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Topic Three – E-Business Models
A sound Business Model
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must always put business fundamentals as priority
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must establish a basic framework of a sound business model before we
investigate the possibilities of “e-business models”
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sound business models includes planning, cash flows, profit, loyal
customer base.
Value and Creation as Critical Strategic Pursuits
A Business model is made up of the following key components:
a)
Creating Value
b)
Capturing Value
c)
Exchanging
Must create value for all:
** Suppliers Value Chain -à Firms Value Chain –-> Buyers Value Chain
Value Definition: the ratio between the effort and the return.
A Model of Doing E-Business
Areas of developing a successful business plan:
a)
market and position choices
b)
channel choices
c)
customer dynamic
d)
competitor dynamic
Difference E-Business Models
“no model” Model = e-model not required, traditional business practice is more
than satisfactory
Brokerage Model = a central point of exchange “portal” such as E-Trade
Advertising Model = revenue driven model such as YAHOO. Gives away a
service for free and focuses on attracting advertisers, and hence revenue.
Infomediary Model = offers things for free while building profiles and
databases on information which could then be sold, i.e. hotjobs.
Merchant Model =
a)
Catalogue Merchant = online retailer organized as a paper
catalogue
b)
Virtual Merchant (pure play) = typical online-only retailer
c)
Click and Mortar = shop front places there store online
Manufacturer Model = Manufacturer makes direct links with end customers,
bypasses the retailer and middleman
Affiliate Model = Cross reference other companies at a fee
Community Model = forum, information sharing, knowledge network
Subscription Model = such as the Economist, LA Times, revenues driven from
subscriptions
Utility Model = similar to subscription – does not charge a flat fee, but charges
per use basis.
** It should be noted that models are always used with each other and not
alone.
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