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1、E-Business Plan: Business ModelA business model is a method of doing business by which a company can generate revenue to sustain itself. The two principal components of the business model are the value propositionwhat customer need does the business fulfilland the revenue modelhow a business or EC p
2、roject intends to generate income.1. What Is a Business Model? Definition of a business model o An architecture for the product, service, and information flows, including a description of the various business actors and their roles; and o A description of the potential benefits for the various busin
3、ess actors; and o A description of the sources of revenue. However, some authors describe the contents of a business model quite broadly, value proposition, revenue model, market opportunity, competitive environment, competitive advantage, market strategy, organizational development, and management
4、team as the eight ingredients of a business model. The focus in this lesson is on determining the value proposition and revenue model for your e-business and explaining the model in the context of the e-business plan.a). Value Proposition The value proposition describes the benefits that a companys
5、products or services provide to customers and/or the fulfillment of a consumers need. In other words, why should a customer buy your product or service?Examples:Value propositions may be based on lowest cost (B), superior customer service (A), reduction in product search (Autobytel) or price discove
6、ry (S) costs, product customization (Dell), or provision of niche products (Anything Left Handed).A good resource to use in writing the value proposition is the brainstorming session for writing the mission statement. Review the words or phrases that describe your business or that describe the compa
7、nys ideal image from a customers point-of-view. Sort out the most important one or two, and then elaborate on it or them to create your value proposition.b). Revenue Model, A revenue model identifies how a business will generate revenue. Examples of revenue models:Sales, transaction fees, subscripti
8、on fees, advertising fees, affiliate fees, and licensing fees. Consider these options for your business idea and identify a revenue model (or two) you intend to use.2. Business Model Taxonomies A number of researchers and authors have developed taxonomies (i.e., a classification) of business models.
9、 From the following taxonomies, you should be able to find at least one business model that matches the value proposition and revenue model identified earlier. For example, China Top Giftss principal business model is a virtual merchant, but it also provides customer benefits and receives revenue fr
10、om its affiliate business model. Generally, businesses will begin with one or two business models. Over time, these models may change, or you may add a third one, but too many models tend to indicate that a business doesnt know what it is about and is focusing on too many activities, perhaps not doi
11、ng any one of them well.Rappa: Business Models on the Webhttp:/digitalenterprise.org/models/models.htmlby Professor Michael Rappa. This taxonomy includes 40 models organized into nine major categories. Listed below is each category with a brief description and a list of the models. 1. Brokerage Mode
12、l: Brokers are market makers. They bring buyers and sellers together and facilitate transactions in B2C, B2B, or C2C markets. Marketplace Exchange Buy/Sell Fulfillment Demand Collection System Auction Broker Transaction Broker Distributor Search Agent Virtual Marketplace2. Advertising Model: This mo
13、del only works when the volume of viewer traffic is large or highly specialized. Portal Classifieds User Registration Query-based Paid Placement Contextual Advertising Content-Targeted Advertising Intromercials Ultramercials3. Infomediary Model: Data about consumers and their buying habits are extre
14、mely valuable, especially when that information is carefully analyzed and used to target marketing campaigns. Independently collected data about products are useful to consumers. Infomediaries provide information to both buyers and sellers. Advertising Networks Audience Measurement Services Incentiv
15、e Marketing Metamediary4. Merchant Model: These are classic wholesalers and retailers of goods and servicesin other words, e-tailers. Virtual Merchant Catalog Merchant Click and Mortar Bit Vendor 5. Manufacturer (Direct) Model: This model is predicated on the power of the Web to allow manufacturers
16、to reach buyers directly and thereby compress the distribution channel. Purchase Lease License Brand Integrated Content6. Affiliate Model: This model provides purchase opportunities from a number of different sites. The affiliate sites provide purchase-point click-through to the merchant. Banner Exc
17、hange Pay-Per-Click Revenue Sharing7. Community Model: Users who have a common interest in an area congregate at community Web sites. The viability of the community model is based on user loyalty. Open Source Public Broadcasting Knowledge Networks8. Subscription Model: Users are charged a periodic f
18、ee to subscribe to a service. Content Services Person-to-Person Networking Services Trust Services Internet Service Providers9. Utility Model: A metered usage or pay-as-you-go approach. Metered Usage Metered SubscriptionsApplegate: New Models for ManagersBy Professor Lynda Applegate This taxonomy li
19、sts model differentiators, likely revenues, likely costs, examples, and, for each category, trends that will influence the development of these models. 1. Focused Distributor Models: provide products and services related to a specific industry or market niche. Retailer: Like brick-and-mortar equival
20、ents, e-tailers assume control of inventory, set a nonnegotiable price, and sell physical products (A, LandsE). Marketplace: Marketplaces make their money through commissions and transaction fees when they sell information-based products and services online at a nonnegotiable price, without taking c
21、ontrol of physical inventory (Quicken Insurance, E-Loan). Aggregators: Aggregators provide information on products or services for sale by others, but do not complete the final transaction. Their main revenue source is advertising and referral fees (InsWeb, Autoweb). Infomediary: This special class
22、of aggregator unites buyers and sellers of information. Because no physical product is involved, the transaction can be completed online. Again advertising and referral fees are the main source of revenue (O). Exchange: These sellers may or may not take control of physical inventory and may or may n
