The Four Components Of The E-Business Model

E- business model

The e-business model is a model taken by companies or businesses when they want to become profitable on the internet. The e-business model describes how a company works, how it provides products or services, how it generates revenue and how it is going to adapt to new markets and technologies. It is made up of four components namely value proposition, e-business concept, sources of revenue and the required resources, activities and capabilities which all work together to make the business successful.

E-Business Models can be grouped generally into the following

• Business - to - Business (B2B): This occurs when businesses buy from and sell to each other over the internet.

• Business - to - Consumer (B2C): This occurs when

First Mover Advantage: First mover advantage is another strategy that can be employed by e-businesses. The general idea is that the first business into an underserved or unserved market captures the largest share of the market and is in a better position to survive compared to other businesses.

3. Increasing Value through Network Dominance: Another strategy could be increasing value through dominance. Metcalfe 's Law states that the value of the network to each user increases as more users are added to the network. Thus, one of the competing networks becomes dominant as most of the buyers and sellers shift to it. Competing with a company that has achieved network dominance can be quite difficult and expensive.

4. Maintain And Improve Competencies: A good strategy will be to develop the capabilities, and to build and maintain competencies in order to keep an advantage over other competing firms. One must understand market conditions and the firm 's strengths and weaknesses in other to do this.

5. Overall cost leadership through efficient scale facilities and vigorous cost reductions. This can be achieved through the following:

 Cost

There include the following:

1) Merchant Account: This account is necessary for your e-business to accept credit and debit cards directly.

2) Third-Party Payment Processing: This occurs through the offering of services by means of third-parties who process credit and debit cards in addition to e-checks.

3) Third-Party Retail Accounts: These are third-party accounts that allow you to accept credit and debit cards without establishing a merchant account. The third party is the middle man between the buyer and the seller.

4) Escrow Accounts: This is an account where money is held by a third party on behalf of the transacting parties. This may be needed when selling high-priced web-based services such as consulting and web design as you and the client may want to go through an escrow account to avoid issues in future.

Explain the security and reliability issues in E-business operations.

Security is an important and essential part of transactions that take place via the internet. Also, the reliability of the network when needed in terms of frequency of network failure, system downtime etc. are also important points to