The document defines business models and their key components. It discusses traditional business models and e-commerce models. For business models, it identifies the main components as the value proposition, target customers, distribution channels, customer relationships, revenue streams, resources, activities, and cost structure. For e-commerce models, it provides examples of revenue streams like advertising, subscriptions, transactions, and sales. It also discusses the value proposition, target market segments, competitive environment, market strategy, and customer relationship management as important components of e-commerce models.

1. BUSINESS MODEL
Business Model: set of planned activities designed to earn profits in market
guide how and where you run your company
Business plan :describe what yours company does.
Carries the details of means and resources to achieve the goal of that model
E-business Model: describe the activities which uses internet and web technologies to
achieve its goal of profits making as well as value creation to sustain in
competitive environment

2. Components of Business model
i. Offers/Value proposition
ii. Target Segments
iii. Movement channel
iv. Consumer Relationship
v. Revenue model
vi. Key resource
vii.Key activities
viii.Network and Affiliation
partners
ix. Cost structure
Components of e-commerce Model
i. Value Proposition
ii. Revenue model
iii. Advertisement Revenue
iv. Subscription revenue
v. Transaction Revenue
vi. Sale Revenue
vii.Market opportunity or Target market segment
viii.Competitive Environment
ix. Market Strategy
x. Supply chain management
xi. Customer Relationship Management

3. Offers/Value proposition
i. Customer need and requirement
ii. Better value to customer than their competitors in order to service in the industry
iii. Focus the business on well being of the customer as well as their sustain ability in the
environment
iv. Offers of a company may take in form of physical services ,digital product, or idea.
Value proposition can be offered to customer
a. Innovation
b. Design
c. Brand
d. Price
e. Customization
Relevant Case Studies
Amazon retails books and other products at competitive prices, all with purchaser reviews.
Netscape made the first browser and opened up the Internet.
Nespresso developed coffee machines for the mass market.
Netflix provides on-demand Internet streaming video.
Microsoft developed Visual Basic for fast and accurate program coding.
Eneco moved from being a fixed cost gas supplier to providing a service for commercial
greenhouses.
Nitendo offered its wii game controller.

4. Target Segments
i. Targeted market is the group of consumers to whom the product or service is
being offered by companies.
ii. It is basic on buying behaviour,geographically location, tastes and
preferences.
iii. Who will be using my product?
iv. What other interests do they have?
v. When will they purchase my product?
vi. Where will they be using my product?
vii. Why do they need my product or service
viii. Research the Competition
ix. Product Promotion

5. Distribution or movement channel
i.Path through which a company reaches its customers
ii.All activities right from Starting to Finish the product and Services
iii.Channel type can be direct
Own store
Web sale
i. Indirect
Partner store
Wholesale

6. Customer Relationships
i.Describes the types of relationships a company establishes with specific Customer
Segments.
ii.Define how to gain their trust and deliver your product
iii.There are several categories of Customer Relationships
iv.Personal assistance
v.Dedicated personal assistance
vi.Self-service
vii.Automated services
viii.Communities

7. Key Resources
i.Key resources can be physical, financial, intellectual, or human.
ii. A microchip manufacturer needs capital-intensive production facilities
iii.Nature of industry will define the quality invested in the business
Key Resources can be categorized
i.Physical
assets such as manufacturing facilities, buildings, vehicles, machines, systems,
point-of-sales systems, and distribution networks come into this category
i.Intellectual
Under intellectual resources come brands, proprietary knowledge, patents and
copyrights, partnerships, and customer databases.
i.Human
All enterprises need human resources, but those resources are particularly
prominent in knowledge-intensive and creative industries
i.Financial
Some business models depend especially heavily on financial resources and/or
guarantees: as cash, lines of credit, or a stock option pool for hiring key employees.

8. Key Activities
i.Are those activities of business organization which must be performed y a
company in order to service and sustain
They can be
i.Production activity dominates the business models of manufacturing firms, be they
related to design, manufacture, delivery or quality control.
ii.Consultancies, hospitals, and other service organizations typically focus on
problem-solving activities, requiring in turn knowledge management and continual
staff training.
iii.Creating or maintaining platforms can be a key activity. Visa's business model
requires a common platform between banks, merchants and customers. Microsoft
must supply a reliable operating system to support third-party software products.
eBay's platform is its auction site and software. Platforms have to be maintained,
extended and promoted.

9. Cost Structure
The expenses that a firm must take into account when manufacturing a product or providing a
service. Types of cost structures include transaction costs, sunk costs, marginal costs and
fixed costs. The cost structure of the firm is the ratio of fixed costs to variable costs.
Cost-driven
Cost-driven business models minimize costs wherever possible, often through a low price
Value Propositions, maximum automation, and extensive outsourcing.
Value-driven
Value-driven companies focus on a premium Value Proposition, often with a high degree of
personalized service. Designer clothes, luxury hotels and asset management fall into this
category
Cost Structures also have the following characteristics
Costs remain the same regardless of the volume of goods or services. Examples are salaries,
rents, and maintenance in factories, restaurants and leisure facilities.
Costs vary in proportion to the volume of goods or services. Music festivals are one example,
as are hosting services

10. Revenue Streams
i.Revenue Streams is the building block representing the cash (not profit, which is revenue
minus costs) a company generates from each Customer Segment
ii.Such Revenues are the lifeblood of a company.
A business model also distinguishes revenues resulting from
 one-time customer payments from
recurring revenues where ongoing payments deliver a Value Proposition or after-sales
services to a customer.
i. Companies continually research the answers to such questions as:
•What are customers willing to pay for what value?
•How are they currently paying, and are they satisfied doing so?
•How much does each Revenue Stream contribute to overall revenues and profits?
Revenue Streams can be generated in many ways:
Asset sale
Usage fee
Subscription fees
Lending/Renting/Leasing
Licensing
Advertising

11. Types of E-Commerce Model
Business 2 Business
Business 2 Customer
Customer 2 business
Customer 2 customer
Peer to Peer Model
M-commerce
E-governance