The E-Business Model

A business model is a set of process/activities that results in sustainable profit through desired revenue and customer value. The business model spells out how a company makes money by specifying its position in the value chain. A business model which uses electronic communication technology such as internet for exchanging information is called e-business model. The e-business model includes the roles and relationships among a firm's customers, allies, and suppliers; the major flows of product, services, information, and money; and the major benefits to the participants. The model include eight ingredients of business like value proposition, revenue model, market opportunity, competitive environment, competitive advantage, market strategy,

E-BUSINESS MODELS

E-business and E-commerce are commonly used interchangeably in many books, they have distinct definition as e-business model which is a ‘framework’ for classifying e-businesses in terms of strategic business objectives, and e-commerce model, which is a schema for business, processes that shows, in general terms, where the goods and money flow. All the business models used in practice mainly focus on the value proposition and revenue generation by using e-business processes.

(a) Value proposition : Since the focus of the value proposition is on the customer, firms have to state the proposition from the customer's perspective. Value propositions may be based on lowest cost (Buy.com), superior customer service (Amazon.com), reduction in product search (Autobytel) or price discovery (Shopping.com) costs, product customization (Dell), or provision of niche products (Anything Left Handed). A good resource to use in writing the value proposition is the brainstorming session for writing the mission statement of the business firm. Review the words or phrases that describe planned business or that describe the firm’s ideal image from a customer's point-of-view. By choosing most important one or two, and then elaborate on it or them to create value proposition of the

Examples of revenue models include sales, transaction fees, subscription fees, advertising fees, affiliate fees, and licensing fees. Considering these options for the business idea the firm has identify a revenue model (or two) to be intended to use. Based on above principle, Rappa M (2007) [1], and Applegate L. M. (2001) [2], identified some of the e-business models.

The first approach of classifying e-business models as given in Rappa M (2007) [1], and Applegate L. M. (2001) [2], is listed below :

(1) Brokerage E- Business Model : (B2B, B2C, C2C) The Brokerage e-business model is a website that brings two parties together to conduct business, The best example of this is online auctions like Ebay. However it is not limited to online auctions, Online Real estate, business brokers, boat brokers etc also use this method. They generally collect a fee for their service which can be worked out with a percentage base or a set fee. Brokers are market makers. They bring buyers and sellers together and facilitate transactions in B2C, B2B, or C2C markets.

• Marketplace Exchange

• Buy/Sell