Saturday, 12 April 2014

Topic 5: Business Models.

1-Describe the features of each of these business models giving an example of each.
·      Brokerage:

A brokerage is a financial institution that facilitates the buying and selling of financial securities between a buyer and a seller.

Features

Ø  Brokerage firms trade public stocks and other securities, usually through the firm's agent stockbrokers.
Ø  The staff brokerage researches the markets to provide appropriate recommendations and direct the actions of pension fund managers and portfolio managers.
Ø  These firms also offer margin loans for certain approved clients to purchase investments on credit, subject to agreed terms and conditions.
Ø  Traditional brokerage firms have also become a source of up-to-date stock prices and quotes.

Examples:

Different Brokerage models vise examples are given below as outlined by Michal Rappa in his digital enterprise resources.
                             
Model                                                         Examples
·         Marketplace Exchange                      Orbitz, ChemConnect
·         Buy/Sell Fulfillment                          CarsDirect, Respond.com
·         Demand Collection System               Priceline.com
·         Auction Broker --                             eBay
·         Transaction Broke                            PayPal, Escrow.com
·         Virtual Marketplace                        zShops and Merchant Services at Amazon.com


·      Advertising:

Features

Advertising is a form of marketing communication used to encourage, persuade, or manipulate an audience (viewers, readers or listeners; sometimes a specific group) to take or continue to take some action. Sites that rely on advertising, sell advertisements against their traffic. In basic terms: the more traffic you have, the more you can charge for ads. A web site, provides content (usually, but not necessarily, for free) and services (like email, IM, blogs) mixed with advertising messages in the form of banner ads. The banner ads may be the major or sole source of revenue for the broadcaster.



Examples:

Examples of advertisement business model include paid placements done by sites like Google, Yahoo etc. Other examples includes placement of search links within various kinds of websites, portals ,classifieds, user registrations, intromercials and ultramercials

·      Infomediary:

The term infomediary is a contraction of "information intermediary. An infomediary works as a personal agent on behalf of consumers to help them take control over information gathered about them for use by marketers and advertisers.




Features

Ø  The most important characteristic of the infomediary model is the capture and sharing of information
Ø  Infomediaries operate on the assumption that personal information is the property of the individual described, not necessarily the property of the one who gathers it.
Ø  Infomediary seeks to act as a trusted agent, providing the opportunity and means for clients to monetize and profit from their own information profiles

Examples:

One of the first focused implementations of the infomediary concept was an online advertising company called AllAdvantage launched in 1999. While that company did not survive, in more recent years there has been renewed interest in the infomediary concept, with entrepreneurs and investors building companies to identify and leverage the market value of consumers' information.
Michal Rappa determined examples of Infomediaries which are as given below,
Advertising Networks                                    example DoubleClick
Audience Measurement Services                   example   Nielsen//Netratings
Incentive Marketing                                       example Coolsavings
Metamediary                                                   example Edmunds



·      Merchant:

The Merchant business model is used by retailers and wholesalers. In simple words merchants buy goods, and sell them with profit.in web based business models this model will include merchants selling digital products like iTunes. Types of merchant model along with their examples as outlined by Michal Rappa are as stated below,




Model
Description
Example
Virtual Merchant
Retail merchant that operates solely over the web
Amazon.com
Catalog Merchant
Mail-order business with a web-based catalog
Lands' End
Click and Mortar
Traditional brick-and-mortar retail establishment with web storefront
Barnes & Noble
Bit Vendor
Deals strictly in digital products and services and, in its purest form
Apple iTunes Music Store

·      Manufacturer (Direct):


Features

Manufacturer direct model operates on the bases that by eliminating third party intermediaries like distributors and wholesalers, consumers are supposed to benefit with lower prices and increased satisfaction of the consumers in dealing directly with manufacturers. This model characterizes efficiency, improved customer service, and a better understanding of customer preferences.

