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BUSINESS & REVENUEMODELS
BUSINESS MODELSbusiness model involves the following choices:1. Value proposition – how to deliver value to the   customer...
Value Proposition Choice of target segment Choice of what benefits you will offer Choice of capabilities
Market Offering   Identify scope of the offering   Address customer decision process   Match product/services to custom...
What resources to deploy ?   Resource system shows how a co must    align its internal “systems” and partners to    deliv...
Financial Models   Revenue Model   Shareholder value models   Growth models
Revenue Models   P roduct/service information (infomediary)   A dvertising (Google Adwords, Adsense)   S ale/transactio...
Shareholder Value ModelsUser Derived: Metamarket- hub for many buyers/sellers, multiple  categories; e.g., BabyCenter.com...
Revenue Growth Models   Deeper penetration into current market    (existing product)   New product development (existing...
Types of e-business modelsgenerally they are classified on the following  basis :- 1.                           2.      Pa...
business models : transaction          types            Aggregator Brokerage Value chainCONTROL           Manufacturer   I...
Agregator Model   Virtual Merchant – Pure Play e-tailers    (Amazon)   Catalog Merchant – Levenger   Bit Vendor – Avast...
Brokerage Model   Buy/Sell Fulfillment      Market Exchange    (eTrade,TradeIndia)        (ChemConnect)   Trading Commu...
Value Chain ModelValue chain moves business away from discretestreams of data about the product being made toone unified p...
Infomediary Model   Recommender System – ePinions   Registration Model – NYTimes.com
Advertising Model   Generalized Portal – AOL   Personalized Portal – MyMSN   Specialized Portal / Vortal   Attention/I...
Other Models    Manufacturer Model – Intel, Apple    Affiliate Model    -Banner Exchange, Pay-per-click,    -Revenue Sha...
business models: partiesinvolved   B2B (Business-to-Business)   B2C (Business-to-Consumer)   C2B (Consumer-to-Business)...
Revenue Model   Revenue Is the amount of money that a    company actually receives during a specific    period, including...
Five Cases revenue models:     Advertising model     Subscription model     Transaction fee model     Sales model    ...
Advertising model   Simply you have website and provides a    contents and forum for advertisements and get    fees from ...
   To attract users to its site, leading Web portal    Yahoo! offers things like free e-mail, extensive    content, and t...
Subscription model   A company offers it users content or services    and charges a subscription fee for access to    som...
   Industries that use this model include mail    order book sales clubs and music sales clubs,    cable television, sate...
Transaction fee model   There are businesses offering services for    which they charge a fee based on the number    or s...
   For example, online travel agents receive a    fee for facilitating a transaction that includes    the making of trave...
Sales model   A company derives revenue by selling    goods, information, or services.   Here the merchants provide good...
Affiliate model   A company steers business to an affiliate    and receives a referral fee or percentage of    the revenu...
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Business and Revenue Models in E-Commerce

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A presentation on various business and revenue models involved in e-commerce.

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Business and Revenue Models in E-Commerce

