A business model is more internal to a company and is a more narrow approach. Strategy is directed towards the external environment and leads to a unique positioning of the firm with regard to other players.
Types of e-business models
· E-tailer
· Community provider
· Content provider
· Portal
· Transaction broker
· Market place
· Service provider
No Inventory based model
Problems:
· Customer will not wait for a product for so long. He may only be willing to wait if the product is niche.
· Also, the seller may directly contact the customer thus avoiding the intermediary altogether.
Warehouse based model
Problems:
· Financing inventory is difficult and highly inefficient.
· For any e-commerce site, on an average 7% is unsold inventory.
Innovative model
· They allow entry to site based on the zip code to which they deliver.
· Upon entering the site, the shopper is presented with a catalogue of costco.
· A personal shopper then goes to the actual store of Costco and purchases on behalf of the customer and delivers it to them.
· The advantage is that instacart does not have to maintain any inventory.
· However, there could arise a situation where the product may not be available at the physical cotsco store.
· The products are slightly market up than what they are available at the Costco store. Thus, instacart makes money on every item and transaction.
· It is an expensive model since they employ personal shoppers. However, they overcame this problem by hiring free lancers with a smartphone. Since these free lancers are not on the payroll of instacart, there could be the problem of training. Instacart came up with an innovative solution for this by taking feedback from customers and sending only the highly rated personal shoppers. In some cases they even allow the customers to choose the personal shopper they want.
Thanks and Regrads
Samriddhee Khanna
12IB-069
section B
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