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E-Business

E-Business. Lecture 4 E-commerce Business Models. Key elements of a business model. Value Proposition Define how a company’s product or service fulfills the need of customers . Key elements of a business model (Cont.). Examples of successful value propositions

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E-Business

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  1. E-Business Lecture 4 E-commerce Business Models

  2. Key elements of a business model • Value Proposition • Define how a company’s product or service fulfills the need of customers.

  3. Key elements of a business model (Cont.) • Examples of successful value propositions • Personalization/ Customization • Reduction of product search, price discovery costs • Facilitation of transactions by managing product delivery

  4. Key elements of a business model (Cont.) 2. Revenue Model • Define how the firm will earn revenue generates profits and produce a superior return on invested capital

  5. Key elements of a business model (Cont.) • Major types: • Advertising revenue models: CNN.com • Subscription revenue models: MATCH.com • Transaction fee revenue model: EBay, E-Trade, Hotwire

  6. Key elements of a business model (Cont.) • Sales revenue model: Amazon, LLbean, Gap.com • Affiliate revenue model: E-pinions, Banner Exchange, Edmunds à sends traffic to another website

  7. Key elements of a business model (Cont.) 3. Market Opportunity • Refers to a company’s intended market space and the overall potential financial opportunities available to the firm in that market space

  8. Key elements of a business model (Cont.) 4. Competitive Environment • Refers to the other competition selling similar products and operating in the same market space • Influenced by :

  9. Key elements of a business model (Cont.) • How many competitors are active • How large operations are the market share for each competitor • How profitable these firms are • How they price their product

  10. Key elements of a business model (Cont.) 5. Competitive Advantage • Achieved when a firm can produce a superior product and/or bring a product to market, at a lower price than most, or all, of their competitors

  11. Key elements of a business model (Cont.) • Types of competitive advantage: • mover advantage • Unfair competitive advantage

  12. Key elements of a business model (Cont.) 6. Market Strategy • Plan that details how a company intends to enter a new market and attract strategy

  13. Key elements of a business model (Cont.) • Organizational Development • Describes how the company will organize the work that needs to be accomplished

  14. Key elements of a business model (Cont.) 8. Management Team • Employees of the company responsible for making the business model work • Strong management team gives instant credibility to outside investors

  15. 4types E-commerce Business Models • B2B: Business-to-business • B2C: Business-to-consumer • C2C: Consumer-to-consumer • C2B: Consumer-to-business

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