© 2008 Thomson, a part of the Thomson Corporation. Thomson, the Star logo, and Atomic Dog are trademarks used herein under license. All rights reserved. INTERNET MARKETING : INTEGRATING ONLINE AND OFFLINE STRATEGIES Chapter 3 Business Models and Strategies

2 WHAT IS A BUSINESS MODEL?

3 A BUSINESS MODEL DESCRIBES The Core Value Proposition Sources and Methods of Revenue Generation Costs of Revenue Generation Planned Growth Trajectory

4 FUNCTIONS OF BUSINESS MODELS Articulate Value Proposition Identify Target Market Segment Define Structure of Value Chain Define Cost Structure and Profit Potential Explain Position in Value Network Set Forth Competitive Strategy

5 NOT A BUSINESS PLAN Focuses on Customer Value Creation Does Not Focus On Production and Other Operational Aspects Detailed Financial Projections

6 THE VALUE PROPOSITION

7 VALUE DELIVERY vs. PRODUCT ORIENTED

8 REVENUE MODELS Internet Access Advertising & Sponsorship Donations Memberships or Subscriptions Sale or Licensing of Systems Software-Based Services Syndication or Licensing Transactions  E-Commerce, Auctions, Barter Value-Added Services

9 Web Sites Need Multiple Revenue Streams STRATEGY RECOMMENDATION

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11 THE BUSINESS MODELS Aggregator ASP Content Provider Fund Raiser Infomediary  X Marketplace Multichannel Machine to Machine Open Source Peer to Peer Portal Amazon Corio, New York Times Red Cross Stockgroup Media  List Brokers eBay, Craigslist, Exostar Staples Otis Elevator Linux, Apache Kazaa Yahoo!

12 AGGREGATOR AMAZON USES PERSONALIZATION AND SEARCH

13 CONTENT PROVIDERS ATTRACT VISITORS USING RSS FEEDS

14 INFOMEDIARIES DEAL IN DATA

15 M2M WILL IMPACT MANY SECTORS

16 PORTALS CONTINUE TO ADD FEATURES

17 THE FUTURE? Have You Meet A NEW BUSINESS MODEL Lately?

18 SUMMARY Succinct Statement of Business Rationale Little Distinction Between B2C and B2B Models Value = f (Customer Needs, Core Competencies) Require Multiple Revenue Streams Many Business Models  Considerable Overlap -B2C, B2B -Types of Models New Models Likely to Emerge