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Source Applegate, Lynda M., Robert D. Austin,
and F. Warren
McFarlan
.,
Corporate Information Strategy and Management
. Burr Ridge, IL
Introduction Figure I
-
4
McGraw
-
Hill/Irwin, 2002.
4
The Value Chain Defines Industry Structure and
Relationships
Source Applegate, Lynda M., Robert D. Austin,
and F. Warren
McFarlan
.,
Corporate Information Strategy and Management
. Burr Ridge, IL
Introduction Figure I
-
2
McGraw
-
Hill/Irwin, 2002.
5
Classifying Network Business Models
Source Applegate, Lynda M., Robert D. Austin,
and F. Warren
McFarlan
,
Corporate Information Strategy and Management
. Burr Ridge, IL
Chapter 2 Figure 2
-
3
McGraw
-
Hill/Irwin, 2002.
6
Classifying Network Business Models
Network Model Manufacturers Service
Providers Educators Advisors Info and
News Producer Portals
Characteristics for Network Usage Streamline,
integrate, coordinate, control physical channels
of production Deliver services and to connect
and share with customers, suppliers, and
partners Deliver online courses, course support
materials, etc. Used to disseminate knowledge,
connect w/clients, create communities of
interest Package and deliver content both on-line
and off-line Support all aspects of production
and distribution
Source Applegate, Lynda M., Robert D. Austin,
and F. Warren
McFarlan
,
Corporate Information Strategy and Management
. Burr Ridge, IL
Chapter 2 Figure 2
-
3
McGraw
-
Hill/Irwin, 2002.
7
Classifying Network Business Models
Network Model Retailers Marketplaces Aggreg
ators Infomediaries
Characteristics for Network Usage Assume control
of inventory, set prices, and sell products
online (BestBuy) No physical inventory,
commission revenue for bring buyers and sellers
together through integrated systems (auction
sites) Information only, revenue from referral
fees to providers sites, cannot complete the
transaction for buyers and sellers
(Autoweb) Aggregator for information based
products such as news, weather, sports,etc.
Revenue from consumer or corporate subscription
fees or advertising fees
Source Applegate, Lynda M., Robert D. Austin,
and F. Warren
McFarlan
,
Corporate Information Strategy and Management
. Burr Ridge, IL
Chapter 2 Figure 2
-
3
McGraw
-
Hill/Irwin, 2002.
8
Classifying Network Business Models
Network Model Horizontal Vertical Affinity

Characteristics for Network Usage Broad range of
services and content to service a different
markets, industries or customers groups. Revenue
is derived from advertising, licensing, and
subscription revenue. (AOL, Yahoo) Deep content
and services for a narrow market or industry.
Revenue is generated advertising and referral
fees. Vertical portal with a
Source Applegate, Lynda M., Robert D. Austin,
and F. Warren
McFarlan
,
Corporate Information Strategy and Management
. Burr Ridge, IL
Chapter 2 Figure 2
-
3
McGraw
-
Hill/Irwin, 2002.
9
Classifying Network Business Models
Network Model Manufacturers Service
Providers Educators Advisors Info and
News Producer Portals
Characteristics for Network Usage Streamline,
integrate, coordinate, control physical channels
of production Deliver services and to connect
and share with customers, suppliers, and
partners Deliver online courses, course support
materials, etc. Used to disseminate knowledge,
connect w/clients, create communities of
interest Package and deliver content both on-line
and off-line Support all aspects of production
and distribution
Source Applegate, Lynda M., Robert D. Austin,
and F. Warren
McFarlan
,
Corporate Information Strategy and Management
. Burr Ridge, IL
Chapter 2 Figure 2
-
3
McGraw
-
Hill/Irwin, 2002.
10
Classifying Network Business Models
Network Model Equipment and Component Mfgs
Software Firms Custom Software and Integration
SP
Characteristics for Network Usage Produce, sell,
and service network equipment and software as OEM
or contract manufacturer Revenue from sales and
cost is affected by rapid obsolescence cycle
(Cisco) Operating system, application, and
database software for devices such as servers
and clients. Revenue through direct and indirect
channels consists of license fees or capacity.
(Oracle) Customizers or producers of software or
integration services with revenue coming from
development and installation of software
products. (Accenture)
Source Applegate, Lynda M., Robert D. Austin,
and F. Warren
McFarlan
,
Corporate Information Strategy and Management
. Burr Ridge, IL
Chapter 2 Figure 2
-
3
McGraw
-
Hill/Irwin, 2002.
11
Classifying Network Business Models
Network Model Infrastructure Retailers Infrastruct
ure Marketplaces Infrastructure
Aggregators Infrastructure Exchanges
Characteristics for Network Usage Inventory and
sell physical products on-line. (Comp
USA) Same as retail market places (Ingram
Micro) Comparisons and information about
products. No direct sales. (Cnet) Auction of
new and used equipment
Source Applegate, Lynda M., Robert D. Austin,
and F. Warren
McFarlan
,
Corporate Information Strategy and Management
. Burr Ridge, IL
Chapter 2 Figure 2
-
3
McGraw
-
Hill/Irwin, 2002.
12
Classifying Network Business Models
Network Model Horizontal Vertical
Characteristics for Network Usage ISP (AOL
Hosting Services) ASPs (IBM eBusiness Solutions)
Source Applegate, Lynda M., Robert D. Austin,
and F. Warren
McFarlan
,
Corporate Information Strategy and Management
. Burr Ridge, IL
Chapter 2 Figure 2
-
3
McGraw
-
Hill/Irwin, 2002.
13
Prentice Hall, 2002
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