Internet Marketing - HND Assignment Help

Internet Marketing - HND Assignment Help:

Internet Marketing

Executive summary

paper explores the business model in online businesses which are at
present used in the online business segment. There are eight key
elements for the business model used in the online business models such
as revenue model, competitive advantage, competitive environment and
value proposition. Importance of clear business model can’t be ignored
in the online businesses and present paper would highlight importance of
clear business model. Finally a hypothetical business would be selected
which would be based on proposed business model and justification would
be made for the business development plan for that business.

 images (19)

Table of Contents

1.0 Introduction.. 3

2.0 Business model 3

3.0 Importance of clear business model 5

4.0 Selected business model 7

5.0 Business development plan.. 9

Conclusion.. 11

References. 11

1.0 Introduction

model in simplest term can be defined as the functioning of a business,
wherein it focuses on key areas such as way in which a particular
business provides products or services to consumers and the method
through which revenue is being generated in the business. Aim of the
present report is to analyse business models in online business domain
and to develop an imaginative business with the selected business model.
Present report would focus on strategic plan of the online business
wherein it’s underlying business model, function & elements, value
proposition, revenue stream and business development plan would be
discussed (Michael and George, 2006). Structure for the current report
would include business model discussion, importance of having a clear
business model, developing hypothetical business with selected business
model and deciding on a business development plan by providing example
for the online business using same business model.

2.0 Business model

online business model can be defined as the business which leverage on
the benefits offered by internet so as to plan & develop activities
for resulting profit at marketplace. Basically, there are eight vital
elements of an online business model which are given as under:

  • Value proposition: Value
    proposition defines the capability of a business to fulfil customer
    requirement. Value proposition of a business known as the heart of the
    business. For simple understanding of value proposition of a business,
    reason for a customer to do business with this organization in
    comparison to its competitor should be explored. For example,
    FreshDirect has the value proposition to offer freshest food in New
  • Revenue model: Revenue
    model of a business will tell how business would earn revenue, make
    profit and earn good amount of return on equity employed. It is commonly
    known as financial model of the business (Paul, 2000). For example
    Yahoo has adopted advertisement revenue model while has adopted
    subscription revenue model.
  • Market opportunity: Market
    opportunities can be defined as the potential marketplace and presence
    of financial opportunities in the captioned marketplace for the
    business. For example if a small software training company with
    instructor led training program starts its business into a big market
    with total $100 size, then overall market opportunity can be find out by
    segmenting the market for small and big organizations and computer
    based and instructor based training program. So finally in this
    situation let say $10 would be the market opportunity for the business.
  • Competitive environment: Competitive
    environment of an organization can be built by competitive
    organizations selling similar product in similar marketplace. For
    example for, would be under its competitive environment
    not because both are into same product or service selling but due to
    the reason that both compete for consumer time online (Alt and
    Zimmermann, 2011).
  • Competitive advantage: An
    organization is said to possess competitive advantage in case it can
    bring a superior product or at lower price as compared to other players
    prevailing in market. For example when apple offered iTune in 99 cent
    for legal download there was competitive advantage for the company both
    in term of superior product and lower price.
  • Market strategy: Market
    strategy can be defined as the plan made by an organization to enter a
    new market and capture consumer segment. For example You Tube follows
    social network marketing strategy.
  • Organizational development: Organizational
    development is a plan which organization builds in order to accomplish
    the work and division of this plan into different departments of the
    organization. For example ebay was started in order to enable trade of
    PEZ dispenser but with increasing business many experienced people were
    hired to form such a big organization in current time.
  • Management team: Management
    team can be defined as the people working in organization who would be
    behind the successful execution of business model. In order to develop
    management team in any organization the major focus should be to hire
    people who have good experience and can apply this experience to new
3.0 Importance of clear business model

clear business model in online business is much better as compared to
the excellent ambiguous business model. Implementing a clear business
model would be easier for the stakeholders as everyone has clear
understanding of the roles & responsibilities which would be taken
care by them. Overall importance of the clear business model in online
businesses can be given as under:

