Ebuisness Models

Introduction

E-Business models are now essential to doing good business. According to Wilder (1999), ÐŽ§Many companies are struggling with the most basic problem: What's the best E-business model? They're experimenting with different formulas. Some are incorporating E-business throughout the organization. Some are creating E-business subsidiaries, then spinning them off as separate online entities. Others are investing in or merging with Internet startups. Some are even moving their businesses entirely to the WebЎЁ.

This paper will explore the e-business model similarities and differences of three different types of businesses, Dell Computers, Classmates.com and the American Red Cross. In addition, the strengths and weaknesses of each model will be examined.

B2C E-Business: Dell Computers

Dell is a global computer company that has become the company to benchmark in the computer industry. Michael Dell created Dell Computer in 1984 and the company essentially changed the way consumers purchase computers by eliminating the middleman and allowing customers to purchase equipment direct from the company. This has allowed them to have a closer relationship with their customers so they can understand their needs and constantly improve service.

Dell sells a variety of goods such as desktop and notebook computers, their own brand of televisions, handhelds, printers and various other electronics and accessories. Computer equipment arrives with a large color-coded diagram showing the customer exactly how to hook up equipment. The customer can also pay to have someone come to his or her home to set up the equipment leaving the computer ready to use. Dell also markets equipment such as servers and storage solutions to small and large businesses but their main customer is the home consumer.

DellÐŽ¦s target audience for their website is consumers around the world. Dell has done an effective job with their website by allowing the consumer to choose which country they are from on the companies home page. Once selected, the website appears entirely in that countryÐŽ¦s native language. If that countryÐŽ¦s first language is Spanish and second language is English, the website will appear in Spanish but also give an option to display the site in English.

Another important feature Dell provides its customers is the ability to customize his or computer. The customer can build his or her computer with a variety of memory, graphics, hard drive, operating system, and ROM/RAM configuration options among others. If the customer chooses conflicting components, an error message will appear and the customer has to make corrections before continuing the ordering process. If at any time the customer is confused on which options to choose, he or she can just pick up the phone and order the computer through a sales associate.

The customer also has the ability to order additional bundled software, which reduces the cost or ordering them individually. Once the order is complete the customer sign on to the Dell website and see exactly what stage in the process is company at in building their computer. Dell also run upgrade, discount and free shipping specials daily on their website.

DellÐŽ¦s business model has strengths and weaknesses. Because Dell offers their customers a built-to-order option, they are able to eliminate the need to house a great deal of inventory and offer the customer the latest technology. Customer also has a direct relationship will Dell, making it easier to voice their concerns or praise. Dell also has a solid brand reputation.

A weakness in the Dell business model is they do not offer their product in a traditional retail environment. Customers who are not comfortable with purchasing a computer over the Internet or via phone may choose a different vendor. Dell also offers other brand products like printers. This type of products in not customized and frequently there is not a need to get the latest model. Dell also has an opportunity to expand its large corporation customer base.

C2C E-Business: Classmates.com

Classmates.com was started in 1995 and is an online community that allows members to look up friends and classmates they may have lost touch with over the years. The site offers both free and subscription membership (Member Benefits, 2005). With the free membership the user can do the following:

„X Create a user profile in the member directory. The user can an add all the schools he or she attended to the directory going as far back as grammar school. When other users sign on to the site, he or she can search their school by the year they graduated, a succession of years, or see all the other students that attended that school regardless of graduation year. This is an easy tool to try to locate a former classmate.

„X Create a personal biography. In this section the user can create a personal biography listing information such as family status, hobbies, work or military life etc. The user can also post updated pictures of them.

„X Other free benefits include posting to message boards and posting or reading information concerning upcoming class reunions.

Classmates.com make it money by selling a gold membership for a low monthly fee or a yearly membership of $39. With this membership, the user now has access to send other classmates emails and have access to others complete biography as well as photo albums and a reunion-planning center. The company has also partnered with many well-known companies such as Hertz, Blockbuster, various hotels etc. Members can save money on entertainment, travel and a variety of other goods by taking advantage of the member rewards benefit.

The company markets themselves by using online advertising. A pop-up ad normally appears as users are surfing the Internet. The target audience also learns about this website through traditional word of mouth methods. Their school reunion committee also directs users to the site.

One of the strengths of Classmate.com is nostalgia. Many people think back and wonder what happened to a friend they lost touch