Web Business Models - kurtkomaromi.com · Web Business Models Kurt Komaromi •Identify the levels of commitment to Web- based business •Review the primary business models that
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Web Business ModelsKurt Komaromi
• Identify the levels of commitment to Web-based business
• Review the primary business models that use the Internet
Learning Objectives
• Value proposition for customers, partners and revenue generation
• Use technology to to achieve strategic objectives
• Goals - Achieve competitive advantage and survive
• Companies select one or more models
E-Business Models
Source: Strauss & Frost
Levels of Commitment
• Order processing
• Online purchasing
• Business intelligence
• Online advertising & PR
• Sales promotions
• Dynamic pricing strategies
Activity Level
• Customer Relationship Management (CRM)
• Supply Chain Management (SCM)
• Database marketing
• Knowledge management
• Mass customization
Business Process Level
• E-commerce
• Portal
• Social networking
• Broker model - exchange, online auction
• Agent model - shopping agent, manufacturer’s rep
Enterprise Level
• Exist on Internet only
• Challenges - establish new brand, convert customers from traditional firms
• Potential to redefine industries - Amazon, eBay, MySpace, iTunes
Pure Play Level
• Founded in 1995 as a pure play retailer
• Did not become profitable until 2001
• 2007 results:
! $14.8 billion in sales
! $476 million in net income
CASE:
• Leveraged strengths
• Developed new business model & partnerships
• Launched first affiliate program
vs.• Brokerage
• Advertising
• Infomediary
• Merchant
• Manufacturer
• Affiliate
• Community
• Subscription
Source: Rappa, M. North Carolina State University
Web Business Models
• Exchange (Orbitz)
• Demand collection (Priceline)
• Auction (eBay)
• Transaction (PayPal)
• Search agent (Shopping bot)
Brokerage Model
• Portal (Yahoo)
• Classifieds (Monster)
• Search Paid Placement (Google)
• User Registration (NY Times)
Advertising Model
• Advertising networks (DoubleClick)
• Audience measurement (Nielsen)
• Metamediary (Edmunds)
Infomediary Model
• Virtual merchant (Amazon)
• Catalog merchant (Land’s End)
• Click and Mortar (Barnes & Noble)
• Bit vendor (iTunes Music Store)
Merchant Model
• Direct (Dell)
• Purchase, lease or license
• Disintermediation - cut out the distribution partners
Manufacturer Model
• Banner exchange
• Pay per click
• Revenue sharing
Affiliate Model
• Open source (Linux)
• Open content (Wikipedia)
• Public broadcasting (NPR)
• Social networking (Facebook)
Community Model
• Content services (Netflix)
• Networking services (Classmates)
• Internet service providers (AOL)
Subscription Model
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