Complementary Role of Website in Business Model Development

Complementary Role of Website in Business Model Development

Olli Kuivalainen (Lappeenranta University of Technology, Finland)
DOI: 10.4018/978-1-60566-154-4.ch010
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Abstract

The aim of this chapter is to provide a holistic exploration of the development of the business model of a magazine Web site, and of the factors behind its success. The discussion is based on an explorative case study of a successful Finnish magazine publisher and its Web site. We use triangulated data (interviews, observation, statistical data, customer feedback, and newspaper articles) to describe and analyze the development of the Web site and the subsequent changes in the e-business model of the magazine from the Web site foundation in 1998 to the situation in fall 2004. Our case illustrates that a magazine’s Web site is linked to all of its functions (editorial, circulation, and advertising), and to the business-model elements that are vital to its success. We suggest that the discussion forums in question (one type of virtual community) benefited from the positive feedback that resulted in positive network effects, and led to the adoption of the service. Moreover, community activities have enhanced customer loyalty and added a more lifelike dimension to the magazine concept. As such, the Web site now complements rather than substitutes the print magazine. Interestingly, although it does not independently fulfill the requirements of a successful business model (cf. e.g., Magretta, 2002), it enhances the customer experience and adds new dimensions to the magazine’s business model.
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A Review Of The Literature On Business Models

For many companies the Internet has provided a platform for various business activities. It could be seen as a new market place, and in order to find out how to compete in such an arena many people have found the business model concept useful (Lumpkin & Dess, 2004). All the recent technological advances have brought about an extensive increase in choices and decisions that managers face in terms of business models, partly explaining the growing research interest in the field (Osterwalder 2004, 12). Business model concept has been widely discussed in both conceptual and qualitative papers, but also quantitative approaches evaluating the success factors of e-business models are emerging (see e.g. Albers and Clement, 2007).

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