Business Models for Electronic Markets

Topics: Marketing / Pages: 18 (4430 words) / Published: Mar 21st, 2011
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Business Models for Electronic Markets by Paul Timmers, European Commission, Directorate-General III, April 1998*

Abstract Electronic commerce over the Internet may be either complementary to traditional business or represent a whole new line of business. In either case, in view of the new features of the Internet, critical questions to be answered include: ♦ what are the emerging business models; and related to this, ♦ which strategic marketing approaches are applied, or emerging. This article addresses the first question above by providing a framework for the classification of Internet electronic commerce business models. This framework has been developed on the basis of current commercial Internet business and experimental work in European R&D programmes. Introduction Electronic commerce.i.Electronic commerce; can be defined loosely as “doing business electronically” (European Commission 1997). Electronic commerce includes electronic trading of physical goods and of intangibles such as information. This encompasses all the trading steps such as online marketing, ordering, payment, and support for delivery. Electronic commerce includes the electronic provision of services, such as after-sales support or online legal advice. Finally it also includes electronic support for collaboration between companies, such as collaborative design. Some forms of electronic commerce exists already for over 20 years, e.g. electronic data interchange (EDI), in sectors such as retail and automotive, and CALS (Computer Assisted Lifecycle Support) in sectors such as defence and heavy manufacturing. These forms of electronic commerce have been limited in their diffusion and takeup. Recently, however, we see an explo-

sive development in electronic commerce. The reasons for that are, of course, the Internet and the World Wide Web, which are making electronic commerce much more accessible. They offer easily usable and low cost forms of electronic commerce.

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