The social welfare of the businesses increase and they look to increase the welfare to the customers. There can be price discrimination with the use of the Internet as the customers are aware of the products. The business houses may look to decrease the price of the goods to attract the customers. The e business model of Amazon is based on offering products at lower costs. This helps in the increase of the social welfare. With the rise of the Internet, various other business opportunities are open for the entrepreneurs.
Complementarities: The model has described the services as the complementarities. The services of the e business model should be quick and precise. The basic concept is to provide the customer’s with valuable information that helps in the development of the business.
Lock in: The lock in period of the business houses is relatively low while using the e business model. The search for customers’ get quicker and the cost is less than that of the traditional process. Therefore, the lock in of the company is automatically reduced. The company may also adopt a model to produce what is demanded.
Novelty: In the e business model, there has been a rise in the novelty process with the rise of innovation. The business houses look to attract the customers with the use of innovative techniques. Amazon and Ebay offer discounts and gift vouchers, which encourage the customers to shop online. (Kirikova & Grundspenkis, 2002; Pp 378-379)
Porter’s value chain activities describes that a relation exists between the firm’s activities regarding the suppliers and the customers. The value chain activities of a firm can be described as follows:
With the advancement of technology and the use of the Internet, the value chain of a company can be related easily. The effectiveness of a company has increased with the use of the Internet. All the components in the value chain have been benefited by the use of the Internet. The