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E-Commerce Business Models Overview

The document discusses the key elements of an e-commerce business model, including value proposition, revenue model, market opportunity, and competitive environment. It describes different types of e-commerce business models for B2C and B2B, such as etailers, community providers, and transaction brokers. The document also covers factors that influence competitive environments like the number and size of competitors, and strategies for developing an organizational structure and management team.

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42 views4 pages

E-Commerce Business Models Overview

The document discusses the key elements of an e-commerce business model, including value proposition, revenue model, market opportunity, and competitive environment. It describes different types of e-commerce business models for B2C and B2B, such as etailers, community providers, and transaction brokers. The document also covers factors that influence competitive environments like the number and size of competitors, and strategies for developing an organizational structure and management team.

Uploaded by

mostfamhmd12389
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Chapter 2

 Business model: - Set of planned activities designed to result


in a profit in a marketplace.
 Business plan: - Describes a firm’s business model.
 E-commerce business model: - Uses unique qualities of In-
ternet and Web.
 Eight Key Elements of a Business Model: -
5. Competitive advantage 1. Value proposition
6. Market strategy 2. Revenue model
7. Organizational development 3. Market opportunity
8. Management team 4. Competitive environment

 Value Proposition: -
 Successful e-commerce value propositions:
 Personalization/customization.
 Reduction of product search, price discovery costs.
 Facilitation of transactions by managing product delivery.
 Revenue Model: - 5 Major types:
 Advertising revenue model.
 Subscription revenue model.
 Transaction fee revenue model.
 Sales revenue model.
 Affiliate revenue model.
 Market Opportunity: -
 Marketspace: Area of actual or potential commercial value in
which the company intends to operate.
 Realistic market opportunity: Defined by revenue potential in
each market niche in which the company hopes to compete .
 Competitive Environment: -
 Other companies sell similar products in the same marketspace and
include both direct and indirect competitors.
 Influenced by:
3. Competitors’ profitability 1. Number and size of active
4. Competitors’ pricing competitors

2. Each competitor’s market


share
 Competitive Advantage
 Market Strategy: -
 Details on how a company intends to enter the market and attract
customers.
 Best business concepts will fail if not properly marketed to potential
customers.
 Organizational Development: -
 Describes how the firm will organize work.
 Typically, divided into functional departments.
 As the company grows, hiring moves from generalists to specialists.
 Management Team: -
 Can make the business model work.
 Can give credibility to outside investors.
 Has market-specific knowledge.
 Has experience in implementing business plans.
 Categorizing E-commerce Business Models: -
 E-commerce sector (e.g., B2B)
 E-commerce technology (e.g., m-commerce)
 B2C Models: -
 E-tailer: - Online version of traditional retailer
 Revenue model: Sales
 Community Provider: - Provide an online environment (social network)
where people with similar interests can transact, share content, and communi-
cate.
 Example: Facebook, LinkedIn, Twitter, Pinterest.
 Revenue model: Typically, hybrid, combining advertising, subscriptions,
sales, transaction fees, affiliate fees.
 Content Provider: - Digital content on the Web.
 Example: News, music, video, text, artwork.
 Revenue model: Subscription, advertising, or affiliate.
 Portals: - Search plus an integrated package of content and services.
 Revenue model: Advertising, referral fees, transaction fees, subscriptions.
 Transaction Broker: - Process online transactions for consumers.
 Revenue Model: transaction fees.
 Industries using this model: Financial services, Travel services and Job
placement services.

 Market Creator: - Create a digital environment where buyers and sellers


can meet and transact.

 Example: Priceline and eBay.


 Revenue Model: transaction fees.

 Service Provider: - Online services.

 Example: Google—Google Maps, Gmail, etc.


 Revenue Model: sales, subscription, and advertising.
 B2B Models: -
 E-distributor: - Version of retail and wholesale store, and indirect goods.

 Example: [Link].
 Revenue Model: sales.
 E-procurement: - Creates digital markets where participants transact for
indirect goods.

 Example: Ariba.
 Revenue Model: Service fees, supply-chain management, fulfillment
services.
 Exchanges: - Independently owned vertical digital marketplace for direct
inputs.
 Revenue Model: Transaction, commission fees.

 Industry Consortia: - Independently owned vertical digital marketplace for


direct inputs.

 Revenue Model: Transaction, commission fees.


 Example: Exostar.

 Private Industrial Networks: - Used to coordinate


communication among firms engaged in business together.
 E-commerce Enablers: -
ment  Hardware, soft-
systems ware, networking,
 Media solutions, performance enhancement security
 CRM software  E-commerce soft-
 Databases ware systems, pay-
 Hosting services, etc.

 How the Internet and the Web Change Business: -


 Strength of suppliers  Rivalry among existing competitors
 Bargaining power of buyers  Barriers to entry
 Threat of new substitute products

 Business Strategy: -
 Differentiation
 Cost
 Scope
 Focus

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