Small IT case
JasperZ511626
eBiz_Models.pptClass Discussion
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
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Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
Eight Key Elements of a Business Model
Value proposition
Revenue model
Market opportunity
Competitive environment
Competitive advantage
Market strategy
Organizational development
Management team
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
Slide 2-*
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
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Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
Slide 2-*
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
1. Value Proposition
- “Why should the customer buy from you?”
- Successful e-commerce value propositions:
- Personalization/customization
- Reduction of product search, price discovery costs
- Facilitation of transactions by managing product delivery
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
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Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
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2. Revenue Model
- “How will you earn money?”
- Major types of revenue models:
- Advertising revenue model
- Subscription revenue model
- Transaction fee revenue model
- Sales revenue model
- Affiliate revenue model
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
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3. Market Opportunity
- “What marketspace do you intend to serve and what is its size?”
- Marketspace: Area of actual or potential commercial value in which company intends to operate
- Realistic market opportunity: Defined by revenue potential in each market niche in which company hopes to compete
- Market opportunity typically divided into smaller niches
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4. Competitive Environment
- “Who else occupies your intended marketspace?”
- Other companies selling similar products in the same marketspace
- Includes both direct and indirect competitors
- Influenced by:
- Number and size of active competitors
- Each competitor’s market share
- Competitors’ profitability
- Competitors’ pricing
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
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5. Competitive Advantage
- “What special advantages does your firm bring to the marketspace?”
- Is your product superior to or cheaper to produce than your competitors’?
- Important concepts:
- Asymmetries
- First-mover advantage, complementary resources
- Unfair competitive advantage
- Leverage
- Perfect markets
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
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6. Market Strategy
- “How do you plan to promote your products or services to attract your target audience?”
- Details how a company intends to enter market and attract customers
- Best business concepts will fail if not properly marketed to potential customers
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
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7. Organizational Development
- “What types of organizational structures within the firm are necessary to carry out the business plan?”
- Describes how firm will organize work
- Typically, divided into functional departments
- As company grows, hiring moves from generalists to specialists
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8. Management Team
- “What kind of backgrounds should the company’s leaders have?”
- A strong management team:
- Can make the business model work
- Can give credibility to outside investors
- Has market-specific knowledge
- Has experience in implementing business plans
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall
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