University of Greenwich Business

School

MSc Accounting and Finance Programmes

2006-2007
Dissertation title:
“E-Business Models and their Success”

Student Name: Tsourela Maria

Supervison Name: Athianos Stergios
Acknowledgements
I am very grateful to my supervisor Dr. Athiano and to Dr. Chatzoglou for
their precious help and guidance in the implementation of my dissertation. I
would also like to thank all the other professors of the postgraduate program for
providing support for this study.

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CONTENTS
1. INTRODUCTION ............................................................ 3

2. LITERATURE REVIEW ................................................... 6

2.1 E-Business.......................................................................................... 6
2.2 E-business models .............................................................................. 9
2.3 Types and classification of e-business models ................................ 14
2.4 Commonality of e-business models ................................................. 32

3. FACTORS AFFECTING E-BUSINESS SUCCESS OR FAILURE34

4. RESEARCH DESIGN ..................................................... 38

4.1 Demographic data ............................................................................ 38
4.2 ANALYSIS ...................................................................................... 40

5. CONCLUSIONS ............................................................ 52

6. LIMITATIONS.............................................................. 53

7. FUTURE RESEARCH .................................................... 53

References ....................................................................... 54
APPENDIX ...................................................................... 58

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1. INTRODUCTION
E-business models are part of a greater section called “New Economy”.
The term New Economy is not yet very clear. It is used frequently but it is almost
never clearly explained. Many names are used to describe it such as digital
economy, electronic economy, knowledge economy, network economy etc. It
was first used during the last decade of the 20th century to state the change that
happened in the business world and the economy.
“New Economy and Information Technology provide geographical clusters
with new development opportunities, drawing new possible trajectories of
evolution”, Carbonara (2005). The basic aspects of “New Economy” are:
1) Digital economy which includes:
 e-business
 e-commerce (B2B, B2C models)
 information management
 e-business models
 supply chain (management)
 web technologies
 web services
 ICT management, information systems management
 intellectual property
 technology management
 innovations management
 process management
 technology management
 alliances
2) Knowledge, which includes:
 Knowledge management
3) Services, which include:
 service management
4) Globalization, which include:
 internationalisation
 international management

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 Businesses by adopting information and communication technologies they
change the existing fashions of competition, the ways of achieving success, the
business models and the value creating processes. A business by embodying
information and communication technologies acquire the ability to manage
information (gather, transmit and handle information) faster and break the time
barriers by creating time independence.
Also, education will change. On-line schools will appear and schools with
only physical essence will start to diminish. Educational Institutions will provide
lessons through the Internet resulting to more competition among them, wider
range of choice for students and more teacher accountability. .
According to John Chambers (1998) the Internet business principles for
success are the following:
 “The Internet is the competitive advantage
 Companies must thrive in the globalization of business
 Companies must be customer driven
 Companies must empower employees
 Change is part of the culture”
Also, geographic limitations are eliminated and the opportunity to enter
and sell products and services to the “global market” is offered to them.
According to Timmers (1999) the universal reach of the Internet its all day long
accessibility diminish time and geographical boundaries and detach customer
service from supplier presence. The capabilities and advantages of ICT are
showed in Table 1.
Through the use of ICTs a very large number of possible purchasers and
suppliers is connected electronically and fit to each other. Eventually the
relationships of all the members concerned in the “trading” process are increased
and the cost of all the process is reduced. All these promote the development of
new business models that will be based on network processes the so called “e-
business models”.
As Timmers (1999) stated Internet and the contextual e-business models
like B2B (business-to-business) and B2C (business-to-consumer) offer assets to
the traders and profits to the customers. Some of these are “lower transaction
costs, better prices, reduction of time to market, affirmation of brand image,

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market share and access to markets, customer orientation, customer choice
increasing, and customer-driven design”, Timmers (1999).

Table 1: ICT capabilities and advantages, Davenport and Short (1990)

Capability Advantages Example’s of ICT’s
Transactional/networking ICTs can transform Artificial intelligence, dedicated
unstructured processes software, groupware technology,
into routinised multimedia.
transactions.
Geographical ICTs allow an easy and EDI, Internet (Intranet/Extranet),
fast information transfer videoconferencing, telework.
along large distance,
making processes
independent of geography
Automational ICTs can replace or Artificial intelligence, CAD/CAM,
reduce human labour in a CNC, EDI, PLC, search engine.
process.
Analytical ICTs can bring complex Dedicated software, workstations
analytical methods to bear
on a process.
Informational/multimedia ICTs can deal with and CAD/CAM, databases,
deliver a great amount of videoconferencing, audio-
information expressed in conferencing, search engines.
several ways: text,
graphics, sound, video.
Sequential ICTs can enable changes Groupware technology, shared
in the sequence of tasks databases, Internet
in a process, often (Intranet/Extranet).
allowing multiple tasks to
be worked on
simultaneously.
Knowledge management ICTs allow the capture Artificial intelligence, groupware
and dissemination of shared databases, data mining,
knowledge and expertise. videoconferencing,chat systems.
Tracking ICTs allow the detailed Artificial intelligence, CAI, CAM,
tracking of task status, PLC, sensors, Internet-based
inputs, and outputs. applications.
Disintermediation/interactivity ICTs can be used to CAD/CAM, EDI, Internet
connect, synchronously (Intranet/Extranet).
and asynchronously, two
parties that would
otherwise communicate
through an intermediary.

After the crash of the dot.com companies called the Internet bubble, the
madness surrounding this new technology, the theories about e-business being a
secure way of value creation and the impression that e-business was the answer
for all the problems that a business could have faded away. Until today many
companies try to catch up and recover from the losses that they had due to the
bursting of the Internet bubble.

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 “New Economy and e-businesses are still at the infancy stage”, Brown
(2001), but they evolve in high rates. Although, in some cases, digital assets
today value more than physical assets, with companies such as Amazon.com
growing in market cap and in revenue. The Wall Street Journal writes that due to
the fact that purchasing goods and services from the Internet is cheaper and
operating costs of the purchases through the Internet is lower, eventually many
of the goods and services can be as much as 72 per cent cheaper. According to
Hodge and Cagle (2004) e-business may be regarded as a high-quality asset in
the attempt to increase abilities and raise capabilities in daily dealings and the
Internet is primarily a new way of linking customers and suppliers.
In order for companies to achieve value creation and generally enjoy
returns from e-business they must change their organizational structure and the
business model that they use into ways that fit the new network environment and
not expect to reach success just by entering the new networked global market
and without making any changes to the internal and external features of the
business.
Electronic businesses create major challenges for companies as it induces
both how companies relate to external parties (customers, suppliers, partners,
competitors and markets) – and the way they function on the inside in controlling
actions, processes and systems, Rayport & Jaworski (2001). Firms for
succeeding in e-business have to combine the use of the net with the business
models and activities that were using before.

2. LITERATURE REVIEW
2.1 E-Business
As we enter the twenty-first century, network economy enforces a different
perception of business. Business is separated in to three dimensions which are
product, process and delivery agent. Consequently businesses can be separated
into three categories, as shown in Figure 1, which are “traditional business,
partial e-business and pure e-business”, Stahl & Choi (1997).
Electronic business (e-business) will overly modify the way business is
carried out. Transactions are now conducted through Internet and this advances
ease of access to endless information and services and distant payments. This
“Information Age” has begun and even the world’s stronger financial markets,

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telecommunications and markets and industries of water and power supplies rely
part of their functions on the procedures ICTs based on the Internet, Chaum, Fiat
& Naor (1990).

Figure 1: Three types of businesses, Stahl & Choi (1997)

E-business with its effectuality, its fast expansion and its strong
competitive characteristics guarantees fresh and innovative ways for prosperity,
Amit &Zott (2001). A major characteristic of e-business is the fact that gives firms
the opportunity to generate wealth through alliances and corporate ventures.
Already established businesses are expanding to this new technology era by
making online businesses and new firms are considering of conducting their
operations through the Internet.
Every e-business belongs to one of the three most known market
structures: “portals, market makers and product or/and service providers”,
Mahadevan (2003). Portals supply users with information about products and
services. Market makers also supply users with information about products and
services but they also contribute by making transactions easier. A market formed
this way can give a trade area with lower costs because the procedure of
searching the desirable good reduces as well as the transaction costs of goods

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and services, Mahadevan (2003). Product and/or sales providers are businesses
that make the dealings with their customer through Internet.
E-business works inside virtual markets which are characterized, as
shown in Figure 2, by “high connectivity”, Dutta & Segev (1999), “a focus on
transactions”, Balakrishnam, Kumara & Sundaresan (1999), “the importance of
information goods”, Shapiro and Varian (1999), “ high reach and richness of
information”, Evans & Wurster (1999) and “digital representation” Zott, Amit &
Donlevy (2000). Also, a major and of great importance characteristic of a virtual
market is that it does not have geographical limitations.

Figure 2: Characteristics of virtual markets

High
Connectivity
Digital
Representation
Digital High Focus on
Representation Connectivity Transactions

VIRTUAL
MARKET

Importance of
Richness Information
Goods

High Reach

These characteristics set the background for the creation of successful

and value creating e-business models. Value is created mot only fro the e-
business but for all the entities involved in to the e-business processes such as
the customers, the suppliers the members etc.
On the other hand many e-businesses face big problems due to several
imperfections that information systems may have. Such imperfections bring out
problems to the business and are alarming for its proper and safe operation.

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These imperfections may concern security problems, flawed controls and
wrongly designed back-end systems.
Issues like these are mixed by insecurities that grow from fast
improvement, system difficulty, enlarged risk through connectivity and decreased
comprehension of the innovative technology and networked economy, Wang,
Hidvegi, Bailey & Whinston (2000). Thus, the need of recognizing and repairing
e-process weaknesses before acting is a deliberate constraint for winning in the
e-business battle, Anderson et al (2005).

2.2 E-business models

In order to go well in e-business, the setting of an e-business model that
will be suitable as start in requirement analysis for the e-business information
systems is necessitated. E-business models serve as a leg up for firms to carry
out their strategies and provide the means to help firms evaluate, scale, alter and
simulate their activities.
This term is widely discussed but it is almost never explained. It is used by
many but deeply understood by few. As Osterwalder & Pigneur (2002) stated
counsellors, executives, researchers and journalists have ‘nastily’ manipulated
the expression ‘business model’ but have hardly ever presented an exact
explanation of what precisely denoted by using it. This resulted to a
misunderstanding of the concept and the creation of a grey shadow around its
credibility and importance.
Having a deep knowledge and good comprehension of the use of e-
business models is necessary in the constantly changing and mercurial business
environment. Some of the most important reasons based on the literature review
are the following:
 The procedure of sculpting public structure or an ontology – like an
electronic business model- facilitates recognizing and comprehending the
related aspects in a particular area and the connections among them,
Ushold et al,(1995) & Morecroft (1994).
 Setting conventionalized e-business models assists managers to by far
come to an understanding of an e-business among other stakeholders,
Fensel (2001).

