(Christopher)Identify the eight key components of e-Commerce business models
The textbook (Laudon&Traver, 2021)Â lists the eight key components as:
Value propositionÂ – is the need the product or service offered by the business fills. This is the fundamental reason a customer would buy your product or service in the first place.
Revenue model -Â the actual way the business makes money off the product or service. For example, directly selling the good/service or offering a subscription.
Competitive environmentÂ -Â describes the state of the market for the good or service offered. is there a large amount of potential consumers with only a few existing businesses offering? or are there few potential customers and a large amount of competitors?Â
Market opportunity -Â what’s the size and viability of the intended market? is there a large amount of people with the relevant unfulfilled need? does that group have money enough to be relevant themselves?
Competitive advantage -Â can you produce a good or service at a lower opportunity cost then your competitors? For example can your produce shirts cheaper then another shirt company?Â
Market strategy -Â How a business plans to actually attract customers and get into a chosen market, can involve things such as marketing and demographic analytics.
Organizational development -Â The structure(s) of the organization necessary for the execution of the business model. this can include managerial structures, or in larger organizations enterprise architecture.Â
Management team -Â This refers to the core personnel required to run the business smoothly at managerial/directorial level.Â
Describe two major B2C business models
Content provider -Â This a model where the business provides a platform on which content (videos, music, movies…etc) get posted and customers can then then view said content. a content provider can make money through advertising (as by design there will be many eyes on the platform for an extended period) or can hybridize with a subscription model and charge customers a fee to access the content. One prominent example of this model is Youtube, which allows users to post videos on its site and makes money through advertising.
Transaction broker -Â This business model offers the service of performing a transaction on behalf of a customer. This model makes money by charging a fee for performing the transaction. A common example would be ticket sellers, they don’t actually own the tickets most of the time they simply facilitate their purchase and charge a fee for the convenience.Â
Describe two major B2B business models
Exchanges -Â this is a platform on which a mass of supplier can meet and sell to a select number of large buyers. The platform makes money by charging transaction fee’s and/or charging membership fees. an important aspect of this model is being able to effectively know a market and to court participants (Wang et al, 2022).
E-distributers -Â This is a model where a company directly sells products to other companies via the web/internet. this model makes money through the direct sales of goods (selling a product for more than it cost to make) to other businesses.Â
Laudon, K. C., & Traver, C. G. (2021).Â e-Commerce 2021: Business, technology, and societyÂ (16th ed.). Pearson.
Wang, J., Zhang, Q., & Hou, P. (2022). Fixed Fee or Proportional Fee? Contracts in Platform Selling Under Asymmetric Information.Â International Journal of Electronic Commerce,Â 26(2), 245â€“275. https://doi.org/10.1080/10864415.2022.2050584