Lecture 2 (E-commerce business strategies) Flashcards
Business model meaning
Set of planned activities designed to result in a profit
8 key elements of a business model
- VALUE PROPOSITION - why customer should buy from you?
- REVENUE MODEL - how will you earn money?
- MARKET OPPORTUNITY - what marketspace you intend to serve and its size?
- COMPETETIVE ENVIRONMENT - who else occupies you intended marketspace?
- COMPETETIVE ADVANTAGE - what special advantages does the firm bring?
- MARKET STRATEGY - how you promote products to attract target audience?
- ORGANIZATIONAL DEVELOPMENT - what types of organizational structures within the firm are necessary to carry out the business plan (functional departments/generalists/specialists)
- MANAGEMENT TEAM - what kind of backgrounds should the company’s leaders have?
Major types of revenue models
- Advertising
- Subscription
- Freemium (free to use but better when paid)
- Transaction fee
- Sales
- Affiliate
Marketspace meaning
Area of actual or potential commercial value of company’s operation
Competetive environment influenced by:
- Number and size of active competitors
- Each competitor’s market share
- Competitors’ profitability
- Competitors’ pricing
First-mover advantage meaning
By being first in a market, there’s a lot of hindrances but if you succeed rewards are large.
Unfair competetive advantage
Sustainable, hard-to-replicate edge that competitors cannot easily copy and it lasts long-term. e.g. charismatic founder
Assymetries meaning in competetive advantage
unequal access to resources, knowledge, or capabilities that give one company an advantage over others
Capital raising methods:
- Seed capital - Initial funding FFF
- Elevator pitch
- Traditional (angels, banks, VC)
- Equity crowdfunding - business raises small investments from a large number of people in exchange for equity
B2C models, give examples:
1. Online retailer (E-tailer)
2. Community provider
3. Content provider
4. Portal
5. Transaction broker
6. Market creator
7. Service provider
- Amazon, AH, Nike; (Revenue - sales, Low entry barrier)
- Tiktok, X, Linkedin; (Revenue - Hybrid: ads, subscriptions, sales, transaction fees)
- Spotify, New york times; (Revenue - advertising, subsription, sales of digital goods)
- Yahoo; (Revenue - ads, referral fees, transaction fees, subscriptions for premium)
- Etoro, skyscanner; (Revenue - Transaction fees. Value from saving time and money)
- Ebay, Etsy, Uber, Airbnb; (Revenue - Transaction fees, fees for merchants for access)
- Google, Dropbox; Revenue - Sales of services, subscription
Types of Online retailers
- Virtual merchant - amazon
- Omnichannel - AH (both physical and virtual)
- Manufacturer-direct - Nike (Instant delivery from manufacturer)
5 Generic business strategies
- Product/Service differentiation [Tesla, Apple]
- Cost competition [Shein, Ryanair]
- Scope (Range of products) [LinkedIn, Spotify]
- Focus/Market niche [GoPro, Lamborghini]
- Customer intimacy (Main focus on personalization) [Amazon, Netflix]