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  Surveying and make use of e-business models as a ground base for
discussion makes change possible and also easier. Business model
designers with little effort can alter some of the essentials of an already
existing e-business model, Petrovic et al. (2001).
 A conventionalized e-business model can be proved as a useful tool to
recognize the appropriate methods that an e-business can adapt, as with
the Balanced Scorecard Approach, Norton et al. (1992).
 Managers when using e-business models have the opportunity to replicate
e-businesses and find out many things about them. This way
experimentation with limited risk can be made and the viability of the
institution or business is not jeopardized, Sternman (2000).
There are many definitions of e-business models. Mahadevan (2000) says
that “a business model is a blend of three streams; value, revenue and logistics”.
The first stream that is value deals with the value proposition for buyers, sellers
and market makers. The second stream that is revenue makes out the way and
the means by which the organisations will earn revenue and the third and last
stream that is logistics is concentrated in supply chain and how the business can
be influenced by it.
Timmers (1999) states that an e-business model is an “architecture for
product, service and information flows and that is comprised of components,
linkages and dynamics’’. Components stand for customers, products and
services, pricing, revenues, customer value, implementation, abilities of the
business and long-livedness of the firm. Linkages stand for business activities
that affect one another and are related to trading and costs which are combined
in order to accomplish a competitive advantage. Dynamics stand for the reaction
of a business to change in order either to obtain a new competitive advantage or
to support the one that already has and the ways to act better than its
competitors.
Also according to Lam & and Harrison-Walker (2003) e-business models
are “methods, concepts, frameworks or architectures”. Through these methods,
concepts, frameworks or architectures businesses can apply the Internet or the
Web to accomplish their strategies of engaging leading market positions,

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ascertaining feasible market placements, adding value for their stakeholders or
preserving themselves over time.
A very interesting approach of e-business models is made by Osterwalder
and Pigneur (2002) which they argue that a business model is the value that a
firm gives to its customers and the structure of the company and its network of
associates for the generation, marketing and handing out of this value and capital
in order to create gainful revenue streams. The central components of a model
which are connected to four sides of the business are “product innovation,
customer relationship, infrastructure management and financial aspects”,
Osterwalder and Pigneur (2002), as shown in Figure 3.

Figure 3: Aspects of an e-business model

E-business model

Product Customer Infrastructure Financials

Innovation Relationship Management

The aspect of product innovation concerns all the topics related to

customers and the value that the company offers to them. It comprises of three
main factors which are ‘target customer’, ‘value proposition’ and ‘capabilities’,
Osterwalder and Pigneur (2002). These factors are connected to each in the
following way: extensive research has to be conducted to all of the target
customer segments in order to uncover the elements of an efficient value
recognition by the customer and how they are related to each other. Then, in
order the company to pass over this value proposition, it has to have some
specific capabilities.
The factor of value proposition concerns the value that is given to
customers. With the development and adoption of Information and
Communication Technology many new opportunities for value creation showed
up. A business has now the chance to create a competitive advantage by making

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innovations through new offerings or by reducing the prices (something that can
be done due to cost savings) or by providing corking service excellence
relationship to the customers.
The target customer factor means that the company creates value for a
specific section of customers. There is portion of the entire entity of customers
that the company wants to be competitive and this portion refers to the
customers, areas and products that is interested in. The differentiation between
traditional businesses and e-businesses is the distance and time. These two
elements are eliminated by Internet and this on one hand is a prospect but on the
other hand is a risk because obstacles to market entry are lesser and competition
enhances, Porter (2001).
The capabilities factor means that in order to pass over the value the
company has to have some capabilities. According to Wallin (2000) capabilities
can be defined as perennial modules of action in order to generate assets,
produce and/or offer goods and services to a market.
The aspect of customer relationship comprises of three elements which
are ‘understanding the customer’, ‘serving the customer’ and ‘providing trust and
loyalty’. Due to the fact that in e-businesses there is no face-to-face contact
during business transactions the business must be able to infuse credibility and
integrity.
The element of understanding the customer works on collecting
information about the customers and finding ways to taking advantage of this
information for finding ways to managing as good as possible and outperforming
customer relationships. Also use the gather information to find new and value
creative business opportunities. “Data mining, data warehousing and business
intelligence are important opportunities that allow managers to gain insight on
their customers buying behaviour”, Osterwalder and Pigneur (2002).
The element of serving the customer refers to the method a company
enters to market and the way it essentially gets in touch with its customers,
Hamel (2000). The company has to determine the ways by which it will offer its
customers additional value and the level of service that is willing to offer to them.
A business has to name its channel strategy and be aware that the Internet has a
large prospective to balance rather than thyestean its business, Porter (2001).

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 The element of providing thrust is extremely important due to the virtuality
and impersonality of business transactions. Trust in e-businesses is one of the
key elements for the success of the business. Customer loyalty results from
customer trust. If the customer feels secure about an e-business it will choose to
use this –business over another of the same kind and this promotes the
customer’s loyalty to this e-business. In order to obtain customer loyalty the
company has to “create positive relationship dynamics”, Hamel (2000), “where
emotional (such as e-branding), as well as transactional elements in the
interaction between the firm and the client pay an important role”, Osterwalder
and Pigneur (2002).
The infrastructure management aspect “describes the value system
configuration that it necessary to deliver the value proposition”, Gordign (2001). It
consists of the three following elements: “activity configuration, resources and
assets and partner work”, Osterwalder and Pigneur (2002).
Through activity configuration element the company tries to create value in
order to make the customers prompted to pay fir it. In order to define the
procedure of value creation the “value chain framework”, Porter et al. (1985) is
used and the extension of value chain to “value shop and value network”, Stabell
and Fjeldstad (1998).
The element of partner network describes how value creation process is
allotted among the associates of the company. It concerns the possible ways to
generate value with a group of partners and not what value will be offered at the
end. Strategic networks are established attachments inside the organization
which are strategically vital to cooperating firms. They possibly receive the
structure of strategic alliances, joint-ventures, long-term buyer-seller partnerships
and other attachments, Gulati et al. (2000).
For the creation of value a business requires assets. Assets are separated
to “tangible, intangible and human”, Grant (1995).
The financial aspect is the charge needed to obtain the base to generate
value and the revenues of traded value, Dubosson-Torbay et al. (2001). So the
three elements of this aspect are revenue, cost and profit.
The revenue element calculates the capability of the business to transform
the value it proposes to its clients into cash and consequently produce received
revenue streams, Dubosson-Torbay et al. (2001). “ICT have had an vital effect

13
on pricing and have produced a completely innovative variety of pricing systems,
Klein (2000).
The element of cost calculates the costs that occur during the processes
of producing, marketing and offering value to the customers. It lays down the
price for all the activities and assets that may produce costs to the company.
The element of profit evaluates the skill of a business to make positive
cash flow, Dubosson-Torbay et al. (2001).
According to the above, Figure 3, which demonstrates the aspects of an e-
business model, can be filled in by showing the elements of each aspect, as
illustrated in Figure 5. The way that all the aspects and elements interlink and
bound together is shown in Figure 4, Pigneur (2002)

Figure 4: Interaction of the aspects and elements of an e-business model

Pigneur (2002)

2.3 Types and classification of e-business models

In every science sector classification of things during research is essential
and promotes the development and implementation of other researches. Theory
is not able to give details if it grounds on an insufficient scheme of taxonomy,
Baily (1994). In order to be able to move build up in theory and expand is to have
a good classification. Through classifications theoretical and complicated
concepts can be managed. Business models are intangible and intricated

14
conceptions of which apprehending can be boosted through the creation of a
common taxonomy scheme, Lambert (2006).
Classifying means setting things into sections based on the common
elements that they have. In the business model research uncovering the
commonalities and differences among business models is the keystone for
further development and research. Bailey names ten advantages of good
classification:
 Provides an exhaustive and definite array of types or taxa.
 Lessens intricacy and attain stinginess.
 Recognizes resemblances among items and permits a set of items to be
analyzed leaving out other more varied items.
 Recognizes dissimilarities so that objects are broken up for investigation.
 Shows an in-depth directory of proportions or features.
 Permit sorts of items to be compared.
 Supervises and takes stock of types of objects.
 Facilitates the planning of assumptions regarding affairs among groups of
items and then recognition of observed cases.
 “Types can be utilized as decisive factor for measurement. One type can
be used as the reference point and others can be measured relative to
that criterion.”
 Offers flexibility, i.e. goes well with a lot of requirements and can
demonstrate several sides of the facts. , Bailey (1994).
According to the existing literature there are many classifications of the
existing business models. They are categorized in many different ways. Rappa
(2003) identifies nine categories of e-business models which consist of business
models. Ticoll (1998) identifies four different types of models. Timmers (1999)
proposes 11 types of e-business models. Bambury (1998) proposes fourteen
types of business models which are separated into two categories. Eisenman
(2002) identifies eight types of business models. Lam & Harrison Walker (2003)
propose six categories of business models which consist of thirty three models.
Hodge & Cagle (2004) propose seven categories of business models which
consist of twenty eight models. Table 2 presents the above classifications.

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Figure 5: Aspects of an e-business model and their elements

E-business Model

Product Innovation Customer Infrastructure Financials

Relationship Management

Target Understanding Activity Revenue

Customer the Customer Configuration

Value Serving Resources & Cost

Proposition the Customer Assets

Capabilities Trust & Partner Profit

Loyalty Network

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 Linder and Catrell (2000) identify eight categories of business models and
the criteria of their differentiation according to them are “core profit making
activity and relative position on the price / value continuum”. Weill and Vitale
(2001) identify eight categories which they are characterized by “strategic
objectives, sources of revenue, critical success factors and core
competencies required”. Betz (2002) identifies six major categories of e-
business models based on resources, sales, profit and capital. Laudon and
Traver (2003) identify seven major categories. Below, an analysis of the most
known and frequently used categories of business models will be carried out.
As mentioned above, Ticoll et al. (1998) identify four types of e-business
models which depend on the value integration (low to high) and control (self-
organising to hierarchical) in the supply chain as shown if Figure 6. They
describe economic management as the point to which a market has a director
that straights the character and run of dealings, that is, the extent to which it is
hierarchical or self-organising. High value integration takes place when
offerings from lots of suppliers are collected and put together to give an
exclusive product offering. Low value integration takes place when the product
offering comprises from a mixed pannier of different products and services,
e.g, a supermarket, Ticoll et al., 1998.

