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Nong Mai Anh Chapter 1

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CHAPTER 2
INTRODUCTION TO
ECOMMERCE: REVIEW
QUESTIONS
Nong Mai Anh
161115004
TMAE306E.1
TABLE OF CONTENT
1. What is a business model? How does it differ from a
business plan?.................................................................. 2
2. What are the eight key components of an effective
business model? ............................................................... 2
3. What are Amazon’s primary customer value
propositions? ................................................................... 3
4. Describe the five primary revenue models used by
e-commerce firms? .......................................................... 3
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Answer review questions for chapter 2.
1. What is a business model? How does it differ from a business plan?
A business model is a set of planned activities (sometimes referred to as
business processes) designed to result in a profit in a marketplace while a
business plan is a document that describes a firm’s business model
2. What are the eight key components of an effective business model?
1, Value proposition: defines how a company’s product or service fulfills
the needs of customers.
2, Revenue model: describes how the firm will earn revenue, produce
profits, and produce a superior return on invested capital.
3, Market opportunity: refers to the company’s intended marketspace and
the overall potential financial opportunities available to the firm in that
marketspace.
4, Competitive environment: refers to the other companies operating in
the same marketspace selling similar products.
5, Competitive advantage: achieved by a firm when it can produce a
superior product and/or bring the product to market at a lower price than
most, or all, of its competitors.
6, Market strategy: the plan you put together that details exactly how
you intend to enter a new market and attract new customers.
7, Organizational development: plan that describes how the company will
organize the work that needs to be accomplished.
8, Management team: employees of the company responsible for making
the business model work.
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3. What are Amazon’s primary customer value propositions?
Amazon makes it possible for book lovers to shop for virtually any book in print
from the comfort of their home or office, 24 hours a day, and to know immediately
whether a book is in stock. Amazon’s Kindle takes this one step further by making
e-books instantly available with no shipping wait. Amazon’s primary value
propositions are unparalleled selection and convenience.
4. Describe the five primary revenue models used by e-commerce firms?
1, Advertising revenue model: a company provides a forum for advertisements and
receives fees from advertisers.
2, Subscription revenue model: a company offers its users content or services and
charges a subscription fee for access to some or all of its offerings.
3, Transaction fee revenue model: a company receives a fee for enabling or
executing a transaction.
4, Sales revenue model: a company derives revenue by selling goods, information,
or services.
5, Affiliate revenue model a company steers business to an affiliate and receives a
referral fee or percentage of the revenue from any resulting sales.
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