E-Business Models and Strategies

Taherdoost, Hamed

doi:10.1007/978-3-031-39626-7_2

Hamed Taherdoost^3,4

Part of the book series: EAI/Springer Innovations in Communication and Computing ((EAISICC))

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Abstract

E-business has revolutionized how businesses operate and engage with customers, suppliers, and partners. To stay competitive, organizations must grasp various e-business models, revenue models, and development strategies. The first section of this chapter provides an overview of e-business models. These models outline how organizations create, deliver, and capture value through electronic technologies. Examples include business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer (C2C), consumer-to-business (C2B), business-to-government (B2G), government-to-business (G2B), and mobile commerce models. The second section focuses on revenue models for e-businesses. These models describe how organizations generate revenue from their products or services. Common examples include subscription-based, pay-per-use, advertising-based, and transaction-based models. Selecting an appropriate revenue model is vital for an e-business’s success, as each model presents unique benefits and challenges. The third section discusses e-business strategy development. This involves creating a comprehensive plan to achieve an organization’s e-business objectives. An effective e-business strategy considers the organization’s e-business model, revenue model, competitive landscape, target market, and technology infrastructure. This chapter aims to provide readers with a comprehensive understanding of e-business models, revenue models, and development strategies. By grasping these essential components, organizations can create effective strategies that ensure competitiveness in the evolving digital landscape.

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Authors and Affiliations

Department of Arts, Communications and Social Sciences, University Canada West, Vancouver, BC, Canada
Hamed Taherdoost
Hamta Business Corporation, Vancouver, BC, Canada
Hamed Taherdoost

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Hamed Taherdoost
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Appendices

Summary

Overview of E-Business Models

Definition: E-business models refer to the frameworks and structures that define how electronic businesses operate and generate value online.
Types of e-business models:
- B2C (business-to-consumer): E-commerce platforms that sell products or services directly to consumers
- B2B (business-to-business): E-commerce platforms that facilitate business transactions
- C2C (consumer-to-consumer): E-commerce platforms where consumers can buy and sell products directly to/from other consumers
- C2B (consumer-to-business): E-commerce platforms where consumers offer products or services to businesses

Revenue Models for E-Businesses

Definition: Revenue models outline how e-businesses generate income and monetize their products or services online.
Common revenue models:
- Sales Revenue: E-businesses generate revenue by selling products or services directly to customers.
- Advertising Revenue: E-businesses earn revenue by displaying advertisements on their platforms.
- Subscription Revenue: E-businesses charge users a recurring fee for access to premium content or services.
- Freemium Model: E-businesses offer essential services for free but charge for additional features or upgrades.
- Affiliate Marketing: E-businesses earn a commission by promoting and selling other companies’ products or services.
- Data Licensing: E-businesses sell anonymized user data to third parties for market research or advertising purposes.

E-Business Strategy Development

Definition: E-business strategy development involves planning and implementing a comprehensive approach to achieve business goals in the online marketplace.
Key components of e-business strategy development:
- Market Analysis: Research the target market, customer needs, and competitive landscape.
- Value Proposition: Define a unique value proposition that differentiates the e-business from competitors and attracts customers.
- Customer Segmentation: Identify and segment the target audience based on demographics, preferences, and behavior.
- Marketing and Promotion: Develop marketing strategies to reach and engage the target audience through various digital channels.
- Technology Infrastructure: Establish a robust technological infrastructure to support e-business operations and ensure scalability.
- User Experience: Design intuitive, user-friendly interfaces to enhance customer satisfaction and encourage repeat visits.
- Data Analytics: Utilize data analytics to gain insights into customer behavior, optimize business processes, and make data-driven decisions.
- Security and Privacy: Implement robust security measures to protect customer data and build user trust.
- Continuous Improvement: Monitor and evaluate the e-business performance regularly, identify areas for improvement, and adapt strategies accordingly.

Case Study

Company X aspires to disrupt the retail industry by offering a one-of-a-kind online purchasing experience. Using augmented reality technology, the company has developed a smartphone app that allows users to put on clothing and accessories virtually. They have worked with other fashion brands to give a varied selection of things. Company X is still in its early stages of growth and seeks to build an effective e-business strategy.

1.
Identify the target market groups that Company X should focus on based on its unique virtual try-on service. How might Company X better target these demographics with its marketing efforts?
2.
How does Company X’s virtual try-on feature offer value to the purchase experiences of customers when compared to traditional Internet shopping? How can the company communicate and reinforce its value proposition to potential customers?
3.
Investigate the competitive climate of the online fashion business. Identify and evaluate the e-business strategies and techniques of Company X’s significant competitors. How can Company X set itself apart and get a market competitive advantage?
4.
Given the nature of the firm and the technology involved, which revenue model(s) would be suitable for firm X? Justify your choice and explain how it aligns with the company’s aims and target market.
5.
Research a successful e-business strategy from a similar industry or location. How may Company X adapt and incorporate analogous elements into its e-business plan to increase its chances of success?