Figure 6: E-business communities differentiate on axes of economic

control and value integration (Ticoll et al, 1998)

Bambury (1998) categorizes e-business models into Transplanted Real-

World Business Models and Native Internet Business Models. The first

17
category is about models that are present to real businesses and they have
been permeated to the Internet. The fist one consists of eight models, as it is
shown in Table 2.
Transplanted Real-World Models
Mail-order model is the type of business that you enter electronically to the
shop, you choose a product, you pay electronically with credit card and then
the product is delivered at you. It is the simplest type of model and it has all
the characteristics of a traditional business with the difference that dealings
are made electronically (e.g. Amazon.com).
Advertising based model looks like the type of model that television uses.
Here revenues come from advertising. By clicking on an advertisement you
are transferred to the homepage of the product and the clicking is marked to
the original site. This model is widely used by search engines such as Google.
“Companies that apply the subscription model are well-matched for
blending with digital delivery”, Bambury (1998). Customers pay monthly or
annually with credit card in order to be able to enter a database of digital
products. This is mostly done in some sites for music or pornographic.
The free trial model is used by businesses that wish to give customers the
opportunity to try their product-usually software but it will work only for a
specific time e.g. 30 days. This kind of software is usually called shareware.
Direct marketing model – spam is the use of e-mail direct marketing to the
net. This happens to traditional businesses as well but there, there are ways
of controlling it something that is not yet completely possible to the Internet.
Real estate business model is used by businesses that sell domain names
and e-mails addresses. Everybody wants to have an address that is easy to
remember, easy to spell and fits the product that the company trades. Some
own such names and sell them. The purchase of name that has all the above
characteristics is very expansive.
Through incentive scheme models advertising companies try to convince
users to accept the advertisement by giving the chance to win gifts.
Business to business usually uses automated processes between trading
partners and is also used business corporations through Internet. “B2B
include financial, research and employment services”, Bambury (1998)

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 Table 2: A synthesis of the proposed e-business model classifications

Author Categories of e-business models Types of e-business models

Ticoll (1998) 1. Aggregation
2. Agora /open market
3. Alliance
4. Value chain
Bambury (1998) 1. Transplanted Real-World Business Models 1 2
2. Native Internet Business models  Mail-Order  Freeware Model
 Advertising Based  Library Model
 Subscription  Information Barter
 Free Trial  Access Provision
 Direct Marketing Model  Web Site Hosting & Other
 Real Estate Model Internet Services
 Incentive Scheme  Digital Products & The
 Business to Business Digital Delivery Model
Timmers (1999) 1. E-shop 7. Collaboration Platforms
2. E-mall 8. Value-chain service
3. E-procurement Provider
4. Third Party Marketplace 9. Value-chain Integration
5. E-auction 10. Information Brokerage
6. Virtual Community 11. Trust Services
Linder & Cantrell (2000) 1. Price Model
2. Convenience Model
3. Commodity-plus Model
4. Experience Model
5. Channel Model
6. Intermediary Model
7. Trust Model
8. Innovation Model
Eisenmann (2002) 1. Online Retailers
2. Online Portals
3. Internet Access Providers
4. Online Content Providers
5. Application Service Providers

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 6. Online Brokers
7. Online Market Makers
8. Networked Utility Providers
Weill & Vitale (2001) 1. Content Provider
2. Direct to Customer
3. Full-service Provider
4. Intermediary
5. Shared Infrastructure
6. Value Net Integrator
7. Virtual Community
8. Whole-of Enterprise/ Government
Betz (2002) 1. Strategic Finance
2. Strategic Enterprise
3. Strategic Response
4. Strategic Learning
5. Strategic Innovation
6. Strategic Firm
Rappa (2003) 1. Brokerage 1 4
2. Advertising  Marketplace Exchange  Virtual Merchant
3. Infomediary  Buy/Sell Fulfillment  Catalog Merchant
4. Merchant  Demand Collection System  Click and Mortar
5. Manufacturer (Direct)  Auction Broker  Bit Vendor
6. Affiliate  Transaction Broker 5
7. Community  Distributor  Purchase
8. Subscription  Search Agent  Lease
9. Utility  Virtual Marketplace  Licence
2  Brand Integrated Content
 Portal 6
 Classifields  Banner Exchange
 User Registration  Pay- per- click
 Query-based Paid  Revenue Sharing
Placement 7
 Contextual Advertising  Open Source
/Behavioural Marketing  Open Content
 Content – Targeted  Public Broadcasting

20

Laudon & Traver (2003)
Lam & Harrison Walker (2003)
Advertising  Social Networking
 Intromercials Services
 Ultramercials 8
3  Content Services
 Advertising Networks  Person - to – Person
 Audience Measurement Networking Services
Services  Trust Services
 Incentive Marketing  Internet Services Providers
 Metmediary 9
 Metered Usage
 Metered Subscriptions
1. Portal
2. E-tailer
3. Content Provider
4. Transaction Broker
5. Market Creator
6. Service Provider
7. Community Provider
1. Internet Merchants and Portals 1  Buyer Cooperative
2. Virtual Product Differentiation  Manufacturer  Manufacturers’ Agent
3. Brokerage Networks  Subscription 5
4. Purchase Assistance Networks  Pay-per-use  E-tailer
5. Retail Networks  Product Line Extension  Virtual Mall
6. Interactive Networks  Voluntary Contributor  Retail Alliance
7. Internet Promoters  Public Support  Bargain Discount
8. Image Building  Free  Metamediary
 Content Sponsorship  Catalog Aggregator
2 6
 Online Product  Dealer Support
Enhancement  Collaborative Design
 Bundling  Community – Building
 Post-purchase Support 7
3  E-coupon
 Online Auction  E-contest
 Dutch Auction 8

21
  Reverse Auction  Category-building
 Bounty Broker  Brand-building
 Online Exchange  Free Trial
4
 Shopping Agent
Hodge & Cagle (2004) (This is a classification of Business-to-Business Models) 1  Sales Support
1. Sourcing Models  Catalog Hubs  Online Catalog
2. Ownership Models  Exchanges  Customer Management
3. Service-based Models  Yield Managers 5
4. Customer Relationship Management Models  MRO Hubs  Websites
5. Interaction Models 2  Sales Portals
6. Revenue Models  Independent  Exchanges
7. Supply Chain Models  Industry/Consortia  Procurement Models
 Private 6
3  Fee-based
 Total Procurement  Pay-per-view/visit
 Catalog Buying  Micropayment
 Auction Houses  Advertising
 Collaboration Facilitators  Online Sales
 Full Service  Others
 Specialty Service 7
4  Combination of Demand
 Supplier Management Management, Supply
Management and
Inbound/Outbound Logistics

22
 Contrasting the actual humanity the national economy of the Internet does
not stand on shortage but on profusion. There is a profusion of data and all of
us can operate it, Bambury (1998). Much value is produced and traded on the
Internet but the concerned exchanges are not financial but many engage the
accretion of ‘reputation capital’, Ghosh (1998). The second category which is
Native Internet Business models consists of six models, as it is shown in
Table 2.
Native Internet Business Models
The first model is the library model. Internet is full of free information.
Academics were the first that took advantage of the opportunities that the
Internet offers for free disposal of knowledge and information through is public
network.
“The freeware model is extensively used by the Internet software
community and much software are available for free download”, Bambury
(1998). Netscape uses this model and turned to be very successful.
Information barter model is very simple and widely used. It handles trade
of information through the Internet among different parties. There is a major
drawback in this model which is security of personal data.
The model of digital products and digital delivery involves sounds, images,
text and other products that are in digitalized form. They are purchased or
downloaded in that form and in the case of purchase the payment is also
made electronically.
The access provision model is totally essential to the function of the
internet but is frequently ignored in the talks about I-Commerce. This industry
offers admission to the Internet with ventures called Internet Service Providers
(ISPs), Bambury (1998).
The Web site hosting and other Internet services are able for the
provision of various services such as e-mail and hosting web servers. They
make profit from the advertisement reside in them.
Timmers (1999) proposes eleven business models that considers them
to be “generalizations of specific business models”, Timmers (1999). The first
one is e-shop. E-shop gives the opportunity to the business to offer products
with reduced prices comparatively to traditional businesses. Also it can offer
its services in a 24hour basis and expand by addressing to a wider range of

23
people. It services customers by making the selection, purchase and payment
easier and faster. It also raises the profits of the business in a way, by saving
money from promotion and sales departments.
E-procurement is widely used by many e-businesses and especially
public ones. “It is the electronic tendering and procurement of goods and
services”, Timmers (1999). Businesses take advantage of it by being able to
choose among a wider range of suppliers and this leads to reduction of costs,
better quality and better delivery. Generally the basis of the income in this
model is much lowered costs.
E-auctions are the same with auctions in the physical world. They are
implemented through electronically biding. It offers many advantages for both
parties of the transactions. Resources of earnings for suppliers are in
abridged surplus stock, improved operation of manufacture capability and
minor sales overheads. Resources of earnings for purchasers are in abridged
buying overhead costs and lessened cost of products or services bought,
Timmers (1999).
The e-mall is just like malls of the physical world. It hosts many e-
shops. An e-shop expects that the user by visiting one e-shop will visit the
other shops of the e-mall. If the brand of the e-mall is famous it makes money
by renting or selling e-space to the e-shops. “The benefits for the e-mall
members (e-shops) are lower cost and complexity to be on the Web, with
sophisticated hosting facilities such as electronic payments and additional
traffic”, Timmers (1999).
Third party marketplace is an up-and-coming model which fits to
businesses that want to leave the internet marketing to a third party. They
have the same marketing frontend and transaction support to multiple
businesses. ”Revenues are generated on the basis one-off membership fee,
service fess, transaction fees or percentage on transaction value”, Timmers
(1999).
Through the virtual communities model users can put data into a
standard environment that the virtual community provides. Users meet inside
the site and share their interests just like they would do in the physical world.
There are several causes for persons to get nearer to virtual societies e.g.
business, idle gossip, spiritual exploration, psychological support, political

24
action, intellectual discourse, etc. reproducing the complete variety of human
concerns and requirements, Anderson, (1999). Virtual community is an
‘intangible’ extension of a real community. Users pay in order to use the
community and also many advertisements are place inside this virtual
environment. These two elements are source of revenue. A virtual society can
as well be significant attachment to other marketing functions in order to
construct customer loyalty and obtain customer feedback and response,
Hager & Armstrong (1997).
Value chain service providers focus on operations for value chain. One
of these operations is paying through the Internet. Many banks use this model
and try to achieve a competitive advantage through it by discovering new
ways of using networks.
Value chain integrators “focus on integrating multiple steps of the value
chain, with the potential to exploit the information flow between those steps as
further added value”, Timmers (1999).
Collaboration platforms give the opportunity of cooperation to firms by
offering them several mechanisms and digital environments. Deciding on a
collaboration platform is a very important strategic decision that influences the
company’s technology and effects on the infrastructure and architecture of the
company’s status.
Information and all kinds of data is available on the Internet and
information brokerage businesses try to gather them and odder them through
information search system. An example is Yahoo, business opportunities
brokerage etc. Users most of the times are subscribers to such sites or pay
per use.
“Trust services are a unusual group of data and information brokerage
and give guaranteed authorities and electronic notaries and other trusted third
parties”, Timmers (1999).
Timmers (1999) classifies these eleven business models according to
two dimensions: Functional integration and degree of innovation. According to
Figure 6, e-shop which is down on the left is the simplest type of business
model and up on the left is value chain integration which is complicated and
cannot be used by traditional businesses because it uses a great amount of
information technology.

