Timmers (1998) adopts a broader perspective to include other stakeholders and defines a business model as “an architecture for the product, service and information flows, including a description of the various business actors and their roles. and a description of the potential benefits for the various business actors. and a description of the sources of revenues.” Novak and Hoffman (2001), without departing from the common elements of revenue for the business and customer value of the above definitions, propose a customer-centric framework for understanding and implementing business models.
Just as many areas of the Internet are still not yet clear-cut, so is the term “business models”. On the internet today, there are various categories of business models. Some models mean the same thing but are given different names by their creators. With the evolution of the internet, many new models have emerged. At the same time, some do not stay long and have gone. Rappa (no date) identifies nine generic forms of business models, including the brokerage model, advertising model, infomediary model, merchant model, manufacturer model, affiliate model, community model, subscription model, and utility model. Timmers (1998) classifies business models by positioning them along the two dimensions of the degree of innovation and functional integration. In Novak and Hoffman’s (2001)’s customer-centric framework, for any business model to be successful, it must integrate customer models, value models, and revenue, models. In this paper, the customer-centric framework of Novak and Hoffman (2001) will be adopted as each of the three subsidiary models answers questions such as who are the communities or customers served by the firm, how the firm attracts the target audience, and where does the revenue for the firm come from respectively.
A customer model is a segmentation of the users of the electronic business. The four groups of users are businesses, consumers, agents, and employees. Each customer model consists of two groups of users. The most common type of customer model seen on the internet today would be businesses to consumers. Businesses to businesses and consumers to consumers are not uncommon as well. Therefore, fourteen segmentations of customer models are .possible.