What Is The Difference Between A Business Model And An Ebusiness Model?

Do you know what is the difference between a business model and an ebusiness model? If you are an entrepreneur, or planning to launch your business in near future, then you should know the differences between these two. Whether you have a traditional business or an online one, understanding the present market scenario and developing an effective business plan is the foremost priority.

With the changing time, the business structures have also changed a lot. Traditional business markets have gone through drastic evolution and people and businesses are now more inclined towards online platforms. And even more after the worldwide pandemic, people are giving more preferences to online shopping due to the sake of their health. 

Starting a new business is always a challenge. Analyzing and understanding what people are wanting is the first step of developing a successful business. Your products or services must be useful to the audiences. They have to solve their problems or fulfil their real-life needs. But this is only the first step towards success. The next part is to find ways to make your business grow bigger and earn more revenues overall. Here’s where the business models come into play.

Although there cannot be any head-to-head differences between traditional businesses and online businesses, because they both carry different forms of structures, and different aspects. Depending upon the products, services, location, target audience, reach of the services, etc. the business should determine the best suitable option between traditional business and e business. But understanding the business models for both of them is highly required.

What Is A Business Model?

What is a business model

In simple words, a business model is the strategic planning of how your business is going to perform in the market and earn revenues. It is a framework that explains all the necessary aspects of a business and the systematic ways to generate money from it. Business models are important for both start-ups and established businesses. A good business model encompasses a lot of things like the products or services the business is going to deliver, how much value will they add in their customer’s life, what would be the production planning in case of the products, how the marketing and selling departments would work, what would be cost associated with the different processes, and many more. At the end of the day, a successful business model should draw more money by selling than the cost invested. 

Examples of business models-

Here are some examples of business models differentiated by categories

  • Production,
  • Commission
  • Advertising
  • Subscription
  • Referral
  • Offers
  • Exchange

Why Is A Business Model Important?

importance of business model

A business model is important for several reasons. Some of the major ones we will talk about here:

  1. A business model defines a strategic path of executable actions to drive business success.
  2. A business model given you an overall insight of the present market and possible channels to generate revenues.
  3. A business model is the framework that highlights the major aspects of your business and you can stay focused on them.
  4. A business model takes care of different business points and plans. It helps you analyze the success or failure of those points distinctly.
  5. A business model helps you understand how you can add more values to your customers through your products and services.

What Is A Traditional Business Model?

traditional business model

I hope it is quite familiar to you what a traditional business means. A traditional business is all of those businesses that we see around us present physically, not virtually. It might be a grocery shop, a restaurant, a factory, or even giant companies that sell its products. A traditional business comprises an office, or store, employees, and deals with their customers directly and generates revenues. 

The business models of these types of businesses are referred to as traditional business models. It has the primary target of making effective plans and earning more money for the business. It identifies the costs involved in production, management, marketing, etc and the final income from it. It makes sure that the final income is more than the costs invested.

What Is An E business Model?

e business model

E-businesses are the businesses that are present virtually, like e-commerce platforms. Any business that operates functionality over internet platforms are referred to as e business. As for the business models it has its business models too just like the traditional businesses. The kinds of business may deal with products selling, or providing services, or even some other forms, like information sharing, news broadcasting, etc. 

Just like the traditional business models e business models also deals with the planning and execution of production or services, marketing, online subscription, referral, etc. The ultimate goal is the same. To generate more money from the business than invested.

Difference Between A Business Model And An E business Model

difference between traditional vs e business

Although there are not many big differences between a business model and an e business model, some of the key points are there. As mentioned earlier, the e business has taken over the whole business vertical, challenging the traditional ones head-to-head. It is now very important to know What is the difference between a business model and an e business model?

Business model E business model
Physical business model Completely virtual business
Limited to a restricted area and audience Not limited to a particular area. You can spread your business around the world.
Physical presence is required for products and services No physical presence required. Products or services should be demonstrated across the internet platforms.
Instant delivery The product delivery or the services might take some time.
Investment is more Less investment is required compared to the traditional business.
Analytical survey is complex Easy analysis of final results.

Conclusion –

A business model is one of the most important pillars of business. It helps you to build-up the entire planning for your business and to analyze how well it is performing. The difference between a traditional business and e business is not much, but it is required to understand the advantages and disadvantages of both.

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sayan

Sayan Banerjee is a Digital Marketer and a Blogger by passion. He has years of experiences in the mentioned field. He shares his thoughts and ideas through several platforms. He is associated with ( Tech Trends Pro ).

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