23、ot complete the final sales transaction online. The key differentiating feature of this model is that the price is not set; the buyer and seller negotiate the price at the time of the sale (Priceline, eBay).2. Portal Models: A portal is a gateway or entry, and on the Web a portal business model prov
24、ides a gateway for consumers to gain access to content or services. 1. Horizontal Portals: The giants of the portal model, these sites provide a gateway to the Internets vast store of content, and also a broad range of tools for locating information (e.g., search engines) and Web services (e.g., e-m
25、ail, personalized pages, home pages). Their goal is to attract eyeballs to appeal to advertisers, which is their primary source of revenue (Yahoo!, Microsofts MSN). 2. Vertical Portals: While horizontal portals try to appeal to everyone, a vertical portal specializes in a particular area. Lacking th
26、e huge traffic of horizontal portals, vertical portals cannot depend on advertising as a primary source of revenue. Instead commissions and referral fees take up a much larger portion of their revenue (Expedia). 3. Affinity Portals: These are the most specialized portals of all, offering deep conten
27、t, commerce, and community features to a specific market segment. Like vertical portals, affinity portals must depend on a variety of revenue sources (iV, TheK).3. Producer Models: Producers design, produce, and distribute products and services that meet customer needs. These are usually brick-and-m
28、ortar firms that are integrating the Internet into their core business activities. Manufacturers use the Internet to design, produce, and distribute physical products (Ford, Pepsi). Service providers produce and deliver a wide range of online service offerings (American Express, Citigroup). Educator
29、s create and deliver online educational offerings (Harvard Business School). Advisors provide online consulting and advice (*Accenture, IBM Business Consulting Services). Information and new services providers create, package, and deliver online information (Wall Street Journal online). Custom suppl
30、iers design, produce, and distribute customized products and services (Boeing, McGraw-Hill).4. Infrastructure Provider Models: Unlike previous business models that use the digital infrastructure of the Internet, these models provide that infrastructure. Infrastructure retailers sell the infrastructu
31、re (CompUSA). Infrastructure marketplaces take inventory and complete the sales transactions (TechData, MicroAge). Infrastructure exchanges (Converge). Horizontal infrastructure portals include, principally, Internet service providers, network service providers, and Web hosting providers (AOL, Sprin
32、t). Vertical infrastructure portals host software applications for rent (Oracle Business online). Equipment/Component Manufacturers Software Firms Infrastructure Services Firms Custom Suppliers, Hardware Custom Suppliers, Software Weill and Vitale: Atomic Business Models By Peter Weill and Michael V
33、itale Eight models that can be combined (like atoms combine to form molecules) in multiple ways to represent virtually any kind of business model. Content Provider: Provides content (information, digital products, and services) via intermediaries. Direct to Consumer: Provides goods or services direc
34、tly to the customer, often bypassing traditional channel members. Full Service Provider: Provides a full range of services in one domain (e.g., financial, health, industrial chemicals) directly and attempts to own the primary consumer relationship. Intermediary: Brings together buyers and sellers by
35、 concentrating information. Shared Infrastructure: Brings together multiple competitors to cooperate by sharing common IT infrastructure. Value Net Integrator: Coordinates activities across the value net by gathering, synthesizing, and distributing information. Virtual Community: Creates and facilit
36、ates an online community of people with a common interest, enabling interaction and service provision. Whole of Enterprise: Provides a firm-wide single point of contact, consolidating all services provided by a large multiunit organization. Hartman and Sifonis: Extended E-Conomy Business Models E-Bu
37、siness Storefront: An entity in which commerce occurs, margin is created, and value is extracted using existing as well as new digital market channels. When end users need to buy something, chances are they go to an e-business storefront. Infomediary: An entity that brokers content, information, kno
38、wledge, or experiences that add value to a particular e-business transaction; also known as a content aggregator. Trust Intermediary: An entity that creates trust between the buyer and seller. These firms provide a secure environment in which buyers and sellers can confidently exchange value. E-Busi
39、ness Enabler: An entity that creates and maintains an infrastructure in which product and service providers can conduct transactions reliably and securely. Infrastructure Providers/Communities of Commerce: Members aggregated across a set of complementary interests (products, content, and services) a
40、nd markets; communities of enterprises organized around common interests through a common infrastructure. Other Business Model TaxonomiesE-Commerce Business Models: (Kenneth C. Laudon and Carol Guercio Traver) describe various models by type or mode of electronic commerceB2C (portal, e-tailer, conte
41、nt provider, transaction broker, market creator, service provider, community provider), B2B (e-distributor, e-procurement, exchanges, industry consortia, single-firm networks, industry-wide networks), and others (C2C, peer-to-peer, mobile commerce). Typical EC Business Models: This list of typical E
42、C business models (with links to example companies) includes online direct marketing (Wal-Mart), electronic tendering systems (General Electrics Global Exchange Services (GXS), name your own price (Priceline), find the best price (E-Loan), affiliate marketing (A), viral marketing (Blue Mountain Arts
43、), group purchasing (LetsBuyI), online auctions (e-Bay), product and service customization (Dell), electronic marketplaces and exchanges (Agentrics), information brokers (Google), bartering (BarterOnline), deep discounting (H), membership (Net Market), value-chain integrators (A), value-chain service providers (United Parcel Service), and supply chain improvers (Orbis).You now have all you need to identify and describe a business model for your e-business plan as required in assignment 7 in the Business Description lesson.
