Chapter 2 Flashcards
Definitions
Business model
A set of planned activities which ultimate goal is generate profit
Business plan
It is a document that describes a firm’s business model
Commerce business model
use and leverage the internet, the web and the mobile platform
Key components of e-commerce business models
8 key elements
1. Value proposition
how products of service fulfill the needs of customers
2. Revenue model
How the firm will earn revenue, generate profits and
produce superior return on Capital
Advertising revenue model
Subscription revenue model
freemium strategy
Transaction fee revenue model
Sales revenue model
Affiliate revenue model
- Market opportunity
Refer to marketspace ( area of actual of potential
value) and financial opportunity
4. Competitive environment
Refers to other companies selling in the same
marketspace
Presence of substitute products
New entrants on the markets
- Competitive advantage
Achieve by the firm when It can produce a superior
product and bring it to market at a lower price than
most of all of its competitors
Asynmetry
First mover advantage
Complementary resources - Market strategy
It is the plan you put together explaining exactly how
I intend - Organizational Development
How the company is going to be organized and reach
the goals - Management team
Employees of the company responsible for making the
business model grow
Describe the major B2C business models
*Portal
Use powerful tool as well as integrated package of
content and services all in one place
AOL, Yahoo, MSN, Bing
*E-tailer
Online retail stores
Extremly competitive bc barriers to entry
*Community provider
creates an online environment where people can transact ( buy and sell): facebook, linkedin and twiter
*Content provider
Distributes info content like digital news, music,
photos, video and artwork
*Transaction broker
Process tx for people that are normally handled in
person.. used by financial services, travel services.
*Market creator
Builds a digital environment where buyers and sellers
can meet, display and search for product and services
- Service provider
Office services online
Describe the major B2B business models
*E-distributor
Companies that supplies product and services directly
to individual business
*E-Procurement
Create and sell access to digital markets
B2B service providers: sell business services to other
firms
Scale economies
*Exchange
An independent digital marketplace where suppliers
and commercials purchases can conduct transactions
*Industry Consortium
Industry own vertical market places that serve specific industries ( automobile, aerospace, chemical, floral, or logging industries)
*Private industrial network
Digital network designed to coordinate the flow of communications to coordinate the flow of communications among firms engaged in business together
understand key business concepts and strategies applicable to e-commerce
E-commerce has affected business environment in the last decade affecting
*Industry structure analysis
An effort to understand and describe the nature of competition in an industry, nature of substitute products, the barriers to entry and the relative strengths of consumers and suppliers.
Example of big airline companies that create their own e-commerce
- Industry value chains
The set of activities in an industry or in a firm that transforms raw input into final products and services
*Firm value chains
The set of activities a firm engages to create final products from raw materials
Value web : networking business ecosystem that coordinates the value chain of several firms
*Business strategy
A set of plans for achieving superior long-term returns on the capital invested in a business firm
Differentiation
Refers to all the way producers can make the product unique
Commodization
A situation where there are no differences among products or services and the only basis of choosing is price.
