Case Study

4.) As described in the text, a freemium revenue model makes sense for Pandora for the reasons that it has a low marginal cost. It would also have to depend on the potential customer base and what major competition that they would have to go up against while using freemium.


1)   A business model vs business plan:

A model covers elements such as a revenue model, market opportunity, and competitive advantage. A business plan is more of a proposition a how to implement something within a model.

5) Why is targeting a market niche generally smarter for a community provider than targeting a large market segment?:

It potentially allows a provider offer services that not very many other companies offer, which would make the provider desired by the small community. Targeting a larger community offers more competition and more providers offering the same service.


10) Why is it difficult to categorize e-commerce business models?:

Because there is no one right/correct way that a business could implement its business model. There are more approaches and options available for different businesses base on if they are online/traditional, large or small, and what products/services they offer.

15) What are the key success factors for exchanges?:

Reliability of delivery (care of the product), speed, updates to customer (buyer), respectable person to person interaction with questions.

20) What is crowdfunding and how does it help e-commerce raise capital?:

It allows a company to collect money from individuals/groups of people on the internet to fund a startup, event, or product.    

One Project question

2.) Shopping online vs. Traditional:

Shopping online offers a much larger selection of items to review and find the best prices for, however if you were buying clothes or shoes, you canít try them on through the internet. Traditional allows you to try items on, or look them over, and purchase them on the spot, however they have a very limited selection compared to on-line and you have to drive to the location to purchase/ look at the item(s). Online shopping doesnít require you to leave your home, but it might take two days to ship to you (Amazon Prime).