Discussion

1.
What is the definition of e-business models and how have they evolved over time?
2.
What are the different types of e-business models and how do they differ from each other?
3.
Can a company use more than one e-business model? If so, how does this impact their operations?
4.
How have e-business models changed the way companies do business?
5.
What are the key characteristics of B2B and B2C e-business models?
6.
How do B2B and B2C e-business models differ from each other in terms of customer behavior, purchasing process, and marketing strategies?
7.
What are some advantages and disadvantages of using B2B and B2C e-business models?
8.
How do companies successfully implement B2B and B2C e-business models?
9.
What are the different types of revenue models for e-businesses and how do they work?
10.
How do revenue models impact a company’s pricing strategy and customer acquisition?
11.
What are the pros and cons of subscription-based, transaction fee-based, and advertising-based revenue models?
12.
How do companies choose the best revenue model for their e-business?
13.
Why is it important for companies to develop an e-business strategy?
14.
What are the key elements of an e-business strategy, and how do they contribute to a company’s success?
15.
How do companies conduct customer segmentation, develop a value proposition, and perform competitive analysis when developing an e-business strategy?
16.
Can you provide examples of companies that have successfully developed and implemented e-business strategies?

Multiple-Choice Questions

1.
Which of the following statements best defines e-business models?
1. (a)
  The physical layout of an online store
2. (b)
  The process of selling products and services over the Internet
3. (c)
  The software used to manage online transactions
4. (d)
  The pricing strategies implemented by online businesses
2.
Which of the following is not a type of e-business model?
1. (a)
  B2B (business-to-business)
2. (b)
  B2C (business-to-consumer)
3. (c)
  C2C (consumer-to-consumer)
4. (d)
  B2G (business-to-government)
3.
Which of the following companies is an example of a B2B e-business model?
1. (a)
  Amazon
2. (b)
  Alibaba
3. (c)
  eBay
4. (d)
  Dell
4.
Key characteristics of a B2C e-business model include:
1. (a)
  Selling products/services to other businesses
2. (b)
  Long-term contractual agreements with customers
3. (c)
  Direct interaction with end consumers
4. (d)
  Large-scale bulk transactions
5.
What is one of the key differences between B2B and B2C e-business models?
1. (a)
  B2B models focus on individuals as customers, while B2C models focus on businesses.
2. (b)
  B2B models typically involve larger transaction volumes than B2C models.
3. (c)
  B2C models rely on third-party intermediaries, while B2B models do not.
4. (d)
  B2B models are more consumer-driven, while B2C models are more supplier-driven.
6.
Which of the following companies uses a B2B e-business model?
1. (a)
  Amazon
2. (b)
  Walmart
3. (c)
  eBay
4. (d)
  Shopify
7.
Revenue models for e-businesses refer to:
1. (a)
  The overall profit margin of an e-business
2. (b)
  The marketing strategies used to generate sales
3. (c)
  The different ways an e-business generates revenue
4. (d)
  The pricing models employed by e-businesses
8.
Which of the following is an example of a subscription-based revenue model for an e-business?
1. (a)
  Google AdSense
2. (b)
  PayPal
3. (c)
  Netflix
4. (d)
  eBay
9.
Which revenue model relies on charging a fee for each transaction facilitated through the e-business platform?
1. (a)
  Subscription-based model
2. (b)
  Advertising-based model
3. (c)
  Transaction fee-based model
4. (d)
  Freemium model
10.
Which of the following companies uses an advertising-based revenue model for its e-business?
1. (a)
  Amazon
2. (b)
  Facebook
3. (c)
  eBay
4. (d)
  Netflix
11.
Why is developing an e-business strategy important?
1. (a)
  To increase customer satisfaction
2. (b)
  To attract investors
3. (c)
  To differentiate from competitors
4. (d)
  To reduce operational costs
12.
Which of the following is a key element of an e-business strategy?
1. (a)
  Marketing budget allocation
2. (b)
  Supplier selection criteria
3. (c)
  Competitive analysis
4. (d)
  Distribution channel optimization
13.
Which element of an e-business strategy involves identifying and targeting specific groups of customers?
1. (a)
  Competitive analysis
2. (b)
  Value proposition
3. (c)
  Customer segmentation
4. (d)
  Market research
14.
Which of the following is a successful e-business strategy case study?
1. (a)
  Blockbuster
2. (b)
  Kodak
3. (c)
  Amazon
4. (d)
  Toys “R” Us
15.
In an e-business strategy, a value proposition refers to:
1. (a)
  The price of products/services offered
2. (b)
  The unique benefits or advantages an e-business provides to its customers
3. (c)
  The target market segment for the e-business
4. (d)
  The promotional activities employed by the e-business

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Taherdoost, H. (2023). E-Business Models and Strategies. In: E-Business Essentials. EAI/Springer Innovations in Communication and Computing. Springer, Cham. https://doi.org/10.1007/978-3-031-39626-7_2

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DOI: https://doi.org/10.1007/978-3-031-39626-7_2
Published: 05 September 2023
Publisher Name: Springer, Cham
Print ISBN: 978-3-031-39625-0
Online ISBN: 978-3-031-39626-7
eBook Packages: Intelligent Technologies and RoboticsIntelligent Technologies and Robotics (R0)

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