Objectives of knowledge management

Part 1
Introduction
KP: key partners
•
 Experts – sector
specialists
• Marketing agency and
freelancer
s
• Online Publishers
e.g. iMedia Connection
• Publishing/conference
organisers
• Industry influencers and
bloggers
• Trade organisations
e.g. 
www.theidm.com
KA: Key activities
•
 Content creation
•
 Experience creation
• Service promotion
• Sales maximisation
CR: Customer
relationships
•
 Self-service
• Dedicated mentoring and
consulting
• Co-creation – blog posts
and forum
C: Cost structure
Fixed cost
s
CS: Customer
segments
Businesses wanting to
improve their returns
from marketing
Role:
•
 
Company owners
•
 
Marketing managers
•
 
Digital marketing
managers
•
 
Consultants
VP: Value proposition
•
 1. Help businesses grow
value by improving cross
channel marketing
communications using
recommendations from
ebooks, courses and
software
• Support individual learning
and development
• Deliver specific consulting
or training advice or
mentoring
C: Channels
•
 
Search marketing
•
 
Email marketing
•
 
Partner arrangements
•
 
Social media marketing
•
 
Paid advertising
Company type/sector
•
 
Consultant
•
 
Business type
•
 
Agency
•
 
B2B
•
 
Ecommerce/retail
•
 
Not-for-profit
KR: Key resources
•
 
Content creation X2
•
 
Development X2
•
 
Marketing X1
Business model summary
•
 Salary
•
 
Hosting and software costs
•
 Content creation
•
 
Agency marketing fee
s
•
 
Advertising fee
s
Variable costs
R€: Revenue stream
•
 Annual subscription to companies and individuals
•
 
Individual product purchase
•
 
Ad revenue
•
 
Consulting and training (direct and affiliate)
•
 
Licensed content revenue
Created for: SmartInsights.com
By: Dave Chaffey
Date: 1
st
 May 2013
Version: 1.0
Figure 2.10
Business Model Canvas example
Source: 
Smart Insights. With permission.
4
Channels. The methods by which the organisation’s services will be delivered and the 
audiences reached.
5
Key partners. To exploit online and offline value networks, forming partnerships gives an 
opportunity of expanding reach and taking advantage of existing organisations and online 
influencers that have built an audience.
6
Activities. The main activities that need to be performed to deliver the value proposition 
to develop revenue.
7
Resources. Different types of process and people to complete the activities to create and 
deliver the value proposition.
8
Cost structure. Different cost‑ elements; these should be checked against activities and 
resources. Costs are classically broken down into fixed and variable costs and economies 
of scale.
9
Revenue stream. This is the method by which a business derives income. Common online 
options are: ad revenue, subscription fees, sales of physical or virtual goods or affiliate‑ 
based commission arrangements. Licensing and leasing are other alternatives.
An example of how these nine different elements of a business model can be applied is shown 
in Figure 2.10.
It’s a great framework, but it’s always worth considering what the missing elements of 
frameworks are. It’s arguably missing a method of specifying key performance indicators 
(KPIs) for evaluating performance of the business model. I recommend adding these to the 
relevant sections, in particular for revenue stream, cost structure and key activities. It also 
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Chapter 2
Marketplace analysis for e‑commerce
doesn’t directly consider the impact of different forms of competitors. To help here, it’s also 
useful to think through how the canvas would look for successful companies already active 
in this market. (We will look further at how to define elements of the business model such as 
value proposition and targeting in Chapters 5 and 8.)
A review of the different online business models made available through e‑commerce is of 
relevance to existing companies, but in particular, start‑up companies and online interme‑
diaries. Venkatram (2000) pointed out that existing businesses needed to use the Internet to 
build on current business models, while at the same time experimenting with new business 
models. New business models may be important to gain a competitive advantage over exist‑
ing competitors, while at the same time heading off similar business models created by new 
entrants. More commonly, they may simply offer a different revenue stream through adver‑
tising or charging for services in a new way. For Internet start‑ ups the viability of a business 
model and in particular their sources of revenue will be crucial to their success and funding 
from venture capitalists. But what is a business model?
Regardless of the descriptors used, the important point is that as part of strategy develop‑
ment, organisations should identify relevant partners and develop tactics for working with 
them appropriately.
Finally, Michael Rappa, a professor at North Carolina State University, has a useful compi‑
lation of examples of online business models in these and other categories in the link shown 
at the end of the chapter. At a lower level, Rappa identifies utilities providers that provide 
online services (such as the Internet service providers and hosting companies we discuss in 
Chapter 3). Now complete Activity 2.2 to assess whether it is possible to simplify these busi‑
ness models and read Case study 2.1 to see examples of new revenue models that can be used 
by a forward‑ looking retailer.
Figure 2.11 suggests a different perspective for reviewing alternative business models. 
There are three different perspectives from which a business model can be viewed. Any indi‑
vidual organisation can operate in different categories, as the examples below show, but most 
will focus on a single category for each perspective. Such a categorisation of business models 
can be used as a tool for 
formulating digital business strategy
. The three perspectives, with 
examples, are:
1 
Marketplace position perspective.
The book publisher here is the manufacturer, Amazon 
is a retailer and Yahoo! is both a retailer and a marketplace intermediary.
2 
Revenue model perspective.
The book publisher can use the web to sell direct while Yahoo! 
and Amazon can take commission‑ based sales. Yahoo! also has advertising as a revenue 
model.
3 
Commercial arrangement perspective.
All three companies offer fixed‑ price sales, but, in 
its place as a marketplace intermediary, Yahoo! also offers alternatives.
Activity 2.2
Exploring business models
Purpose
To explore the different types of business model available on the web and suggest a 
structure for evaluating business models.
Question
Identify overlap between the different business models identified by Timmers (1999). 
Can you group the different business models into different types of services? Do you 
think these business models operate in isolation?
Answers to activities can be found at
www.pearsoned.co.uk/chaffey
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