Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Online Business Models

6,764 views

Published on

Different business models for online businesses

Published in: Business

Online Business Models

  1. 1. An Introduction toONLINE BUSINESS MODELS<br />Anand .G<br />II MBA<br />Dept. of Management Studies<br />Pondicherry University<br />From the book “Introduction to e-commerce” by Jeffrey F. Rayport & Bernard J. Jaworski<br />
  2. 2. Online vs. traditional<br />In online business, there is a shift from supply side to demand side<br />Customers are looking for core benefits and companies should respond accordingly<br />Customers can add value to an online business<br />Companies should facilitate C2C relationships <br />
  3. 3. 7 models for E-business<br />Metamarket Switchboard model<br />Traditional and Reverse Auction models<br />Freshest-Information model<br />Highest-Quality model<br />Widest-Assortment model<br />Lowest-Price model<br />Most-Personalized model<br />
  4. 4. Metamarket Switchboard model<br />It brings together buyers and sellers based upon the activities that customers engage in to meet particular goals<br />Example: babycenter.com<br />
  5. 5.
  6. 6. Babycenter.com<br />Core benefit: Providing a single-point of access for all needs related to child development<br />Offering: Products, Services, Community, News on child rearing, Advice<br />Resources: A large, active customer base and a significant brand name<br />Revenues: Transactions, product sales, affiliate deals and advertising<br />
  7. 7. Traditional and Reverse Auction models<br />They bring together a large number of buyers and sellers<br />In traditional model, the buyer with the highest bid buys the item. In reverse model, the supplier with the lowest bid delivers the goods to the buyer.<br />Example: ebay.com<br />
  8. 8.
  9. 9. Ebay.com<br />Core benefit: Large and deep product line, large no. of buyers & sellers<br />Offering: Trustworthy and easy transactions of products and cash<br />Resources: Large user community, brand name, credibility, technology and support<br />Revenues: Transaction fees, in-house auctions<br />
  10. 10. Freshest-Information model<br />Quickly and efficiently deliver information to users<br />Example: nytimes.com<br />
  11. 11.
  12. 12. Nytimes.com<br />Core benefit: Timeliness, accuracy, quality reporting and passion for news<br />Offering: Local, national & world news; exclusive and breaking news<br />Resources: Best personnel, freshest information, archives etc<br />Revenues: Products, services, information and advertising revenue<br />
  13. 13. Highest -Quality model<br />High quality, premium-priced products, services or information<br />Across all consumer markets and categories, there is room for a high-quality offering<br />Example: fao.com<br />
  14. 14.
  15. 15. Fao.com<br />Core benefit: High-quality products and their associated exclusivity<br />Offering: Toys, dolls, arts & crafts, collectibles etc to a niche market<br />Resources: Sourcing ability, brand exclusivity, an outstanding online experience that’s simply the best<br />Revenues: High margins for premium products<br />
  16. 16. Widest-Assortment model<br />Breadth and depth of product assortment, within and across product categories<br />Example: secondspin.com<br />
  17. 17.
  18. 18. Secondspin.com<br />Core benefit: Large inventory and best prices, so shop here first<br />Offering: Internet&apos;s largest buyer and seller of used CD’s, DVD&apos;s, videos, games etc<br />Resources: Very strong logistics, quality control, large user base and brand name<br />Revenues: Product sales, premium pricing of most desired products<br />
  19. 19. Lowest-Price model<br />Offers the customer the lowest prices available online<br />Example: buy.com<br />
  20. 20.
  21. 21. Buy.com<br />Core benefit: lowest prices above anything else<br />Offering: Large variety of products across many categories<br />Resources: Outstanding supply chain management and procurement, strong back-office systems, frugal culture<br />Revenue: Small percentage of product sales<br />
  22. 22. Most-Personalized model<br />Able to provide a highly personalized, truly unique, one-of-a-kind experience<br />Example: reflect.com<br />
  23. 23.
  24. 24. Reflect.com<br />Core benefit: A unique experience or product, or a personalized solution to a problem<br />Offering: The offering is built on the demands of each customer<br />Resources: Exceptional customer knowledge, a good website, a combination of personnel and technology<br />Revenues: Premium prices for high cost service<br />
  25. 25. Conclusion<br />A company can pursue more than one model at a time<br />Never blindly follow any business model<br />Companies should think how each component - value proposition, online offering, resources, and revenue model - will fit together to form a successful business.<br />
  26. 26. Source: From the book “Introduction to e-commerce” by Jeffrey F. Rayport & Bernard J. Jaworski, Tata McGraw-Hill<br />

×