Diversity of Business Models
Diversity of Business Models
As mentioned, there is no standard business model that guarantees success when used in a particular industry or a specific segment of an industry. Firms approach their markets in different ways and devise different ways to make money. For example, there are six distinct ways that online companies make money. These approaches, shown in Table 6.1, are the core piece of their respective company’s business models. The table illustrates one of the beauties of the Internet—you don’t have to have a product or service to sell to make money online. If you know a great deal about a particular topic, such as cooking or home repair, you can launch a Web site; populate it with articles, tips, and other useful information; and make money online by essentially selling access to the people you attract to your Web site. This is possible by becoming an affiliate of another company, allowing pay-per-click ads to be placed on your Web site, or by selling direct ads that are placed on your Web site, as described in Table 6.1. All of these approaches were developed and pioneered by business model innovators. The result is that the Internet is essentially an ecosystem of varying business models that allow both online and offline companies to make money. A Web site that promotes BMX biking, for example, makes money by selling ads to companies that make
BMX bikes and related equipment. The advertisers, in turn, make money when people respond to the ads and buy their products. The search engines, like Google and Bing, make money by bringing Web sites and advertisers together.
Over time, the most successful business model (or models) in an industry predominate and the weaker models fall by the wayside. There are always opportunities for business model innovation, as illustrated in the “Savvy Entrepreneurial Firm” feature. Netflix in movie rentals, Amazon.com’s Kindle in digital books, Cirque du Soleil in live entertainment, and Apple’s iTunes in the way music is purchased are familiar examples of successful business model innovations.
As mentioned, there is no standard business model that guarantees success when used in a particular industry or a specific segment of an industry. Firms approach their markets in different ways and devise different ways to make money. For example, there are six distinct ways that online companies make money. These approaches, shown in Table 6.1, are the core piece of their respective company’s business models. The table illustrates one of the beauties of the Internet—you don’t have to have a product or service to sell to make money online. If you know a great deal about a particular topic, such as cooking or home repair, you can launch a Web site; populate it with articles, tips, and other useful information; and make money online by essentially selling access to the people you attract to your Web site. This is possible by becoming an affiliate of another company, allowing pay-per-click ads to be placed on your Web site, or by selling direct ads that are placed on your Web site, as described in Table 6.1. All of these approaches were developed and pioneered by business model innovators. The result is that the Internet is essentially an ecosystem of varying business models that allow both online and offline companies to make money. A Web site that promotes BMX biking, for example, makes money by selling ads to companies that make
BMX bikes and related equipment. The advertisers, in turn, make money when people respond to the ads and buy their products. The search engines, like Google and Bing, make money by bringing Web sites and advertisers together.
Over time, the most successful business model (or models) in an industry predominate and the weaker models fall by the wayside. There are always opportunities for business model innovation, as illustrated in the “Savvy Entrepreneurial Firm” feature. Netflix in movie rentals, Amazon.com’s Kindle in digital books, Cirque du Soleil in live entertainment, and Apple’s iTunes in the way music is purchased are familiar examples of successful business model innovations.
Diversity of Business Models
Reviewed by Shopping Sale
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05:28
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Reviewed by Shopping Sale
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05:28
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