25
 As mentioned above, Rappa (2003) identifies nine categories of e-
business models. The first category which is Brokerage model is about
market-makers. They connect buyers and sellers and promote dealings. For
every deal the broker takes a commission. This category has eight models.
Brokerage Model
Marketplace exchange provides services concerning the
implementation dealings. Buy/Sell Fulfilment is responsible for placing the
orders of the customers. Through demand Collection System bids are made
for the products and the broker is responsible for the execution of the bid.

Figure 6: Classification of the Internet business models, Timmers (1999)

Through Auction broker the broker does auctions and profits by charging
commission.
“Transaction Broker provides a third-party payment mechanism for
buyers and sellers to settle a transaction”, Rappa (2003). Distributor has the
form of catalog that joins together producers and consumers. Search Agent is
software that helps buyers to find the price of the product that they desire and
if it is available on the time being. Virtual Marketplace is a virtual environment
which hosts e-shops and charges them ‘rent’.

26
 The second category is Advertising Model which resembles the hitherto
advertising models. The web-site mixes the service provisions with
advertisements in the form of banner advertisements.
Advertising Model
Portal is a search engine that mixes provision of services with
advertisements that turn to be a great source of profit for the company due to
rose traffic if the engine. Classifieds are lists of products that are for sale. In
order to enter a product to the list there is a fee to be paid. User-based
Registration are free sites but in order to one to enter he/she must provide
some personal information. After this information is recorded it can be used
for advertising campaigns and thereby create value.
“Query-based Paid Placement sells favourable link positioning or
advertising keyed to particular search terms in a user query”, Rappa (2003).
Contextual Advertising / Behavioral Marketing make freeware products that
team advertisements as well as pop-ups when the users serfs the Internet.
Content Targeted Advertising expands the accuracy of seek advertising to the
remaining web, Rappa (2003). Intromercials are advertisements that are
located at the beginning of a site and the visitor sees them prior seeing what
he/she wanted to see when he/she entered the site. Ultramercials are
advertisements that seeing them requires pressing on them.
The third category which is Infomediary Model and it collects
information about consumers and their tendencies. This kind of data is
needed in marketing and advertising campaigns.
Infomediary Model
Advertising Networks gather information concerning users of the
Internet that are further used to measure marketing effectiveness. Audience
Measurement Services are “online audience market research agencies”,
Rappa (2003). Incentive Marketing gives motives to users by offering coupons
to buy products by firms that they cooperate with. The information that collects
concerning users is sold to advertising companies. Metamediary makes the
transactions between purchasers and providers easy by offering information.
The fourth category is Merchant Model which consists of four
subcategories and is “wholesalers and retailers of goods and services. Sales
may be made based on list prices or through auction”, Rappa (2003).

27
Merchant Model
Virtual Merchant is a tradesman that sells its products only through the
Internet. In Catalog Merchant products exist in a catalog on the Internet and
the orders are made through mail, e-mail of telephonically. Click and Mortar is
the extension of the traditional business with the difference that the
transactions are made through Internet. Bit Vendor is a dealer that operates
on the Internet and makes either sales or distributions.
The fifth category which is Manufacture Model consists of four
subcategories and is based on the fact that through Internet eliminates the
intermediate links that were needed in the physical world in order to reach the
customer.
Manufacturer Model
Purchase is “the sale of a product in which the right of ownership is
transferred to the buyer”, Rappa (2003). Lease is similar of renting a product
for an agreed time. During that time the lessee is the owner of the product but
after the expiration of the agreement the product is returned. License is the
sale of product and the buyer has only the right to use it and not resell it. Only
the manufacturer is entitled to sell this product. Brand Integrated Content is
produced the producer itself for the single origin of product position,
Rappa(2003).
The sixth category which is Affiliate Model consists of three
subcategories and it puts forward financial inducements to associated co-
worker sites. The associate supply buy-point click- through to the vendor and
it is a pay-for-performance model, Rappa (2003).
Affiliate Model
Banner Exchange buys and sells positions among affiliated sites. Pay-
per-click are sites that “pays affiliates for a user click-through”, Rappa (2003).
Revenue Sharing puts forward a percent-of-sale provision standing a user
click-through in which the consumer afterwards buys a good, Rappa (2003).
The seventh category is Community Model and consists of four
subcategories. This model depends on users’ devotion. It profit by
transactions of products or even by contributions. It is one of the most prolific
models of the Internet due to social networking.

28
Community Model
Open Source is software that is free and revenues for this model are
generated by affined services such as tutorials, users documentation etc.
Open Content is free content that was produced by providers voluntarily.
Public Broadcasting is consumer held up model utilized by non-for-profit radio
and television broadcasting expanded to the internet, Rappa (2003). Social
Networking Services are models that allow one person to connect to another
in keeping with a mutual hobby, profession etc.
The eighth category is Subscription Model which consists of four
subcategories. This model makes profit by charging users monthly or annually
in order to provide them a service.
Subscription Model
Content Services are web sites that offer music, text etc and the users
have to pay a subscription to enjoy these products. Person-to-Person
Networking Services are “conduits for the distribution of user-submitted
information”, Rappa (2003). Trust Services appear in the type of sponsorship
links that stand for an unambiguous policy of perform and in which parts give
a contribution fee, Rappa (2003). Internet Service Providers provide
connection to the Internet.
The ninth and last category is Utility model which consists of two
subcategories. This model gives certain and measured quantity of the product
and in order one to continue using it he/she has to pay.
Utility Model
Metered Usage determines how much the product was used and
charges users in accordance to that use. Metered Subscriptions offers the
possibility to the users to prepay for a certain time of using the product.
Lam & Harrison Walker (2003) classify e-business models into eight
categories based on two dimensions: relational objectives and value based
objectives. The unique characteristic of the Internet is its ability to be able to
reach every possible buyer and user regardless the physic distance. The first
dimension is used to sort them based on this characteristic of the Internet.
The target of the second dimension is to sort models according to the possible
ways that they can add value to businesses.

29
 The first category is Internet Merchant and Portals and it consists of
eight models. Here profit is gained through straight sale of goods. Its first
model is Manufacturer where manufacturers sell their goods directly to users.
Its second model is Subscription which is users by businesses that sell data or
services to buyers and take a fee for doing this. The fee is certain apart from
how much the user will use it. This is the main difference with the third model
which is Pay-per-use. This model is the same with subscription but here the
users pay step by step as they move.
Product Line extension Model is when a company adds its products to
the Internet. Voluntary Contributor model does not earn revenues from sales
or advertisements but they are financed by volunteers that make the
donations for several services that the business may provide them. Public
Support model is same with voluntary contributor model with the difference
that the donations are made in order the business to continue working.
To the Free model, websites donate goods and services because they
want to generate traffic and advertising chances, Lam & Harrison Walker
(2003). In Content Sponsorship model businesses can produce important
content, links and services to catch the attention of guests and have elevated
traffic, Lam & Harrison Walker (2003). Companies that use it operate as
portals.
The second category is Virtual Product Differentiation and is used by
traditional businesses that desire to exploit Internet in order to differentiation
their products. This way customer satisfaction can be enhanced. Its first
model is Online Product Enhancement were businesses seek to increase their
offline offering by using the Internet. In the Bundling model goods are
provided through the Internet and at the same time to the bricks and mortar
business. In the Post-purchase Support Model “companies replace high-cost
service counters with less expensive customer support”, Lam & Harrison
Walker (2003).
The third category is Brokerage Networks and consists of five models.
In this category e-business models make profit be connecting several users
like buyers, sellers, manufacturers etc. The first model here is Online Auction
where after the end of a dealing pay a fee. The Dutch Auction is the reverse of

30
the online auction. Here the price of the product is set high and it reduces
along biding.
Reverse Auction is also like online auction but the price is set not by
the supplier but from the users. Users name the price of what they need.
Brokers search to find the item in the lowest price that they can and their fee
is the difference between the amount of money that they needed to buy the
item and the amount of money that they sold it to the buyer. In the Bounty
Broker model a user needs a certain product or service and everyone that
fulfil the users’ request gets paid. The broker collects a fee from both of them.
The fourth category is Purchase Assistance Networks where “buyers
and sellers seek better deals using the Net”, Lam & Harrison Walker (2003).
Its first model is Buyer Cooperative and it groups several buyers of a certain
product in order to get it in better price to the increase quantity bought.
Manufacturers act on behalf of many producers and retailers in order to trade
a product. Shopping Agents are models through which prospective buyers can
find the lowest price of a product that they desire. They do not pay a fee to the
business which makes profits by advertisements.
The fifth category is Retail Networks. The first model of this category is
E-tailer .Clients pay for goods bought from the electronic shop and are
regularly established bricks-and-mortar businesses with a Web window,
uncontaminated value vendors that work just on the Web or bit vendors that
vend and distribute digital goods via the Internet, Lam & Harrison Walker
(2003). Virtual Malls are models that involve many e-shops into their virtual
environment.
Retail Alliance models are e-businesses that you can enter by pushing
a button in a different –business. Bargain Discount models are sellers that sell
products or services intentionally below cost. Metamediary models are sellers
that focus on certain subjects. Catalog Aggregators gather data from several
sellers and offer this information to the Internet.
The sixth category is Interactive Networks which contains three
models. The purpose of this category is to enable user satisfaction. The first
model is Dealer Support where a producer utilizes the website to guide clients
toward its associated co-workers, Lam & Harrison Walker (2003). In
Collaborative design model many businesses exploit Internet to manage

31
product formation. Community – Building models aim to offer endorsement
and information to supply chain associates, permitting them to speak to others
that contribute to related matters, Lam & Harrison Walker (2003).
The seventh category is Internet Promoters and contains two models.
The first one is E-coupon that offers coupons. The second is E-contest
models that organize contests to attract buyers.
The last category is Image Building that contains three models. In
Category-building models “companies educate visitors about certain products
types in order to build primary demand”, Lam & Harrison Walker (2003).
Brand-building models permit businesses to make use of Internet in order to
transmit information about a brand. In Free Trial models visitors are permitted
to download several digitalized products.

2.4 Commonality of e-business models

As analyzed above, there are many classifications of e-business
models. Many depend on the partakers, others on their placement on the
value chain etc. Despite the fact that the number of models seems to be very
big, in many cases what changes is only the number, while the basic concept,
characteristics and operations are similar or even the same. In Table 3 the
commonality of some identified e-business models is showed.

