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The readings in this part provide a
rigorous analysis of a variety of business models
that have been used by Internet companies. Critical
issues are examined surrounding the value creation
potential of business models in the digital economy.
WebHouseClub, Inc. is a unique version of an online
grocery model, in contrast to the traditional
grocery business model. The case of WebHouse, with
its unique “name-your-own-price” approach for
groceries, illustrates how a novel bidding system
operates, as customers bid for grocery items from a
list of possible prices.
Another
equally captivating example is found in
MyCityMarket.com, whose customers within selected
cities are provided the opportunity to shop on the
Internet in a secure and convenient way. The
underlying business model of this company reflects
how to build a local marketplace with personalized
service on the Web. Customers have the option of
using the MyCityMarket site to window-shop or to
purchase items online that can later be picked up in
person. This feature set a new standard of
integration, and created a novel model for business
as a result.
The
readings provide a thorough description of Internet
business models based on conceptual considerations
and empirical analysis. The meaning of “business
model” is discussed and supported by several
examples. The value creation potential of online
business models and the factors that determine their
likelihood of success are highlighted. Further, the
impact on value creation of operating in a networked
world, where everyone is connected, is discussed.
Valuable practical insights are provided for how
companies may effectively build business models and
position themselves to compete in the digital
economy.
Reading 1: Anonymous
(2001)
Reading 2: Mahadevan (2000)
- Copyright © 2000 Regents of the University of California. Reprinted from the California Management Review, Vol 42. No 4. By permission of the Regents. All rights reserved. This article is for personal viewing by individuals accessing this site. It is not to be copied, reproduced, or otherwise disseminated without written permission from the California Management Review. By viewing this document you herby agree to these terms. For permission or reprints contact cmr@haas.berkeley.edu
Reading 3: Sawhney
and Parikh (2001) -
Reprinted by permission of Harvard Business
Review from "Where Value Lives in a
Networked World" by M. Swahney and D. Parikh,
Harvard Business Review, January 2001. Copyright ©
2001 by the Harvard Business School Publishing
Company, all rights reserved.
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