When it comes to looking for e-businesses on the internet, there are thousands to choose from. I found there to be many different kinds of e-businesses. Some only meant for the internet, some that were e-businesses that also have locations that you can visit. Yet there are some that were originally brick and mortar type stores that opened an e-business version of their stores or became a primarily online e-business. Out of all the e-businesses I saw online, there were few that I saw that were really able to be analyzed effectively and yet be fairly unknown by others in the class. One I found really interesting that I have noticed that few other students really know about is Chegg.com, a young and growing textbook company.
Chegg.com is first and foremost, a textbook rental website (The company decided on Chegg as it was an interesting mix of the words “chicken and egg”). However, it was not always that way. It was originally created in 2001by three college students from Iowa. Their names were Josh Carlson, Mike Seager and Mark Fiddelke . The original site was called cheggpost.com. This website was quite different from the website we see online today (cheggg.com). The website cheggpost.com was a website made and marketed primarily to college students, and was very similar to the website craigslist.com, as it sold everything that many college students had or needed. Advertising was supposed to be the source of income, however the used textbooks was the biggest sales on the website (as most college students are looking for cheaper ways to get their textbooks). The website, while not being immensely popular nationwide, did attract some people. A repeat user of Cheggpost.com named Aayush Phumbhra mentioned the website to Osman Rashid, a friend of Aayush. Osman saw the possibilities in the website and joined the company in 2005 as Chief Executive Office. At this time, the company decided to deliver a formal announcement of the creation of Chegg Inc. After gaining some initial investments & acquiring other small firms, as well as testing out some initial services, Chegg Inc. launched textbookflix.com, their system of renting textbooks to people, which they modeled after Netflix. Later in 2007, they decided to rename the service as Chegg.com. There were some initial problems with money as Rashid used credit cards to buy books before renting them. As soon as 2010, Chegg rented its two millionth book. Chegg.com has also enjoyed growth due to word of mouth as well as stories in college newspapers across the nation. According to the company’s estimates, Chegg.com has rented books to students in well over 4,000 campuses. They also state that they have over 4.2 million titles in their catalog on their website. Chegg also has a program where they buy books from people (which could be used to replenish their rental stock as well).
When reviewing Chegg.com, I found it difficult to see the whole picture as the business is still relatively new and small in comparison to other e-business companies. However, while their business is fairly new and somewhat unknown, there is still plenty of knowledge that we have on them. So, to begin our analysis of their business model, we first need to define what a business model is. A business model is defined by the books as “a set of planned activities designed to result in a profit in a marketplace” (Traver p 66). Since Chegg.com is a website, it would actually be using what is known as an e-commerce business model. This means that Chegg.com uses the World Wide Web to its advantage to reach people in universities across the nation.
When reviewing the business model of any company, there are “eight key elements” that should be reviewed and analyzed. The eight components of a business model are: Value proposition, revenue model, market opportunity, competitive environment, competitive advantage, market strategy, organizational development, and management team....