Examples:

Dell Computer is the example other examples include Example is flowerbud.com the company which sold flowers directly online.


·      Affiliate:

Affiliate is Electronic commerce business model that enables a firm to generate revenue streams on hundreds (even thousands) of items without carrying inventories, managing orders, processing payments, or handling packaging and shipping. In this arrangement, a website concentrates on a relationship with a very specific group of individuals as its core. It develops and continuously upgrades content and services to attract and retain the patronage of this group. Once it has a sizable number of regular visitors, it can generate revenue by carrying ads or links to merchants with products that its visitors seek or are interested in.

Examples:

Many software vendors operate affiliate marketing schemes, eg. online backup vendors Mozy and Carbonite. Amazon also operates an extensive affiliate program, allowing website owners to earn commission for referrals on books and other products.
There are a number of affiliate portals, such as Clickbank, Commission Junction and Kolimbo which exist to create links between vendors and potential affiliates.
http://www.sqa.org.uk/e-learning/ECIntro01CD/page_14.html

·      Community:

Features

In community model an online presence is developed and several individuals or groups are encouraged to join and participate in ongoing interaction designed around a common purpose. This model is based on consumer loyalty revenue is generated by selling ancillary products and services or voluntary contributions.


Examples:

Public broadcasting (Google, Wikipedia) and social networking services (Facebook, Flicker) are the examples of community model.

·      Subscription:

Features:

This is the model in which users are charged a periodic, daily, monthly or annual, fee to subscribe to a service. Subscription fees are incurred irrespective of actual usage rates. Subscription and advertising models are frequently combined.


Examples:

Examples include different magazines and newspapers subscribing to send periodic newsletters etc. American online, class mates etc.

·      Utility.

Features:

The utility model is a "pay-as-you-go" service provider that charges based upon metered usage. It takes its name from the utility services, such as water and electricity, which have traditionally used this metered charge style. In some countries, ISPs are still billed as a metered service, with rates varying as usage increases or decreases. In a slight variation, some Internet businesses, among them Slashdot, operate as subscription utilities. In this utility variation, subscribers are charged a fee based upon number of website content pages viewed.
Examples:
Internet service providers are the example of utility model. Other examples include metered subscription like charges per page view.

2-Study Global Technology report and answer the following:
1) What is the Mobile phone use /100 population - compare Australia, USA, China, India, Your Country
     
Comparison is as shown below,

Country
Mobile Phone use/100 Population,
Rank/142
Australia
108.3/100
67
USA
92.7/100
95
China
73.2/100
115
India
72/100
117

2) Internet use / 100 population- compare Australia, USA, China, India, Your Country

Country
Internet use,%
Rank/142
Australia
79
18
USA
77.9
20
China
38.3
74
India
10.1
119




3) Compare main strengths and weaknesses of Australia or your home country in the survey

Strengths of Australia:
·         Australia has effective law making bodies it ranks 18 among 144 nations and score of its effectiveness of law making bodies is 4.9 which is above median.
·         Australia has good business and innovation environment to support ICT as it ranks 19 in availability of latest technologies quality of management schools is also good.
·         Australia has secure internet servers
·         Australia ranks well among 144 nations in 5th pillar of skills it ranks 1st in secondary education gross enrollment rate.
·         Australia has availability of knowledge intensive jobs(rank 12 /144)
·         Australia’s Government services are also available online.(rank 9/144)
·         E-participation index
·         99% adult literacy rate

Weaknesses of Australia:

·         Affordability, 4th pillar, high tariffs
·         High software piracy rate



4) What does the survey suggest to you about the Information Technology readiness of Australian business compared to Australian consumers?

Australia is well developed country according to Networked readiness index detail firm level technology absorption rate is of near best level business to business and business to consumer internet usage index is also well staff is also trained well as its index is 4.6 which is also above median. On the other hand individuals are also free to use internet personal computers and households also have access of internet. Individuals also use virtual social network frequently.



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