Value Creation from E-Business Models by Wendy Currie download in iPad, ePub, pdf
The other group of customers are advertisers, who provide the portal with revenues, for which they can display advertisement. According to Amit and Zott these four categories represent groups of factors that can enhance the total value created by e-business. Paper presents strategies of value proposition on the Internet. This strategy has been popular since the early years of commercial use of Internet.
These strategies are different from traditional strategies of value proposition, which refer values for customers to the level of price. The adoption of unique values strategy may result from innovations, privileged access to resources or operating in a niche. The scope of these activities is also broad. Moreover, many companies offer values based on the economies of scope.
Author proposed in this paper five strategies of customer value proposition. As an indicator of financial performance served the operational return on sales ratio obtained by dividing operational income from transactions on the internet by sales achieved on the internet. To increase item reply rate from survey participants, the variable did not have open-ended format but was categorized with four predetermined answer classes. Strategy of free values can be a part of a broader business strategy assuming the revenue generation. This phenomenon occurs when one of the transaction parties has greater knowledge than the other party and is able to take advantage of it.
According to this rule, companies offering inferior values charge customers lower prices than companies offering superior values. Hence, there can be several strategies of value proposition distinguished e.
Examples of companies following this strategy are Skype and Google with its search engine. To test this hypothesis it was necessary to develop adequate measures of elements of value creation model and competitive performance, which will be discussed in the subsequent section. In the traditional economy a very common rule of value proposition formulation is combining the price level with the values for customer.
Moreover, these companies decrease also customer costs by reduction of information asymmetry. Internet portals have two distinct groups of customers. This situation is very attractive, as it allows charging high prices and thus taking advantage of high margin. Referring values to price level may not always be used on the Internet for several reasons. The application possibilities of this rule on the Internet are constrained.
The first one are final users who take advantage of values offered by the portal for free such as news, e-mail or search engine. Value co-creation orientated at other customers assumes that a customer actively participates in activities aimed at creating values for other customers. Many Internet companies apply the efficiency strategy while offering values related to communications. According to his conclusion a company should act either as a price leader and offer low value for low prices, or as a differentiator and offer differentiated values for higher prices. The way in which companies shape their values propositions is also a subject of change.
As can be seen, the constructs Complementarities and Efficiency were represented by a single component variable each, while the construct Novelty had two independent dimensions. They can be differently categorized. Strategy of Free Values Free value strategy is based on offering values to customers, for which they are not charged. The greatest disadvantage of this strategy are difficulties in creating scarce values and then sustaining the scarcity in long term.
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