Objectives of knowledge management

4 
Trading in the marketplace can be sell‑ side ( seller‑ controlled), buy‑ side ( buyer‑ 
controlled) or at a neutral marketplace.
5 
A business model is a summary of how a company will generate revenue identify‑
ing its product offering, value‑ added services, revenue sources and target custom‑
ers. Exploiting the range of business models made available through the Internet is 
important to both existing companies and start‑ ups.
6 
The Internet may also offer opportunities for new revenue models such as commis‑
sion on affiliate referrals to other sites or banner advertising.
7 
The opportunities for new commercial arrangements for transactions include nego‑
tiated deals, brokered deals, auctions, fixed‑ price sales and pure spot markets, 
and barters should also be considered.
8 
The success of Internet start‑up companies is critically dependent on their busi‑
ness and revenue models and traditional management practice.
Firebox received £500,000 of investment from New Media Spark, with further funding from private inves‑
tors. Sales grew 156% a year from £262,000 in 2000 to £4.4 million in 2003 and £8 million in 2004 from 
175,000 orders. In the same year, it received 4.5 million page impressions and 680,000 monthly unique 
visitors, according to the Nielsen// Netratings panel (eSuperbrands, 2005). Firebox.com became profitable in 
2001.
One of the reasons for the success of Firebox is the way it has embraced traditional channels to market. 
Silicon.com (2004) reports that head of PR Charlie Morgan explained: ‘In a marketplace that was fast becom‑
ing cluttered there was a strong need to both expand the customer base and ensure that Firebox itself grew 
as a brand. By building in a programme of catalogue drops, Firebox aimed to recruit many new customers 
who had not thought of the Internet as a purchasing medium, increase turnover and of course grow the 
brand.’
In 2009, the company reported that the Firebox.com website attracted nearly 10 million visits in 2009 and 
served 48 million page impressions according to Google Analytics. The email newsletter is sent twice a week 
to over 700,000 recipients while over 1 million copies of the catalogue are circulated annually. In 2010, the 
revenue of the business was £14.4 million. By continuing to look for a niche in the market and playing to 
its strengths, the company has continued to be a profitable, growing, independently owned company. In 
2013 the company continued trading with a mobile responsive site. (See Chapter 11 for more details on this 
approach.)
Source
: Company website, About Us, eSuperbrands (2005) and Silicon.com (2004). With thanks to www.firebox.com.
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74
Part 1
Introduction
Exercises
Answers to these exercises are available online at 
www.pearsoned.co.uk/chaffey