Description
It initially starts off with the current revenue model of the company. Further on its tries to differentiate between horizontal market expansion or vertical market dominance. It answers the pros and cons of both the methods.Finally it rounds off with the proposed revenue model for the company.
FreeMarkets OnLine
Current Revenue Model
SUPPLIERS 2.5% of Purchase Price
FreeMarkets OnLine
$75000 per month
BUYERS
Horizontal Market Expansion or Vertical Market Dominance?
Horizontal Market Expansion
• To go into new supply markets of commodities - Not advisable Reasons - Price Discovery is Easy - Therefore, less saving for Buyer
Vertical Market Dominance
• Vertical Market Dominance – Advisable Reasons Past Experience of Employees of the organization Core Competencies include: - Understanding the Buyer needs - Preparation of RFQ and Reducing number of suppliers • This is not easily imitable
Technology and User – Support Subscription Licensing?
Technology and User – Support Subscription Licensing
• Not Advisable –in current market scenario Reasons - Lose their First Mover Advantage - Risk of Misuse of the Software – Copyright issues - Risk of tarnishing the Company’s Image –
Improper usage and Processes followed
Networked Purchasing Information Systems
Networked Purchasing Information Systems
• Not Advisable Reasons - Major Incremental External Investment - Risk of Misuse of Information (which would go on World Wide Web) is higher
Proposed Revenue Model
SUPPLIERS 2.5% of Purchase Price
FreeMarkets OnLine
$75000 per month + % of SAVINGS due to usage of FMOL
BUYERS
Limitations
- Savings for the Repeat Customer would be on the Lower Side
THANK YOU
doc_490661151.pptx
It initially starts off with the current revenue model of the company. Further on its tries to differentiate between horizontal market expansion or vertical market dominance. It answers the pros and cons of both the methods.Finally it rounds off with the proposed revenue model for the company.
FreeMarkets OnLine
Current Revenue Model
SUPPLIERS 2.5% of Purchase Price
FreeMarkets OnLine
$75000 per month
BUYERS
Horizontal Market Expansion or Vertical Market Dominance?
Horizontal Market Expansion
• To go into new supply markets of commodities - Not advisable Reasons - Price Discovery is Easy - Therefore, less saving for Buyer
Vertical Market Dominance
• Vertical Market Dominance – Advisable Reasons Past Experience of Employees of the organization Core Competencies include: - Understanding the Buyer needs - Preparation of RFQ and Reducing number of suppliers • This is not easily imitable
Technology and User – Support Subscription Licensing?
Technology and User – Support Subscription Licensing
• Not Advisable –in current market scenario Reasons - Lose their First Mover Advantage - Risk of Misuse of the Software – Copyright issues - Risk of tarnishing the Company’s Image –
Improper usage and Processes followed
Networked Purchasing Information Systems
Networked Purchasing Information Systems
• Not Advisable Reasons - Major Incremental External Investment - Risk of Misuse of Information (which would go on World Wide Web) is higher
Proposed Revenue Model
SUPPLIERS 2.5% of Purchase Price
FreeMarkets OnLine
$75000 per month + % of SAVINGS due to usage of FMOL
BUYERS
Limitations
- Savings for the Repeat Customer would be on the Lower Side
THANK YOU
doc_490661151.pptx