E-BUSINESS MODELS_1

1. E-BUSINESS MODELS_1 Evaluation Criteria Şule Özmen

2. Agenda • E-Business Model • Key components of e-business models • Generic values offered to e-visitors, e-customers • Revenue models • Competition • Components related with e-business functions Şule Özmen March 2008

3. Business model: Planning business processes, tasks and managerial activities E-commercebusiness model: Planning e-business processes e-tasks and e-managerial activities Business Models • Revenue • Profit • ROI Şule Özmen March 2008

4. Goal Competitive Advantage Revenue profit ROI Sustainability Şule Özmen March 2008

5. By adopting and utilizing ICT Information Communication Technologies: • Computer, • Internet, • Web and mobile communication devices • E-applications ICT increase Efficiency Effectiveness Şule Özmen March 2008

6. Business Plan Documentation of business model Şule Özmen March 2008

7. Key components of business models • Offer: products and services • Revenue model • Competitive advantage • Resources • Production • Marketing • Management Şule Özmen March 2008

8. Key Components of e-Business Models(an alternative view by Lauden& Traver 2003) Şule Özmen March 2008

9. Components of Business Models • OFFER: What is offered to whom? • What is the product or service offered? • What market is intended to be served? (Perfectly correlated with business definition) Şule Özmen March 2008

10. Value Proposition (offer key elements) • Defines how a company’s product or service fulfills the needs of customers • Description of “offer” • Differentiation and competitive advantage Questions to ask: • Why will customers choose to do business with your firm instead of another? • What will your firm provide that others do not or cannot? Şule Özmen March 2008

11. Successful value propositions in e-business models • Personalization/customization • Reduction of product discovery, search and purchasing costs • Transaction facilitating services • Fullfillment of the order • Managing product delivery, order tracking • After sales service Şule Özmen March 2008

12. Revenue Model • Describes how the firm will earn • revenue • generate profits and • produce a superior return on invested capital • Major types of revenue model: • Advertising revenue model • Subscription revenue model • Transaction fee revenue model • Sales revenue model • Affiliate (referral fee) revenue model Şule Özmen March 2008

13. Advertising Revenue Model • Paid advertisements e.g.:....... • Adsense, adwords, SEM (get definitions from google) • Advertisers are convinced if web site has • a sizeable viewership, or • a highly specialized viewership Şule Özmen March 2008

14. Banner types (visit following)source: www.medyanet.net, www.adnet.com.tr Standart BannerCursor Modeli Roll Over Sabit Alt Bant Banner Full Page Over Lay Floating Menüde Asansör Advertorial Mailing Asansör Banner Ad Corner Page Skin ( Ekşi Sözlük Modeli ) Son Dakika Haberi İçinde Tanıtım Manşet Üstü Açılımlı Haber Linkli Videostreaming Arama Motoru Newsletter (Haftalık Bülten) Reklamları Şule Özmen March 2008

15. Subscription Revenue Model • Web site that offers users content or services for a subscription fee for access to some or all of its offerings • Examples: monthly annual subscription fees • To overcome the disinclination of users to subscribe and make payment is offering a content • highly value added, premium, • not readily available elsewhere, • not easily replicated • Cumhuriyet newspaper published on Internet • eg. Yahoo charged subscription fee for yahoo platinum which gives viewers access to cnn, nascar racing Şule Özmen March 2008

16. Transaction fee revenue model • Receives a transaction fee (commission) when it enables or executes a transaction for a customer • E-retailers auction sites Şule Özmen March 2008

17. Sales revenue model • Companies draw profits directly from the sale of • goods, • information, or • service to consumers • eg. Hepsiburada.com, bascuda.com, kangurum.com Şule Özmen March 2008

18. Affiliate revenue model • Sites receive referral fees or a percentage of the revenue from any sales that result from steering business to the affiliate • E.g; google, • Zargan.com.tr Şule Özmen March 2008

19. Competition • Competitors are other companies selling similar products and operating in the same marketspace • Competition level depends on: • No. of active competitors • First movers (sektöre ilk girenler) • Sustainability of the first mover advantage (innovation) • market share for each competitor • profitability of competitors • price of competitors (plus the other terms) Şule Özmen March 2008

20. Competitors • Direct competitors – companies that sell products or services that are very similar and into the same market segment • eg.Bascuda.com, hepsiburada.com • Indirect competitors – companies that may be in different industries but that still compete indirectly because their products can substitute for one another Şule Özmen March 2008

21. Competitive advantage in e-business models • First mover advantage • results from a firm being first into a marketplace • Example: amazon.com, ideefixe.com Şule Özmen March 2008

22. Key Elements of Business Models • RESOURCES: Availability and accessibility of resources (human, financial and physical assets, information, network) • PRODUCTION: Capability of producing the goods and services at convenient terms (product features, cost efficient production, quantity and delivery constraints) • MARKETING: Appropriate positioning and segmentation strategies • MANAGEMENT: Essential managerial skills and ability (allocation of resources to business tasks) Şule Özmen March 2008