Table 3: ‘Moral’ matches of identified e-business models

Rappa (2003) Timmers (1999) Ticoll et al. Eisenmann

(1998) (2002)
Merchant E-shop On-line Retailer
Brokerage Third Party Aggregation On-line Brokers
Marketplace
Auction Broker E-auction Agora / Open
Market
Virtual Mall, E-mall On-line Retailer
Metamediary
Subscription On-line Content
Providers
Community Virtual Alliance
Community
Manufacturer E-procurement
Utility Networked Utility
Content Services Information
Brokerage
Trust Services Trust Services

32
 A merchant, an e-shop and an on-line retailer are businesses that
operate to the Internet. Either they use the Internet to promote their products
or they proceed to selling their products and making payments through it.
A third party marketplace provides access through the Internet to the
catalog of goods and services of the business. Placing, delivery and safe
payoffs can be additional adds by the third party marketplace supplier,
Timmers (1999). Similarly, brokerage model is about market-makers. They
connect buyers and sellers and promote dealings. In aggregation there is also
the ‘market-maker’ point because a business trains the transactions and
automatically turns to a large retailer. On-line brokers are the same as
brokerage.
E-auction is a digital marketplace where sellers and purchasers parley
prices in order to move to transaction. The site provider is unable to influence
these transactions. The same thing is agora. Similarly, auction broker is a site
that carries out public sales for vendors and receives profits from payments
and commission, Hayes & Finnegan (2005).
E-malls and virtual malls are the same thing. They host many different
e-shops. Virtual malls are growing in the direction of metamediaries that will
offer operation services like economic completion, quality guarantee, order-
tracking and invoice services, Rappa (2003).
Subscription, as well as on-line content providers, provides access to
sites under fee.
Virtual communities allow and promote interplays among users and this
helps to sustain the relationship with customers. Similarly, through
communities information concerning the products are provided and through
”knowledge networks”, Rappa (2003), sites with forums on several subjects
are created. In alliance high value integration occurs when contributions from
many suppliers are bundled together to provide a unique product offering and
through this bundling a kind of community is created.
Manufacturer is the model that sidesteps mediates in order to shorten
distribution. Similarly, e-procurement provides connection between many
purchasers and many producers so as to shorten distribution channel.

33
 Utility gives certain and measured quantity of the product and in order
one to continue using it, he/she has to pay. Networked utility has the same
characteristics and operations in general as utility.
Information brokers and content services proffer services in order to
facilitate the information that exists on the Internet. Such services can be
“information search, customer profiling, investment advice and commercial
business information services”, Hayes & Finnegan (2005).
Trust services are provided by certification authorities and electronic
notaries. They charge subscription fees or service fees.

3. FACTORS AFFECTING E-BUSINESS SUCCESS OR

FAILURE
The business literature describes business models from various points
of views and aspects, every one centring on unlike components. This directs
to a splintered and mystifying image concerning the form and task of e-
business models and the factors that differentiate successful business
models, Woodruff (2001).
Still, there is a wide literature surrounding the factors which are
possibly responsible for the success or failure of an e-business. According to
Janenko (2003) many businesses used the Internet to automate many of their
processes and expected that by doing this and nothing else success would
come. Also other reasons for the downfall of many dot.coms are “ poor
revenue/cost/profit model, no competitive advantage, lack of benefit to
consumers, problems in organization and execution, ineffective warehouse
management and fulfilment and web site conflict with existing business
partners”, Lovelock 2001.
When a firm makes the decision to go online and consequently enter
the global market, the direction of this firm must be detail in order to embrace
a business model that will fit. Of course a business model that immunizes the
company from mistakes and ensures success does not exists. It is vital to
realize what the business model really is and what the business seeks to gain
from it. A good business model is essential to every successful organization,
whether it is a new venture or an established player.

34
 A business model in order to be considered good it must do two things
which are adding value to the company but also adding value to the customer.
It should be able to make obvious the ‘identity’ of the customer, the means by
which the company will earn money and the way by which the value will be
passed over the customer at the lower cost.
Measuring success of an e-business is very difficult due to the
multidimensional nature of the business and Internet combination. Many use
the “hit” technique to measure success but it is not always accurate. This
happens because the “hit” measures the number of the IP addresses that
enter a site and not the real number of persons that visited that site (for
example, public facilities have one IP address, but the users are many).
Another method is “page view” and it is considered much more
accurate because by including a time element, it illustrates the number of
pages downloaded by guests above a certain time, Kroll (2000). Also
“stickiness” is another tool for measuring success by allowing us to know how
much time a visitor spent on web-page. Although, the most accurate and
reliable tool is “conversion rate”. This technique divides the number of guests
above a phase with the number of guests who conduct business, such as
purchasing, Gurley (2000).
One of the most important factors that affect e-business success is
product pricing. In many cases lower price of a product leads to a higher rate
of purchases. Many on-line businesses achieve lower prices for products and
services relatively to traditional businesses due to cost savings. Brynjolfsson
and Smith (2000) found that “internet prices are lower than retail outlet prices
depending on the products’ cost structures and product types”.
Another factor is time. Time saving is one major advantage of e-
businesses. Consumers can either make their purchases or request for
provision of services regardless of where they are. Catalogs and shopping
charts are offered on-line along with on-line payment. In other cases such as
software the product itself is offered on-line. Time that is necessary in some
procedures of good buying, together with order time, dealing out time, lining
up time and feeing time are lessened significantly, Quaddus & Achjari (2005).
Continuing, a majority of people find it much more convenient to make
their purchases from their home and at any time. Although paying on-line

35
using credit card is considered by many people to be risky, several systems
and mechanisms have been developed to ensure the safety of each person’s
personal data.
Internet provides the opportunity to e-businesses to explore and
expand to markets that otherwise they wouldn’t have the chance to do it. E-
businesses have overcome the local market and are now selling their services
and products to a wider market the so called global market.
On the contrary, there are also factors that can affect the success of
the e-business negatively. One major factor that impedes their success is
delivery time. Traditional businesses in most cases have immediate delivery
of the purchased product or service. On the contrary, e-businesses deliver the
purchased product or service after a settled number of days. The only case
that this does not happen is in software products, where the delivery can take
place on-line.
Another drawback that can reduce the success of an e-business is risk.
Many people are concerned about the integrity of the on-line business and
that after the payment takes place they will indeed receive the product. Also,
they are concerned about the discreteness of the business concerning their
personal data which will be collected after the end of the purchase (e.g. credit
card).
Also an e-business model has to have the efficiency to “manage stages
of growth while working with limited capital”, Chen (2003). This is very
prominent because e-businesses tend to have a high ‘burn rate’. Burn rate is
how quickly they overspend their initial capital. In Figure 7 the common e-
business route is illustrated.
These can be considered some of the most important factors that affect
the success of an e-business. All these are crucial elements and key factors
of the business model that each business uses. As it seems it is incumbent to
refer to which e-business model we use and not to what business we are in.
For each business there is a corresponding model that satisfies its
requirements. Choosing the wrong business model for the business may lead
to total failure.
According to Chen (2003) the most important factor that is responsible
for an e-business model failure is “corporate structure”. Above, in Table 4 the

36
Figure 7: A common route of e-business, Chen (2003)

most important causes of an e-business model failure are shown. The

business models are classified to four key distinctions according to
Mahadevan (2000) and Weill & Vitale (2001): “the supply chain model, the
revenue model, whether the model serves the business or consumer market,
whether the firm is pure play or clicks and mortar”.

Table 4: Causes of failure, Chen (2003)

Business Key problem Examples

Model area
Corporate Pure Internet Creating brand Wine.com
Structure awareness
Clicks-and- Channel conflict Levi Strauss,
mortar Starbucks,
Reebok
Revenue Free Generating The Globe,
Model sufficient revenues Cybergold,
elsewhere Alladvantage,
Freeride
Pay Product/price Iam, Arzoo
trade-offs
Supply Direct sales Product/service Musicmaker.
Model quality. Cost of First-e
operations
E-tail Shipping costs, Pets.com,

37
 speediness and Webvan,
reliability of Kozmo,
delivery Furniture.com,
eToys
Portal Attracting enough Go, Quepasa
eyeballs; copycats
Marketplace Gaining critical Bizbuyer,
mass of buyers or Letsbuyit,
sellers; copycats Bid.com,
Metalsite,
Chemdex
Market B2C Increasing PlanetRx,
Type customer Mercata
awareness,
interest and
access
B2B Integrating with Rx, Zoxo
ERP systems of
buyers

4. RESEARCH DESIGN
In this section the methodology of the research is analyzed. The data
needed for the conduction of the research are collected from the literature
review and from the interviews that took place. These data refer to the
identified success factors of an electronic business model. These data are
joined together and a survey is conducted through selected Greek e-
businesses.
An interview of 10 employees of ten e-businesses took place in the fall
of 2007. These e-businesses stand for different sectors of economy: tourism
and traveling, vesture, telecom and technology, entertainment. These
interviews were conducted in order to discover critical factors that affect
success of the e-business model that each business uses. From the
interviews 14 factors of success derived and from the literature derived 34
more.

4.1 Demographic data

370 questionnaires where handed out and 110 where gathered, which
is 30 % response rate. Respondents were mainly male (82%) within the age
group of 25-45 years old. They possessed a university degree (73%) of a
degree from a technical school (27%). They mainly occupied either in the
management of the business (55%) or as directors (45%). Some of them have
more than ten years of previous employment (18%) and 50% of this 18% have

38
more than 15 years previous employment. It is obvious that most of them
(82%) have one to ten years.
Concerning previous employment in e-business 91% of them have up
to ten years of previous employment and only 9% has more than then years. It
is also proved than none (0%) has more than 15 years experience.
85% of the respondents seem to be very optimistic and believe that the
profitability of their business will go upwards the following years contrarily to
the other 25% that shows a pessimistic tendency by believing that profitability
of their business will not have an increase and will remain the same. Also,
almost 90% of them support that competition in the sector that their business
belongs has increased while the remaining 10% supports that they haven’t
noticed any change in the level of competition. Continuing, 62% of them state
that they try to differentiate through the strategy of their company. The
remaining 38% remains loyal to “cost leadership strategy”.
Concerning Intranet and Extranet, 72% of the respondents say that
their business uses intranet during the previous 5 years, 20% is using it from 5
to ten years, only 8% is using it from ten to fifteen years and none is using it
for more than fifteen years. Of course 100% of them use intranet now. All of
the respondents (100%) support that they would choose electronic business
from a bricks and mortar business because they would want to increase their
profitability something that is made possible through the use of electronic
channels for distribution to all directions (customers, suppliers etc.). 61% of
them also aim at growing turnover without pressure on profit at the following
five years while the other 39% do not.
As far the maturity of the business, given the increased competition of
every economic sector, in keeping with the answers of the respondents, 43%
of them believe that their company is at least as mature as its competitors.
Regarding the profitability factor 18% of the respondents categorized the
business that they work to the last level (6 and 7). 62% categorized their
business to a medium level of profitability (4 and 5) and the rest 20% gave
their company a low value of two and less.
To the questions concerning how respondents see the evolvement and
development and success of the business that they work 71% feel very strong
and believe that the business will continue growing and will have a very good

39
development rate. It is possible that the ones that find it difficult to keep
evolving in the same rate is due to competition that is very tight and that many
problems may rise, that will have a negative impact on the development of the
business.
Nowadays more and more companies seem to use ICT and generally
all the technologies surrounding electronic business. After the Internet boom
and the dot.com crash it seems that many businesses are profitable and in
many cases more than if the were in the traditional business system.
Competitive advantages can be created by the privileges that electronic
business offer to a business but it does not guarantee the profitability and
generally the success of the business.