  1. 1. BUSINESS & REVENUEMODELS
  2. 2. BUSINESS MODELSbusiness model involves the following choices:1. Value proposition – how to deliver value to the customer2. Market offering – what will sell, where, …3. Resource system – what facilities, …4. Financial model – how will you charge for your product or service
  3. 3. Value Proposition Choice of target segment Choice of what benefits you will offer Choice of capabilities
  4. 4. Market Offering Identify scope of the offering Address customer decision process Match product/services to customer decision process:
  5. 5. What resources to deploy ? Resource system shows how a co must align its internal “systems” and partners to deliver the benefits of the value proposition
  6. 6. Financial Models Revenue Model Shareholder value models Growth models
  7. 7. Revenue Models P roduct/service information (infomediary) A dvertising (Google Adwords, Adsense) S ale/transaction (eCommerce – buy/sell) S ubscription (to a service – Bloomberg, Dunn & Bradstreet, Prowess DB, …)
  8. 8. Shareholder Value ModelsUser Derived: Metamarket- hub for many buyers/sellers, multiple categories; e.g., BabyCenter.com Auctions- competitive bid hub: eBay, Freemarket Category switchboard- aggreg brands: PlanetRXCompany Derived:  Best Information- Zagat, NYTimes  Wildest assortment- Secondspin.com  Lowest Price- Buy.com, Lowestfares.com  Most Personalized- Reflect.com
  9. 9. Revenue Growth Models Deeper penetration into current market (existing product) New product development (existing market) New market development (existing product) New products and new markets On-line and off-line space
  10. 10. Types of e-business modelsgenerally they are classified on the following basis :- 1. 2. Parties connected transaction types e.g B2B, B2C etc
  11. 11. business models : transaction types Aggregator Brokerage Value chainCONTROL Manufacturer Info-mediary AdvertisingHighLow Subscription Affiliate Community Low VALUE INTEGRATION
  12. 12. Agregator Model Virtual Merchant – Pure Play e-tailers (Amazon) Catalog Merchant – Levenger Bit Vendor – Avast Surf-and-turf
  13. 13. Brokerage Model Buy/Sell Fulfillment  Market Exchange (eTrade,TradeIndia) (ChemConnect) Trading Community  Buyer Aggregator (VerticalNet,Goozex  Virtual Mall ) (Yahoo!Store) Distributor  Auction Broker (ConvergeTrade) (eBay) Metamediary  Classifieds (Zshops)  Search Agent Reverse Auctions (DealTime) (priceline.com)
  14. 14. Value Chain ModelValue chain moves business away from discretestreams of data about the product being made toone unified pool of information
  15. 15. Infomediary Model Recommender System – ePinions Registration Model – NYTimes.com
  16. 16. Advertising Model Generalized Portal – AOL Personalized Portal – MyMSN Specialized Portal / Vortal Attention/Incentive Marketing – CyberGold Free Model – Blue Mountain Bargain Discounter – Buy.com
  17. 17. Other Models Manufacturer Model – Intel, Apple Affiliate Model -Banner Exchange, Pay-per-click, -Revenue Sharing Community Model: - Voluntary contributor model (NPR) - Knowledge Networks (Deja, Guru, ..) Subscription Model (WSJ) Utility Model – use based
  18. 18. business models: partiesinvolved B2B (Business-to-Business) B2C (Business-to-Consumer) C2B (Consumer-to-Business) C2C (Consumer-to-Consumer)
  19. 19. Revenue Model Revenue Is the amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise. It is the "top line" or "gross income" figure from which costs are subtracted to determine net income. Revenue = Price of goods and services X no. of units
  20. 20. Five Cases revenue models:  Advertising model  Subscription model  Transaction fee model  Sales model  Affiliate model
  21. 21. Advertising model Simply you have website and provides a contents and forum for advertisements and get fees from advertisers. The advertising model is an addition of the traditional media model. The web site, provides content which always free and services like email, IM, blogs and users accepts advertising messages in the form of banner ads.
  22. 22.  To attract users to its site, leading Web portal Yahoo! offers things like free e-mail, extensive content, and travel services. The firm got its start in early 1995 when founders Jerry Yang and David Filo put together a simple list of favorite Web sites.
  23. 23. Subscription model A company offers it users content or services and charges a subscription fee for access to some or all of it offerings. where a customer must pay a subscription price to have access to the product/service. The model was pioneered by magazines and newspapers, but is now used by many businesses and website.
  24. 24.  Industries that use this model include mail order book sales clubs and music sales clubs, cable television, satellite television providers with pay-TV channels, satellite radio, telephone companies, cell phone companies, internet providers, software providers, business solutions providers, financial services firms, fitness clubs, and pharmaceuticals, as well as the traditional newspapers, magazines and academic journals.
  25. 25. Transaction fee model There are businesses offering services for which they charge a fee based on the number or size of transactions they process. The business provides information to the customers which is required to complete a transaction and revenue is purely earned on that basis.
  26. 26.  For example, online travel agents receive a fee for facilitating a transaction that includes the making of travel arrangement for their clients, as well as, advising them about lodging, transportation etc. Stock brokerage firms also use this model as they charge their customers a commission for each transaction of stocks/shares executed through them.
  27. 27. Sales model A company derives revenue by selling goods, information, or services. Here the merchants provide goods and services online but based on list prices or via auction. Examples: wwww.1800flowers.com This site sells the flowers online, and deliver your order almost everywhere in US.
  28. 28. Affiliate model A company steers business to an affiliate and receives a referral fee or percentage of the revenue from any resulting sales. Example: www.movies.com This site uses Amazon Associates Web Services to deliver a complete marketplace of DVDs.

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