eStrategy: Thinking About eBusiness Models (Part II)


In the previous article we laid the groundwork for a meaningful discussion on the different types of eBusiness models. To recap, we laid out four eBusiness models: Information Transaction Knowledge Community This article describes these eBusiness...

In the previous article we laid the groundwork for a meaningful discussion on the different types of eBusiness models. To recap, we laid out four eBusiness models:

  1. Information
  2. Transaction
  3. Knowledge
  4. Community

This article describes these eBusiness models in detail. eBusiness Model: Information The Information based eBusiness model does what its name suggests: use the internet as an enabler to disseminate information! The information being provided is almost always public information on the company, its products, its locations or how to contact it. This information is provided to key stakeholders, most often, customers but also to employees, investors, the press etc. In its simplest form the Information eBusiness Model implements an online or electronic brochure. Instead of the “four color glossy” that kills forests the work is done by electrons that cause global warming! Other than the inherently superior presentation capabilities of online web pages there is little if any difference between these two brochure ware. The information content is static but if we stretch the boundaries of this model we could include functions such as “find the nearest store location” or “find an agent in your area.” However, the central idea or inherent value of this model does not change much as a result. The inherent value of this model is simple:

  1. “Me too” – everybody and their brother have a website; if you don’t then you are fundamentally disadvantaged. This model provides the basic – and cheap – way of getting in the game
  2. Distribution – As more people move online the online brochure becomes more relevant. Customers often prefer reading information on their own especially if this does not include dealing with a pushy salesperson afterwards!
  3. Cost – is the online brochure cheaper than its print version? Generally. But the cost differential is often not in the production but in the “total cost of ownership” which includes production, distribution, update and reproduction costs etc.
  4. The competition for this model is the print brochure. However, there are many other technologies that provide similar capability. Telephone PBX systems and Fax back to name a few. However, they do not have the depth of functionality nor the “readers’” support.

As you know, this is the base or “vanilla” eBusiness model – the starting point of all websites. However, there are two decisions that need to be made:

  1. How deep should we go with this model? In other words, what are the various types of information our website should provide?
  2. Should we have only this model? In other words, should our website provide other functionality and for what reason?

Example: http://www.boeing.com/: If you are Boeing, are you better served spending your dollars on taking your customers out to expensive dinners and other boondoggles or setting up a “build your own 777 online” feature on your website? The answer is obvious to most people except those on the far left who are shocked and appalled at big business buying favors and want to launch an investigation! To the rest of you, Boeing is better served sticking to an Information eBusiness model but the question is: what information should the Boeing site provide? The answer depends on who is the site serving? If it is customers then Boeing has to work on building its image as the “diligent and conscientious defender” of the nation and overcome the “satanic cause of all wars” or the “cause of all corruption in the world” labels. So, not surprisingly, the website focuses on telling us about the various Boeing programs that defend the nation and also about corporate governance! They also provide information for potential investors. But the website is sorely missing the capability to design your own plane and take delivery at the nearest dealership! What about Boeing’s suppliers? Well that is a discussion for another day! Next, we will look at the Transaction eBusiness Model Sourabh Hajela is a management consultant and trainer with over 20 years of experience creating shareholder value for his Fortune 50 clients. His consulting practice is focused on IT strategy, alignment and ROI. For more information, please visit www.StartSmartS.com. Or feel free to contact Sourabh at [email protected]


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