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New business models and strategies for the internet economy

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Rubén Benimeli Rocher

on 18 October 2016

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Transcript of New business models and strategies for the internet economy

New business models and strategies for the internet economy

Rubén Benimeli
David Velasco
Francisco Serrano

What is a business?
Short definition:
An organization or economic system where goods and services are exchanged for one another or for money.

Is this definition enough?
For us it is not enough
Times change and the world adapts to these changes

About Internet in the business
If you are going to be in e-commerce, you have to build a business that destroys the old brick-and-mortar model.
—John B. McCoy, CEO, Bank One Corp.

There will be thousands of winners on the Internet. But there will be only a very few really big winners.
—Mary G. Meeker, Morgan Stanley Dean Witter

Impact of the Internet and E-Commerce
who uses a smartphone in this class?

Internet provides a lot of advantages, to the business and for everybody.

What is an E-comerce?
This is a shop that sells it´s productson-line
You can buy almost everything on internet
There are different types of these shops
How do these shops earn money?
Impact of the Internet and E-Commerce
Impact on external industry environment
-Changes character of the market and competitive environment
-Creates new key success factors
-Breeds formation of new strategic groups
Impact on internal company environment
-Having, or not having, e-commerce capabilities tilts the scales toward valuable resource strengths or threatening weaknesses
-Creatively reconfiguring the value chain will affect a firm’s competitiveness vis-à-vis rivals
Supply Side of the Internet Economy
Major groups of Internet and e-commerce firms comprising the supply side include:
Makers of specialized communications components and equipment
Providers of communications services
Suppliers of computer components and hardware
Developers of specialized software
E-commerce enterprises
Business-to-business merchants
Business-to-consumer merchants
Media companies
Content providers

Google makes the majority of its money from ads shown as part of search results.
However Google's search ads monetize much better than the ads shown on a typical web page (e.g. a news article) because the ads users see are typically from providers who can help them solve a problem they are actively trying to solve at that moment.

While most industry insiders have a firm grasp on Facebook’s monetization models, most people still don’t understand how Facebook makes money.
Effects of the internet and e-commerce
Can produce important shifts in an industry’s competitive forces
Alters industry value chains, spawning substantial
opportunities for increasing efficiency and reducing costs
Affects a company’s resource strengths and weaknesses
Rapid pace of technological change with an often uncertain direction

Overview of E-Commerce: Business Models and Strategies
Provide new opportunities to put a globally-connected Internet infrastructure in place:

Build out telecommunications system
Install millions of servers
Provide high-speed Internet connections to billions of businesses and households
Develop software and networks to create a wired global economy

Strategy Options for Suppliers of Communications Equipment
Invest aggressively in R&D to win the technological race against rivals
Form strategic alliances to build consensus for favored technological approaches
Acquire other companies with complementary technological expertise
Hedge firm’s bets by investing sufficient resources in mastering one or more of the competing technologies

There are two sources of advertising google:
Google Adsense
Google Adwords
Facebook earn money through different methods:
Advertising Business
Facebook’s single most important revenue channel is advertising.
Self-Serve Facebook Advertising

Engagement ads
Engagement ads
Virtual Goods And The Gift Shop
Facebook Credits

Hawkers is a Spanish company that sells sunglasses online formed by four young men in 2013.
This company stands out for its tremendous growth in such a short time, reaching revenues of 15 million euros in 2014.
The hawkers success is due to its new communication and advertising measures.
Wallapop is a mobile platform that allows the buyer and seller make contact.
Key points in the use of wallapop:
Immediacy: you can publish photo + text
Proximity: geolocation, this allows you to not have to go to a transporter company.
Communication: you can talk to the person concerned through the chat

Business Models: Suppliers of Communications Services
Business models are based on profitably selling services for a fee based on a flat rate per month or volume of use

Firms must invest heavily in extending lines and installing equipment to have capacity to:
Provide desired point-to-point service and
Handle traffic load

Investment requirements are particularly heavy for backbone providers, creating sizable up-front expenditures and heavy fixed costs

Offer potential to exploit business opportunities in a globally wired
e-commerce environment:

Provide content
Provide services to users
More business models:
Suppliers of Computer Components and Hardware
Developers of Specializ E-Commerce Software
E-Commerce Retailers
Internet Strategies for Traditional Businesses
Some Key Success Factors: Competing E-Commerce Environment:
Develop capability to quickly adjust business model and strategy to respond to changing conditions
Focus on a limited number of competencies and perform a relatively specialized number of value chain activities
Stay on the cutting edge of technology
Use innovative marketing techniques that are efficient in reaching the targeted audience and effective in stimulating purchases

traditional businesses seeking to adapt their strategies to avoid becoming obsolete
to improve results and adapt to the new model is necessary at least:
-Gather real-time data on customer tastes and buying habits.
-Build systems to pick and pack products that are shipped individually

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