Running head: Evaluating Business Models 1

In the ever-evolving landscape of commerce, two distinct business models have emerged as
influential forces each possessing its own strength and weaknesses at the same time. The
brick-and-mortar model, also known as the traditional model represents businesses that are
characterized by operations in physical locations with tangible storefronts or office spaces
and face to face interactions. Where as the E-commerce model, is a digital business model
that operates primarily on the internet. Both models have their advantages and disadvantages
and it is important to weigh these factors carefully before making a decision. Some of the
advantages of the brick-and-mortar and E-commerce model include; physical presence, local
community engagement, immediate gratification and human interactions, global reach, low
overheads, 24/7 accessibility and data driven decision making. First and foremost, businesses
that have brick and mortar have a tangible and physical presence that most definitely creates
a sense of trust and credibility among customers.

Which is very valuable especially in industries where in-person interactions are

essential such as healthcare. Two, most of these businesses are more often than not rooted
deeply in their local communities hence creating a platform for direct engagement with
customers and a strong sense of community involvement and as a result a loyal customer
relationship is established as well as the benefit of word-of mouth marketing (Böttcher,
2021). Thirdly, customers or rather consumers have the opportunity to touch and try out
various products before making a purchase leading to immediate gratification and reduced
uncertainty if there was any about the quality of products. Another advantage is human
interaction between customers and service providers, the presence of knowledgeable stuff can
provide personalized expert advice and customer service therefore enhancing the overall
shopping experience (Li, 2022). For E-commerce model the first pro would be that business
can reach a global audience enabling access to a broader customer base.

Secondly, operating costs are probably going to be significantly lower as there is no

need for a physical store front and staffing requirements are bound to be more flexible. Also,
customers are allowed to shop at any time they want to do so regardless of time, providing
them with convenience and flexibility (Mariappan, 2023). Finally, e-commerce platforms are
able to collect and analyze consumer data to make data driven decisions and improve overall
customer experience. While the advantages of both the brick and mortar and e-commerce
models are compelling, it is important to consider their respective disadvantages to make
informed decisions in today’s dynamic business landscape (Betzing, 2019). They include high
overheads, limited geographic reach, limited operating hours, intense competition, trust and
Evaluating Business Models 2

credibility, logistical challenges and security concerns. The brick-and-mortar businesses

typically have much higher operating costs due to rent, staffing and utilities which can lead to
thinner profit margins (Shukla, 2020). Two, the physical location in most cases usually
restricts the business’s potential customer base to those in the vicinity hence limiting
opportunities for growth.

Likewise, traditional stores have fixed operating hours such that they have a specific
time for opening and closing the business, which may not align with customer preference in
context to convenience and flexibility (Liu, 2022). When it comes to e-commerce the biggest
disadvantage is intense competition, in that ease of entry into the digital market has led to
strong competition making it a challenge for new businesses to stand out and offer something
new to the consumers. Establishing trust and credibility is also proving to be a hard task in
the digital space as customers are not in a position to physically touch or see products being
offered to them before purchasing (Albataineh, 2020). Another disadvantage are challenges
associated with logistics, managing shipping, inventory and returns cab be quite complex and
costly.

The selection of the appropriate business model, whether it is the brick and mortar or
the e-commerce model plays a crucial role in the screening of ideas during the development
of a feasibility study. The careful consideration and selection of the most suitable business
model in the early stages of idea screening enhance the effectiveness and relevance of the
subsequent feasibility study significantly (Hokkanen, 2020). Ensuring that it addresses the
specific challenges, opportunities and resource requirements associated with the chosen
model. Some of the reasons why these models should be used include; alignment with
business concepts, competitive landscape evaluation, resource assessment and target audience
analysis.

The choice for of a business model should align seamlessly with the core concept of
the venture that was proposed; alignment with business concept. By selecting a business
model at the planning process stage which is the feasibility study, we can ensure that the
chosen model complements the nature of the products and services intended to be offered
(Mäki, 2023). Likewise, each model comes with its own competitive dynamics; competitive
landscape evaluation, for example, ecommerce businesses compete in a crowded online
marketplace while brick and mortar one’s face competition from neighboring physical stores
therefore evaluating the competitive landscape that is specific to the chosen model enables us
Evaluating Business Models 3

to identify potential challenges and come up with strategies to stand out in respective
markets.

The target audience analysis is another reason why these models should be used,
understanding the preference and target audience behavior is important. Different
demographics may have varying levels of comfort with in person experiences or a strong
preference with online shopping (Yoo,2019). By selecting the appropriate model early, the
feasibility study can delve into market research for that model specifically hence helping
entrepreneurs like us to grasp the needs and expectations of potential customers.

In conclusion, the comparison and contrast of both business models has shed light on
the pros and cons inherent ion each approach, the traditional model, offers stability and
reliability, however may lack the agility and innovation required to rapidly adapt to changing
markets. On the other hand, e-commerce model has the potential to capture new markets and
redefine industries with its innovative approach but carries higher risks due to its potential for
market saturation. In context to screening ideas in the development of a feasibility study, the
choice between these models should be driven by the specific goals and circumstances of the
project.
Evaluating Business Models 4

References
Böttcher, T. P., Li, W., Hermes, S., Weking, J., & Krcmar, H. (2021). Escape from Dying
Retail by Combining Bricks and Clicks: A Taxonomy of Digital Business Models in
Retail. In PACIS (p. 10).

Li, S., Liu, Y., Su, J., Luo, X., & Yang, X. (2022). Can e-commerce platforms build the
resilience of brick-and-mortar businesses to the COVID-19 shock? An empirical
analysis in the Chinese retail industry. Electronic Commerce Research, 1-31.

Mariappan, E. (2023). AN OVERVIEW OF RETAILERS: BUSINESS MODELS, TRENDS,

AND IMPACT ON CONSUMER MARKETS. International Journal of Economics
Finance & Management Science, 8(08), 01-04.

Betzing, J. H., Niemann, M., Barann, B., Hoffmeister, B., & Becker, J. (2019). Mirroring e-
service for brick and mortar retail: An assessment and survey.

Shukla, R. (2020). Aesthetics of Business in a Globalizing World: The Consumer’s

Perspective. Available at SSRN 3662138.

Liu, J. (2022). Analysis of the Mission Statements of Terminology Ecommerce. Journal of

Internet Banking and Commerce, 27(2), 1-3.

Albataineh, A., & Qusef, A. (2020, April). Why Companies in Jordan Should Adopt e-
Business Solutions?. In 2020 11th international conference on information and
communication systems (ICICS) (pp. 272-276). IEEE.

Hokkanen, H., Walker, C., & Donnelly, A. (2020). Business model opportunities in brick and
mortar retailing through digitalization.

Mäki, M., & Toivola, T. (2023). Innovation and Digital-Driven Retail Business Models.
In ISPIM Conference Proceedings (pp. 1-11). The International Society for
Professional Innovation Management (ISPIM).

Yoo, B., & Jang, M. (2019). A bibliographic survey of business models, service relationships,
and technology in electronic commerce. Electronic Commerce Research and
Applications, 33, 100818.