– Clicks-and-mortar is an internet business model conceived when a bricks-and-mortar model is in place... Properties of the Internet and the 5-Cs Internet Properties •Mediating tech[r]
(1)Internet Marketing Strategy
(2)Objectives
• Defining the business model
• Integrating Internet marketing strategy • Levels of web development
(3)Defining The Business Model
• the first determinant of a firm’s performance is its business model
• the method by which a firm builds and uses its resources to offer its customers better
(4)Determinants of Business Performance
Business Model
•Components & linkages •Dynamics
Environment
•Competitive •Macro
Change
•Properties
(5)Internet Business Models
• Given such landscape-transforming
properties of the Internet, the question is,
How can a firm take advantage of them and make money.
• The Internet business model is the system – components, linkages, and associated
(6)Internet Business Models
• It takes advantages of the properties of the Internet in the way it builds each of the components – value, scope, revenue sources, pricing, connected activities, implementation, capabilities, and sustainability – and crafts the linkages among these components.
• Categorized as pure play or clicks-and-mortar
– Pure play Internet business model - if firm does not have a bricks-and-mortar model.
(7)Properties of the Internet and the 5-Cs Internet Properties •Mediating technology •Universality •Network externalities •Distribution channel •Time moderator •Information asymmetry shrinker
•Infinite virtual capacity •Low cost standard
(8)Determinants of Firm Performance
Business Model •Customer value •Scope
•Price
•Revenue sources •Connected activities •Implementation
•Capabilities •Sustainability Internet
Environment
(9)Taxonomy of Business Models
• Brokerage model – firms act as market makers who bring buyers and sellers together and charge a fee for the transaction that they enable.
• Advertising model – the owner of a web site provides some content and services that attract visitors Charge advertisers fees for banners, permanent buttons …
• Infomediary model – a firm collects valuable
(10)Taxonomy of Business Models
• Merchant model – is the “e-tailer” model in which wholesalers and retailers sell goods and services over the Internet.
• Manufacturer model – try to reach end users directly through the Internet instead of going through a
wholesaler or retailer.
• Affiliate model – a merchant has affiliates whose websites have click-through to the merchant.
(11)Taxonomy of Business Models
• Subscription model – access to a web site is not free Members pay a subscription price and in return receive high-quality content. • Utility model – firms pay as they go
(12)Internet Marketing Strategy
• Block Strategy – firm erects barriers around its product market space by having inimitable
capabilities and lowering prices.
• Run Strategy – an innovator often has to run
Running means changing some subset of components or linkages or business models or reinventing the
whole business model to offer customers better value. • Team-up Strategy – if a firm can not it alone Use
(13)David Teece argued that two things
determine the extent to which a firm can profit from its invention or technology:
(14)Who Profits from Innovation
I Difficult to make
money II Holder of complementary assets makes money IV Inventor makes money
III Party with both
technology and assets or with bargaining power makes money
H ig h L ow Im it ab ili ty Freely Available
(15)Strategies for Building Business Models I Run II Team-up •Joint venture •Strategic alliance •Acquisition Internal development IV Block III Block Team-up •Joint venture •Strategic alliance •Acquisition H ig h L ow Im it ab ili ty Freely Available
(16)Internet Technology Life Cycle
•Locate profit
site •Determine strengths and weaknesses of business model
•Build business model
•Defend competitive advantage
•Decide where in the Internet value network you want to be
•Build capabilities •Build network
•Invest in infrastructure •Win customers
•Build brand name
(17)(18)Simple Framework for IMS development
Develop Internet marketing strategy
Define Internet marketing plan
Design site
Implement site
Monitor (metrics)
(19)Strategic Marketing Planning Process
1 Mission
2 Corporate objectives Marketing audit
4 SWOT analysis Assumption
6 Marketing objectives & strategies Estimate expected results
8 Identify alternative plans & mixes Budget
Measurement and review
Phase
Goal setting
Phase
Situation review
Phase
Strategy formulation