model

Business modelsHow will the business win?: 

Business models How will the business win?

Learning objectives: 

Learning objectives What is an online business model? What are the components of a value proposition/cluster? What are the approaches to developing an online offering? What are the steps necessary to develop a resource system? What are the different revenue models available to firms? What are some business models that online companies follow?

Learning objectives: 

Learning objectives What is an online business model? What are the components of a value proposition/cluster? What are the approaches to developing an online offering? What are the steps necessary to develop a resource system? What are the different revenue models available to firms? What are some business models that online companies follow?

Online business model: 

Online business model Specify the value proposition or the value cluster for the business Articulate the online product, service or information offering Define how the company needs to align its resources to deliver the value proposition Define and select the most appropriate revenue model to pursue Four components of an online business model:

Learning objectives: 

Learning objectives What is an online business model? What are the components of a value proposition/cluster? What are the approaches to developing an online offering? What are the steps necessary to develop a resource system? What are the different revenue models available to firms? What are some business models that online companies follow?

Value propositions/clusters: 

Value propositions/clusters Questions to ask: Which target segments should the company focus on? What is the combination of customer benefits that is offered? What makes the firm and its partners better positioned to deliver the offering than anybody else? Value clusters = multiple value propositions

Value propositions/clusters: 

Value propositions/clusters Segment-choice decision factors: Market attractiveness Significant market size & growth rates Unmet customer needs Weak/nonexistent competitors Competing capability Matching business strengths with segment benefits

Value propositions/clusters: 

Value propositions/clusters Customer benefits decision factors: Benefit offerings Price Product differentiation Customer support On-time delivery Competing capability Matching benefit offerings with customer needs

Value propositions/clusters: 

Value propositions/clusters “The special occasion segment” + + Online experience Unique, broad product line of complementary gifts Fresh flowers Complementary gifts Low prices “PC Flowers & Gift serves the special occasion segment by providing fresh flowers and unique complementary gifts” “Mid- to high-end market” Strong brand name Market Communication Supplier network Easy delivery of flowers “FTD.com provides the mid- to high-end market with the easiest way to send flowers thanks to its extended network of suppliers”

Learning objectives: 

Learning objectives What is an online business model? What are the components of a value proposition/cluster? What are the approaches to developing an online offering? What are the steps necessary to develop a resource system? What are the different revenue models available to firms? What are some business models that online companies follow?

Online offering: 

Online offering 3 steps: identify the scope of the offering identify the customer decision process map the offering to the customer decision process

Online offering: 

Online offering Step 1: Identify the scope of the offering: the number of categories of products and services offered on the site Secondspin.com (used CDs) RitzCamera.com Continuum of Scope Category-Specific Dominance Focus on one product category Cross-Category Dominance Focus on a large number of categories Dealtime (electronics and other goods) Amazon

Online offering: 

Online offering Step 2: Identify the customer decision process

Online offering: 

Online offering Step 3: Map the offering to the customer decision process

Online offering: 

Online offering An egg diagram for 1-800-flowers.com

Learning objectives: 

Learning objectives What is an online business model? What are the components of a value proposition/cluster? What are the approaches to developing an online offering? What are the steps necessary to develop a resource system? What are the different revenue models available to firms? What are some business models that online companies follow?

Resource system: 

Resource system Identify core benefits in the value cluster Identify resources that relate to each benefit Identify to what degree the firm can deliver each benefit Identify partners who can complete resources

Resource system: 

Resource system Broad Assortment of Gifts Customer Service Widespread, Easy Access High Quality of Flowers Step 1: Identify core benefits in the value cluster The value proposition of 1-800-Flowers.com is to serve the “mid- to high-end market” with a broad gift assortment, fresh flowers, and easy access because of its strong distribution network, product and media partnerships and multiple contact points.

Resource system: 

Resource system Broad Assortment of Gifts Customer Service Widespread, Easy Access High Quality of Flowers Step 2: Identify resources that relate to each benefit For 1-800-Flowers.com, the benefit “widespread, easy access” is linked to four capabilities: strong brand name, wide reach to customers, multiple points of contacts and a popular website.

Resource system: 

Resource system Broad Assortment of Gifts Customer Service Widespread, Easy Access High Quality of Flowers Core Benefits Step 2: Identify resources that relate to each benefit

Resource system: 

Resource system Telephone Online Franchise Stores Catalog 3,000 Affiliates Customer Service Widespread, Easy Access Broad Assortment of Gifts High Quality of Flowers Step 3: Identify to what degree the firm can deliver each benefit For 1-800-Flowers.com, both product and media partnerships are required to make the system operate effectively.

