Digital business models are becoming increasingly popular. No wonder, after all, a lot of money can be made now. The possibilities are manifold and are already used by many entrepreneurs and founders.

Digital business models and how to get there

Digitalization and especially digital business models have become particularly important for companies. This is partly due to the fact that many new variants have emerged in terms of value creation. The Internet in particular has long been integrated into existing business models. In some cases, however, this technology has even created completely new digital business models, while at the same time displacing old options.

However, these not only determine the way companies work, but are also an essential decision-maker in generating profits. As a result, they automatically count as a key factor for a company’s economic success.

But how does a company decide which digital business model it wants to use in the first place? In order to answer this question, companies should analyse three aspects in particular in detail.

  • Offer (What can a company offer to the customer?)
  • Customer benefit (How does the customer benefit from the offer?)
  • Value chain (What options are possible for designing a value chain?)

Digital business models – these are the possibilities!

Some variants of digital business models have now proven to be particularly successful.

E-commerce

E-commerce is a classic and widespread option for digital business models. Especially giants like Amazon or Zalando have developed into successful retailers. However, since even smaller companies can easily transfer the typical offline principle of trading goods to the online world, this area is booming enormously. Especially with regard to the competitiveness of companies, it is now almost fatal to do without the possibility of online shopping.

Platforms

But the use of platforms has also become enormously important as a variant for digital business models. Finally, only a marketplace is provided here for the coming together of supply and demand, instead of producing or selling themselves.

Platforms in particular that compare offers are very popular. Users benefit from the simplified search for companies and the simultaneous comparison. Key Factor is clearly the reach here. Platforms with great notoriety make it almost obligatory for companies to appear online and in direct comparison to the competition, despite a fee.

Pay-per-use

The pay-per-use model is so popular with users because it only pays for actual consumption. This digital business model is particularly popular with customers who refuse to pay fixed contributions but at the same time want to remain flexible in their use. Accordingly, it also makes itself extremely attractive for companies looking for profitable sources of income, even though sales are comparatively difficult to calculate and plan.

Subscription model

Providers such as Sky, Netflix and ParShip have professionalized the subscription principle, making a smart choice when choosing digital business models. Due to a fixed monthly fee of the customer, the revenues for companies are usually very stable and well predictable. At the same time, such digital business models enjoy a high level of customer satisfaction, as the subscription is permanently available to the user.

Freemium

Especially in the app sector, freemium is often used as a variant of a digital business model. A basic service is offered free of charge, but usually a premium version is based on it. However, companies only offer this extended service against payment of a fee.

The regular version attracts many customers, who are later partly willing to pay for the extension. Although there are of course fewer premium customers compared to the basic version, this number usually still allows to manage the free option by means of cross-financing and at the same time to make profits.

If you want to learn more about digitalization in companies, please read the following articles on these topics:

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I blog about the impact of digitalization on our working environment. For this purpose, I present content from science in a practical way and show helpful tips from my everyday work. I am a manager in an SME myself and I wrote my doctoral thesis at the University of Erlangen-Nuremberg at the chair of IT Management.

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