Teaching and Learning

Solution

Module: Business Management 1

(HBMN130-1)
Week number (Date): 10 (23 April 2020)
Unit covered: Unit 11

Instructions:

To enrich your learning experience at Boston even further, and to ensure that you are
exposed to a variety of resources in this module, announcements will be posted every
week containing additional materials or activities for you to work through.

It is important to note that these activities are neither compulsory nor weighted, but that
it will be to your advantage to participate. The purpose of the activities is to help you
better understand the content of your weekly unit/s of study, and it will assist in creating
insight and deeper meaning.

This Activity is based on Unit 11 of the prescribed courseware for this module.

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QUESTION [14 marks]

Solution:

Describe, with examples the seven (7) basic internet business models.

(7 x 2 = 14 marks)
1. Commission-based business model: Based on commissions charged by
intermediary services. Example: Amazon makes available a platform that shop
fronts products and services for sale at a commission fee.  
2. Advertising-based business model: Based on this model, advertisers pay for web
content. Example: The owner of a sport shop pays Nike sports brand to advertise
their products on their webpage. 
3. Mark-up-based business model: Involves selling marked-up merchandise and ads
value to brand image and reputation. Example: Hand sanitiser company puts a
mark-up on products sold during the coronavirus pandemic. 
4. Production-based business model: Entails selling manufactured goods and custom
services and adds value in increasing production efficiencies and capturing
customer preferences. Example: Takealot.com provides an area for customer
feedback after receiving a product that was purchased online. 
5. Referal-based business model: Fees are charged by referring customers.
Example: Online stores that offer a discount to customers when they refer other
costumers to experience their products. 
6. Subscription-based business model: Charges fees for unlimited use of the service
or content. Example: An online yoga class company can be view by customers
with one free yoga class to access. When customers want to obtain more yoga
classes, they need to subscribe and pay to have permanent access to all of the
yoga classes available. 

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 7. Fee-for-service-based business model: Charges fees for metered services.
Example: An online yoga class company can be view by customers with one
free yoga class to access. When customers want to make use of more yoga
classes, they need to subscribe and pay a monthly fee, to receive new yoga
classes that are made available on a monthly bases. 

Learning outcome(s):

 Define the term ‘e-business’ and explain the various categories of business
models in e-business strategy.

Source(s):

 Chapter 16 p 382

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