Amazon's Business Model Evolution
Added on 2020-03-01
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Running head: ESSAYInnovation and Sustainable DevelopmentName of the StudentName of the UniversityAuthor’s Note
1ESSAYBusiness model is quite confusing topic and often confused with the business strategy.Drucker’s definition was basically accumulation of some assumptions on what a business willand will not achieve in course of time and how they will achieve is closely related to thedefinition proposed by Michael Porter for the business strategy. Business model is considered tobe the structure of a business. It is the structural framework that defines the plan and theprocedure of making money (Ovans, 2015). In other words, it is the revenue generating modelthat can include various components of business organization such as product and servicepromotion, selling and many more. Discussion will be carried forward with highlighting differentdefinitions of business model proposed by different scholars. The next part of the essay will befocusing on the explanation of e-business archetype, business model as an activity and businessmodel ass cost revenue architecture and an explanation is given on the their use as analytical andproblem solving tools. The idea of business context is clarified in the final part of the essaydrawing an example to support it.The concept of business model can be identified by various fields of application that arepromising in business. The purpose of a business model is to identify the significant componentsof a business and focus o the process of revenue generation using them. This includesidentification of profit potential, estimation of cost structure, identification of target market,value proposition of the company, prepare the structure of the value chain and choosing propertechnology and feature. These are the vital factors of a business model which ensures the successof a business organization. It also looks into the customers’ demand and works towards thesatisfaction of the need (Wirtz et al., 2016; Mishra & Zachary, 2014).Business models that are used in various fields can be explained by seven high levelabstractions. They are summed up under e-business archetypes. These are categorized under
2ESSAYprimary and secondary archetypes. Product, Trade and service archetypes are included in theprimary archetype, whereas, marketplace, brokerage, subscription and ecosystem are identifiedas secondary archetypes. Development of a tangible artifact that are produced and sold on one-time base is looked after the product archetype. When discussing about the online market, isusually refers to the plug-in software for major platforms or the content products. Trade isanother primary archetype that focuses on the connection between sellers and buyers. Thecompany can generate revenue when the product is sold for a greater price than buying. Serviceis the last puzzle of primary archetype which is responsible for providing intangible solutions forboth client and customers in the areas where commoditized products are insufficient. This fieldoften comprised of maintenance, customization or integration of popular platform solution. It isused by the companies that are related to service providing (Fielt, 2013). The first secondary archetype is the marketplace that is a combination of trade andproduct. It facilitates in bringing the seller and buyer together. By products, it refers to eitherphysical shopping mall or the online portal like Amazon. Either services or tangible products areavailable in the marketplace. Brokerage is the second one which is a combination of trade andservices done by the company on behalf of the clients. It is the service sector such as advertisingor similar that helps the trading companies in online traffic sourcing. Subscription is a popularmixture of products and services. It is basically the service providing companies which offersoftware or content as service. It solves the problem of one time bulk investment for a product.Last but not the least; ecosystem is a combination of all the three primary archetypes. Success ina single primary archetype opens up opportunity for the company to evolve in the second one.Example can be sighted for the product creators whose success in the particular field leads themto provide services to the customers. The most common example that can be sighted in the
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