4.2 ANALYSIS
For start the 34 elements which were derived from literature that may
drive an electronic business model to success and consequently the business
where evaluated on a Likert scale (from 1-not important to 7-extremely
important). After taking the answers the percentages of each factor was
calculated and the total means were found, Table 5.
The biggest variation from the averages in scale 1 had the following
factors: E-business enables an increased customer independence (e.g. self-
service), Company identifies and understands customer needs in its e-
business, Company achieves trust of its e-business customers, E-business
products and services are well-accessible and the geographic spread of
offering is wide, Company's e-business processes and products are easy to
use, Company manages well its e-business product portfolio in each life-cycle
stage, Company has a clear customer offering in e-business, Company has a
targeted e-business offering based on customer desires, E-business
operations are reliable, Company's e-business is cost-efficient, Company
reacts quickly to relevant changes in its e-business environment, Company
manages the multi-channel environment including both the traditional and
electronic channels.
In the second scale the biggest variation from the total average was
noticed to the following factors: E-business enables an increased customer
independence (e.g. self-service), Company's customer service in e-business
is well functioning and responses quickly to a customer's responses, E-

40
business products and services are well-accessible and the geographic
spread of offering is wide, Company manages the multi-channel environment
including both the traditional and electronic channels, Company guarantees
security for its e-business customers, The quality of e-business products and
services is good, Company's e-business is cost-efficient, Company has a
systematic risk management to minimize its vulnerability in e-business.
In the third scale the biggest variation from the total average was
noticed to the following factors: Company manages the multi-channel
environment including both the traditional and electronic channels, E-business
related software and hardware are stabile, Company has an ability to solve e-
business related problems, E-business related software and hardware are
stabile, Company's e-business is cost-efficient, E-business operations are
reliable, Company has a large range of e-business products, Company
achieves trust of its e-business customers, Company's e-business is strong in
competition within its Industry, E-business products and services are well-
accessible and the geographic spread of offering is wide.
In the fourth scale the biggest variation from the total average was
noticed to the following factors: Company's e-business is cost-efficient, E-
business operations are reliable, Company has a targeted e-business offering
based on customer desires, Company's e-business processes and products
are easy to use, Company guarantees security for its e-business customers,
Personnel is highly motivated and committed, Company manages right-timing
in its e-business, Company has a large range of e-business products.
In the fifth scale the biggest variation from the total average was
noticed to the following factors: Company manages well its e-business
networking and partnering, Personnel is highly motivated and committed, E-
business operations are reliable, Company manages well its e-business
product portfolio in each life-cycle stage, Company identifies and understands
customer needs in its e-business, E-business enables an increased customer
independence (e.g. self-service).
In the sixth scale the biggest variation from the total average was
noticed to the following factors: the biggest variation from the total average
was noticed to the following factors:, Company has a systematic risk
management to minimize its vulnerability in e-business, Personnel is highly

41
experienced and possesses good capabilities and skills, Company's e-
business is cost-efficient, Company has a large range of e-business products,
The quality of e-business products and services is good, E-business enables
time-saving for its customers.
Finally, in the seventh scale the biggest variation from the total average
was noticed to the following factors: Customer service of e-business is always
available, The quality of e-business products and services is good,
Company's e-business processes and products are easy to use, Company
manages well its e-business product portfolio in each life-cycle stage,
Company has a targeted e-business offering based on customer desires, E-
business related software and hardware are stabile, Company has an ability
to identify new e-business market Opportunities.

Table 5: Literature factors percentages for success

%
FACTORS
1 2 3 4 5 6 7
E-business enables an increased customer
1 0,00 0,00 0,00 50,91 30,91 7,27 10,91
independence (e.g. self-service)
Company identifies and understands customer
2 0,00 13,64 9,09 31,82 36,36 9,09 0,00
needs in its e-business
Company achieves trust of its e-business
3 0,00 9,09 36,36 31,82 9,09 13,64 0,00
customers
Customer service of e-business is always
4 10,00 17,27 19,09 8,18 9,09 13,64 22,73
available
E-business enables time-saving for its
5 7,27 29,09 10,00 10,00 10,91 23,64 9,09
customers
Company improves its e-business skills
6 11,82 24,55 18,18 16,36 10,91 18,18 0,00
together with the customer
Company's customer service in e-business is
7 well functioning and responses quickly to a 31,82 4,55 18,18 27,27 9,09 9,09 0,00
customer's responses
Company modifies/encourages its customers
8 16,36 29,09 14,55 12,73 7,27 10,91 9,09
to use e-business
Company guarantees security for its e-
9 19,09 35,45 9,09 1,82 6,36 19,09 9,09
business customers
Company's e-business is strong in competition
10 16,36 16,36 36,36 9,09 12,73 4,55 4,55
within its Industry
E-business products and services are well-
11 accessible and the geographic spread of 2,73 8,18 43,64 10,91 16,36 18,18 0,00
offering is wide
The quality of e-business products and
12 15,45 36,36 11,82 9,09 9,09 0,00 18,18
services is good
13 Company prices its e-business at a profit 16,36 9,09 20,91 9,09 18,18 10,91 15,45
Company's e-business processes and products
14 3,64 24,55 14,55 2,73 9,09 16,36 29,09
are easy to use
Company manages well its e-business product
15 0,00 16,36 20,00 9,09 22,73 11,82 20,00
portfolio in each life-cycle stage
Company has a targeted e-business offering
16 35,45 11,82 16,36 4,55 4,55 9,09 18,18
based on customer desires

42
 Company has a clear customer offering in e-
17 0,91 17,27 27,27 15,45 18,18 11,82 9,09
business
Company has a large range of e-business
18 9,09 13,64 1,82 34,55 13,64 27,27 0,00
products
19 E-business operations are reliable 50,91 30,91 0,00 0,00 4,55 9,09 4,54
Company's e-business is a forerunner in terms
20 15,45 18,18 10,91 20,91 9,09 16,36 9,09
of products, services and technology
Company develops its e-business and products
21 11,82 20,00 22,73 16,36 20,00 9,09 0,00
constantly
22 Company's e-business is cost-efficient 37,27 51,82 0,91 2,73 7,27 0,00 0,00
Company manages right-timing in its e-
23 10,91 10,00 7,27 29,09 10,00 23,64 9,09
business
Company reacts quickly to relevant changes in
24 36,36 9,09 16,36 12,73 16,36 4,55 4,54
its e-business environment
25 Company's culture and atmosphere are open 23,64 14,55 16,36 4,55 13,64 18,18 9,09
Company has an ability to solve e-business
26 16,36 29,09 2,73 24,55 9,09 3,64 14,55
related problems
Personnel is highly experienced and possesses
27 28,18 27,27 17,27 13,64 13,64 0,00 0,00
good capabilities and skills
28 Personnel is highly motivated and committed 10,91 0,00 8,18 43,64 2,73 18,18 16,36
E-business related software and hardware are
29 19,09 11,82 4,55 24,55 17,27 4,55 18,18
stabile
Company manages well its e-business
30 17,27 19,09 24,55 9,09 0,91 17,27 11,82
networking and partnering
Company manages the multi-channel
31 environment including both the traditional and 45,45 3,64 0,91 8,18 14,55 27,27 0,00
electronic channels
Company has a systematic risk management
32 24,55 32,73 15,45 9,09 18,18 0,00 0,00
to minimize its vulnerability in e-business
Company has an ability to identify new e-
33 9,09 24,55 17,27 16,36 11,82 1,82 19,09
business market Opportunities
Company acknowledges both cultural and
34 generational differences when developing its 10,91 16,36 29,09 12,73 14,55 7,27 9,09
e-business
Averages 16,60 18,69 15,35 15,99 12,89 11,63 8,85

Then the above factors were categorized into seven streams

depending on where they refer to. As it is shown is Table 6 the first nine refer
to customers, the tenth refers to competition, factors eleven to eighteen refer
to the proposed offer, factors from nineteen to twenty-six refer to business
activities, factors twenty-seven to twenty-nine refer to the resources that a
business can have, factor thirty refers to suppliers and factors thirty-one to
thirty-four refer to the management of the business.

Table 6: Streams of literature factors

CUSTOMERS

E-business enables an increased customer independence (e.g. self-service)

Company identifies and understands customer needs in its e-business

43
Company achieves trust of its e-business customers

Customer service of e-business is always available

E-business enables time-saving for its customers

Company improves its e-business skills together with the customer

Company's customer service in e-business is well functioning and responses quickly to a customer's
responses
Company modifies/encourages its customers to use e-business

Company guarantees security for its e-business customers

COMPETITION
Company's e-business is strong in competition within its Industry

OFFER
E-business products and services are well-accessible and the geographic spread of offering is wide

The quality of e-business products and services is good

Company prices its e-business at a profit

Company's e-business processes and products are easy to use

Company manages well its e-business product portfolio in each life-cycle stage

Company has a targeted e-business offering based on customer desires

Company has a clear customer offering in e-business

Company has a large range of e-business products

BUSINESS ACTIVITIES
E-business operations are reliable

Company's e-business is a forerunner in terms of products, services and technology

Company develops its e-business and products constantly

Company's e-business is cost-efficient

Company manages right-timing in its e-business

Company reacts quickly to relevant changes in its e-business environment

Company's culture and atmosphere are open

Company has an ability to solve e-business related problems

RESOURCES
Personnel is highly experienced and possesses good capabilities and skills

44
Personnel is highly motivated and committed

E-business related software and hardware are stabile

SUPPLIERS
Company manages well its e-business networking and partnering

MANAGEMENT
Company manages the multi-channel environment including both the traditional and electronic
channels
Company has a systematic risk management to minimize its vulnerability in e-business

Company has an ability to identify new e-business market Opportunities

Company acknowledges both cultural and generational differences when developing its e-business

In the Tables 7,8,9,10,11,12,13,14 each category’s factors percentages

and means are analytically presented. Continuing the means of the factors as
groups are calculated and presented in Table 7. This way the variations
among either the factors or the groups are obvious.

