The literature on e-business models reveals many different interpretations of the popular term 'business model'. Where once companies talked about 'business plans', 'business models' became the catchphrase that encapsulated the e-commerce revolution in the 1990s.
Osterwalder, Pigneur and Tucci (2005) documented the various uses and meanings attributed by different researchers in the field.
Some like Galper (2001) and Gebauer and Ginsberg (2004) refer to business models as the way companies do business. Others like Gordijn (2002) and Osterwalder (2004) considers it as a conceptualization of a company's business, that is, its elements and relationships.
Osterwalder et. al. (2005) proposed the following definition for business models:
A business model is a conceptual tool that contains a set of elements and their relationships and allows expressing the business logic of a specific firm. It is a description of the value a company offers to one or several segments of customers and of the architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams.
They summarized the business model components studied in the literature and proposed Nine Business Model Building Blocks:
The CREC group at the University of Texas developed a conceptual framework that provides a good bird's eye view picture of e-commerce.
Their framework breaks down the Internet Economy into four layers: infrastructure, applications infrastructure, intermediary, and commerce (see table). Click on table to enlarge.
Source:Based on "Measuring the Internet Economy," Center for Research in Electronic Commerce, University of Texas, June 6, 2000,www.internetindicators.com.
One of the difficulties with research in this area has to do with definitions.
Various terminologies that seem to approximate each other have emerged in this field. For instance, e-commerce (or electronic commerce), online commerce, e-business, online business, e-marketing , Internet marketing, digital marketing, Web marketing, and online marketing.
The field has not matured to an extent where there is no clear agreement about the various definitions and terms, so it is quite common to see terms like e-business and e-commerce being used interchangeably.
For the purpose of this project, the following definitions will be used:
eCommerce:
The process of buying, selling transferring, or exchanging products, services, and/or information via computer networks, including the Internet.
Source: Turban et. al. (2006)
Simply put, eCommerce means buying and selling over the Internet.
This definition shall encompass the following perspectives:
Communications - ECommerce is the delivery of goods, services, information, or payments over computer networks or by any other electronic means.
Commercial (trading) - ECommerce provides the capability of buying and selling products, services and information on the Internet and via other online services.
Business Process - ECommerce is doing business electronically by completing business processes over electronic networks, thereby substituting information for physical business processes (Weill and Vitale 2001, pg 13)
Service - ECommerce is a tool that addresses the desire of governments, firms, consumers, and management to cut service costs while improving the quality of customer service and increasing the speed of service delivery.
Learning - ECommerce is an enabler of online teaching and education in schools, universities, and other organisations, including businesses.
Collaboration - ECommerce is the framework for inter-organisational and intra-organisational collaboration.
Community - ECommerce provides a gathering place for community members to learn, transact and collaborate.
eBusiness:
eBusiness is the transformation of key business processes through the use of Internet technologies.
Source: www.ibm.com/e-business (since moved)
IBM was one of the first organizations to use the term in 1997 to describe its services, and this definition is broad enough to encompass the various sub-components of an organization that practices e-business.
Dave Chaffey's efforts to distinguish between the two terms can be found here.
Basically, the differences in these terms can be made in terms of their scope.
eCommerce is essentially buying and selling online, and it includes the buy-side eCommerce which interfaces with organizational suppliers, as well as sell-side eCommerce which are the organization's customers and end users.
eBusiness is a broader concept that encompasses eCommerce. It also covers organizational processes and functional units.
Chaffey's diagram below illustrates this perfectly and should dispel any confusion as to how these terms apply.
Blogshops are therefore a type of e-business organization because they operate on the Internet and have processes that are Web dependent.
They are also a type of e-commerce entity because their primary activity is online selling and buying. In this regards, they are an e-retailer or e-tailer (online retailer) as their interface is usually with end-users.
So, the hierarchial scheme should look like this:
References:
Chaffey, D., Ellis-Chadwick, F., Johnston, K., and Mayer,R. (2006). Internet Marketing, Strategy, Implementation and Practice. Prentice Hall, Third Edition, Essex, England.
Turban, E, King, D., Lee, J.K. and Viehland, D. (2006). Electronic Commerce 2006: A Managerial Perspective, Pearson Prentice Hall, 2006 edition, New Jersey.
Weill, P. and Vitale, M.R. (2001). Place to Space: Migrating to eBusiness Models. Boston: Harvard Business School Press 2001.
