Internet Business Models And Strategies Text And Cases Pdf

internet business models and strategies text and cases pdf

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Business model

Excerpts from the article: T. This paper presents characteristics of business models adopted by Internet companies operating in the consumer market. The typology covers online vendors, e-service providers, content providers, multi-sided platforms, and community providers. The business model types are described here, also with respect to selected economic categories.

Additionally, the paper discusses the notion of business models from systemic and typological perspectives and compares this term to the notion of strategy and revenue model. The notion of business model gained in popularity as Internet companies emerged in the late s. They were characterised by an operational logic different from the one pursued by traditional companies.

Since then, numerous technological innovations have been introduced as well as consumer behaviours and methods of influencing them by companies have changed. Although the basic business models adopted by Internet companies have remained fairly stable, the latter have acquired new properties along with their development and adaptation to the changing conditions.

Therefore, the need to look at the current characteristics of such companies is noticeable. The aim of this paper is to fill the research gap by describing the properties of business models adopted by Internet companies operating in the consumer market. The relevant literature distinguishes various approaches to the analysis of business models. This study describes systemic and classification approaches mainly typological ones.

In the former case, it is treated as a complex system composed of correlated elements. The classification perspective, in turn, consists in grouping companies into sets comprising companies with similar characteristics. The classification perspective resembles the ranks of organisms in biology. It is composed of two major approaches: taxonomy and typology.

Taxonomy consists in grouping companies based on a quantitative analysis which takes many factors into consideration. Typology, in turn, is a qualitative deductive approach resulting in identifying ideal types, that is theoretical models with properties typical of a given group of businesses Lambert, In the systemic approach, a business model changes when a modification of at least one of the key elements causes different relations between them.

An introduction of a new product might not lead to a change of the business model if it takes place with unchanged elements constituting the business model and the same structure. If, however, it involves a redefinition of the target group, acquiring new competencies, and a different revenue model, the business model changes. In the typological approach, its business model, that is online vendor, remained the same. The business model changed when the company expanded its operating model by activities related to a multi-sided platform enabling sale to other entities and an online service offering cloud computing services.

The systemic and typological approaches differ also with respect to competing with the use of business models. In the typological approach, competing with business models plays a less significant role as companies applying the same business model e. Although competition can occur between different types of business models, this is much the same as a grocery shop competing with a multi-sided platform, such as a local marketplace.

The differences regarding the postulate of uniqueness of a business model, which is formulated by some researchers, are similar. It can be considered from the systemic point of view but, from the typological perspective, its application is limited since companies are usually characterised by one of the several identified business models.

Exceptions are the situations where companies combine several types of business models in their operations. A variety of classifications of Internet companies, covering both taxonomies and typologies, can be found in the relevant literature. Many of them were developed at the turn of the 21 st century in response to the emergence of pure players often operating based on a different logic than that of bricks and mortars.

Most of the business models distinguished at that time have still been in use. However, unsuccessful models, that is ones which are no longer applied or are unpopular, can also be identified. They include the e-mall, which was distinguished by P. Timmers in his typology as a place aggregating online shops Timmers, A likely reason for this business model being out of use is the popularity of comparison shopping engines, which offer similar services in a form that is more attractive to the customer.

The classifications designed in recent years often concern new types of companies, e. The existing classifications differ in terms of the number of business models. The smallest ones comprise five types of entities, whereas the more expanded ones distinguish twenty or more entities Nojszewski, Some taxonomies are created as a list of possible combinations of available components of business models e.

This approach results in a large number of target taxa. Identification of many business models shows, on the one hand, the diversity of the entities operating in a given sector and, on the other hand, hampers the generalisation of their characteristics and results in their superficial description. Certain classifications of business models adopted by entities operating online assume a given component of a company as a starting point.

