A practical guide for understanding online business models

• DOI: https://doi.org/10.1108/IJWIS-07-2018-0060
• Published date: 04 April 2019
• Date: 04 April 2019
• Pages: 71-82
• Author: Won Kim
• Subject Matter: Information & knowledge management,Information & communications technology,Information systems,Library & information science,Information behaviour & retrieval,Metadata,Internet

A practical guide for

understanding online

business models

Won Kim

Gachon University, Seongnam, Korea

Abstract

Purpose –There is a lackof clarity about what online business modelsare. The top 20 Google search results

on online business modelsare articles that explain online business models. However, each of themdeals with

just one or two elements of business strategies. The list of business models is also a mixture of business

strategies.This paper aims to provide practical guide that putsthese business models into proper perspective.

Design/methodology/approach –A business model includes all key elements of the business,

marketing and operationalstrategies. There are many such elements. The author hasreviewed the popular

use of the term online business modelsand found that just five of the key elementscan put almost all of them

into properperspective.

Findings –Five elements of the business and marketing strategies constitute a practical guide for

understanding,discussing and even designing the first working draftof a business plan.

Practical implications –The practicalguide will serve as a robust vehicle for understanding,discussing

and even designing the first working draftof a business plan. The current haphazard use of the term online

businessmodels does not shed light on online business models.

Originality/value –The author has examined 20 top Google search resultsfor “online business models”

and “business models”.These are articles that talk about 3-17 “business models”. The author examinedall of

them and confirmed that the five key elements of the business and marketingstrategies can put all of them

into properperspective.

Keywords E-commerce, Marketing 4Ps, Online business models, Online market place

Paper type General review

1. Introduction

The term business model has been around for a long time. It has become more widely used

with the spread of online business. A business model is, simply put, a way to make money.

However, a comprehensive definition of a business model encompasses all core aspects of a

business, including “purpose, business process, target customers, offerings (and value

propositions),strategies, infrastructures, resources,cost structures, organizational structures,

sourcing,operational processes andpolicies, and even culture”[https://en.wikipedia.org/wiki/

Business_model;https://en.wikipedia.org/wiki/Business_Model_Canvas].

This may be an academically comprehensive definition. However, it certainly is not a

practical guide for understandingand discussing how a business can make money.

The author would like to thank the reviewers for offering many insightful and constructive

comments which resulted in improving the contents and presentation of this paper. This research

was supported by the Korean MSIT (Ministry of Science and ICT), under the National Program for

Excellence in SW (2015-0-00932), supervised by the IITP (Institute for Information and

communications Technology Promotion.

Online

business

models

71

Received27 July 2018

Revised27 August 2018

Accepted28 August 2018

InternationalJournal of Web

InformationSystems

Vol.15 No. 1, 2019

pp. 71-82

© Emerald Publishing Limited

1744-0084

DOI 10.1108/IJWIS-07-2018-0060

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