competitive advantage marketspace market creator e-commerce business model sales revenue model subscription revenue model advertising revenue model

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1 achieved by a firm when it can produce a superior produce and/or bring the product to market at a lower price than most, or all, of its competitors. competitive advantage the area of actual or potential commercial value in which a company intends to operate marketspace builds a digital environment where buyers and sellers can meet, display products, search for products, and establish a price for products. Example EBay and Etsy. market creator a business model that aims to use and leverage the unique qualities of the Internet and the World Wide Web. a company derives revenue by selling goods, information, or services, ex Amazon. a company offers its user content or services and charges a subscription fee for access to some or all of its offerings, ex. Hulu e-commerce business model sales revenue model subscription revenue model a company provides a forum for advertisements and receives fees from advertisers, ex Yahoo a company receives a fee for enabling or executing a transaction, ex. E*TRADE advertising revenue model transaction fee revenue model a company steers business to an affiliate and receives a referral fee or percentage of the revenue from any resulting sales, ex MyPoints affiliate revenue model a company that supplies product and services directly to individual businesses, Alibaba e-distributor

2 a competitive market advantage for a firm that results from being the first into a marketplace with a serviceable product or service. first-mover advantage Creates and sells access to digital electronic markets, ex. Ariba e-procurement firm defines how a company's product or service the needs of customers value proposition describes how the firm will earn revenue, produce profits, and produce a superior return on invested capital. digital network designed to coordinate the flow of communications among firms engaged in business together. revenue model private industrial network distributes information content, such as digital news, music, photos, videos, and artwork, over the web. Examples include WSJ and CNN content provider a document that describes a firm's business model business plan employees of the company responsible for making the business model work management team an independent digital electronic marketplace were suppliers and commercial purchasers can conduct transactions. exchange industry-owned vertical marketplaces that serve specific industries. industry consortia

3 key elements of a business model networked business ecosystem that coordinates the value chains of several firms, such as partner firms, suppliers, and customers. Value proposition, revenue model, market opportunity, competitive environment, competitive advantage, market strategy, organizational development, management team value web offers services online. Examples include RocketLawyer and VisaNow.com service provider offers users powerful Web search tools as well as an integrated package of content and services all in one place. Example, Google and Bing portal online version of a retail store, example itunes, Sears e-tailer plan describes how the company will organize the work that needs to be accomplished the plan you put together that details exactly how you intend to enter a new market and attract new customers. refers to all forms of human expression that can be put into a tangible medium such as text, CD's, or on the web. refers to all the ways producers can maker their products unique and different to distinguish them from those of competitors. organizational development market strategy intellectual property differentiation refers to the company's intended market space the over all potential financial opportunities available to the firm in that marketspace market opportunity

4 refers to the nature of the players in an industry and their relative bargaining power. refers to the other companies operating in the same marketspace selling similar products industry structure competitive environment resources and assets not directly involved in the production of the production of the product but required for success, such as marketing, management, financial assets, and reputation. complementary resources the set of activities a firm engages in to create final products form raw inputs. firm value chain the set of activities performed in an industry or in a firm that transforms raw inputs into final products and services. a set of planned activities designed to result in a profit in a marketplace value chain business model a set of plans for achieving superior longterm returns on the capital invested in a business firm business strategy site that processes transactions for consumers that are normally handled in person, by phone, or by mail. Example, E*TRADE, Expedia transaction broker sites that create a digital online environment where people with similar interests can transact (buy and sell goods); share interest, photos, and videos; communicate with like-minded people; and receive interest-related information, examples include Facebook, and Twitter community provider a situation where there are no differences among products or services, and the only basis of choosing products is price commoditization

5 when a company uses its competitive advantages to achieve more advantage in surrounding markets. Leverage