E-Business Models for Companies - Essay Example

e-Business Strategy of e-Business Strategy Introduction Business models are plans that aremade by companies to earn profits by implementing such plans. Every organization makes some plans to achieve the mission of the company and have a competitive edge over the competitors. Making of the plan and its implementation are a part of the business model. Sustainability and success can be achieved with the help of an innovative business model. New entrants in the market need to implement a great business model to capture their desired market share and give healthy competition to others in the market (Casadesus-Masanell & Zhu, 2013). There are different business models for different companies. Usually companies that begin their business with low capital or they have a small scale business then their business plan is expected to be a simple one that can be easily implemented. Large organizations have complex business models that require experienced and efficient employees to implement its perfectly and attain benefit from it (Bertels, et al., 2015). An e-Business Model is similar to that of a normal business model and achieves all the factors that are achieved through a usual business model. With the help of e- business model, a company can find a way to generate revenue and realize the procedure of providing product or services to its customers. There are four main components of an e-Business model that are e-Business concept, value proposition, the source of revenue and activities, resources and capabilities. These components are the traditional components of e-Business model, and all of them must work together to be supportive and beneficial for the company. E-Business performs the same activities as a normal business but the placement of orders is done through Internet, and there is no direct contact with the customers. Those organizations that only do marketing and promotional activities through internet are not a part of e- Business (Casadesus-Masanell & Zhu, 2013). Competitive Advantage of e- Business There are several elements that provide a competitive advantage because of e- business model. Time and distance have compressed because of the Internet. E-Business is more convenient for the customers as it provides them to have access to greater information from a particular place. By selecting and searching for products, a customer will have an option to search for a wider range of products and will also be able to compare the products easily. Ordinary business models are expensive to implement but e- the business model has low operational cost. Due to the advancement that is taking place in the technology many changes have also taken place in the e- business model. Individual and firms find it easy and cost reducing and wants to get into such business environment. When the business is being carried through the Internet, then the organization remains in effective contact with its suppliers and customers. When the company starts meeting the expectations of the customers, then they have a great competitive advantage over others in the market (Drakulevski & Nakov, 2014). Strategy of Organizations While focusing on the strategies, the main aim of the business is to provide information and communicate with their products and services in such a manner that the productivity is increased, and the cost is decreased. With the help of e- business, mass customization and customer participation are increased to a greater extent. There are two levels on which the strategies of e- business model are made that is corporate level and functional level. The corporate level is related to the strategies of the business that the company plans to follow. The main aim is to build strategies to determine the dealings between the supplier and customers. The main goals of the organization are made at this level and also the methods under which the firm will perform its activities are discussed in these strategies (Huizingh, 2002). The functional level of the e- business develops value chain operations of the organization to build relationships. The focus of this level is to assist the main objectives of the organization. With the help of strategies implemented at this level, the company can find the solutions to the problems of the different customers. Feedback is appreciated, problems are noted and customer’s satisfaction is provided at this level that is the main aim of this level (Zilber, 2012). Innovation in e-Business Model Innovation is very necessary for e- business model as it gives a competitive edge to the new entrants in the market. Innovation is necessary for all forms of the business model, and it should be used to attract the customers and meet their needs. Innovations are adopted in the business models because of the changes in the market or the environment. Changes are required in the business plans and to make changes in e- business plans is much easier and cost of it is also very low. The changes are made on a frequent basis in e- business model because of the continuous changes made in the software. To maintain high-performance changes in the business models are necessary for the organizations (Canzer, 2006). Novel roles and characteristics of e- Business Model There are certain views through which e- business model can also be discussed in the following manner. Media As e- business is slightly different from other business models as it totally operates online. Online media is used in the strategies of e- business model for the buying and selling of the products and the promotional activities are also conducted through online operations (Casadesus-Masanell & Zhu, 2013). Website Website is one of the main reasons for the success of e- business model. As everything is connected through an online channel therefore the customers can gain all the information through the websites. Companies prefer using their website as it gives their customers all the required information about the company and can also take feedback from the customers (Huizingh, 2002). Location e- Business models have helped the entrepreneurs in a great manner as they are free to operate from any place they want. Mostly, people operate their e- business from home and have easy access towards everything because of the technological advancements taken place (Zilber, 2012). Communication Communication is an essential part of the business as it is important to communicate with the customers and suppliers. Good communication can lead the business to success. e- Business provides a room for effective communication between