Resource system: 

Resource system AOL Yahoo Broad Assortment of Gifts Customer Service Widespread, Easy Access High Quality of Flowers Step 4: Identify partners who can complete resources For 1-800-Flowers.com, Lenox, Sharper Image, Blue Mountain cards, San Francisco Music Box Company are its product partners; Online sites such AOL, Yahoo are its media partners; telephone representatives, franchise stores, and catalog are its offline contact points partners. CSR Catalog Franchise

Resource system: 

Resource system Online partnerships Portals: brand exposure, e.g., 1-800-Flowers.com with AOL Anchor-tenant: sole provider of a specific product/service for another retail site, e.g., Proflowrs.com with Amazon.com Promotion: cross-promotions or promoter-client, e.g., 1-800-Flowers.com with Barnes & Noble.com; 1-800-Flowers.com with American & Delta airlines

Resource system: 

Resource system Assess the quality of a resource system: System uniqueness: how does the company’s resource system differ from that of its competitors? Resources-benefits links: how strong is the link? Resources-system link: how well do the resources complement and support one another? Online-offline link: how well does the online resource system complement and support its offline system? Resource sustainability: is the resource system difficult to replicate?

Learning objectives: 

Learning objectives What is an online business model? What are the components of a value proposition/cluster? What are the approaches to developing an online offering? What are the steps necessary to develop a resource system? What are the different revenue models available to firms? What are some business models that online companies follow?

Revenue models: 

Revenue models Advertising revenues can be generated through the selling of ads, site sponsorships, event underwriting, etc. (e.g., Yahoo, AOL, Business2.com) Revenues can be generated from the sales of goods and services (e.g., Amazon, CDNow, Buy.com) Revenues can be accrued from charging a fee or taking a portion of the transaction sum for facilitating a customer-seller transaction (e.g., Schwab, eBay) Website can gain revenues by offering subscription services for information (e.g., FT.com, NYTimes.com) Fees generated from the licensing of content (e.g., software companies). 5 sources of revenue:

Learning objectives: 

Learning objectives What is an online business model? What are the components of a value proposition/cluster? What are the approaches to developing an online offering? What are the steps necessary to develop a resource system? What are the different revenue models available to firms? What are some business models that online companies follow?

Alternative online business models: 

Alternative online business models

Marketwatch.com: 

Marketwatch.com Business model #1: value proposition Mission statement: Our goal is to create the preeminent brand for real-time business news and financial information on the Web and other media. Target segments: Savvy investors, seekers, dabblers Key benefits: Up-to-the-minute information; Original, in-depth, credible analysis; Personal-finance tools; Multiple points of access Rationale: Experienced editorial staff; Technological infrastructure; Credibility through CBS News association

Marketwatch.com: 

Marketwatch.com Business model #2: online offering Learn Getting Started Investor’s Primer IPO Basics Financial Term Glossary Invest Sponsorships by Online Brokerages Datek Online Fidelity Investments National Discount Brokers Ameritrade Cybertrader Scottrade Broker Decision Center Planning Tools Shareholder Payment Calculator Home Price Check Best Credit Card Rates Insurance QuickQuote Third-Party Sources Market Guide Hoover’s Online Multex Annual Reports Club INVESTools Over 250,000 Investment Research Reports Community Private e-mail People Watch Hot Discussions Occasional Polls US Markets Market Monitor Major Indexes Dollar Volume Leaders Commentary Thom Calandra’s Stockwatch Bambi Francisco’s Net Sense Bezderick on Bonds (Many other commentary columns) eNewsletters Online News Watch E-mail Alerts Real-time Headlines Hotstock Tracker Marketwatch Live eSignal Radio Contribution to Westwood One Global Markets Key Rate Snapshot International Indexes Non-Us Stocks Track Investments Portfolio View Portfolio Analyzer Portfolio Allocation Portfolio Tracker Breaking News Market Figures Television CBS MarketWatch Weekend Contributions To: CBS Early Show CBS Evening News CBS NewsPath Develop Insight Futures and Options Futures Contracts After-Hours Futures Bonds Bellwether Bonds Report Funds Fund Profile Fund Charts Stocks Interactive Charting Historical Charts

Marketwatch.com: 

Marketwatch.com Business model #3: resource system

Marketwatch.com: 

Marketwatch.com Business model #3: resource system (Partners)

Marketwatch.com: 

Marketwatch.com Business model #4: revenue model