Electronic Commerce Business Models: A Conceptual Framework

Abstract

The recent boom in the new economy of internet based commerce has created a large number of firms with a variety of business models that aim to leverage the power of the internet to further their business goals. In this paper we attempt to provide a conceptual framework for understanding e-commerce business models on a number of important dimensions - nature of consumer activity, nature of e-commerce activity, target customers, targeting strategy, revenue generating modes, procfactfcerwce delivery modes, payment collection modes, operating modes, market places, advantage mechanisms and domination characteristics. We also examine means of improving value proposition and net-friendliness for e-commerce activities and identify areas where e-commerce models have not been explored or fully exploited so far. Since the range of economic activities on the internet is vast and growing, newer models and opportunities are likely to emerge through improvements in internet technologies as well as innovations in their application to business contexts. Hence any conceptual framework on e-commerce business models, including our own, can never be comprehensive.