- Why is the concept of the business model important? In what ways is it useful?
Simply put, a business model is what Michael Rappa said: “a business model is the method of doing business by which a company can sustain itself-that is, generate revenue. The business model spells out how a company makes money by specifying where it is positioned in the value chain”. It is useful because it helps people understand the business so they can make better decisions. The business model articulate the value proposition, identifies the market segment, define the structure of the value chain, estimate the cost structure and profit potential, and fomulates a competitive advantage.,
- How have Internet revenue models evolved from the original content/advertising/ monetization model? In your opinion, which model(s) offer the best opportunities for sustainable long-run profitability? Why?
The internet has lent itself to many new different business models. Before, it was hard to get people to buy things online but today more and more people rely on the internet to shop for many items. There have been plenty of revenue models that have evolved among them: donations, membership or subscription revenue, sale or licensing of software or systems, software-based services, syndication or licensing of content, transactions revenue, auction/reverse auction, barter, and e-commerce. I believe that the one that offer the best opportunity for sustainable long-run profitability is software-based services. I strongly believe in this revenue models because it means a win/win situation for the supplier and the buyer. SaS are developing high-end technology for companies to manage activities such as sales and operations. I personally use salesforce.com and I think this is one of the best things that have happened in the internet world since google. The way they structure their business guarantees money coming in from customer for a long time because once they have set up their operations with one system its really hard to get them to change to something else, plus the cost of a lot less than licensing or buying software.
- The text implies that multichannel retailers are more likely to experience long-term success in the Internet economy than are pure-play Internet retailers. Do you agree with this statement? Why or why not?
I do agree that today it is hard for bricks and clicks company to experience better success because people feel more comfortable when they are buying goods from a company that has a physical location. It makes someone feel that her investment is secured. I do agree with the book that this companies are poised for long-term success because they have a competitive advantage over those that are purely internet retailers.
Notes for Blog
I learned about Zara. They have trendy fashion when that customer want. They get trendy by getting feedback from customers in the store. They use PDAs (real time customer feedback) to understand what people need. They have a supply chain that is integrated with an information chain. An excellent customer relationship model. They make people feel as fashion professionals. They take things that don’t sell off the shelves.
View customers as input as oppose as the end result
The iPod
ITunes was created by apple in order to consolidate and legalize the digital music industry. This would create more ipod customers and increase their number of loyal customers.
Apple target market – college students
Dell
- Manage supply chain as single organization – very efficient
- Close customer relationships
- Customer segments
- Customer experience and relationships
- Cost control creates custoemr value
- Speed and Agility
- Extensive metrics in real time
- Targeting global growth
They offer customization
RFID – is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders.