E-Commerce

Business Model

Lecture # 2
Saif Ali
What is E-Commerce Business Model
Set of Planned Activities

Set of Business Processes

An e-commerce business model aims to use the

unique qualities of the Internet and the World Wide
Web
EIGHT KEY ELEMENTS OF A BUSINESS
MODEL
Key Elements of E-Commerce Business
Model (Contd…)
Value Proposition
A value proposition defines how a company’s
product or service fulfills the needs of customers
Personalization of product
Customization of product
Reduction of product search cost
Reduction of price discovery cost
Key Elements of E-Commerce Business
Model (Contd…)
Revenue Model
How the firm will earn revenue
Ho to generate profits
How to produce a superior return on invested
capital
Advertising revenue model
Subscription revenue model
Five Primary Revenue Models
Key Elements of E-Commerce Business
Model (Contd…)

Market Opportunity

Potential financial opportunities available in E-

Commerce marketspace
Key Elements of E-Commerce Business
Model (Contd…)
Competitive Environment
Other companies operating in the same
marketspace
Other companies selling same products
Direct Competitors
Indirect Competitors

Firms that can provide superior products at

lowest cost on a global basis are truly
advantaged.
Key Elements of E-Commerce Business
Model (Contd…)
Competitive Advantage
Produce a superior product
Bring your product to market at a lower price
Regional Market
National Market
Global Market

Firms that can provide superior products at

lowest cost on a global basis are truly
advantaged.
Key Elements of E-Commerce Business
Model (Contd…)
Market Strategy
The plan you put together that details exactly
how you intend to enter a new market and
attract new customers

Organizational Development
Plan describes how the company will organize
the work that needs to be accomplished
Key Elements of E-Commerce Business
Model (Contd…)
Management Team
How much skilled managers you have?
What is their experience?
Are your people able to deal new situations?

The challenge is to find people who have both

the experience and the ability to apply that
experience to new situations.
Thanks!