Table 7: Means of customer factors

%
CUSTOMER FACTORS
1 2 3 4 5 6 7
E-business enables an increased customer
independence (e.g. self-service) 0,00 0,00 0,00 50,91 30,91 7,27 10,91
Company identifies and understands
customer needs in its e-business 0,00 13,64 9,09 31,82 36,36 9,09 0,00
Company achieves trust of its e-business
customers 0,00 9,09 36,36 31,82 9,09 13,64 0,00
Customer service of e-business is always
available 10,00 17,27 19,09 8,18 9,09 13,64 22,73
E-business enables time-saving for its
customers 7,27 29,09 10,00 10,00 10,91 23,64 9,09
Company improves its e-business skills
together with the customer 11,82 24,55 18,18 16,36 10,91 18,18 0,00
Company's customer service in e-business is
well functioning and responses quickly to a
customer's responses 31,82 4,55 18,18 27,27 9,09 9,09 0,00
Company modifies/encourages its customers
to use e-business 16,36 29,09 14,55 12,73 7,27 10,91 9,09
Company guarantees security for its e-
business customers 19,09 35,45 9,09 1,82 6,36 19,09 9,09
AVERAGES 10,71 18,08 14,95 21,21 14,44 13,84 6,77

45
Table 8: Means of competition factors
%
COMPETITION FACTORS
1 2 3 4 5 6 7
Company's e-business is strong in
16,36 16,36 36,36 9,09 12,73 4,55 4,55
competition within its Industry
AVERAGES 16,36 16,36 36,36 9,09 12,73 4,55 4,55

Table 9: Means of offer factors

%
OFFER FACTORS
1 2 3 4 5 6 7
E-business products and services are
well-accessible and the geographic 2,73 8,18 43,64 10,91 16,36 18,18 0,00
spread of offering is wide
The quality of e-business products and
15,45 36,36 11,82 9,09 9,09 0,00 18,18
services is good
Company prices its e-business at a
16,36 9,09 20,91 9,09 18,18 10,91 15,45
profit
Company's e-business processes and
3,64 24,55 14,55 2,73 9,09 16,36 29,09
products are easy to use
Company manages well its e-business
product portfolio in each life-cycle 0,00 16,36 20,00 9,09 22,73 11,82 20,00
stage
Company has a targeted e-business
35,45 11,82 16,36 4,55 4,55 9,09 18,18
offering based on customer desires
Company has a clear customer offering
0,91 17,27 27,27 15,45 18,18 11,82 9,09
in e-business
Company has a large range of e-
9,09 13,64 1,82 34,55 13,64 27,27 0,00
business products
AVERAGES 10,45 17,16 19,55 11,93 13,98 13,18 13,75

Table 10: Means of business activities factors

BUSINESS ACTIVITIES %
FACTORS 1 2 3 4 5 6 7
E-business operations are reliable 50,91 30,91 0,00 0,00 4,55 9,09 4,54
Company's e-business is a forerunner
in terms of products, services and 15,45 18,18 10,91 20,91 9,09 16,36 9,09
technology
Company develops its e-business and
11,82 20,00 22,73 16,36 20,00 9,09 0,00
products constantly
Company's e-business is cost-efficient 37,27 51,82 0,91 2,73 7,27 0,00 0,00
Company manages right-timing in its
10,91 10,00 7,27 29,09 10,00 23,64 9,09
e-business
Company reacts quickly to relevant
36,36 9,09 16,36 12,73 16,36 4,55 4,54
changes in its e-business environment
Company's culture and atmosphere are
23,64 14,55 16,36 4,55 13,64 18,18 9,09
open
Company has an ability to solve e-
16,36 29,09 2,73 24,55 9,09 3,64 14,55
business related problems
AVERAGES 25,34 22,95 9,66 13,86 11,25 10,57 6,36

46
Table 11: Means of resources factors
%
RESOURCES FACTORS
1 2 3 4 5 6 7
Personnel is highly experienced and
28,18 27,27 17,27 13,64 13,64 0,00 0,00
possesses good capabilities and skills
Personnel is highly motivated and
10,91 0,00 8,18 43,64 2,73 18,18 16,36
committed
E-business related software and
19,09 11,82 4,55 24,55 17,27 4,55 18,18
hardware are stabile
AVERAGES 19,39 13,03 10,00 27,27 11,21 7,58 11,52
Table 12: Means of suppliers factors
%
SUPPLIERS FACTORS
1 2 3 4 5 6 7
Company manages well its e-
17,27 19,09 24,55 9,09 0,91 17,27 11,82
business networking and partnering
AVERAGES 17,27 19,09 24,55 9,09 0,91 17,27 11,82

Table 13: Means of management factors

%
MANAGEMENT FACTORS
1 2 3 4 5 6 7
Company manages the multi-channel
environment including both the 45,45 3,64 0,91 8,18 14,55 27,27 0,00
traditional and electronic channels
Company has a systematic risk
management to minimize its 24,55 32,73 15,45 9,09 18,18 0,00 0,00
vulnerability in e-business
Company has an ability to identify
9,09 24,55 17,27 16,36 11,82 1,82 19,09
new e-business market Opportunities
Company acknowledges both cultural
and generational differences when 10,91 16,36 29,09 12,73 14,55 7,27 9,09
developing its e-business
AVERAGES 22,50 19,32 15,68 11,59 14,77 9,09 7,05

Table 14: Group percentages of each stream

GROUPS %
COMPETITION 10,71 18,08 14,95 21,21 14,44 13,84 6,77
OFFERING 16,36 16,36 36,36 9,09 12,73 4,55 4,55
ACTIVITIES 8,65 17,58 23,68 11,75 14,19 11,84 12,31
RESOURCES 25,34 22,95 9,66 13,86 11,25 10,57 6,36
SUPPLIERS 17,27 19,09 24,55 9,09 0,91 17,27 11,82
MANAGEMENT 22,50 19,32 15,68 11,59 14,77 9,09 7,05
AVERAGES 16,81 18,90 20,81 12,77 11,38 11,19 8,14

Concerning the other factors that where concentrate by the interviews

and are considered to be the factors that may drive an electronic business
model to success and consequently the business, they where evaluated on a
Likert scale (from 1-not important to 7-extremely important). After taking the
answers the percentages of each factor was calculated and the total means
were found, Table 15.

47
 The biggest variation from the averages in scale 1 had the following
factors: E-business customers are satisfied (satisfaction), E-business has
many customers (number of customers), Customers' searching costs are
reduced (searching costs), E-business has adequate turnover (revenue), E-
business is growing in terms of turnover (increased revenue), E-business
explicates savings and benefits (cost savings).
The biggest variation from the averages in scale 2 had the following
factors: E-business has many customers (number of customers), E-business
is profitable (profitability), E-business is growing in terms of turnover
(increased revenue).
The biggest variation from the averages in scale 3 had the following
factors: Return on investment of e-business is good (ROI), E-business
explicates savings and benefits (cost savings), Successful partnerships
(success on partnerships), E-business customers are satisfied (satisfaction),
E-business customers are loyal (Loyalty).
The biggest variation from the averages in scale 4 had the following
factors: E-business explicates savings and benefits (cost savings), E-business
is growing in terms of turnover (increased revenue), E-business is profitable
(profitability), Company has a good market value that e-business supports
(market value), Return on investment of e-business is good (ROI).
The biggest variation from the averages in scale 5 had the following
factors: Return on investment of e-business is good (ROI), E-business has
adequate turnover (revenue), E-business products and services have reached
market leadership (market leadership), Successful partnerships (success on
partnerships), E-business has many customers (number of customers), E-
business customers are satisfied (satisfaction).
The biggest variation from the averages in scale 6 had the following
factor: Return on investment of e-business is good (ROI). Here is the only
case that there is only one factor that has large variation from the average.
Lastly, the biggest variation from the averages in scale 7 had the
following factors: Return on investment of e-business is good (ROI), E-
business achieves stated strategic goals (reached strategic goals), E-
business is profitable (profitability), E-business has many customers (number
of customers).

48
Table 15: Percentages from interview factors for success
%
FACTORS
1 2 3 4 5 6 7
E-business customers are
1 0,00 9,09 27,27 9,09 31,82 4,55 18,18
satisfied (satisfaction)
E-business customers are
2 11,82 24,55 17,27 19,09 9,09 11,82 6,36
loyal (Loyalty)
E-business has many
3 customers (number of 0,00 27,27 14,55 8,18 0,91 3,64 45,45
customers)
Gained benefits through e-
business are shared with
4 13,64 22,73 8,18 9,09 17,27 19,09 10,00
customers (shared benefits
with customers)
Customers' searching costs are
5 24,55 4,55 4,54 11,82 19,09 18,18 17,27
reduced (searching costs)
Successful partnerships
6 16,36 18,18 24,55 11,82 0,00 18,18 10,91
(success on partnerships)
E-business products and
7 services have reached market 32,73 10,00 4,55 25,45 1,82 6,36 19,09
leadership (market leadership)
E-business is profitable
8 24,55 2,73 16,36 29,09 9,09 14,55 3,64
(profitability)
E-business has adequate
9 50,00 7,27 10,91 10,91 2,73 7,27 10,91
turnover (revenue)
E-business is growing in
10 terms of turnover (increased 0,00 43,64 8,18 2,73 18,18 16,36 10,91
revenue)
E-business achieves stated
11 strategic goals (reached 4,55 9,09 4,55 10,91 18,18 11,82 40,91
strategic goals)
Company has a good market
12 value that e-business supports 16,36 14,55 23,64 4,55 9,09 18,18 13,64
(market value)
Return on investment of e-
13 4,55 9,09 0,00 4,55 30,91 0,00 50,91
business is good (ROI)
E-business explicates savings
14 0,00 18,18 27,27 29,09 6,36 10,00 9,09
and benefits (cost savings)
AVERAGES 14,22 15,78 13,70 13,31 12,47 11,43 19,09

At the end the factors derived from the literature where combined with
the factors that derived from the interviews. This was made in order to find the
averages of the percentages of all the factors together in order to have an
integrated view of how they move and where the largest variations exist. This
combination is presented on Table 16 .

