Online Business Models Revisited

The development in Internet technologies have enabled the companies to transactions to be conducted electronically to make e-business. Electronic business is about executing company’s business processes, over open networks, such as Internet, in order to substitute information for original handwork business transactions. The accelerating growth of e-business has initiated an increased interest to examine the transformation from traditional business models towards e-business models and their integration on the companies’ traditional business models.

So what is the definition of a business model? If you search Google you will find 459,000,000 results. I like the way Alex Osterwalder & Piqneur put simple: “A business model describes the rationale of how an organization creates, delivers and captures value”. Since this blog focuses on online marketing, I wanted make a classification of online business models in particular, which are being presented in the picture. Osterwalder’s and Piqneur’s definition applies well to online context, if you just add “through Internet” in the end 🙂 I will depict the characteristics of the models and elaborate on how such companies typically make money. I will also bring in some real life examples of companies using those models in B2B and B2C context. The very same models apply to non-profit organizations as well.

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Classification of Online Business Models, adapted from Roberts’ and Zahay’s book of Internet Marketing: Integrating Online & Offline Strategies (2008).

This is just one approach to online business models. Online business models are evolving rapidly at this point and we can still see some major disruptive innovations in the e-business environment. This when we come to one of my favourite topics, business model innovation, which refers to the search for new logic of the firm and new ways to create and capture value for its stakeholders; it focuses primarily on finding new ways to generate revenues and define value propositions for customers, suppliers, and partners. Business model innovation represents a new frontier in innovation beyond just product or service innovation. Though technology is an important medium for business model innovation, it is not all about just introducing and implementing new technology, but it can be thought through any kind of reassessment and reconstruction in the organizations value creation, and hence, new business models themselves can represent a form of innovation. One way to approach business model innovation is to merge several business models together and make it a success, like many of the before mentioned companies, such as Amazon have already done.

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About tonikarkkainen

I am Toni Karkkainen 28 years old marketing prospect from Finland. I am Soon to be graduated as a Master's of Science in Economics and Business Administration, from Lappeenranta University of Technology, Finland. I major in Strategy, Innovation and Sustainability and my two minors are of International Marketing Management and Strategic Management. I just finished my marketing minor in California State University in Fullerton, California and I am actively seeking for internship opportunities in the area. I am an innovation enthusiast and I have a natural curiosity in new trends and initiatives, especially when it comes to marketing and commerce in all of their respective channels. That is what I blog about is around these topics. I flag for open communication and sometimes I challenge to initiate discussion, thinking and exchange of ideas between people. I think a healthy self-critique is essential for the development of any individual or organization, including myself. I usually have lot of things to say, in good and in bad, but before this blog, I feel like I haven't had a proper forum to share and discuss about my thoughts. You are very welcome to comment and critique my posts, since they aren't necessarily "the absolute truths" about the topics, but rather my own opinions and thoughts on them. So be Brave! During my leisure time I go to gym, skate and surf, and I try to hang out with my friends always when I'm not busy with work and/or school. I am currently finishing up my studies in California State University where I have been studying for Strategic Internet Marketing, Retail Marketing Strategies, Marketing Information Technology and Consumer Behaviour. As mentioned, I'm in a search for a marketing internship, preferably in Los Angeles. Please see my LinkedIn and other social media platforms for my experience and contact information.
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