This is how Rappa distinguishes the advertising model, where he classifies also companies acting as content providers and e-services This study treats it as a revenue model which could occur in several business models. Classifications of business models differ also in terms of the research field. Most probably, they include e-business models, while business models in electronic markets Timmers, or companies where the Internet plays a crucial role Afuah, Tucci, , p.

It is a significant issue since the mentioned categories are not identical. Depending on the selected definition of e-business, some pure players may not be taken into account in the classification, e. This study is an attempt to look at characteristics of Internet companies from a current perspective.

It has been 20 years since the first classifications were developed and although many companies still function according to a similar logic today, characteristics of some entities have changed. The research field has been limited to pure players operating in the consumer market, thus excluding bricks and clicks, bricks and mortars, and entities from the business market. The applied approach distinguishes fewer types as it focuses on an attempt to describe their characteristics in more depth with the use of economic categories rather than on a description of examples of companies.

The proposed typology of business models adopted by Internet companies operating in the consumer market comprises: online vendors online shops and retailers on e-commerce platforms , e-service providers companies offering an automated service provided via the Internet , content providers companies creating and publishing content online , multi-sided platforms Internet intermediaries , and community providers companies enabling interactions to people with shared interests.

This classification coincides with the seven business models adopted by pure players as identified by Kenneth and Jane Laudon , : e-tailers, transaction brokers, market creators, content providers, community providers, portals, and service providers.

These typologies differ, however, in terms of not only number of models but also and foremost description of their properties. Based on a literature review and findings of our own research on operations of companies on the Internet, which was conducted for a few years, pure ideal types were distinguished in the deduction process and their qualitative features were described.

This approach is used in creating a typology Lambert, The typology is complementary to the taxonomy of Polish Internet companies, which is a classification prepared with the use of questionnaire surveys and statistical analysis.

These are companies selling products through their shop or an e-commerce platform. Online vendors can be intermediaries offering products manufactured by other enterprises or, less commonly, selling products manufactured by themselves. Online retailers usually offer traditional products, digital products e. Online sale is characterised by low barriers to entry defined as overall costs which must be incurred to commence an activity.

There are numerous solutions being ready-made online shops, where one only needs to place product descriptions and other contents. The fact that it is so easy to enter the sector results, however, in a high competitive pressure. Online vendors often function in conditions similar to perfect competition, which arises from offering homogenous products; a high number of entities operating in the market; problems with standing out; market transparency and a significant role of price as a factor influencing consumer buying behaviours which is affected by effortless comparison of prices.

On the other hand, there are factors that disturb the purity of perfect competition. These include: uniqueness or non-homogeneity of some products; the resulting difficulty in comparing them and making consumer decisions; the necessity for companies to incur expenses for promotion, and distinctive features developed over a long term. The latter can include the achieved economies of scale, recognisable and trusted brand often outside the Internet or based on positive opinions of customers in reputation systems , integration with traditional entities, or community preparing and publishing product reviews.

For the purpose of this study, e-service is defined as an automatic service provided remotely via the Internet without any direct involvement of an employee of the service provider, which requires self-service and hence it is customised.

Examples of e-services include e-mail, Internet search engines, Internet banking, and network storage. The most common revenue models are sale of services, freemium, and revenue from advertising. E-services are characterised by non-rival consumption consumption of a certain good by one person does not reduce the consumption of it by others and scalability, understood here as the capability of easy serving a greater number of customers.

In the case of e-services, barriers to entry might occur. The major initial cost is the development of software but the achievement of critical mass, defined as acquisition of an appropriate number of customers, is not normally required. This is because it is possible to provide e-services on a small scale. There are many related terms originating from IT. These include SaaS software as a service , cloud as a service, and infrastructure as a service.

The latter aspect is extremely important and is at times overlooked in publications on management. By analogy, a book is not a service but the activity pursued by libraries or bookshops consisting in making it available can be considered a service. It is an entity distributing and sometimes also creating content online.

