New Business Models And The Internet[1]

New Business Models and the InternetSupply Side of the Internet EconomyMakers of communications components and equipmentProviders of communications servicesMakers of computer components and hardwareDevelopers of softwareE-commerce enterprisesCharacteristics of the E-commerce EnvironmentCompete globallyCompetition is heightenedExisting rivalsNew entrantsLow barriers to entryBuyers have bargaining powerSearch globally for best suppliersCharacteristics of the E-commerce EnvironmentTechnology advancing rapidlyFaster diffusion of new technologyCompanies must move quicklyOpportunities to retool value chainsEconomically deliver customer serviceReadily available capital (again…)Need for human talent is greatestBusiness Models and Strategies:Communications Equipment SuppliersInvest heavily in R & DForm strategic alliancesAcquire complementary companiesHedge your betsBusiness Models and Strategies:Communication Services SuppliersAccess for a feeFlat rate, orCharge by volumeBandwidthBundlingName recognition and advertisingBusiness Models and Strategies:Computer Hardware SuppliersInvest heavily in R & DRapid technological changeMust stay abreast or ahead of rivalsFirst-movers only can charge a premiumAll others must compete on priceBusiness Models and Strategies:Software DevelopersMost costs are up-frontProfitability depends on volumeRevenues enhanced by upgradesTransaction-based application may charge fee per transactionRent, or subscriptionBusiness Models and Strategies:E-commerce RetailersTraditional retailingMerely using Internet to interfaceMany “brick and mortar” firms are becoming involvedSell at, or below costSell advertising space on web siteSell information collected from usersBusiness Models and Strategies:E-commerce RetailersSpend heavily on advertisingAdd new product lines with increase in trafficBe a first-moverKeep web siteAttractiveInnovative entertainingBusiness Models and Strategies:E-commerce Service SuppliersIdentifying market nichesExamplesWarehousing and deliveryInternet intermediaries match buyers and sellers•Priceline.com•E-Bay•Rental servicesVisa, MasterCard, Amex, etc.Business Models and Strategies:Media Companies and Content ProvidersContent providersPurchase contentGive content to visitors usually for freeKey success factorsCreate a sense of communityDeliver•Convenience•Entertainment •ValueRevenue enhances by advertising and salesBusiness Models and Strategies:Traditional Businesses and the InternetUse technology to communicate and collaborate with suppliersRevamp value chainsMass customizationOffer customers a choice of interactionNew distribution channel to reach buyersGather market data on customersBusiness Models and Strategies:Key Success FactorsInnovative business modelsCapability to adjust model quicklyFocus on a limited number of specialized value chain activitiesStay on the cutting edge of technologyInnovative marketing techniquesEngineer to enable generic strategies