Business Models for Internet Based E-Commerce an Anatomy

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Business Models for Internet based E-Commerce An Anatomy
B Mahadevan Associate Professor, Production & Operations Management Indian Institute of Management Bangalore 560 0 76, INDIA. e-mail:

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Abstract The success of Internet based businesses in the Business to Customer segment in recent years is an indication of the events to unfold at the dawn of the new millennium. It is widely projected that the Business to Business segment is poised for a spectacular growth. However, a consistent definition and a framework for a business model for the Internet based business is still non-existent. This paper is an effort to fill in this gap.

We propose
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We particularly identify and focus on two broad issues concerning organization engaging in Internet based business: Is there a basis on which one can classify these new propositions? and are there any factors that could potentially influence an organization in identifying an appropriate sub-set of these propositions for its business? We propose to address these issues in this paper. Barua et al.6 proposed a four-layer framework for measuring the size of the Internet economy as a whole. The Internet infrastructure layer addresses the issue of backbone infrastructure required for conducting business via the net. Expectedly, it is


largely made up of telecommunication companies and other hardware manufacturers such as computer and networking equipment. The Internet applications layer provides support systems for the Internet economy through a variety of software applications that enable organizations to commercially exploit the backbone infrastructure. Over years, several applications addressing a range of issues from web page design to providing security and trust in conducting various business transactions over the net have been developed. The Internet intermediary layer includes a host of companies that participate in the market making process in several ways. Finally, the Internet commerce layer covers companies that conduct business in an over all ambience provided by the other three layers. We refer to their
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