the company and the people it deals with (Zilber, 2012). Access e- Business has provided its customers with an easy access as they can operate at any time. The customers do not have to wait for purchasing the products and they would also give more feedback is the operations are conducted online (Huizingh, 2002). Delivery Delivery of products is a disadvantage as the customers do not get the delivery immediately. It usually takes the customers 2-3 days to get what they ordered. A slight advantage that the customers get is delivery of goods at the doorstep (Huizingh, 2002). Risks Word of mouth is one of the biggest sources to gain fame and also it can defame the business. In e- business, the customers has the ability to reach other customers and give their feedback which can add up to the company’s fame or bring harm to the company (Huizingh, 2002). Range and Details e- Business allows the company to sell a diverse range of products and also provide details about the products they offer to their customers. It acts as an advantage for the company if all the details of the products are provided to the customers as it is easy for them to select their desired products (Huizingh, 2002). Value Creation New areas of business ventures can be explored with the help e- business models through the facility of the web. New concepts of e- business are also developed easily from the concepts that are prevailing in the market. As it is easily accessible and new concepts are easily created, therefore, it creates values. Not only economic benefits are derived from the e- business model but other issues are also observed because of this. Social issues are identified, and a proper platform to interact is provided in which critical factors of the society are discussed (Currie, 2004). Value Creation Mechanism For this purpose, creativity is important as it allows one to generate new ideas that help in making and developing new concepts that are essential for the business. The advancement that takes place in the technology is helpful in creating innovative ideas that lead to value creation. By making appropriate changes according to the changes in the technology allow the organization to develop potential areas (Lee, 2007). Important Features of e-Business All the organizations need certain steps like effective communication and transferring of information to achieve success. E-Business models have the capability to develop proper grounds for communication and establish proper systems through which information is transferred. With the help of e- business, the organizations can provide a great variety of products and services to their customers. Even the organizations that are not involved in e- business and are physically carrying out the activities to provide goods and services to the customers are adopting e- business policies to bring efficiency in the business activities. Overall it can be said that the e- business is very helpful as it tends to cater a larger audience and changes swiftly in accordance with the environment of the market. Through e- business, a firm can satisfy the needs of the customers efficiently, which increases the share of the firm in the market (Lee, 2007). Case Study eBay eBay Inc. is the largest marketplace on internet which allows its members to buy and sell almost all the products. 147 million people use eBay and purchase goods from this platform. The organization uses online payment system service PayPal for the transactions all over the world. It is the biggest and the most popular platform to do trade all over the world and it is also one of the safest platforms. The products available on eBay are diversified and are not limited to a particular industry. To carry on its working activities, eBay uses the ‘click and click’ business model, which provides it a competitive advantage over others and differs from mortar and brick model. The case study defines the benefits of their model that provides a great advantage to the company (Gopalkrishnan, 2007). 3M 3M is an American multinational conglomerate based in Minnesota. It was founded in 1902. 3M produces over 55,000 products, and 76,000 employees are associated with it. The organization has achieved its success by providing high-quality services and excellent supply chain network. As the business of the organization is diversified, the company decided to use a different business model to achieve greater success. The company adopted e- a business model that has enabled the company to make suitable changes that will benefit the organization and give it a competitive edge over its customers. E-Business model has allowed the organization to make flexible changes in it to cope with the market environment (VMware, Inc., 2013). Conclusion From the above case studies, it is observed that the organizations have witnessed a growth in their market share. It is because that these organizations have adopted e- business policies that allow them to have a competitive edge over others. Both the organizations have different course of business but e- business has helped them to a great extent. The organizations enjoy a big competitive advantage over other firms in their respective markets. It can be said that e- business model are helpful for all the organizations. List of References Bertels, H. M., Koen, P. A. & Elsum, I., 2015. Business Models Outside the Core. Research Technology Management, 58(2), pp. 20-29. Canzer, B., 2006. E-Business: Strategic Thinking and Practice: Strategic Thinking and Practice. Mason: Cengage Learning. Casadesus-Masanell, R. & Zhu, F., 2013. Business model innovation and competitive imitation: The case of sponsor-based business models. Strategic Management Journal, 34(4), pp. 464-482. Currie, W., 2004. Value Creation from E-Business Models. Oxford: Butterworth-Heinemann. Drakulevski, L. & Nakov, L., 2014. Managing Business Model as Function of Organizational Dynamism. Management, 1(72), pp. 37-44. Gopalkrishnan, J., 2007. eBay: “The world’s largest online marketplace”- A Case Study. [Online] Available at: [Accessed 4 May 2015]. Huizingh, E. K. R. E., 2002. Towards Successful E-Business Strategies: A Hierarchy of Three Management Models. Journal of Marketing Management, 18(7/8), pp. 721-747. Lee, I., 2007. E-Business Models, Services and Communications. Pennsylvania: IGI Global. VMware, Inc., 2013. 3M Case Stdy. [Online] Available at: [Accessed 4 May 2015]. Zilber, S. N., 2012. Small Companies Innovations in Emerging Countries: E-Business Adoption and its Business Model. Journal of Technology Management & Innovation, 7(2), pp. 102-115. Read More