E-business Models: A Conceptual Framework for Small and Medium-sized Canadian Enterprises

• Preface
• Executive Summary

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Preface

Following the spectacular drop of the Nasdaq index in February 2000, the term e-business model (EBM) became increasingly popular and somewhat banalized the concept to the point where it is becoming difficult to build consensus around a common definition.

Nonetheless, developing an original and balanced e-business model that meets the needs of the company and its business partners is an essential step in the development of e-business among Canadian SMEs. Going into e-business without an e-business model is like going into business without an e-business plan. But what is an EBM?

For information technology specialists, an EBM often boils down to technological solutions like a Website, a portal or an e-business place. For visionaries and other strategy experts, the EBM becomes a reflection of the strategy to be implemented as a means of conducting e-business. For managers with financially-oriented training, it generally turns out to be the business plan for an e-commerce project.

An EBM is actually much more complex since it combines and integrates all of these dimensions. In fact, an EBM matches the Web or EDI-based technological solutions implemented as a means of supporting the company's e-business strategy and value chain activities including its business partner relations, with a view to creating value for the company and its clients.

Not only does a company have to select the products and services sold on the Web, the markets to be courted, it also has to determine the nature of the Internet-based relations it has with its business partners, determine a level of e-business integration for its operations, identify technological solutions and select the deployment strategy that is best suited, while hooking up with the right business partners and ensuring the viability of its e-business project.

This task is a complex and sometimes perilous one. However, the prize is worth the risk and Canadian SMEs must pursue this process designed to integrate their e-business operations. The objective of this document is to demonstrate how companies, using EBMs that are often very different, can successfully position themselves in the e-business field. Consequently, it is intended for all Canadian SMEs seeking to ensure their growth and competitiveness through e-business.

Executive Summary

Based on the concepts of innovation and strategic scope, this report identifies four categories of firms that set themselves apart through their e-business model, i.e. balanced, diversified, bold and ambitious businesses. Balanced businesses essentially use e-business to consolidate their core competencies. Diversified businesses seek to use e-business as a means of increasing their strategic scope in terms of product line, territory and client base. Bold businesses rely on innovation and their technical expertise to develop new ways of doing business on the Internet. Finally, ambitious businesses seek to dominate their market by imposing an indispensable technological standard.

Despite the differences that may exist between these four categories of businesses, it is possible, for each category, to identify the companies that have achieved outstanding success. This document highlights six examples of businesses spread among the different categories and operating in various industry sectors, in order to demonstrate that there is no better or worse category, and that there simply are different ways, all equally valid, of going into e-business.

No matter what category fits your business, a well designed and adequately deployed e-business model can offer potential that is extremely interesting in terms of creating value for both your company and its business partners.

"Permission to publish this content was provided by CEFRIO."