The scope of the content is broad and includes, among others, text, graphics, audio, and video. This type of activity is characterised by high costs of content creation and ease of its publication in various forms and channels.

Hence frequent relationships between online content providers and enterprises operating in the media market. The revenue model adopted by such companies is primarily to display advertisements while offering contents free of charge or, less commonly, to sell contents.

Free access to topical contents offered, among others, by online portals reduces however consumer willingness to buy the paid contents, the paper form of which is often delayed with respect to free ones available online. Earning revenue from advertisements along the offered contents may seem a simple revenue model. In effect, a website with valuable contents competes in the open marketplace with many websites with poorer quality contents, which offer the possibility to reach the target group at a lower expense.

Premium publishers are in a slightly better position as they make their spaces available at higher rates to a limited number of advertisers as part of the private marketplace Dyba, Multi-sided platforms are intermediaries between various groups of customers, which provide an environment in which transactions or other types of interactions take place.

Transactions can be carried out there e. The revenue models applied by platforms are commission fees on transactions, charges for an account with expanded features, charges for publication or promotion of an advertisement.

Achieving critical mass at the beginning of the operations of a multi-sided platform is a challenge in its management. This means the necessity to acquire a sufficient number of customers from both groups to enable interactions between them. If the initial actions are successful, it is important to establish a balance between the size of both groups of customers.

Community providers are companies offering people with similar ideas, identities, interests or needs various interaction opportunities, such as exchanging or sharing resources, communicating, and at times even cooperating. Hence, communities are based on interactions using the so-called value co-creation oriented towards others, that is contributing a certain workload or sharing a resource, the beneficiary of which will be the community, rather than on interactions directly related to concluding transactions.

Communities based on resource exchange comprise exchanging objects of everyday use or sharing a car during travel.

Internet Business Models and Strategies: Text and Cases 0071151230, 9780071151238

The phrase business model has found its way into the vocabulary of just about everyone who must manage or work in businesses with an Internet content, from venture capitalists to CEOs. Despite the enormous importance of the Internet and business models to firms, and the explosive interest in both sub- jects, there are no business school texts that address the impact of the Inter- net on firm performance. In Internet Business Models and Strategies: Text and Cases, we draw on research in strategic management and the management of technology to develop an integrative framework that allows readers to put their minds around what determines firm performance and the central role that business models play in the face of the Internet. We offer concepts and tools that students of management need to analyze and synthesize business models, especially Internet business models. The framework developed in the book allows its users to make more informed concept- and theory-grounded arguments about Internet start-ups, bricks-and-mortar firms that must face challengers, the rel- ative merits of formulating and implementing Internet business models and strategies, and how much ventures might be worth. In the first part of the book, we explore the concepts on which Internet business models rest and the tools that can be used to analyze and appraise them. In addition to building a conceptual framework, the chapters include discussion questions and key terms to engage readers further with the subject matter.

Where did you go to buy clothes? How did you get your groceries? What did you do when it was time to buy a new mattress? Innovative ecommerce businesses have transformed the way we shop today and redefined what is possible. While many of the tools are new and rapidly improving, the rules have stayed the same. Each has its benefits and challenges, and many companies operate in several of these categories simultaneously. Knowing what bucket your big idea fits in will help you think creatively about what your opportunities and threats might be.

Internet Business Models in the Consumer Market – a Typological Approach (pdf)

Excerpts from the article: T. This paper presents characteristics of business models adopted by Internet companies operating in the consumer market. The typology covers online vendors, e-service providers, content providers, multi-sided platforms, and community providers. The business model types are described here, also with respect to selected economic categories.

Duplicate citations

The system can't perform the operation now. Try again later. Citations per year. Duplicate citations. The following articles are merged in Scholar.

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In Internet Business Models and Strategies: Text and Cases, we draw on research in strategic management and the management of technology to develop an.

Jose L.


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The design of their business models is decisive for the market success of entrepreneurial ventures attempting to commercialize an emerging technology.