This document discusses new business models and strategies for companies in the internet economy. It defines the internet economy as being based on digital computing technology and infrastructure like the internet. Effective business models operationalize good strategies and help firms build and capture wealth. The internet impacts both external industry environments by changing markets and competition, and internal company environments by affecting resources and competitiveness. Major groups that comprise the supply side of the internet economy are listed. The document then provides an overview of common e-commerce business models and strategies like business-to-business and business-to-consumer sales.

1. NEW BUSINESS MODELS AND
STRATEGIES FOR
THE INTERNET ECONOMY

2. Internet economy
It is also called as digital economy based on
digital computing technology
The main infrastructure required for such
market is internet
Internet and e-commerce is the basic tool for
the formulation of strategy, implementation of
strategy and control of the strategy in the
modern business environment

3. “If you are going to be in
E-commerce, you have to build a
business that destroys the old
brick-and-mortar model.”
John B. McCoy
© 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin Copyright

4. Business Model
A business model describes what a
firm will do, and how to build and
capture wealth for shareholders
Effective business models
operationalize good strategies –
turning position and fit into wealth.

5. • Internet is composed of
– Integrated network of users’ connected
computers
– Banks of servers and high-speed computers
– Digital switches and routers
– Telecommunications equipment and lines

6. Impact of the Internet and
E-Commerce
• Impact on external industry environment
– Changes character of the market and competitive
environment
– Creates new driving forces and key success
factors
– Breeds formation of new strategic groups
• Impact on internal company environment
– Having, or not having, e-commerce capabilities tilts
the scales toward valuable resource strengths or
threatening weaknesses
– Creatively reconfiguring the value chain will affect
a firm’s competitiveness vis-à-vis rivals

7. Supply Side of the Internet Economy
• Major groups of Internet and e-commerce
firms comprising the supply side include
– Makers of specialized communications
components and equipment
– Providers of communications services
– Suppliers of computer components and
hardware
– Developers of specialized software
– E-commerce enterprises
• Business-to-business merchants
• Business-to-consumer merchants
• Media companies
• Content providers

8. Overview of E-Commerce
Business Models and Strategies
• Provide new opportunities to
put a globally-connected
Internet infrastructure in place
– Build out telecommunications
system
– Install millions of servers
– Provide high-speed Internet
connections to billions of
businesses and households
– Develop software and
networks to create a wired
global economy
• Offer potential to exploit
business opportunities in a
globally wired e-commerce
environment
– Business-to-business sales
– E-procurement
– Business-to-consumer sales
– E-retailing
– Provide content
– Provide services to users

9. Internet Business Strategies
Advertising
Promoting product
Brokerage
Information Sales
Service sales
Manufacturer (Direct)
Merchandising
Affiliate community
Subscription
Utility

10. Economic potential of Internet economy
•Reduction of cost
•Managing supply chain more effectively
•Easy communication
•Increasing competition
•Making price more transparent
•Broadening markets for buyers and sellers
•Increasing the effectiveness of marketing and pricing
•Increasing consumer choices, convenience, satisfaction
in a variety of ways

11. How do the following companies make
money?
EBAY
SKYPE & PAYPAL
OLX and Quikr
Flipkart
FB
INSTAGRAM
GOOGLE (Advertising)

12. EBAY
Business operates in three
segments
Communication
Skype credit
Monthly subscription
Payments
Market places

13. OLX and Quikr
Adsense
Premium and Featured
posting

14. Flipkart
Promoting product
Merchandising
Manufacturer (Direct)

15. FB
Mobile Advertising
Print and Web Advertising
Other payments and fees

16. How Google does makes money from
Android ( Ad, Royalties )
DOCS ( Subscribers, Freemium )
Gmail (Advertising)
You tube (Advertising)
Chrome
App (Advertising , Royalties )
Twitter (Freemium)

17. Business model includes any one of
the following
Advertising
Subscribers
Lead Gen/ Affiliate
Selling data
Freemium
Royalties

18. India’s Top 10 Online stores
Amazon. in
Flipkart.com
Snapdeal.com
PayTmMail.com
ebay.in
Jabong.com
Myntra.com
Shopclues.com
Pepperfry.com
Homeshop18.com