Advantages And Suppositions Of A Business Model

Decent Essays
For Lewis (2001), a business model means “all it really meant was how you planned to make money” (Lewis, 2001, p. 254). This definition reiterates in simple words the previous “theory of business” by Peter Drucker (1994) who described the term business model as a set of suppositions about what a business will and will not do to get paid for. These suppositions are about the market and external environment, customers, competitors, technology and the company’s strengths and weaknesses (Drucker, 1994). These explanations are very close to the famous definition of strategy by Michael Porter which is the formation of a unique and valuable position by linking different set of the company’s activities (Porter, 1996; Ovans, 2015). In online business, the business…show more content…
(4) Utility model: in contrast to the subscription model, this model charge users based on metering usage or pay on-demand services. Subscribers are allowed to purchase access to a content and pay on actual use, for example pay for number of page viewed (Rappa, 2010; Chaffey, 2011). (5) Manufacturer model: to create Website by a company to sell its products and services online directly to the customers and compress the distribution channel. (6) Merchant model: it is a virtual retailers of goods and services model and are presented in many forms (Rappa, 2010; Chaffey, 2011). It can be virtual market such as Amazon and where they sell products and distribute them by using third party carriers (Beavers, 2017). Or it can be like Apple i-Tunes music store where the sales and distribution of digital product managed by the website. (7) Infomediary model: websites that provide unbiased information to support buyers and sellers to understand a given products or services. Revenue in this model is based on advertising and/or by selling information about customer behaviors and online market. (8) Brokerage model: is to create virtual market and get sellers and buyers
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