Different E-Business Models & Approaches

Topics: Business model, Advertising, Subscription business model Pages: 9 (3254 words) Published: April 18, 2013
E-business is an ever growing, ever expanding entity. It is the term used to describe businesses that operate or use the internet or internet technologies to run their daily business. This can include internal processes like finance and administration and/or external processes such as retail, customer contact and sales and marketing. This essay will go over the key e-business models that are used within the industry and will also provide an analytical breakdown of how companies have implemented these concepts into their business model.

What is E-Business?
E-business goes beyond just having a website for your business. It is the business embracing technology to run and facilitate their needs. IBM defines e-business as “The process of using Web technology to help businesses streamline processes, improve productivity and increase efficiencies. Enables companies to easily communicate with partners, vendors and customers, connect back-end data systems and transact commerce in a secure manner.” (Bocij, Greasley & Hickie, 2008, p.47). It is important to note that E-business is not just the buying & selling of goods but the behind the scenes processes that allow businesses to carry out these sales. E-business also falls into the spectrum of e-commerce, which is “using technology to conduct business transaction, such as buying and selling goods and services.” (Bocij, Greasley & Hickie, 2008, p.47) The growth of e-commerce has allowed the rise of new kinds of business models. These models can be older models that have been done in an “analogue” way but revamped to provide a “digital” presence. An example of this would be Auctions, the very first auction recorded as early as 500 B.C. Auctions involve the bidding of goods or services amongst other people, the aim to outlast and provide the highest offer for the item of choice. Thanks to e-business, auctions have made a digital presence in the form of websites like eBay™. Professor Michael Rappa of North Carolina State University created a list of E-business models. The main ones that we will be using for this essay will include: * Advertising

* Affiliate
* Brokerage
* Subscription

As well the models provided by Michael Rappa, we will be looking at a few other models including: * Freemium
* Crowdfunding

Advertising started off with Sumerian’s drawing on clay tablets in the early 3000 B.C. the first known record of an advertisement for a cow which was owed. We skip forwards at the rise of the first commercial radio station in 1920, then forwards to 1941 when the television was brought to the public and then to 1997 to the birth of E-commerce. Advertising has been a looming presence for quite some time. Although the mediums used for advertising has evolved over the years, the principle has stayed the same. Rappa (2007) notes that the key principle of this model is that there is a provider of content and to help with their own costs of operational and maintenance. They then connect with a 3rd party intermediary to bring the free spaces and the advertisements together. The most popular forms of E-business advertising come in the form of banner advertisements. HotWired coined the term banner ad, and was the first company to sell banner ads in large quantities to a range of major corporate advertisers. Banner ads are usually found at the top of the web page and are now considered to be in-effective as most users are likely to scroll down on any given page rendering the advert pointless. Banner ads then moved to the side of the page and follow the reader’s line of sight as the page is scrolled down. This constant presence in-front of the reader makes this process much more effective. Thanks to the Interactive Advertisement Bureau, we have standardised sizes for online advertisements, which is shown below. Google AdWords is an initiative that enables users to create advertisements for their...
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