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|← Social Media and Business Models||Challenges of E-Organizations →|
Model refers to the rationale behind an organization’s creation, delivery and capture of value. A business model helps a business to organize factors such as customers in a manner that delivers value to them, entices them to pay a reasonable price and make profits out of the activities. Major customers of e-businesses can be organized through realization of the best place to find them, what they listen to and how to reach them. Social media have found its place in e-business models through its ability to allow alignment of a business strategy with online channels. E-businesses operate on a number of levels requiring the support of the internet and other social sites. Social sites are useful in the three levels for the purposes of: creating a community for knowledge interchange, conducting research and finding solutions. Communication and access to information without complication of acquiring procedures and at low costs are useful aspects of social sites to an e-business (Andries & Debackere 2006).
E-businesses depend largely on the network base to communicate with all its stakeholders and mostly customers. Chen points out that business models in this century must take into account the vast capabilities of Web 2.0. These capabilities include collective intelligence, effects of networking, content generated by the user, and the chance of offering self-improvement. His suggestion is that the service industry including traffic, airline, hotel, transportation, restaurant, ICT and E-businesses stand to benefit from adopting business models that are in contemplation of Web 2.0 characteristics (Reiss 2001).
Since e- businesses, unlike other businesses, operate within this web platform, they are more inclined to have strategies that further their goals. It is notable that social media creates a significant deviation from the past forms of engaging clients. For instance, the traditional system had a Broadcast model through conventional newspapers, TVs or radios. Apart from lacking a channel of engagement, the broadcast method is a one-way push channel that offers passive content to its users. The social media e-business model will allow for a two-way interactive channel. It has a characteristic of many-to-many approach. This model allows sharing, new content creation, participation among others. Social as such becomes instrumental in advancing the business goals through building loyalty and maintaining customers (Carlsson 2010).