Business model fct

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Business model fct

  1. 1. Digital Business Models - Aneesh Zutshi
  2. 2. What is a Business Model?• A representation of how an organization makes money! Alexander Osterwalder’s Nine Building Blocks
  3. 3. Gillette Business Model Bait Hook 1904 Business model has an element of innovation
  4. 4. Elements of a Succesful Business Model• Provides Value to customers – Cost Advantage – Betamax VOIP – High Quality – German cars? – Convenience – MiniPreço – Variety – Continente – Style and Status – Apple• Beats competition – Continuous innovation – Lowest Costs – Bait and Hook – Brand Building – Network Effect (eg. Vodafone Closed User Groups)
  5. 5. Digital Business Characteristics• Unique Characteristics Free – Low cost per user Freemium – Large Network Effects – Viral Marketing
  6. 6. Digital Business Characteristics• Information Overload • Reduced role of direct advertising • More Emphasis on word of mouth, social advertising• Extremely short customer response time, quick word of mouth• Potentially high competition• Naturally Globalised Markets• Network Effects- where even free adopters increase future adopter’s valuation of a product.• Demonstration Effects - where software adoption significantly increases if users can try the software before buying.• Free adopters help speed up the diffusion of a new product.
  7. 7. Digital Business Characteristics– User Generated information • Product Reviews • Blogs, Forums, Postings • Videos– Eliminates intermediaries, shortens supply chain– More Choice, variety, customizability– Easy communication
  8. 8. Types of Digital Business Models based on Network Effects• Provisioning of Online Services – Search, Saas, data aggregations, music, etc – Could be viral, especially in case of freemium• Single Sided Platforms – With Network Effects – Eg. Facebook, Youtube• Double Sided Platforms – App development platforms, e-commerce, network effects – Eg. Amazon, ebay 8
  9. 9. Types of Digital Business Models based on Client Type• Business to Business (B2B) eg. Vortal, Amazon Cloud Services• Business to Consumer (B2C) eg. Ebay• Consumer to Consumer (C2C) eg. Youtube
  10. 10. Digital Business Models - VOIP Cheap, multiple front companiesFreemium Business ModelTechnology- Peer to Peer Communications- Free Skype Calls- Paid Skype Outs
  11. 11. Business Model & Are the the main revenue generators- Google aims to promote usage of the Internet- Advertising generates enough revenue for all other products
  12. 12. Crowdsourcing• Getting users to review Places, Hotels• Open Innovation• Crowdvoting T Shirt Designs• Microwork Re-Captcha
  13. 13. Digital Pricing Models• SaaS instead of selling software licenses• Smaller Units of Payment – Monthly Subscriptions – Pay per user – Pay per use/hour/Mb• Free/Freemium• Gift Economy
  14. 14. Digital Business Models largely affected the following industries• Traditional Print/Media• Flight Bookings• Hotel Bookings• Long Distance Calling• Posts• Traditional Retail• Music Industry

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