E-Business Models

ACCA P3 考試：E-Business Models

Definitions: Business model—the organisation of product, service and information flows and the source of benefits for suppliers and customers which lead to revenues.

When organisations "go online" they have to decide which business model best suits their goals.

An e-business model is the same but used in the online presence. The following is a list developed by Michael Rappa of the currently most adopted e-business models:

Brokerage: Brokers are market-makers which bring buyers and sellers together and facilitate transactions. Brokers play a frequent role in B2B, B2C or C2C markets. Usually a broker charges a fee or commission for each transaction it enables.

Advertising: The Web advertising model is an extension of the traditional media broadcast model. The broadcaster, in this case, a website, provides content (usually, but not necessarily, for free) and services (such as e-mail, blogs) mixed with advertising messages in the form of banner ads. The banner ads may be the major or sole source of revenue for the broadcaster. The broadcaster may be a content creator or a distributor of content created elsewhere. The advertising model works best when the volume of viewer traffic is large or highly specialised.

Infomediary: Data about consumers and their consumption habits are valuable, especially when that information is carefully analysed and used to target marketing campaigns. Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as "infomediaries" (information intermediaries) assisting buyers and/or sellers to understand a given market.

Merchant: Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction. A "virtual merchant" is a retail merchant that operates solely over the Web (e.g. Amazon). A "bit vendor" is a merchant that deals strictly in digital products and services and conducts both sales and distribution over the Web (e.g. Apple iTunes Store).

Manufacturer (Direct model): The manufacturer relies on the power of the Web to allow the company to reach buyers directly and thereby compress the distribution channel (eliminating the middleman). The manufacturer model can be based on efficiency, improved customer service and a better understanding of customer preferences (e.g. computer maker Dell Inc.).

Affiliate: The affiliate model provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. The affiliates provide purchase-point click-through to the merchant. It is a pay-for-performance model—if an affiliate does not generate sales it represents no cost to the merchant. The affiliate model is inherently well-suited to the Web, which explains its popularity. Variations include banner exchange, pay-per-click and revenue-sharing programs.

Community: The viability of the community model is based on user loyalty. Users have a high investment in both time and emotion. Revenue can be based on the sale of ancillary products and services or voluntary contributions. The Internet is inherently suited to community business models and today this is one of the more fertile areas of development as seen in the rise of social networking and open source collaboration.

Subscription: Users are charged a periodic—daily, monthly or annual—fee to subscribe to a service. It is not uncommon for sites to combine free content with "premium" (e.g. subscriber- or member-only) content. Subscription fees are incurred irrespective of actual usage rates. Subscription and advertising models are frequently combined.

Utility: The utility or "on-demand" model is a "pay as you go" approach. Unlike subscriber, the on-demand model is based on actual usage rates. Internet service providers (ISPs) may charge customers for connection minutes, as opposed to unlimited access for one price common to the subscriber model.