A New Definition Of A Business Model

Abstract

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="color: black; font-size: 10pt;"><span style="font-family: Times New Roman;">This paper discusses the lack of agreement on the definition of a business model which is a recent addition to management literature since the dot com era. <span style="mso-spacerun: yes;"> </span>An abbreviated literature review was discussed that emphasizes the different perspectives of business model definitions. <span style="mso-spacerun: yes;"> </span>There are categories such as auction, subscription, or advertising business models which describe the processes between a buyer and seller (Rappa, 2005). Business models have also been defined in the literature as a system with components (Afuah&Tucci, 2001) or a method to make money (Weill&Vitale 2001). They have also been categorized as business to business models or business to consumer models (Haag, 2004) <span style="mso-spacerun: yes;"> </span>This author has developed a new definition of a business model that focuses on the transaction between the buyer and seller, regardless of whether it is a traditional transaction, an electronic transaction or the type of transaction.<span style="mso-spacerun: yes;">  </span>The paper has provided six comparisons of the difference between a traditional transaction between a buyer and a seller and an electronic transaction between a buyer and a seller. The direct comparisons of traditional and e-commerce business models illustrate the major component of a business model—the transaction that occurs between the seller and buyer and that the transaction must be included in the definition of a business model. </span></span></p>