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Scenario
Suppose Mr. Akram has established a joint venture company
which deals with different commodities through online e-business. This company
has to process thoudands of customer’s transaction each day. It needs a
powerful web server which to handle all the requests efficiently. The main
purpose of an e-business is to generate revenue and earn profit alongwith
reducing cost and improving customer services. Keeping in view of the following
scenarios, you are required to identify the revenue model for particulars
(Businesses) which will be implemented e-business of this joint venture compay:
Facebook and YouTube are displaying different types of
advertisements. These advertisements can be seen or skipped depending upon our
choice. Which revenue model will be implemented here?
Solution
Advertising Supported Revenue Model
- An advertising-supported revenue model is a business approach that emphasizes the sale of advertising as a major source of revenue. This structure is most prominent in traditional broadcast and print media, as well as online media. Media businesses generally earn revenue from advertising, customer subscriptions or a combination of the two.
Benefits
- The benefit of an advertising-supported revenue model is that if you have an audience, you can almost always find companies that want to pay to reach it. This is especially true when you can provide specific details about the nature of your audience. When you operate with a 100 percent ad-supported model, you can more easily attract users with free content. Newspapers have long given away hundreds of copies to businesses and organizations in communities to drive up their circulation and readership, and subsequently, ad revenue potential.
Drawbacks
- The major drawback of an entirely ad-supported revenue model is the inherent lack of diversification. Businesses generally prefer multiple revenue streams when possible. In a down economy, advertisers might back off their investments, which can more negatively affect a medium that has no subscription revenue.
For online business of retail store of
child’s garments, where customers can shop 24 hours a day without leaving their
home or office. Which revenue model will be implemented here?
SOLUTION:
Web Catalogue Revenue Model
- The web catalog revenue model is essentially an electronic version of the traditional catalog-based retail revenue model.
- The web catalog model was formed through the evolution of the information era. With the advent of the internet and its increased availability, printed catalogs have been either completely replaced or supplemented by a digital online catalog reaching a wider audience in a shorter space of time. Just as the traditional catalog-based model, also known as the mail order or catalog model, allows buyers to order via mail or telephone, the web catalog model allows buyers to place their orders through online forums on the website or by telephone.
Challenge:
- The web catalog model meets its challenges with customers who are not willing to send their personal information across the internet. Many internet users are fearful of their information, particularly credit card information, ending up in the wrong hands. How safe is their information in the hands of an online business? Although this fear has decreased considerably in the past ten years, this will always be a concern because as security improves, so does fraud and hacking.
Suppose you purchase T. Shirt online
and make your payment using your credit card. Which revenue model will be
implemented here?
SOLUTION:
Fee for Transaction Revenue Model
- A company receives commissions based on volume for enabling or executing transactions.7) the revenue is generated through transaction fees by the customer paying a fee for a transaction to the operator of a platform. The company is a market place operator providing the customer with a platform to place his transactions. During this process the customer may be presented as a buyer as well as a seller. To actively participate in this e-market, customers must register, so both parties of a transaction taking place are identified. From a business perspective, the offer is determined by others as customers offer their goods online and are acting as sellers. The amount of the transaction fee can be both – fixed and percentage calculated.
Let’s say that, you are having a health
issue and need some assistance online from a doctor. You approach him/her
online for discussing your health related issues and pay fee for availing this
service. Which revenue model do you think is appropriate in this case?
SOLUTION:
Fee for Service Revenue Model
- Fee-for-service is payment for each unit of service, such as a visit or surgical procedure. Payment for a complete service covering the whole period of an illness or another type of care such as obstetric care including prenatal care and delivery, or other, is called case payment. Fee-for-service is historically the common method of paying for doctors’ services and is still the norm in Canada, Germany, and other countries. In some places, payment may be according to a fixed-fee schedule negotiated between the insurance mechanisms, whether public or private, and the doctors’ representatives. Fee schedules are often weighted towards medical specialists, who have greater prestige than primary care physicians.
Joint Venture Company offered a
platform to submit and publish books, research papers and research articles.
Which revenue model will be implemented here?
SOLUTION:
Digital Content Revenue Model
- The basic idea behind this model is that digital content is packaged with non-digital content or services as a subscription. This is an all-access model, in which users pay a particular fee for use of the services for a specific period of time.
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