How to Create a Successful Online Business Model

Topics: Strategic management, Business model, Business Pages: 126 (43897 words) Published: May 31, 2014
How to Create a Successful Online Business Model
-an Entrepreneurial Perspective

Anders Teddy Pedersen
Master Thesis
Master of Science in Innovation, Knowledge & Entrepreneurial Dynamics Aalborg University, January 7, 2014 
Title page

No. of characters:236,388 (98.49 pages)

Title:“How to Create a Successful Online Business Model – an Entrepreneurial Perspective”

Hand in date:07/01/2014

Signature: ______________________________________________________________

Executive Summary
Problem Statement:
-How can entrepreneurs, who want to start an online business, create a successful online business model aimed at customers in the business-to-consumer market? -What is the content of such a business model?

Elements of the project:
-Introduction, Methodology, Theory, Business Model Analysis, Conclusion, Reflection, References, and Appendices. Methodology
The Research Strategy of the project will be Inductive and Qualitative. The Research Design is: a Case Study. The data to be collected will be Qualitative Primary Data and Secondary Data. The data will be collected by analyzing already successful online businesses and use them as models for creating a successful online business model. Theory

The purpose of business models is: “To create, deliver and capture value by the use of specific resources, processes and activities in order to make a profit”. Business models are built on business model frameworks made by academic scholars. One such framework is Osterwalder and Pigneur’s (2010) Business Model Canvas. This framework is suitable for both physical and online businesses. There are different types of online businesses with different offerings: Virtual Products and Services; Conventional Products and Services; Brokerages; Information, Communication, Entertainment and Gambling; Online Commerce Support Services, Social Media and Networks. Business Model Analysis

To keep the Business Model Analysis from becoming too complex, an online business type must be chosen. The choice in this project is: an E-merchant – which sells Virtual and Conventional Products and Services. The Business Model Analysis will be based on the nine components of The Business Model Canvas: Value Propositions, Customer Segments, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships, and Cost Structure. Conclusion

Entrepreneurs, who want to start an online business, can create a successful online business model aimed at customers in the business-to-consumer market by: First, choosing a framework on which the business model is built. The Business Model Canvas is a good choice. Second, they have to choose which type of online business they want to start. In the case of an online e-merchant business the key content of an online business model is: Value Propositions

-New Offer, Modified Offer, Identical Offer.
Customer Segments:
-Segment Creation with Customer Characteristics used for an Archetype: oGeographic, Demographic, and Behavioral
-Segmentation Approaches:
oMass Market, Single Market, Differentiated, Diversified, and Multi-sided. Channels
-Distribution = Through a Website; Sales = Through a Website. -Communication = Awareness and Evaluation = Online Marketing + Through a Website. Customer Relationships
-Customer Service, Trust and Credibility, Reviews and Ratings Revenue Streams
-Traditional Sales of Products and Services, Advertising, Affiliate Marketing, Subscriptions, Consumer Data Sales, Licensing, Renting and Leasing, Usage Rates, and Brokerage Fees. Key Resources
-E-commerce Solution
Key Activities
-Online Marketing, Logistics, Website Design
Key Partnerships
-Suppliers, Affiliate Websites, Price Comparison Websites, and Investors and Co-founders. Cost Structure
oSetup Costs Budget, Operating Costs Budget, Cash Flow Budget, and Sales Budget.

Table of Contents
1.0 Introduction10
1.1 Problem Statement10
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