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Part 1 Introduction

unique within financial services, its appeal was
increased by the well-publicized success of other peer- Question
to-peer Internet services such as Betfair, the gambling Imagine you are a member of the team at the
web site, and eBay, the auction site. investors reviewing the viability of the Zopa busi-
ness. On which criteria would you assess the future
Sources: Financial Times (2005), New Media Age (2005), Institute of
Directors (2005), Zopa web site (www.zopa.com) and blog potential of the business and the returns in your
http://blog.zopa.com.
investment based on Zopa’s position in the market-
place and its internal capabilities?

Summary 1 The constantly changing e-business environment should be monitored by all
organizations in order to be able to respond to changes in social, legal, economic,
political and technological factors together with changes in the immediate market-
place that occur through changes in customer requirements and competitors’ and
intermediaries’ offerings.
2 The e-business marketplace involves transactions between organizations and
consumers (B2C) and other businesses (B2B). Consumer-to-consumer (C2C) and
consumer-to-business categories (C2B) can also be identified.
3 The Internet can cause disintermediation within the marketplace as an organization’s
channel partners such as wholesalers or retailers are bypassed. Alternatively, the
Internet can cause reintermediation as new intermediaries with a different purpose
are formed to help bring buyers and sellers together in a virtual marketplace or
marketspace. Evaluation of the implications of these changes and implementation of
alternative countermediation strategies is important to strategy.
4 Trading in the marketplace can be sell-side (seller-controlled), buy-side (buyer-
controlled) or at a neutral marketplace.
5 A business model is a summary of how a company will generate revenue identifying
its product offering, value-added services, revenue sources and target customers.
Exploiting the range of business models made available through the Internet is
important to both existing companies and start-ups.
6 The Internet may also offer opportunities for new revenue models such as commis-

sion on affiliate referrals to other sites or banner advertising.
7 The opportunities for new commercial arrangements for transactions include nego-
tiated deals, brokered deals, auctions, fixed-price sales and pure spot markets, and
barters should also be considered.
8 The success of dot-com or Internet start-up companies is critically dependent on
their business and revenue models and traditional management practice.