E-Commerce Business Models

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Presentation transcript:

E-Commerce Business Models Ing. Athanasios Podaras, PhD

Content What is business model? Components of a business model Revenue Models on Internet Functions and objectives of BM Typical EC Business Models Classifications of EC Business Models

What is a BM? A business model describes the manner in which business is done to generate revenue and create value.

Components of a BM Description of the customers to be served and their value proposition A description of all products and services the business plans to deliver Growth strategies. A description of the required business process and the distribution infrastructure (including human resources) A list of the resources required, their cost and availability (including human resources). A description of the organization’s supply chains Value chain structure List of competitors and competitive advantage Expected organizational changes Expected revenues

Revenue Models on Internet Sales . Companies generate revenue from selling products Transaction Fees. Commissions are based on the volume of transactions made Subscription Fees . Customers pay a fixed amount, usually monthly, to get some type of service Advertising Fees Affiliate Fees . Companies receive commissions for referring customers to certain websites Licensing Fees (i.e. Microsoft charges fee for each workstation using Windows NT) Other Revenue Sources . Some companies to watch a sports competition in real time for a fee

Functions of BM Describe the supply and value chains. Formulate the venture’s competitive strategy and its long-range plans. Present the customer value proposition Identify who will use the technology for what purpose; specify the revenue generation process; where the company will operate. Estimate the cost structure and amount and profit potential.

Typical EC Business Models Online direct marketing (b2b, b2c) Electronic tendering systems Electronic marketplaces and exchanges. Viral marketing Group purchasing

Classification of EC BMs (Rapa, 2010) Brokerage Advertising Infomediary Merchant Direct Affiliate Community