49
 Table 16: Combination of interview and literature factors
FACTORS FROM %
LITERATURE &
INTERVIEWS 1 2 3 4 5 6 7
E-business customers are
1 0,00 9,09 27,27 9,09 31,82 4,55 18,18
satisfied (satisfaction)
E-business customers are loyal
2 11,82 24,55 17,27 19,09 9,09 11,82 6,36
(Loyalty)
E-business has many customers
3 0,00 27,27 14,55 8,18 0,91 3,64 45,45
(number of customers)
Gained benefits through e-
business are shared with
4 13,64 22,73 8,18 9,09 17,27 19,09 10,00
customers (shared benefits with
customers)
Customers' searching costs are
5 24,55 4,55 4,54 11,82 19,09 18,18 17,27
reduced (searching costs)
Successful partnerships
6 16,36 18,18 24,55 11,82 0,00 18,18 10,91
(success on partnerships)
E-business products and
7 services have reached market 32,73 10,00 4,55 25,45 1,82 6,36 19,09
leadership (market leadership)
E-business is profitable
8 24,55 2,73 16,36 29,09 9,09 14,55 3,64
(profitability)
E-business has adequate
9 50,00 7,27 10,91 10,91 2,73 7,27 10,91
turnover (revenue)
E-business is growing in terms
10 0,00 43,64 8,18 2,73 18,18 16,36 10,91
of turnover (increased revenue)
E-business achieves stated
11 strategic goals (reached 4,55 9,09 4,55 10,91 18,18 11,82 40,91
strategic goals)
Company has a good market
12 value that e-business supports 16,36 14,55 23,64 4,55 9,09 18,18 13,64
(market value)
Return on investment of e-
13 4,55 9,09 0,00 4,55 30,91 0,00 50,91
business is good (ROI)
E-business explicates savings
14 0,00 18,18 27,27 29,09 6,36 10,00 9,09
and benefits (cost savings)
E-business enables an
increased customer
15 0,00 0,00 0,00 50,91 30,91 7,27 10,91
independence (e.g. self-
service)
Company identifies and
16 understands customer needs in 0,00 13,64 9,09 31,82 36,36 9,09 0,00
its e-business
Company achieves trust of its
17 0,00 9,09 36,36 31,82 9,09 13,64 0,00
e-business customers
Customer service of e-business
18 10,00 17,27 19,09 8,18 9,09 13,64 22,73
is always available
E-business enables time-saving
19 7,27 29,09 10,00 10,00 10,91 23,64 9,09
for its customers
Company improves its e-
20 business skills together with 11,82 24,55 18,18 16,36 10,91 18,18 0,00
the customer

50
 Company's customer service in
e-business is well functioning
21 31,82 4,55 18,18 27,27 9,09 9,09 0,00
and responses quickly to a
customer's responses
Company modifies/encourages
22 16,36 29,09 14,55 12,73 7,27 10,91 9,09
its customers to use e-business
Company guarantees security
23 19,09 35,45 9,09 1,82 6,36 19,09 9,09
for its e-business customers
Company's e-business is strong
24 in competition within its 16,36 16,36 36,36 9,09 12,73 4,55 4,55
Industry
E-business products and
services are well-accessible
25 2,73 8,18 43,64 10,91 16,36 18,18 0,00
and the geographic spread of
offering is wide
The quality of e-business
26 15,45 36,36 11,82 9,09 9,09 0,00 18,18
products and services is good
Company prices its e-business
27 16,36 9,09 20,91 9,09 18,18 10,91 15,45
at a profit
Company's e-business
28 processes and products are 3,64 24,55 14,55 2,73 9,09 16,36 29,09
easy to use
Company manages well its e-
29 business product portfolio in 0,00 16,36 20,00 9,09 22,73 11,82 20,00
each life-cycle stage
Company has a targeted e-
30 business offering based on 35,45 11,82 16,36 4,55 4,55 9,09 18,18
customer desires
Company has a clear customer
31 0,91 17,27 27,27 15,45 18,18 11,82 9,09
offering in e-business
Company has a large range of
32 9,09 13,64 1,82 34,55 13,64 27,27 0,00
e-business products
E-business operations are
33 50,91 30,91 0,00 0,00 4,55 9,09 4,54
reliable
Company's e-business is a
forerunner in terms of
34 15,45 18,18 10,91 20,91 9,09 16,36 9,09
products, services and
technology
Company develops its e-
35 business and products 11,82 20,00 22,73 16,36 20,00 9,09 0,00
constantly
Company's e-business is cost-
36 37,27 51,82 0,91 2,73 7,27 0,00 0,00
efficient
Company manages right-
37 10,91 10,00 7,27 29,09 10,00 23,64 9,09
timing in its e-business
Company reacts quickly to
38 relevant changes in its e- 36,36 9,09 16,36 12,73 16,36 4,55 4,54
business environment
Company's culture and
39 23,64 14,55 16,36 4,55 13,64 18,18 9,09
atmosphere are open
Company has an ability to
40 solve e-business related 16,36 29,09 2,73 24,55 9,09 3,64 14,55
problems
Personnel is highly
41 experienced and possesses 28,18 27,27 17,27 13,64 13,64 0,00 0,00
good capabilities and skills

51
 Personnel is highly motivated
42 10,91 0,00 8,18 43,64 2,73 18,18 16,36
and committed
E-business related software and
43 19,09 11,82 4,55 24,55 17,27 4,55 18,18
hardware are stabile
Company manages well its e-
44 business networking and 17,27 19,09 24,55 9,09 0,91 17,27 11,82
partnering
Company manages the multi-
channel environment including
45 45,45 3,64 0,91 8,18 14,55 27,27 0,00
both the traditional and
electronic channels
Company has a systematic risk
46 management to minimize its 24,55 32,73 15,45 9,09 18,18 0,00 0,00
vulnerability in e-business
Company has an ability to
47 identify new e-business market 9,09 24,55 17,27 16,36 11,82 1,82 19,09
Opportunities
Company acknowledges both
cultural and generational
48 10,91 16,36 29,09 12,73 14,55 7,27 9,09
differences when developing
its e-business
AVERAGES 15,91 17,84 14,87 15,21 12,77 11,57 11,84

5. CONCLUSIONS
“Electronic business models” is a very wide field for investigation. It is
essential for each business to be able to choose the model that best fits its
needs. It is also essential that the model that business will choose to be able
to correspond to the demands of the business as mush as to its own
prospects. Every e-business model has certain technical and functional
feature that makes it different from the other ones. Each one works better and
attributes more when it is asked to perform an action that was created to do.
There are models that are not very often used and that happens not
because they malfunction but because they are too specialized and the
functions that were created to perform are nothing but frequent. On the other
hand, there are others that are in the first choice of businesses and still have
flaws and need either improvement or alteration.
Many categorizations of e-business models have been made by
several practitioners and academics. Some of them are almost the same but
most of them differ in the type of categorization. Some of the most common
types of classifications are according to the value integration, to the control, to
the place in the supply chain, to differentiation, to profit making, to strategic
objectives, to value creation, to sources of revenue. Although, there are times
where one e-business model is recognized and classified by an academic by

52
a certain name and the same model is recognized and categorized by a
different academic with another name. In these cases there is an overlap in
the models and in the related chapter this overlap was showed.
According to the literature there are some factors that affect the
success of an e-business model and consequently the business. In the last
chapter these factors were bounded together and through the questionnaires
that were handed to specific e-businesses their significance (according to the
respondents view) was calculated. It was made obvious which ones
respondents consider to have greater value and which ones do not the
performance of their e-business model.
Also, before handing those questionnaires interviews took place to a
number of businesses in order to identify other factors that could possibly
affect the performance of an e-business model. Fourteen new factors were
recorded and added to the existing ones for the research to be conducted.
What was made clear from the research is that there isn’t any specific
factor that could be considered dominant. And that is because each
respondent answered the questionnaire according to the needs of his
company. It is shown that every factor has its level of significance and that
possibly a combination of most of them is the right one that will drive the e-
business model to success.

6. LIMITATIONS
This research generally covers part of the theory referred to e-business
models and deals with the factors that can or may lead an electronic business
model to success. It was carried out in Greece and it my not be generalized to
other countries that will possibly have other culture and ethics.

7. FUTURE RESEARCH
The same research can be carried out for other countries and the
corresponding comparisons can be made. It is possible that these
comparisons will show the differences on how e-businesses work in every
country and what are the main differences relatively the needs and prospects
of an e-business of each country.

53
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APPENDIX
Part b:

Evaluate the following factors depending on how much you believe

they effect the success of the electronic business model that your
business uses.
1: not important
2: little important
3: neutral
4: needed
5: important
6: very important
7: extremely important

FACTORS 1 2 3 4 5 6 7
E-business customers are satisfied
(satisfaction)
E-business customers are loyal (Loyalty)
E-business has many customers (number of
customers)
Gained benefits through e-business are shared
with customers (shared benefits with
customers)
Customers' searching costs are reduced
(searching costs)
Successful partnerships (success on
partnerships)
E-business products and services have reached
market leadership (market leadership)
E-business is profitable (profitability)
E-business has adequate turnover (revenue)
E-business is growing in terms of turnover
(increased revenue)
E-business achieves stated strategic goals
(reached strategic goals)
Company has a good market value that e-
business supports (market value)
Return on investment of e-business is good
(ROI)
E-business explicates savings and benefits (cost
savings)
E-business enables an increased customer
independence (e.g. self-service)

58
Company identifies and understands customer
needs in its e-business
Company achieves trust of its e-business
customers
Customer service of e-business is always
available
E-business enables time-saving for its
customers
Company improves its e-business skills
together with the customer
Company's customer service in e-business is
well functioning and responses quickly to a
customer's responses
Company modifies/encourages its customers to
use e-business
Company guarantees security for its e-business
customers
Company's e-business is strong in competition
within its Industry
E-business products and services are well-
accessible and the geographic spread of
offering is wide
The quality of e-business products and services
is good
Company prices its e-business at a profit
Company's e-business processes and products
are easy to use
Company manages well its e-business product
portfolio in each life-cycle stage
Company has a targeted e-business offering
based on customer desires
Company has a clear customer offering in e-
business
Company has a large range of e-business
products
E-business operations are reliable
Company's e-business is a forerunner in terms
of products, services and technology
Company develops its e-business and products
constantly
Company's e-business is cost-efficient
Company manages right-timing in its e-
business
Company reacts quickly to relevant changes in
its e-business environment
Company's culture and atmosphere are open
Company has an ability to solve e-business
related problems
Personnel is highly experienced and possesses
good capabilities and skills

59
 Personnel is highly motivated and committed
E-business related software and hardware are
stabile
Company manages well its e-business
networking and partnering
Company manages the multi-channel
environment including both the traditional and
electronic channels
Company has a systematic risk management to
minimize its vulnerability in e-business
Company has an ability to identify new e-
business market Opportunities
Company acknowledges both cultural and
generational differences when developing its e-
business

60
Part a:
GENERAL QUESTIONS
Please check the box right to the right.
SEX

MALE:
FEMALE:
AGE

25-30
30-35
35-40
40-45
45-50
EDUCATION

UNIVERSITY DEGREE
TECHNICAL SCHOOL
BUSINESS POSITION
DEGREE
MANAGEMENT
DIRECTOR
YEARS OF PREVIOUS EMPLOYMENT

UP TO 5 YEARS
5 TO 10 YEARS
10 TO 15 YEARS
MORE THAN 15 YEARS
YEARS OF PREVIOUS EMPLOYMENT IN E-BUSINESS

UP TO 5 YEARS
5 TO 10 YEARS
10 TO 15 YEARS
MORE THAN 15 YEARS
YEARS OF USING INTRANET:

UP TO 5 YEARS
5 TO 10 YEARS
10 TO 15 YEARS
MORE THAN 15 YEARS

61
Please circle your choice of answer to the following questions:

1. Do you believe that the profitability of your business will increase during the
following years?
YES NO
2. Do you believe that competition in your sector has increased?
YES NO
3. Have you tried to differentiate through the strategy of their company or you
prefer to remain loyal to “cost leadership strategy”?
YES NO
4. Would you choose electronic business from clicks and mortar business in order
to have an opportunity to increase the profitability of your business?
YES NO
5. Do you aim at a growing turnover without a pressure on profit during the
following five years?
YES NO

THANK YOU FOR YOUR TIME

62