Information and Knowledge Management using ArcGIS ModelBuilder

Monika Magnusson
5. The processes of design and evaluation of eBusiness models
5.1 Designing the elements
Designing a business model means creating a unique combination of business elements in perfect
interplay. Strategic decisions of which products to offer on which markets need to be combined with
decisions on which distribution channels and technical platforms to use, to best market the products
and reach the target customers. The choices are many and difficult and there is no single ‘best practice’.
While some companies are bound to start from an existing value offering others may start from a
market segment, looking for ways to develop an attractive value propositions for customers in that
segment. Sometimes the launching of new technology is the starting point for new business models.
The sudden increase in apps for so called smart phones is one example of this. A possible starting
point that decreases the complexity of designing the element is to identify possible ‘values’ or variants
for the elements. In Table 2 potential values of the identified elements are proposed. These are only
examples and should not be seen as an exhaustive list of values/variants.
Table 2: Business model elements and potential variants
Strategy level Element variants References
Value Proposition
Target Customers
Competitive
Strategy
Revenue Model
and Cost Structure
Process level
Key Activi-
Mainly products/mainly services/heavy mix
Standardized/some customization/high customization
Access to product/product itself/product bundled with other firm’s product
Assortment; broad, medium or narrow (similar to physical store, adjusted,
decreased or increased)
Value source; efficiency, complementarities, lock-in, novelty
B2B/B2C/both
Geographical segment; local/regional/national/international
Demographical segment
Broad vs niche market
Image of operational excellence/consistency/dependability/speed
Product or service quality/selection/features/availability
Innovation leadership/low cost efficiency/ intimate customer relation-
ship/experience/branding
Revenue methods; sales/leasing/subscription/support etc.
Pricing and revenue sources; fixed/mixed/flexible
Pricing methods; cost-based methods/competition-basedmethods/demand-based
pricing etc.
Operating leverage; high/medium/low
Volumes; high/medium/low
Margins; high/medium/low
Marketing, selling, distribution, sourcing, pricing, customer relationties/Processesships,
after-sales etc.
Distribution and
Traditional distribution channel/online channel
Communication Marketing channels; sales team/catalogue/internet market-
Channels
ing/newsletter/ e-mail/affiliate/TV/radio/social media/sms etc.
Core Compe- Manufacturing, marketing, selling, distribution, sourcing, pricing, custencestomer
relationships, after-sales etc.
Partner Network Suppliers, collaboration partners, industry networks, universities etc.
System level
Technology Type of eCommerce application and technologies in use (e.g. web
shop, e-catalogue etc.)
Sourcing; custom-made or off-the-shelf software, SaaS (Software as a
Service) etc.
Hosting; external or internal
Access platforms; Internet, mobile phone, tablet computers, interactive
TV etc.
Security Payment security, data security, physical security etc.
Systems Integra- Stand-alone eCommerce system or integration with legacy systems
tion such as ERP (Enterprise Resources Planning), external integration with
customers, suppliers and/or collaboration partners.
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