  • Gaining competitive advantage: Developing
    a clear plan would allow an organization to have unique business model
    for their online business. Through this unique business model a buzz can
    be created among the users as well as competitors of the competitors
    (Mayo and Brown, 1999). Further having a clear idea of the business
    model would help in attaining the competitive advantage as no other
    competitor would be able to implement or replicate the same idea with
    such high accuracy. Considering the business model of the first online
    pizza shop that allow consumers to make order through internet medium,
    with the help of online ordering system company not only saved consumer
    time but also developed competitive advantage for itself by managing
    high productivity of its employees.
  • Financial viability: With
    a clear online business model in mind strategic analyst working on the
    business idea are in a position to carry out financial viability
    analysis of the business model selected by the online business. Carrying
    financial viability for the online business model is important as
    business owner needs to ensure that fund deployed in order to establish
    business can be recovered with the help of high business profits
    received from the business. A business that can’t create sufficient cash
    flow through revenue in comparison to the expenditure made for its
    development would be identified as the financially non viable business
    and such business models needs to be identified in initial stage with
    the help of clear business model.
  • Investment plans: Based
    on the online business model company would decide about the investment
    plans to be made for the various activities such as supply chain,
    advertisement and human resource acquiring process (Lee and Cole, 2003).
    With a clear business model in mind online businesses would be in
    position to make suitable investment plan with details plan of
    investment required for each activity and their impact on overall
    business model of the company. In lack of clear business model in mind
    online businesses would not be in position to develop the investment
  • Environmental scanning: Environmental
    scanning is a part of the overall business strategy development for the
    online businesses. A clear business model would help in order to carry
    out environmental scanning both internal as well as external
    environmental scanning (Lim, 2010). A clear business idea would help in
    order to determine competitive strength which a business has in
    marketplace as compared to the competitors present in the industry.
    Similar with clear business model in place an organization would be able
    to recognize its strength, weaknesses, opportunities and threat which
    forms important part of the overall internal environmental scanning for
    an online business.
  • Role assignment: A
    clear business model would allow the senior management to have leverage
    of understanding overall business requirement and accordingly resource
    allocation can be done so as to fulfil business objectives. Senior
    management would be in position to acquire resources which are required
    for the business and accordingly application of each scarce business
    resource can be made so that business objectives can be fulfilled
    (Osterwalder et al, 2005).
  • Avoiding time delays and cost saving: Having
    a clear business model for the online business would save cost as well
    as time for the business owners. By knowing the business model clearly
    business activities which are intended for that specific business can be
    carried out without diverting the resources at other places (Mayo and
    Brown, 1999). With clear business model in mind business owners would
    not have to waster money and time in the business activities which would
    not be the part of the final execution strategy and hence only
    productive resources would be deployed by the organization leading to
    better productivity for the online business in context.
at the above mentioned benefits for the clear business model in the
online business it is advisable to work on the business model at first
and once business model is clear rest of the business execution part
should be taken care by the business owner.

4.0 Selected business model

the present context brokerage model has been selected for the
hypothetical business which is related to selling e-books
( and would involve consumer segment from B2B (Business
to business), B2C (business to consumers) and C2C (consumers to
consumers) as well. In brokerage model, brokers are said to the market
developers and act as agents to bring buyers & sellers at one
platform to facilitate the transaction between two parties. Present
company would charge a fee or commission from the buyers
and sellers which would be 5% of the overall price set for e-book and
this would become the revenue stream for business. Value proposition for
the present business would be to facilitate a medium for both consumers
and buyers wherein they can carry out their transaction (Chen, 2009).
The present business model would include below mentioned critical

