Figure 2.12 Alternative perspectives on business models
Figure 2.12 Alternative perspectives on business models but most will focus on a single category for each perspective. Such a categorisation of business models can be used as a tool for formulating e-business strategy. The three perspectives, with examples are:
1 Marketplace position perspective. The book publisher is the manufacturer, Amazon is a retailer and MSN is a retailer, marketplace intermediary and media owner.
2 Revenue model perspective. The book publisher can use the web to sell direct and MSN and Amazon can take commission-based sales. Yahoo! also has advertising as a revenue model.
3 Commercial model perspective. All three companies offer fixed-price sales, but in its place as a marketplace intermediary, MSN also offers other alternatives.
Michael Porter (2001) urges caution against overemphasis on new business or revenue models and attacks those who have suggested that the Internet invalidates his well-known strategy models. He says:
Many have assumed that the Internet changes everything, rendering all the old rules about companies and competition obsolete. That may be a natural reaction, but it is a dangerous one . . . [companies have taken] decisions that have eroded the attractiveness of their industries and undermined their own competitive advantages.
He gives the example of some industries using the Internet to change the basis of competition away from quality, features and service and towards price, making it harder for anyone in their industries to turn a profit.
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