
3. Exchanges (B2B Hubs)
A digital electronic marketplace where suppliers and commercial purchasers can conduct transactions.
4. Industry Consortia
Industry owned vertical marketplaces that serve specific industries.
5. Private Industrial Networks
Digital networks designed to coordinate the flow of communications among firms engaged in business together.
D. BUSINESS MODELS IN EMERGING E-COMMERCE AREAS
1. Consumer to Consumer (C2C) Business Models
Helps consumers connect with other consumers to conduct business.
2. Peer to Peer (P2P) Business Models
Technology enabling consumers to share files and services via the web,without common servers.
3. M-Commerce Business Models
Extending business applications using wireless technology.
E. HOW THE INTERNET AND THE WEB CHANGE BUSINESS : STRATEGY, STRUCTURE, AND PROCESS
1. Industry structure
Refers to the nature of the players in an industry and their relative bargaining power. An effort to understand and describe the nature of competition in an industry, the nature of substitute products, the barriers to entry, and the relative strength of consumers and suppliers, is called industrial structural analysis.
2. Industry value chain
The set of activities performed in an industry or in a firm that transforms raw inputs into final products and services.
3. Firm Value Chain
The set of activities a firm engages in to create final products from raw inputs.
4. Firm Value Webs
Networked trans-business system that coordinates the value chains of several firms.
5. Business strategy
Is a set of plans for achieving superior long term returns on the capital invested in a business firm.
A. E-Commerce Business Models
A business model is a set of planned activities designed to result in a marketplace. The business model is at the center of the business plan. Business plan is a document that describes a firm’s business model
EIGHT KEY INGREDIENTS OF A BUSINESS MODEL
To develop a successful business model in any arena, we must make sure that the model effectively addresses the eight elements. These elements are :
1. Value Proposition
Is defines how a company’s product or service fulfills the needs of customers.
2. Revenue Model
Is describes how the firm will earn revenue, produce profits, and produce a superior return on invested capital.
3. Market Opportunity
Is the area of actual or potential commercial value in which a company intends to operate.
4. Competitive Environment
Refers to the other companies operating in the same marketspace selling similar products.
5. Competitive Advantage
Achieved by a firm when it can produce a superior product and/or bring the product to market at a lower price than most, or all, of its competitors.
6. Market Strategy
The plan you put together that details exactly how you intend to enter a new market and attract new customers.
7. Organizational Development
Development plan that describes how the company will organize the work that needs to be accomplished.
8. Management Team
Employees of the company responsible for making the business model work.
B. MAJOR BUSINESS TO CONSUMER (B2C) BUSINESS MODEL
Business to consumer (B2C) e-commerce, in which online business seek to reach individual consumers, is the most well known and familiar type of e-commerce. The major business models utilized in the B2C arena :
1. Portal
Offers users powerful web search tools as well as an integrated package of content and services all in one place
2. E-Tailer
Is online retail store, come in all sizes and shape, from giant Amazon.com to tiny local stores that have Web sites.
3. Content Provider
Distributes information content, such as digital news, music, photos, video, and artwork over the web.
4. Transaction Broker
Site that processes transactions for consumers that are normally handled in person, by phone, or mail.
5. Market Creator
Builds a digital environment where buyers and sellers can meet, display product, search for products, and establish a price for product.
6. Service Provider
Service provider offers services online. Some charge a fee, while others generate revenue from other sources, such as through advertising and by collecting personal information that is useful in direct marketing.
7. Community Provider
Sites that create a digital online environment where people with similar interest can transact, communicate with like minded people, and receive interest related information.
C. MAJOR BUSINESS TO BUSINESS (B2B) BUSINESS MODEL
Major business models that utilized in the B2B arena :
1. E-Distributor
A company that supplies products and services directly to individual business.
2. E-Procurement
B2B e-procurement firms create and sell access to digital electronic market. Sells business services to other firms.
3. Exchanges (B2B Hubs)
A digital electronic marketplace where suppliers and commercial purchasers can conduct transactions.
4. Industry Consortia
Industry owned vertical marketplaces that serve specific industries.
5. Private Industrial Networks
Digital networks designed to coordinate the flow of communications among firms engaged in business together.
D. BUSINESS MODELS IN EMERGING E-COMMERCE AREAS
1. Consumer to Consumer (C2C) Business Models
Helps consumers connect with other consumers to conduct business.
2. Peer to Peer (P2P) Business Models
Technology enabling consumers to share files and services via the web,without common servers.
3. M-Commerce Business Models
Extending business applications using wireless technology.
E. HOW THE INTERNET AND THE WEB CHANGE BUSINESS : STRATEGY, STRUCTURE, AND PROCESS
1. Industry structure
Refers to the nature of the players in an industry and their relative bargaining power. An effort to understand and describe the nature of competition in an industry, the nature of substitute products, the barriers to entry, and the relative strength of consumers and suppliers, is called industrial structural analysis.
2. Industry value chain
The set of activities performed in an industry or in a firm that transforms raw inputs into final products and services.
3. Firm Value Chain
The set of activities a firm engages in to create final products from raw inputs.
4. Firm Value Webs
Networked trans-business system that coordinates the value chains of several firms.
5. Business strategy
Is a set of plans for achieving superior long term returns on the capital invested in a business firm.
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