  • Value proposition: Value proposition for would be to provide easy and cheap access to the e-books
    for various subjects. Further consumers would be given the opportunity
    to sell off their own e-books.
  • Revenue model:
    would make money by earning commission or fee from the consumers at the
    time of transaction for the e-books. Fee would be charged from both
    buyers as well as sellers so as to facilitate smooth transaction between
    two parties (Michael and George, 2006).
  • Market opportunities: has a big market opportunity wherein it would like to
    capture the segment of physical books as well. Further in the present
    scenario wherein consumers are more oriented towards reading through
    online medium so would take advantage of the changing
    consumer preference in order to capture a big market segment.
  • Competitive
    advantage: Competitive advantage for would be to
    develop an easy and convenient portal at which consumers can easily
    search for the desired e-books and at the same time they can take part
    in auction without any guidance or manual intervention (Hummel et al,
    2010). The major element of the competitive advantage for the
    organization would be technology part wherein with the help of
    technology a unique platform would be developed.
  • Competitive
    environment: would face direct competition not only from
    the e-book sellers but also from the physical books sellers as well.
  • Market
    strategy: In order to enter the market would adopt the
    strategy of low cost medium wherein alternative for the physical books
    would be provided through low cost e-books. Also e-books would help the
    consumers to get ease of use and allow studying at any time.
  • Organizational
    development: Organizational development for would
    include the technical team of 10 members handling all technical issues
    for the development and maintenance of web portal of the company (Karl
    and Ralf, 2010). Customer service team would be present in order to deal
    with the customer issues and information required by the customers. A
    legal team would be present in order to deal with the issues of
    copyright and other violations.
  • Management team: Management team
    of the company would include 3 directors as company would be private
    limited and other board of directors would be included in the management
    team of the company.
5.0 Business development plan

Business development plan framed for can be justified basis below mentioned factors:

  • There
    is unlimited potential market for the e-books worldwide which offers a
    huge scope for the sales and promotion of the products sold by company
  • Present
    age trend for the study through e-books would offer company good
    futuristic business with enhanced opportunities (George and Bock, 2011)
  • Providing
    auction option for the consumers would be beneficial for the company as
    dual commission would be earned by company from both sellers as well as
    buyers present in the market
  • Giving opportunity for selling
    e-books which have been authored by the consumers themselves. Such
    business model would allow the consumer to get a platform to start their
    own e-books business
One of the popular business model
examples for brokerage business model is which is biggest
online organization for the auction of goods. Company makes use
of the auction method so as to develop a platform where buyers and
sellers can meet to make smooth transaction. In the business model
developed by revenue model is quite clear wherein company makes
revenue through the commission or fee charged from the buyers and
sellers. There are no risks to the revenue model for the company as it
is direct revenue model without having any dependencies on the
intermediary parties. Sellers pay $0.30 to $3.30 per product listed on
the website based on the listed price of the product. Company also have
the option to start storefront for their customers and a fee of $9.95
per month is charged from such customers.

Customer acquisition
process for eBay is fortunately being done through word of mouth
publicity of referral process hence company have to spend very little
amount on the advertisement and promotion of their services for the
customers (Lim, 2010). In addition to this company also give some online
advertisement for acquiring new customers. As a part of promotion,
company makes use of the email marketing tools wherein consumers are
being given special discounted offers through mail marketing.  

cash cycle for the company is such that sellers pay in advance for the
listing made by them. Company do not have any receivable due to advance
payment received by the company and there is no inventory maintained by
the company. Hence working capital requirements are very low for eBay as
there is advance being paid by sellers. Company has major investments
in the infrastructure developed for allowing smooth buying and selling
process. Further as such there is no cost of goods sold by company and
gross margin earned by the company are sufficient enough to cover the
overall cost for company.


paper has highlighted the importance of business model for online
business as deciding on revenue stream, competitive advantage and value
proposition are important aspects before starting a business. It has
been highlighted that a clear business model can help the business to
grow and streamline efforts. Finally website shows the
brokerage business model for online businesses which is similar to the
business model adopted by

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