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Chapter 2 E-commerce fundamentals 79

Pant and Ravichandran (2001) have also produced a similar list of business models. Publishers
are a major type of business model that is not clearly represented in the Timmers categories.
We examine the revenue models for these in the next section.
Riggins and Mitra (2007) have a more recent evaluation of alternative online marketplace
players which we review in Chapter 7. Regardless of the descriptors used, the important
point is that as part of strategy development, organizations should identify relevant partners
and develop tactics for working with them appropriately.
Finally, Michael Rappa, a professor at North Carolina State University, has a useful compi-
lation of examples of online business models in these and other categories in the link shown at
the end of the chapter. At a lower level, Rappa identifies utilities providers that provide online
services such as the Internet service providers and hosting companies we discuss in Chapter 3.
Now complete Activity 2.2 to assess whether it is possible to simplify these business
models and read Case Study 2.1 to see examples of new revenue models that can be used by a
forward-looking retailer.

Activity 2.2 Exploring business models

Purpose
To explore the different types of business model available on the web and suggest a
structure for evaluating business models.
visit the
www
Question
Identify overlap between the different business models identified by Timmers (1999).
Can you group the different business models into different types of services? Do you
think these business models operate in isolation?
Answers to activities can be found at www.pearsoned.co.uk/chaffey

Figure 2.13 suggests a different perspective for reviewing alternative business models. There
are three different perspectives from which a business model can be viewed. Any individual
organization can operate in different categories, as the examples below show, but most will
focus on a single category for each perspective. Such a categorization of business models can
be used as a tool for formulating e-business strategy (Chapter 5, p. 295). The three perspec-
tives, with examples, are:

1 Marketplace position perspective. The book publisher here is the manufacturer, Amazon is
a retailer and Yahoo! is both a retailer and a marketplace intermediary.
2 Revenue model perspective (p. 80). The book publisher can use the web to sell direct and
Yahoo! and Amazon can take commission-based sales. Yahoo! also has advertising as a
revenue model.
3 Commercial arrangement perspective (p. 69). All three companies offer fixed-price sales,
but, in its place as a marketplace intermediary, Yahoo! also offers alternatives.

Revenue models

Revenue models Revenue models specifically describe different techniques for generation of income. For
Describe methods of existing companies, revenue models have mainly been based upon the income from sales of
generating income for an
organization. products or services. This may be either for selling direct from the manufacturer or supplier
of the service or through an intermediary that will take a cut of the selling price. Both of
these revenue models are, of course, still crucial in online trading. There may, however, be
options for other methods of generating revenue; perhaps a manufacturer may be able to
sell advertising space or sell digital services that were not previously possible.